Nexavar Net Revenue $45.4 Million for the Third Quarter; Over $100
Million for First Nine Months EMERYVILLE, Calif., Nov. 7
/PRNewswire-FirstCall/ -- Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX)
today reported its financial results for the three and nine months
ended September 30, 2006. The company reported a net loss of $20.1
million, or $0.49 per share, for the third quarter of 2006 compared
to a net loss of $22.6 million, or $0.64 per share, in the same
period in the prior year. The net loss for the quarter ended
September 30, 2006, includes employee stock-based compensation
expense of $3.5 million, or $0.08 per share. With its collaborator,
Bayer Pharmaceuticals Corporation, or Bayer, Onyx is developing
Nexavar(R) (sorafenib) tablets, an anticancer drug currently
approved for the treatment of advanced kidney cancer in the U.S.,
European Union, and other territories internationally. "With over
$100 million in net revenue in the first nine months of 2006, we
and Bayer have clearly established Nexavar as a valuable and
important drug for the treatment of people with advanced kidney
cancer," said Hollings C. Renton, Onyx's chairman, president, and
chief executive officer. "While we continue to execute
commercially, we are also working to broaden Nexavar's clinical
utility in other tumor types and are investing our considerable
financial resources in a comprehensive development program to take
full advantage of the global oncology franchise opportunity Nexavar
represents." Revenue In accordance with the collaboration agreement
between the two companies, Bayer recognizes all revenue from the
sale of Nexavar. As such, for the quarter ended September 30, 2006,
Onyx reported no revenue related to Nexavar. For the third quarter
in 2006, Nexavar net revenue, as recorded by Bayer, was $45.4
million, primarily from sales in the United States and European
Union. This represents a 41% increase over revenue recorded by
Bayer for the quarter ended June 30, 2006. Onyx recognized $100,000
in revenue for the quarter ended September 30, 2006 for selling
certain Onyx viruses from the now discontinued therapeutic virus
program. Onyx recorded no revenue for the three months ended
September 30, 2005. Net Expense from Unconsolidated Joint Business
The presentation of the Onyx Statement of Operations changed in
2006 due to the commencement of Nexavar sales. Onyx now reports the
net expense (or revenue) from the 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.
The net expense from the unconsolidated joint business is, in
effect, the net amount due to 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. Nexavar product revenue is recognized by Bayer under the
collaboration and, currently, Bayer incurs the majority of expenses
relating to the development and marketing of Nexavar. The
calculation of the net expense from the unconsolidated joint
business is shown in the table following the summary financial
information. Operating Expenses In the third quarter of 2006,
research and development expenses, including employee stock-based
compensation expense of $0.6 million, was $7.6 million. This
represents a decrease of $7.1 million over the third quarter of
2005 primarily due to the change in accounting presentation with
the inclusion of Nexavar-related development expenses in the net
expense from the unconsolidated joint business line item. In
periods prior to 2006, Onyx's share of Nexavar-related research and
development expenses was included in the company's research and
development line item. Under the new presentation, a portion of
Nexavar development expenses is reflected in the net expense from
the unconsolidated joint business line item and only Onyx's direct
research and development expenses are reflected in the research and
development line item. Onyx and Bayer are continuing to expand
their investment in the development of Nexavar for additional
indications including Phase III trials for Nexavar in melanoma,
liver cancer, and lung cancer. In the third quarter of 2006,
selling, general and administrative expenses were $11.9 million, an
increase of $2.6 million over the third quarter of 2005. This
increase was primarily due to a $2.9 million employee stock-based
compensation expense recorded in the third quarter of 2006 as well
as increased payroll and related costs of our sales force and
medical science liaisons. As a result of the change in accounting
presentation, a significant amount of Nexavar-related marketing
expense is included in the net expense from unconsolidated joint
business line item. In periods prior to 2006, Onyx's share of
Nexavar-related marketing expense was included in the company's
selling, general and administrative line item. Under the new
presentation, the selling, general and administrative expense line
item includes only Onyx's direct selling, general and
administrative expenses. Cash, Cash Equivalents, and Marketable
Securities As of September 30, 2006, the company had cash, cash
equivalents, and total marketable securities of $218.2 million
compared to $284.7 million at December 31, 2005. The change
primarily reflects the funds used in operations during the first
three quarters of 2006, offset by the final milestone advance of
$10.0 million received from Bayer in January 2006, as a result of
the U.S. Food and Drug Administration approval of Nexavar.
Nine-Month Results For the nine months ended September 30, 2006,
Onyx recorded a net loss of $72.0 million, or $1.74 per share,
compared with a net loss of $56.8 million, or $1.61 per share, for
the same period in 2005. Nexavar net revenue, as recorded by Bayer,
was $101.3 million for the nine-month period ended September 30,
2006. Onyx reported revenue of $250,000 and $1.0 million for the
nine months ended September 30, 2006 and 2005, respectively. The
revenue represented licensing fees from third parties for rights to
certain Onyx patents and sale of viruses from the now discontinued
therapeutic virus program. Total operating expenses were $81.2
million for the nine months ended September 30, 2006, an $18.9
million increase from $62.3 million for the same period in the
prior year. Conference Call with Management Today Onyx's management
will host a teleconference and web cast to discuss third quarter
2006 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 November 7, 2006. Interested parties may access a live web cast
of the presentation at: http://audioevent.mshow.com/312557 or by
dialing 706-758-9355 and using the pass code 1239796. A replay of
the presentation will be available on the Onyx website or by
dialing 706-645-9291 and using the pass code 1239796 approximately
one hour after the teleconference concludes. The replay will be
available through December 7, 2006. About Onyx Pharmaceuticals,
Inc. Onyx Pharmaceuticals, Inc. is a biopharmaceutical company
developing innovative therapies that target the molecular
mechanisms that cause cancer. The company is developing Nexavar(R),
a small molecule drug, with Bayer Pharmaceuticals Corporation.
Nexavar has been approved for the treatment of advanced kidney
cancer. For more information about Onyx's pipeline and activities,
visit the company's web site at: http://www.onyx-pharm.com/. NOTE:
Nexavar(R) (sorafenib) tablets is a registered trademark of Bayer
Pharmaceuticals Corporation. This news release contains
"forward-looking statements" of Onyx within the meaning of the
federal securities laws. These forward-looking statements include
without limitation, statements regarding the timing, progress and
results of the clinical development, regulatory processes,
potential clinical trial initiations, potential NDA filings and
commercialization efforts of Nexavar. These statements are subject
to risks and uncertainties that could cause actual results and
events to differ materially from those anticipated. Reference
should be made to Onyx's Annual Report on Form 10-K for the year
ended December 31, 2005, filed with the Securities and Exchange
Commission under the heading "Risk Factors" for a more detailed
description of such factors, as well as the Company's subsequent
quarterly reports on Form 10-Q. Readers are cautioned not to place
undue reliance on these forward-looking statements that speak only
as of the date of this release. Onyx undertakes no obligation to
update publicly any forward-looking statements to reflect new
information, events, or circumstances after the date of this
release except as required by law. (See attached tables.) ONYX
PHARMACEUTICALS, INC. SUMMARY FINANCIAL INFORMATION CONDENSED
STATEMENTS OF OPERATIONS (In thousands, except per share amounts)
(unaudited) Three Months Ended Nine Months Ended Sept 30, Sept 30,
2006 2005 2006 2005 Total revenue $100 $- $250 $1,000 Operating
expenses: Net expense from unconsolidated joint business 3,596 -
20,147 - Research and development (1) 7,631 14,780 24,124 40,391
Selling, general and administrative (1) 11,900 9,268 36,944 21,908
Total operating expenses 23,127 24,048 81,215 62,299 Loss from
operations (23,027) (24,048) (80,965) (61,299) Interest income, net
2,879 1,467 8,991 4,102 Other income - - - 375 Net loss $(20,148)
$(22,581) $(71,974) $(56,822) Basic and diluted net loss per share
$(0.49) $(0.64) $(1.74) $(1.61) Shares used in computing basic and
diluted net loss per share 41,499 35,367 41,405 35,300 CONDENSED
BALANCE SHEETS (In thousands) Sept 30, Dec. 31, 2006 2005
(unaudited) (2) Assets Cash, cash equivalents and marketable
securities $212,284 $274,818 Other current assets 8,279 8,285 Total
current assets 220,563 283,103 Property and equipment, net 1,278
1,617 Long-term marketable securities 5,959 9,862 Other assets 74
83 Total assets $227,874 $294,665 Liabilities and stockholders'
equity Current liabilities 22,816 41,425 Advance from collaboration
partner 40,000 30,000 Stockholders' equity 165,058 223,240 Total
liabilities and stockholders' equity $227,874 $294,665 (1) Includes
employee stock-based compensation expense of $0.6 million and $2.9
million for the adoption of FAS 123( R ) in the research and
development and selling, general and administrative expense lines,
respectively, in the income statement for the three months ended
September 30, 2006. For the nine months ended September 30, 2006,
stock-based compensation expense of $2.0 million and $8.8 million
in the research and development and selling, general and
administrative expense lines, respectively. (2) Derived from the
audited financial statements included in the Company's Annual
Report on Form 10-K for the year-ended December 31, 2005. ONYX
PHARMACEUTICALS, INC. CALCULATION OF NET EXPENSE FROM
UNCONSOLIDATED JOINT BUSINESS (In thousands) (unaudited) Three
Months Ended Nine Months Ended Sept 30, 2006 Sept 30, 2006 Product
revenue, net $45,405 $101,342 Combined cost of goods sold,
distribution, selling, general and administrative 29,895 73,778
Combined research and development 40,711 120,104 Combined
collaboration loss $(25,201) $(92,540) Onyx's share of
collaboration loss $(12,601) $(46,271) Reimbursement of Onyx's
direct development and marketing expenses 9,005 26,124 Onyx net
expense from unconsolidated joint business $(3,596) $(20,147)
DATASOURCE: Onyx Pharmaceuticals, Inc. CONTACT: Julie Wood, Vice
President, Investor Relations, +1-510-597-6505; or Greg Schafer,
Vice President and Chief Financial Officer, +1-510-597-6684 Web
site: http://www.onyx-pharm.com/
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