Onyx Pharmaceuticals Reports First Quarter 2007 Financial Results
Onyx Pharmaceuticals, Inc. (Nasdaq: ONXX) today reported its financial results for the first quarter ended March 31, 2007. Onyx, with its collaborator, Bayer Pharmaceuticals Corporation, or Bayer, is marketing and developing Nexavar® (sorafenib) tablets, an anticancer drug currently approved for the treatment of advanced kidney cancer in the U.S., European Union, and other territories internationally. Nexavar net revenue, as recorded by Bayer, was $60.9 million for the quarter ended March 31, 2007 compared to $23.7 million in the same period last year.
“We are pleased with the growing number of kidney cancer patients benefiting from Nexavar,” said Hollings C. Renton, President and CEO of Onyx. “In liver cancer, we look forward to the presentation of our pivotal Phase 3 SHARP data at ASCO next month, which showed that Nexavar significantly extends survival in this devastating disease versus placebo. Based on these data, Bayer is preparing regulatory filings for a supplemental indication that we believe could lead to substantial commercial upside in 2008 and beyond.”
Renton continued, “As a monotherapy, Nexavar has proven efficacy in kidney cancer and now has demonstrated superior overall survival in liver cancer, a second tough-to-treat tumor. Nexavar’s favorable product profile, including its activity in combination with chemotherapy, strengthens our belief that Nexavar may also be a successful treatment for additional types of cancers.”
Onyx reported a net loss of $12.2 million, or $0.26 per share, for the first quarter of 2007 compared to a net loss of $20.4 million, or $0.49 per share, in the same period in the prior year. The net loss for the quarter ended March 31, 2007, includes employee stock-based compensation expense of $3.0 million, or $0.06 per share. The net loss for the quarter ended March 31, 2006, included employee stock-based compensation expense of $3.6 million, or $0.09 per share.
Net Expense due to (from) Unconsolidated Joint Business
Onyx reports the net expense due to (from) unconsolidated joint business for Nexavar as a single line item within the Statement of Operations. This item consists of Nexavar product revenue and the reimbursement of each company for its shared expenses under the collaboration and is, in effect, the net amount due to or from Bayer to balance the companies’ economics under the Nexavar collaboration. According to the terms of the collaboration, the companies share all research and development, marketing, and non-U.S. sales expenses. Onyx and Bayer each bears its own U.S. sales force and medical science liaison expenses. Bayer recognizes all revenue under the Nexavar collaboration and incurs the majority of expenses relating to the development and marketing of Nexavar. The calculation of the net expense due to (from) unconsolidated joint business is shown in the table following the summary financial information. In the first quarter of 2007, Onyx reported a net amount due from Bayer of $3.0 million compared to a net amount due to Bayer of $4.1 million for the first quarter of 2006. This change is primarily due to an increase in Nexavar revenue recognized by Bayer which is partially offset by increases in the combined commercial and development expenses for Nexavar.
In the first quarter of 2007, research and development expenses, including stock-based compensation expense of $0.5 million, was $5.5 million, a decrease of $2.3 million as compared to the first quarter of 2006. This decrease is due to a reduction in activities in the melanoma program subsequent to the release of results in the Phase 2 and Phase 3 metastatic melanoma trials in December 2006.
In the first quarter of 2007, selling, general and administrative expenses, including stock-based compensation expense of $2.5 million, were $13.2 million, an increase of $1.6 million over the first quarter of 2006. This increase is due to an increase in employees in commercial and administrative functions to support our planned growth.
Cash, Cash Equivalents and Marketable Securities
As of March 31, 2007, the company had cash, cash equivalents, short and long-term marketable securities of $261.8 million compared to $271.4 million at December 31, 2006.
Conference Call with Management Today
Onyx’s management will host a teleconference and web cast to discuss first quarter 2007 financial results and provide a general business overview. The event will begin at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on May 9, 2007. Interested parties may access a live web cast of the presentation at:
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