Onyx Pharmaceuticals Inc.
) reported an adjusted loss of 64 cents per share in the second
quarter of 2013, well below the year-ago loss of 85 cents.
Excluding amortization expenses, second quarter 2013 loss was 57
cents, below the Zacks Consensus Estimate of a loss of 63
Quarterly revenues were $153 million, above the Zacks
Consensus Estimate of $146 million and the year-ago revenues of
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 $230 million in the reported quarter, up 7% from the
year-ago period. Revenues were driven by sales growth in the U.S.
and the Asia-Pacific regions and continued improvement in
Onyx Pharma and Bayer are looking to expand the drug's label
to boost sales. A late-stage trial with Nexavar is ongoing for
breast cancer (RESILIENCE study results due in mid-14). The
company also filed for Nexavar's approval for thyroid cancer in
the U.S. and EU.
Kyprolis, which gained FDA approval in Jul 2012, posted second
quarter 2013 sales of $61.0 million, slightly below the $64.0
million reported in first quarter 2013. Demand, however, grew 6%
sequentially due to growth in patient share. Onyx Pharma said
that Kyprolis' share increased to more than 40% of the prevalent
eligible third line plus patient population at the end of the
second quarter, up from the 30%+ patient share at the beginning
of the year. Share of second line patients doubled to about 10%
at the end of the reported quarter. Meanwhile, the company
continued to witness expansion of novel agent use in the third
line plus setting.
At the end of the reported quarter, about 2,400 unique
accounts had ordered Kyprolis since launch, up from 2,100 in the
first quarter of 2013.
We note that
) Pomalyst, a multiple myeloma drug launched earlier this year,
delivered sales of $66 million in the Jun 2013 quarter, which was
the first full quarter of sales in the U.S. for the drug.
Meanwhile, Onyx Pharma is preparing for the potential launch
of Kyprolis in Europe. Positive results from two ongoing studies,
ASPIRE (interim results due in the first/second quarter of 2014)
and FOCUS (results due in the first/second quarter of 2014),
would allow the company to file for EU approval in the second
half of 2014. Once Kyprolis gains EU approval, Onyx Pharma
intends to commercialize Kyprolis directly in about 12
Stivarga royalty revenue came in at $10.2 million in the
second quarter of 2013. The oncology product, on which Onyx
Pharma receives a 20% royalty from Bayer, is approved in the U.S.
for use in treatment-experienced metastatic colorectal cancer
patients and for patients suffering from metastatic and/or
unresectable gastrointestinal stromal tumors. Global net sales
(reported by Bayer) grew 15% sequentially to $61 million in the
second quarter of 2013. Launch in additional markets and
increasing adoption by physicians should drive sales further.
Quarterly research and development (R&D) expenses
increased 34.6% to $102.8 million. Selling, general and
administrative (SG&A) expenses climbed 78.9% to $87.5 million
due to investment in commercial infrastructure and launch
activities for Kyprolis.
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.
Although Onyx Pharma's second quarter 2013 loss was narrower
than the year-ago loss, Kyprolis revenues were slightly soft
during the reported quarter. Moreover, we were disappointed to
see that the FOCUS study missed the interim analysis.
That being said, we expect investor focus to remain on the
company's ongoing strategic process that was announced on Jun 30.
Onyx Pharma said that it is currently in discussions with several
interested parties and we believe an acquisition could be
Onyx Pharma currently carries a Zacks Rank #3 (Hold).
), a Zacks Rank #1 (Strong Buy) stock, looks well positioned.
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