SOUTH SAN FRANCISCO, Calif., Nov. 2, 2011 /PRNewswire/ -- Onyx Pharmaceuticals, Inc. (NASDAQ: ONXX) today reported its financial results for the third quarter 2011. Onyx reported a non-GAAP net loss of $19.5 million, or $0.31 per diluted share, for the third quarter 2011 compared to a non-GAAP net income of $55.3 million, or $0.84 per diluted share, for the same period in 2010. A description of the non-GAAP calculations is provided below in the accompanying table entitled "Reconciliation of GAAP to Non-GAAP Net Income (Loss)."
"We are continuing our strong momentum in 2011, building two robust oncology platforms – one in kinase inhibition and the other in proteasome inhibition," said N. Anthony Coles, M.D., president and chief executive officer of Onyx. "The submission of our new drug application for carfilzomib demonstrates our commitment to getting this important therapy to patients as quickly as possible. For the kinase inhibitor business, Nexavar delivered another quarter of solid operating performance, primarily driven by sales growth in the Asia Pacific and U.S. regions, and we continue to see even more opportunity with this therapy in the approved indications and, potentially, other tumor types. The recent Bayer settlement also gives us a significant interest in regorafenib, and with a successful pivotal trial in colorectal cancer, we are excited about the prospect of this new therapy for patients."
Recent business highlights include submission of the New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) during September 2011 under the accelerated approval process for carfilzomib, and the restructuring of our partnership with Bayer HealthCare Pharmaceuticals Inc., or Bayer, during October 2011 for the global development and marketing of Nexavar® (sorafenib) tablets. The Company also entered into a new agreement with Bayer related to regorafenib, a late-stage oncology compound.
On a GAAP basis, Onyx reported a net loss of $36.9 million, or $0.58 per diluted share, for the third quarter 2011 compared to a net income of $41.5 million, or $0.66 per diluted share, for the same period in 2010. A description of the non-GAAP calculations and reconciliation to comparable GAAP measures is provided in the accompanying table entitled "Reconciliation of GAAP to Non-GAAP Net Income (Loss)."
Revenue from Collaboration AgreementGlobal Nexavar net sales, which are recorded by Onyx's collaborator, Bayer, were $250.3 million for the third quarter 2011, an increase of $24.1 million, or 11%, compared to $226.2 million for the same period in 2010. Onyx and Bayer are marketing and developing Nexavar® (sorafenib) tablets, an anticancer therapy currently approved for the treatment of unresectable liver cancer and advanced kidney cancer in over 100 countries worldwide.
For the third quarter 2011, Onyx reported total revenue from collaboration agreement of $75.0 million compared to $63.7 million for the same period in 2010.
License RevenueIn the third quarter 2010, Onyx recorded license revenue of $59.2 million, reflecting a fee earned as a part of the consideration under the September 2010 exclusive license agreement with Ono Pharmaceutical Co., Ltd.
Operating ExpensesOnyx recorded research and development expenses of $58.5 million in the third quarter 2011 compared to $44.6 million for the same period in 2010. The increase in research and development expense was primarily due to investments in the development of carfilzomib, particularly the Phase 3 ASPIRE and FOCUS trials as well as increased investment in the manufacturing of carfilzomib.
Selling, general and administrative expenses were $42.6 million in the third quarter 2011, compared to $25.9 million for the same period in 2010. Higher selling, general and administrative expenses between periods were primarily due to planned increases in employee headcount and related costs, legal costs, and selected pre-launch spending for carfilzomib.
Onyx recorded $5.9 million of non-cash contingent consideration expense in the third quarter 2011 associated with changes in the fair value of the liability for contingent consideration recorded for the potential milestone payments under the Proteolix acquisition.
Interest ExpenseInterest expense of $5.1 million for the third quarter 2011 primarily relates to the 4.0% convertible senior notes due 2016 issued in August 2009 and includes non-cash imputed interest expense of $2.6 million as a result of the application of ASC 470-20.
Cash, Cash Equivalents and Marketable SecuritiesOn September 30, 2011, cash, cash equivalents, and current and non-current marketable securities were $529.7 million compared to $577.9 million at December 31, 2010. This excludes restricted cash of $31.9 million at December 31, 2010. Subsequent to September 30, 2011, the Company received $160 million as part of the sale of Nexavar royalties in Japan, to Bayer.
Nine-Month ResultsNexavar net sales, as recorded by Bayer, were $731.5 million and $676.7 million for the nine months ended September 30, 2011 and 2010, respectively. Non-GAAP net loss for the nine months ended September 30, 2011 was $60.9 million, or $0.96 per diluted share, compared to non-GAAP net income of $56.6 million, or $0.90 per diluted share for the same period in 2010. A description of the non-GAAP calculations is provided below in the accompanying table entitled "Reconciliation of GAAP to Non-GAAP Net Income (Loss)." For the nine months ended September 30, 2011, on a GAAP basis Onyx recorded a net loss of $140.6 million, or $2.22 per diluted share, compared with a net loss of $67.7 million, or $1.08 per diluted share, for the same period in 2010.
Management Conference Call TodayOnyx will host a webcast and teleconference with management to discuss third quarter 2011 financial results, as well as provide a general business overview, on Wednesday, November 2, 2011, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Financial results for the third quarter ended September 30, 2011 will be released earlier that day.
Interested parties may access a live webcast of the presentation on the company's website at:
or by dialing 847-585-4422 and using the passcode 9667816#. A replay of the presentation will be available on the Onyx website or by dialing 630-652-3042 and using the passcode 9667816# approximately one hour after the teleconference concludes. The replay will be available through November 16, 2011.
About Onyx Pharmaceuticals, Inc.Based in South San Francisco, California, Onyx Pharmaceuticals, Inc. is a global biopharmaceutical company engaged in the development and commercialization of innovative therapies for improving the lives of people with cancer and other serious diseases. The company is focused on developing novel medicines that target key molecular pathways. For more information about Onyx, visit the company's website at www.onyx-pharm.com.
Nexavar® (sorafenib) tablets is a registered trademark of Bayer HealthCare Pharmaceuticals, Inc.
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 sales trends and commercial activities, the timing, progress and results of clinical development, and the agreements reached by Bayer and Onyx regarding Nexavar and regorafenib. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those anticipated, including, but not limited to, risks and uncertainties related to: Nexavar being our only approved product; we may never receive marketing approval for carfilzomib or regorafenib; competition; failures or delays in our clinical trials or the regulatory process; dependence on our collaborative relationship with Bayer; if approved, we or Bayer, as the case may be, may be unsuccessful in launching, maintaining adequate supply of or obtaining reimbursement for carfilzomib or regorafenib; market acceptance and the rate of adoption of our products; pharmaceutical pricing and reimbursement pressures; serious adverse side effects, if they are associated with Nexavar, regorafenib or carfilzomib; government regulation; possible failure to realize the anticipated benefits of business acquisitions or strategic investments; protection of our intellectual property; the indebtedness incurred through the sale of our 4.0% convertible senior notes due 2016; and product liability risks. Reference should be made to Onyx's Annual Report on Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission, as updated by Onyx's subsequent Quarterly Reports on Form 10-Q, under the heading "Risk Factors" for a more detailed description of these and other risks. 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.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share amounts)(unaudited)Three Months EndedNine Months EndedSeptember 30, September 30, 2011201020112010Revenue: Revenue from collaboration agreement
$ 75,041$63,696$ 210,142$195,372License revenue
75,041122,861210,142254,537Operating expenses:Research and development (1) (2)58,53244,568184,071131,394Selling, general and administrative (1)42,64225,924115,34977,293Contingent consideration
5,9455,62223,195101,107Lease termination exit costs
130-10,857-Total operating expenses
107,24976,114333,472309,794Income (loss) from operations
(5,112)(4,943)(15,155)(14,467)Other income (expense) (3)
25(862)(3,776)(862)Income (loss) before provision (benefit) for income taxes
(36,860)41,570(140,533)(68,388)Provision (benefit) for income taxes
-7032(662)Net (loss) income
$(36,860)$41,500$ (140,565)$ (67,726)Net (loss) income per share:Basic
(1.08)Computation of diluted shares:Basic
63,55562,70763,32862,562Dilutive effect of options
-142--Diluted (4)63,55562,84963,32862,562(1)Includes employee stock-based compensation charges of:Research and development
3,090Selling, general, and administrative
6,6854,79917,56513,502Total employee stock-based compensation
22,373$ 16,592(2) Includes a $12.7 million non-cash expense related to the unamortized balance of funding provided to S*BIO which was recorded in the first quarter of 2011.
(3) Includes a $3.0 million impairment charge which reflects the reassessment of the fair value of Onyx's equity investment in S*BIO during the first quarter of 2011.
(4) Under the "if-converted" method, interest and issuance costs and potential common shares related to the Company's convertible senior notes were excluded in the computation of diluted per share amounts for the three and nine months ended September 30, 2011 and 2010 because their effect would be anti-dilutive.ONYX PHARMACEUTICALS, INC.CALCULATION OF REVENUE FROM COLLABORATION AGREEMENT(In thousands, unaudited)Three Months EndedNine Months EndedSeptember 30, September 30, 2011201020112010Nexavar product revenue, net (as recorded by Bayer)
$ 250,340$ 226,181$ 731,472$ 676,665Nexavar revenue subject to profit sharing (as recorded by Bayer)
$ 208,683$ 191,553$ 608,453$ 580,399Combined cost of goods sold, distribution, selling, general and administrative expenses
77,23478,464240,774237,184Combined collaboration commercial profit
$ 131,449$ 113,089$ 367,679$ 343,215Onyx's share of collaboration commercial profit
$ 65,725$ 56,545$ 183,840$ 171,607Reimbursement of Onyx's shared marketing expenses
2,9162,4248,6116,739Revenue from collaboration agreement
$ 75,041$ 63,696$ 210,142$ 195,372ONYX PHARMACEUTICALS, INC.RECONCILIATION OF GAAP TO NON-GAAP NET INCOME (LOSS)(In thousands, except per share amounts)(unaudited)Three Months EndedNine Months EndedSeptember 30, September 30, 2011201020112010GAAP net (loss) / income$(36,860)$41,500$(140,565)$(67,726)Non-GAAP adjustments:Contingent consideration5,9455,62223,195101,107Employee stock-based compensation8,6735,87422,37316,592Imputed interest related to the convertible senior notes due 20162,6432,2927,5876,671Advance funding to S*BIO--12,666-Impairment of equity investment in S*BIO--3,000-Lease termination exit costs130-10,857-Non-GAAP net (loss) / income (5)$(19,469)$55,288$ (60,887)$ 56,644Computation of non-GAAP diluted net (loss) / incomeNon-GAAP net (loss) / income (5)$(19,469)$55,288$ (60,887)$ 56,644Add:Interest and issuance costs related to dilutive convertible senior notes (6)-2,532--Non-GAAP net (loss) / income - diluted (5)$(19,469)$57,820$ (60,887)$ 56,644Computation of non-GAAP diluted sharesBasic shares63,55562,70763,32862,562Dilutive effect of options-142-186Dilutive effect of convertible senior notes (6)-5,801--Non-GAAP diluted shares (5)63,55568,65063,32862,748Non-GAAP net (loss) / income per share (5)$
.91Non-GAAP net (loss) / income per share - diluted (5) $
.90(5) This press release includes the following non-GAAP financial measures: non-GAAP net loss, non-GAAP net loss – diluted, non-GAAP net loss per share, and non-GAAP net loss per share – diluted. The foregoing table reconciles these non-GAAP measures to the most comparable financial measures calculated in accordance with GAAP.Onyx management uses these non-GAAP financial measures to monitor and evaluate our operating results and trends on an on-going basis and internally for operating, budgeting and financial planning purposes. Onyx management believes the non-GAAP information is useful for investors by offering them the ability to better identify trends in our business and better understand how management evaluates the business. These non-GAAP measures have limitations, however, because they do not include all items of income and expense that affect Onyx. These non-GAAP financial measures that management uses are not prepared in accordance with, and should not be considered in isolation of, or an as alternative to, measurements required by GAAP.These non-GAAP financial measures exclude the following items from GAAP net loss and diluted per share amounts:Contingent consideration expense: The effects of contingent consideration expense are excluded due to the nature of this charge, which is related to the change in fair value of the liability for contingent consideration in connection with the acquisition of Proteolix; such exclusion facilitates comparisons of Onyx's operating results to peer companies.Employee stock-based compensation: The effects of employee stock-based compensation are excluded because of varying available valuation methodologies, subjective assumptions and the variety of award types; such exclusion facilitates comparisons of Onyx's operating results to peer companies.Imputed interest related to the convertible senior notes due 2016: The effects of imputed interest related to the convertible senior notes due 2016 are excluded because this expense is non-cash; such exclusion facilitates comparisons of Onyx's cash operating results to peer companies.Advance funding to S*BIO and impairment of equity investment in S*BIO: The effects of the termination of the S*BIO collaboration agreement are excluded because they do not relate to the normal and recurring transactions of Onyx's business; such exclusion allows for a better representation of the ongoing economics of the business, facilitates comparison to peer companies and is reflective of how Onyx management internally manages the business.Lease termination exit costs: The effects of lease termination exit costs are excluded because they represent non-cash items that relate to Onyx's exit from facilities it previously occupied in Emeryville and in South San Francisco, California.(6) Under the "if-converted" method, interest and issuance costs and potential common shares related to the Company's convertible senior notes were excluded from non-GAAP diluted per share amounts for the three and nine months ended September 30, 2011 and 2010 because their effect would be anti-dilutive.ONYX PHARMACEUTICALS, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands)September 30,December 31,20112010(7)(unaudited)AssetsCash, cash equivalents and current marketable securities
549,313Other current assets
70,16795,871Total current assets
577,054645,184Marketable securities, non-current
22,84128,555Property and equipment, net
19,65010,822Intangible assets - in-process research and development
,352,635Liabilities and stockholders' equityCurrent liabilities
72,860Convertible senior notes due 2016
160,288152,701Liability for contingent consideration, non-current
276,653253,458Deferred tax liability
157,090157,090Other long-term liabilities
24,45818,952Lease termination exit costs, non-current
593,265697,574Total liabilities and stockholders’ equity
,352,635(7) Derived from the audited financial statements included in the Company's Annual Report on Form 10-K for the year-ended December 31, 2010.
|SOURCE Onyx Pharmaceuticals, Inc.|
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