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ONYX Pharmaceuticals, Inc. (ONXX)
Q3 FY08 Earnings Call
November 6, 2008, 5:00 PM ET
Julianna Wood - VP, Corporate Communications and IR
N. Anthony Coles - President, CEO and Member of the Board
Laura A. Brege - EVP and COO
Henry J. Fuchs - EVP and Chief Medical Officer
Gregory W. Schafer - VP and CFO
James Birchenough - Barclays Capital
Jason Zhang - BMO Capital Markets
Jessica Li - Goldman Sachs
Howard Liang - Leerink Swann Company
Katherine Kim - Banc of America Securities
David Moskowitz - Caris & Company
Philip Nadeau - Cowen and Company
Previous Statements by ONXX
» Onyx Pharmaceuticals Inc. Q2 2009 Earnings Call Transcript
» Onyx Pharmaceuticals Inc. Q1 2009 Earnings Call Transcript
» Onyx Pharmaceuticals, Inc., Q4 2008 Earnings Call Transcript
Julianna Wood - Vice President, Corporate Communications and Investor Relations
Thank you. Hello and welcome. I'm Julie Wood, Vice President of Investor Relations and Corporate Communications at Onyx Pharmaceuticals. We thank you for joining us today for our third quarter 2008 financial results conference call.
Leading our call today is Onyx President and Chief Executive Officer, Dr. Tony Cole. Also providing updates on the teleconference are Laura Brege, our Chief Operating Officer; Dr. Hank Fuchs, our Chief Medical Officer; and Greg Schafer, our Chief Financial Officer.
Please note that we will be making forward-looking statements during this teleconference that could include financial, clinical or commercial projections, statements that are not historical facts are forward-looking. References to what expect, believe, intend to do, plan, estimate or other statements referring to future events or results are intended to identify these statements as forward-looking.
Forward-looking statements are inherently subject to risks and uncertainties. For a discussion of these risks and uncertainties, we refer you to our 10-K for the year ended December 31, 2007, as well as to our 10-Q for the third quarter of 2008, which is on file today.
In addition, we will be presenting and discussing non-GAAP financial measures in this presentation. For reconciliation of these non-GAAP financial measures to the corresponding GAAP measures, please see today's press release which is posted on our website at www.onyx-pharm.com.
I would now like to turn the call over to Tony Coles, who will begin the discussion with an overview of our business. After Tony's remarks, the management team will review commercial, clinical, including comments on the new oncology compound that we just in-licensed and financial highlights before opening up the call for questions and answers. Tony?
N. Anthony Coles - President, Chief Executive Officer and Member of the Board
Thanks Julie. Let me start the call by saying that we are very pleased with the performance of Nexavar and the business itself on both the top and the bottom line for this quarter. Given the uncertainty of today's financial markets, we are also very pleased to report that Onyx remains very well positioned to whether the current global fiscal crisis given the growth of Nexavar and our strong cash position with no debt. We are uniquely positioned, not only to withstand the uncertain times ahead, but also to capitalize on opportunities to grow the company.
Upon my arrival seven months ago, we laid out four simple priorities to support the company's ongoing growth objectives, objectives that are focused on improving the lives of patients with cancer, and building sustainable shareholder value. I'd like to review these priorities and assess our progress against each one.
Our first objective is to manage Nexavar as a business. For the third quarter, Nexavar continued its impressive sales performance with global net sales of $181 million. This is Nexavar's tenth consecutive quarter of net sales growth and this growth continues to be based on underlying volume.
In addition to the notable top line growth we have seen in Nexavar since its launch, margins have steadily improved both before and after consideration of our ongoing development investment in Nexavar.
We expect Nexavar's cash flow contribution to increase annually as we remain focused on improving margins for the brand worldwide with our partner, Bayer. As a result, we are pleased to update our previous guidance, as we believe that the brand will be cash flow positive and that on a non-GAAP basis Onyx will be profitable in 2008.
Our second priority is to maximize our commercial business by creating a leadership position in the liver cancer market and fortifying our position in kidney cancer. The first stage of our liver cancer launch has been well received by the oncology community and we have great potential ahead of us as we continue to penetrate this large global market and identify new prescribers and new patients.
In less than three years since its first launch, Nexavar has generated over $1 billion in cumulative net sales worldwide. With this forward momentum, we believe that over the next two years in just the existing two indications, Nexavar has the potential to resale of over $1 billion annually.
Our third priority is to continue investments and the development of Nexavar. With Nexavar's unique mechanism of action and compelling competitive attributes, we believe there is the potential for additional impact across other malignancies. In this thing, we are pleased to announce that we are initiating randomized trials in both colorectal and ovarian cancers where the commercial potential and unmet need have already been shown to be significant.
Finally with an eye towards Nexavar's longer-term prospects, we are also evaluating some of the promising early signals that have been observed in a number of other tumors. Demonstrated efficiency in other solid tumors would mean even greater sales potential beyond our current projections.