Narrower Loss from Onyx, Guidance Maintained
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Onyx Pharmaceuticals Inc.
) reported a loss of 32 cents per share in the first quarter of
2013, well below the Zacks Consensus Estimate of a loss of 59
cents and the year-ago loss of 79 cents.
Quarterly revenues were $145.5 million, well above the Zacks
Consensus Estimate of $131 million and the year-ago revenues of
$72.0 million. First quarter 2013 revenues included a $2 million
milestone payment from
) in connection with the initiation of a phase III study with
oncology candidate, palbociclib.
Onyx Pharma's revenues include royalties received under its
) for the development and marketing of Nexavar, Kyprolis sales
and royalties on Stivarga.
Global Nexavar sales (excluding Japan), recorded by Bayer,
amounted to $198.5 million in the reported quarter, down 5.3%.
Performance was affected by inventory reductions at specialized
oncology pharmacies in the US and lower sales in Europe. However,
Nexavar continued to perform well in Asia-Pacific and benefited
from continued improvement in commercial margin.
Onyx Pharma and Bayer are looking to expand the drug's label to
boost sales. Late-stage trials with Nexavar are ongoing for
breast cancer (RESILIENCE study results due in the first half of
2014). The company also intends to file for Nexavar's approval
for thyroid cancer in mid-13.
Kyprolis, which gained FDA approval in Jul 2012, is off to a
strong start with sales coming in at $64.0 million in the March
quarter, significantly above $45.3 million and $18.6 million in
the preceding two quarters. First quarter 2013 sales included
demand sales of $58.1 million. Sales included a favorable
gross-to-net accrual adjustment of $5.9 million. Sales also
included deferred revenues of $9.3 million in the form of
Kyprolis inventory at distributor level.
Onyx Pharma reported an expansion in the number of patients
receiving novel agents in the third line plus setting in response
to the continued adoption of Kyprolis and the entry of
) Pomalyst. The company said that novel agent use increased from
more than 30% at the end of fourth quarter 2012 to more than 40%
at the end of first quarter 2013. Additional expansion is
At the end of the reported quarter, about 2,100 unique accounts
had ordered Kyprolis since launch, up from 1,700 in the fourth
quarter of 2012.
Stivarga royalty revenue came in at $9.2 million in the first
quarter of 2013. The oncology product, on which Onyx Pharma
receives a 20% royalty from Bayer, gained FDA approval in Sep
2012 for use in treatment-experienced metastatic colorectal
cancer patients and for patients suffering from metastatic and/or
unresectable gastrointestinal stromal tumors (GIST) in Feb 2013.
Quarterly research and development (R&D) expenses increased
13.2% to $91.3 million. Selling, general and administrative
(SG&A) expenses climbed 86.3% to $72.5 million due to
investment in commercial infrastructure and launch activities for
2013 Guidance Maintained
Onyx Pharma maintained its guidance that was issued in Feb 2013.
The company expects Nexavar net sales (excluding Japan) in the
range of $890 million - $920 million. Price increases and
increased use in liver cancer should help drive sales. Onyx
Pharma did not provide guidance for Kyprolis or Stivarga as both
products are still in the early stages of commercialization.
The company expects R&D expenses (excluding stock-based
compensation expense) in the range of $400 million to $450
million. Expense will be driven by the additional studies being
conducted with Kyprolis. SG&A expenses (excluding stock-based
compensation expense) are expected in the range of $290 million -
$320 million. Onyx Pharma expects to report a loss in 2013.
Onyx Pharma's first quarter results were well above expectations.
Kyprolis continues to perform well and the strong uptake should
continue thanks to existing prescribers, adoption by additional
clinics and hospitals and new patient additions.
Onyx Pharma currently carries a Zacks Rank #1 (Strong Buy). The
company has successfully transformed itself from a one-product
company to a three-product company with several oncology
indications. Kyprolis represents significant commercial potential
and its performance should remove concerns regarding Onyx
Pharma's dependence on a single product for growth. We expect
investor focus to remain on Kyprolis and Stivarga's
commercialization and pipeline updates.
Currently, Celgene, a Zacks Rank #2 (Buy) stock, also looks well