Nexavar Revenue of $23.7 Million Recorded by Bayer EMERYVILLE,
Calif., May 4 /PRNewswire-FirstCall/ -- Onyx Pharmaceuticals, Inc.
(NASDAQ:ONXX) today reported its financial results for the first
quarter ended March 31, 2006. The company reported a net loss of
$20.4 million, or $0.49 per share, compared to a net loss of $16.1
million, or $0.46 per share, in the same period last year. The net
loss for the quarter ended March 31, 2006, includes a stock-based
compensation expense of $3.6 million, or $0.09 per share, due to
the adoption of Statement of Financial Accounting Standards No. 123
(R), "Share-Based Payment," or FAS 123 (R). 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. "Although
it's early, we are very pleased with Nexavar's solid first quarter
sales performance, as well as its availability to a significant
number of patients," said Hollings C. Renton, Onyx's chairman,
president and chief executive officer. "In addition, Bayer and Onyx
continue to jointly invest the resources needed to expand Nexavar's
use in other territories around the world and in extensive clinical
testing of Nexavar in a number of other tumor types." New Statement
of Operations Presentation - Net Expense from Unconsolidated Joint
Business The presentation of the Onyx Statement of Operations has
changed due to the approval and commencement of sales of Nexavar.
Onyx will now report the net expense (or revenue) of 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. Under the terms of the collaboration, the companies
share all research and development, marketing, and non-U.S. sales
expenses. Onyx and Bayer each bear their own U.S. sales and medical
science liaisons expense. 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 unconsolidated
joint business is shown in the table following the summary
financial information. Revenue In accordance with its collaboration
agreement with Bayer, Bayer recognizes all revenue from the sale of
Nexavar. As such, for the quarter ended March 31, 2006, Onyx
reported no revenue. For the first quarter 2006, Bayer recorded
$23.7 million in net sales of Nexavar, primarily in the United
States. Onyx recognized $1.0 million of license revenue for the
quarter ended March 31, 2005. The 2005 revenue represented a
nonrefundable payment received from Shanghai Sunway Biotech Co.,
Ltd. for exclusive rights to certain Onyx patents from the now
discontinued therapeutic virus program. Operating Expenses In the
first quarter of 2006, research and development expenses, including
a stock-based compensation expense of $0.7 million, was $7.8
million, a decrease of $5.7 million over the first quarter of 2005.
This decrease is 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 prior
periods, 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 continue 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 first quarter of 2006, selling, general and
administrative expenses were $11.6 million, an increase of $6.8
million over the first quarter of 2005. This increase is due to a
$2.9 million stock-based compensation expense recorded in the first
quarter of 2006, as well as the establishment of Onyx's U.S.
Nexavar sales force and Onyx marketing expenses relating to the
Nexavar launch. In addition, with the change in accounting
presentation, a significant amount of Nexavar-related marketing
expenses is included in the net expense from unconsolidated joint
business line item. In prior periods, Onyx's share of
Nexavar-related marketing expenses 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 March 31, 2006, the company had cash, cash
equivalents, short and long-term marketable securities of $258.3
million compared to $284.7 million at December 31, 2005. The $26.4
million decrease primarily reflects the funds used in operations
during the first quarter of 2006 which was 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. Conference Call with Management Today Onyx's management
will host a teleconference and web cast to discuss first 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 May 4, 2006. Interested parties may access a live web cast of
the presentation at: http://audioevent.mshow.com/295362 or by
dialing 706-758-9355 and using the pass code 7413173. A replay of
the presentation will be available on the Onyx website or by
dialing 706-645-9291 and using the pass code 7413173 approximately
one hour after the teleconference concludes. The replay will be
available through June 4, 2006. About Onyx Pharmaceuticals, Inc.
Onyx Pharmaceuticals, Inc. is engaged in the development of novel
cancer therapies that target the molecular basis of cancer. With
its collaborators, the company is developing small molecule drugs,
including Nexavar with Bayer Pharmaceuticals Corporation. 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, 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. 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. ONYX PHARMACEUTICALS, INC.
SUMMARY FINANCIAL INFORMATION CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts) (unaudited) Three Months
Ended March 31 2006 2005 Total revenue $-- $1,000 Operating
expenses: Net expense from unconsolidated joint business 4,102 --
Research and development (1) 7,800 13,532 Selling, general and
administrative (1) 11,623 4,800 Total operating expenses 23,525
18,332 Loss from operations (23,525) (17,332) Interest income, net
3,173 1,232 Net loss $(20,352) $(16,100) Basic and diluted net loss
per share $(0.49) $(0.46) Shares used in computing basic and
diluted net loss per share 41,292 35,274 CONDENSED BALANCE SHEETS
(In thousands) Mar. 31, Dec. 31, 2006 2005 (unaudited) (2) Assets
Cash, cash equivalents and marketable securities $258,308 $274,818
Other current assets 8,689 8,285 Total current assets 266,997
283,103 Property and equipment, net 1,441 1,617 Other assets 83
9,945 Total assets $268,521 $294,665 Liabilities and stockholders'
equity Current liabilities 20,930 41,425 Advance from collaboration
partner 40,000 30,000 Stockholders' equity 207,591 223,240 Total
liabilities and stockholders' equity $268,521 $294,665 (1) Includes
employee stock-based compensation expense of $0.7 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
March 31, 2006. (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 March 31, 2006 Product
revenue, net (as recorded by Bayer) $23,747 Combined cost of goods
sold, distribution, selling, general and administrative 17,708
Combined research and development 30,031 Combined collaboration
loss $(23,992) Onyx's share of collaboration loss $(11,996)
Reimbursement of Onyx's direct development and marketing expenses
7,894 Onyx net expense from unconsolidated joint business $(4,102)
DATASOURCE: Onyx Pharmaceuticals, Inc. CONTACT: Julie Wood, Vice
President, Investor Relations, +1-510-597-6505, or Greg W. Schafer,
Acting Chief Financial Officer, +1-510-597-6684, both of Onyx
Pharmaceuticals, Inc. Web site: http://www.onyx-pharm.com/
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