Nexavar Net Sales increase 107% over Second Quarter 2007
EMERYVILLE, Calif., Aug. 5 /PRNewswire-FirstCall/ -- Onyx
Pharmaceuticals, Inc. (NASDAQ:ONXX) today reported its financial
results for the three and six months ended June 30, 2008. Onyx
reported net income of $4.5 million, or $0.08 per diluted share,
for the second quarter of 2008 compared to a net loss of $10.8
million, or $0.22 per diluted share, in the same period in 2007.
Excluding employee stock-based compensation expense, non-GAAP net
income for the second quarter of 2008 was $8.7 million, or $0.15
per diluted share, compared to a non-GAAP net loss of $7.2 million,
or $0.15 per diluted share, in the same period in 2007. A
description of the non-GAAP calculations is provided below in the
accompanying Reconciliation of GAAP to Non-GAAP Net Income. Global
Nexavar net sales as reported by Bayer HealthCare Pharmaceuticals,
Inc., or Bayer, were $168.5 million for the quarter ended June 30,
2008, a 107% increase over the $81.3 million reported in the same
period in 2007. Onyx with its collaborator, Bayer, is marketing and
developing Nexavar(R) (sorafenib) tablets, an anticancer therapy
currently approved for the treatment of liver cancer and advanced
kidney cancer in the U.S., European Union, and other territories
internationally. "We are pleased with the strong revenues and
continued momentum for Nexavar globally with net sales reaching
$168.5 million in the second quarter, indicating expanding global
demand for the brand. Based on a series of rolling launches
worldwide, we expect to see additional growth opportunities for
Nexavar, particularly for the treatment of liver cancer," said Tony
Coles, M.D., president and chief executive officer of Onyx. "With
the recent approval in China, Nexavar now has the opportunity to
help patients in a country where liver cancer claims hundreds of
thousands of lives annually. Additionally, last month we were
pleased to have the results of the pivotal Phase 3 liver cancer
study for Nexavar published in The New England Journal of Medicine,
reaching an unprecedented number of new physicians around the
world." Dr. Coles added, "Simultaneous with our sales achievements
this quarter, we continue to make focused investments aimed at
maximizing both the near-term and long-term value of this important
oncology agent. This includes investing in expanded commercial
capabilities to support the liver cancer indication, as well as,
continuing to support a robust development program to identify new
opportunities for the use of Nexavar and to drive our growth
strategy for the brand." Net Revenue from Unconsolidated Joint
Business For the quarter ended June 30, 2008, Onyx reported net
revenue from unconsolidated joint business of $30.2 million
compared to $7.5 million for the same period in 2007. The increase
in net revenue from unconsolidated joint business over prior year
is due to increases in Nexavar revenue recognized by Bayer and
royalty revenue offset by the increase in combined commercial and
research and development expenses for Nexavar. The calculation of
this line item is shown in the table following the Condensed
Statement of Operations. Operating Expenses In the second quarter
of 2008, Onyx recorded research and development expenses of $8.6
million, an increase of $2.2 million over the second quarter of
2007. The increase in expenses incurred in the second quarter of
2008 was primarily due to higher costs incurred for the breast
cancer program. Research and development expenses included $0.8
million of employee stock-based compensation for the second quarter
of 2008 compared to $0.7 million for the second quarter of 2007. In
the second quarter of 2008, selling, general and administrative
expenses were $19.8 million, an increase of $4.1 million over the
second quarter of 2007. The increase in selling, general and
administrative expenses was primarily due to increased marketing
and employee-related expenses to support Nexavar. Selling, general
and administrative expenses included $3.4 million of employee
stock-based compensation in the second quarter of 2008 compared to
$2.9 million for the second quarter of 2007. Cash, Cash Equivalents
and Marketable Securities As of June 30, 2008, the company had
cash, cash equivalents, and current and non-current marketable
securities of $471.2 million compared to $469.7 million at December
31, 2007. This increase was primarily due to cash provided by
operations in the first half of 2008. Six-Month Results For the six
months ended June 30, 2008, Onyx recorded net income of $19.9
million, or $0.35 per diluted share, compared with a net loss of
$23.0 million, or $0.49 per diluted share, for the same period in
2007. Nexavar net sales, as recorded by Bayer, were $320.4 million
and $142.2 million for the six months ended June 30, 2008 and 2007,
respectively. Excluding employee stock-based compensation expense,
non-GAAP net income for the six months ended June 30, 2008 was
$29.4 million, or $0.52 per diluted share, compared to a non-GAAP
net loss of $16.4 million, or $0.35 per diluted share for the same
period in 2007. A description of the non-GAAP calculations is
provided below in the accompanying Reconciliation of GAAP to
Non-GAAP Net Income. Conference Call with Management Today Onyx's
management will host a teleconference and web cast to provide a
general business overview and discuss second quarter 2008 financial
results. The event will begin at 5:00 p.m. Eastern Time (2:00 p.m.
Pacific Time) on August 5, 2008. Interested parties may access a
live web cast of the presentation on our website at:
http://www.onyx-pharm.com/wt/page/event_calendar or by dialing
847-413-3235 and using the passcode 22274059. A replay of the
presentation will be available on the Onyx website or by dialing
630-652-3044 and using the passcode 22274059 approximately one hour
after the teleconference concludes. The replay will be available
through September 4, 2008. About Onyx Pharmaceuticals, Inc. Onyx
Pharmaceuticals, Inc. is a biopharmaceutical company committed to
improving the lives of people with cancer by changing the way
cancer is treated(TM). The company, in collaboration with Bayer
HealthCare Pharmaceuticals, Inc., is developing and marketing
Nexavar(R) (sorafenib) tablets, a small molecule drug. Nexavar is
currently approved for the treatment of liver cancer and advanced
kidney cancer. Additionally, Nexavar is being investigated in
several ongoing trials in non-small cell lung cancer, melanoma,
breast cancer and other cancers. For more information about Onyx,
visit the company's website at: http://www.onyx-pharm.com/.
Nexavar(R) (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 and the timing, progress and results of
clinical development, regulatory filings and actions. 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, 2007, 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. CONDENSED STATEMENTS
OF OPERATIONS (In thousands, except per share amounts) (unaudited)
Three Months Ended Six Months Ended -------------------
---------------- Jun. 30, Jun. 30, -------- -------- 2008 2007 2008
2007 ---- ---- ---- ---- Net revenue from unconsolidated joint
business $30,199 $7,470 $67,937 $10,495 Operating expenses:
Research and development (1) 8,625 6,448 16,062 11,982 Selling,
general and administrative (1) 19,822 15,712 39,667 28,895 ------
------ ------ ------ Total operating expenses 28,447 22,160 55,729
40,877 ------ ------ ------ ------ Income (loss) from operations
1,752 (14,690) 12,208 (30,382) Investment income 2,662 3,864 7,933
7,361 ------ ------ ------ ------ Income (loss) before income taxes
4,414 (10,826) 20,141 (23,021) Provision (benefit) for income taxes
(60) - 249 - ------ ------ ------ ------ Net income (loss) $4,474
$(10,826) $19,892 $(23,021) ------ ------ ------ ------ Net income
(loss) per share: Basic $0.08 $(0.22) $0.36 $(0.49) ------ -------
------ ------- Diluted $0.08 $(0.22) $0.35 $(0.49) ------ -------
------ ------- Shares used in computing net income (loss) per
share: Basic 55,675 48,242 55,531 47,265 ------ ------ ------
------ Diluted 56,472 48,242 56,534 47,265 ------ ------ ------
------ (1) Includes employee stock-based compensation charges of:
Research and development $809 $734 $1,389 $1,261 Selling, general,
and administrative 3,444 2,900 8,080 5,365 ------ ------ ------
------ $4,253 $3,634 $9,469 $6,626 ------ ------ ------ ------ ONYX
PHARMACEUTICALS, INC. CALCULATION OF NET REVENUE FROM
UNCONSOLIDATED JOINT BUSINESS (In thousands, unaudited) Three
Months Ended Six Months Ended ------------------ ----------------
Jun. 30, Jun. 30, -------- -------- 2008 2007 2008 2007 ---- ----
---- ---- Nexavar product revenue, net (as recorded by Bayer)
$168,520 $81,332 $320,416 $142,212 Revenue subject to profit
sharing (as recorded by Bayer) 156,547 81,332 308,443 142,212
Combined cost of goods sold, distributed, selling, general and
administrative expenses 80,135 49,285 142,838 85,734 Combined
research and development expenses 43,946 34,856 81,424 68,146
------- ------- ------- ------- Combined collaboration profit
(loss) $32,466 $(2,809) $84,181 $(11,668) ------- -------- -------
--------- Onyx's share of collaboration profit (loss) $16,233
$(1,405) $42,091 $(5,834) Reimbursement of Onyx's direct
development and marketing expenses 13,128 8,875 25,008 16,329
Royalty revenue 838 - 838 - ------ ------ ------ ------ Onyx net
revenue from unconsolidated joint business $30,199 $7,470 $67,937
$10,495 ------- ------ ------- ------- ONYX PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS (In thousands) Jun. 30, Dec. 31, 2008 2007
(unaudited) (2) ----------- -------- Assets Cash, cash equivalents
and marketable securities $427,385 $469,650 Other current assets
39,712 11,006 -------- -------- Total current assets 467,097
480,656 Property and equipment, net 2,529 3,146 Marketable
securities, non-current 43,830 - Other assets 274 281 --------
------- Total assets $513,730 $484,083 -------- ------- Liabilities
and stockholders' equity Current liabilities 19,599 11,441 Advance
from collaboration partner 24,861 39,234 Other long term
liabilities 1,218 1,171 Stockholders' equity 468,052 432,237 Total
liabilities and stockholders' equity $513,730 $484,083 --------
-------- (2) Derived from the audited financial statements included
in the Company's Annual Report on Form 10-K for the year-ended
December 31, 2007. ONYX PHARMACEUTICALS, INC. RECONCILIATION OF
GAAP TO NON-GAAP NET INCOME (In thousands, except per share
amounts) (unaudited) Three Months Ended Six Months Ended
------------------ ---------------- Jun. 30, Jun. 30, --------
-------- 2008 2007 2008 2007 ---- ---- ---- ---- GAAP net income
(loss) $4,474 $(10,826) $19,892 $(23,021) Non-GAAP adjustments:
Employee stock-based compensation under FAS 123R $4,253 $3,634
$9,469 $6,626 ------ ------- ------- -------- Non-GAAP net income
(loss) (3) $8,727 $(7,192) $29,361 $(16,395) ------ --------
------- --------- GAAP diluted net income (loss) per share $0.08
$(0.22) $0.35 $(0.49) Non-GAAP adjustments: Employee stock-based
compensation under FAS 123R $0.07 $0.07 $0.17 $0.14 ------ ------
------ ------ Non-GAAP diluted net income (loss) per share (3)
$0.15 $(0.15) $0.52 $(0.35) ------ ------ ------ ------- Diluted
shares 56,472 48,242 56,534 47,265 (3) This press release includes
the following non-GAAP financial measures: non-GAAP net income
(loss) and non-GAAP diluted net income (loss) per share, both of
which exclude the impact of employee stock-based compensation
expense. The foregoing table reconciles these non-GAAP measures to
the most comparable financial measures calculated in accordance
with GAAP. Our 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. Our management excludes the effects of
employee stock-based compensation because of varying available
valuation methodologies, subjective assumptions and the variety of
award types; such exclusion facilitates comparisons of our
operating results to our peer companies. Our 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 our business. These non-GAAP
measures have limitations, however, because they do not include all
items of income and expense that affect Onyx. The non-GAAP
financial measures we use are not prepared in accordance with, and
should not be considered in isolation of, or as an alternative to,
measurements required by GAAP. DATASOURCE: Onyx Pharmaceuticals,
Inc. CONTACT: Julie Wood, Vice President, Investor Relations,
+1-510-597-6505, or Greg W. Schafer, Chief Financial Officer,
+1-510-597-6684, both of Onyx Pharmaceuticals, Inc. Web site:
http://www.onyx-pharm.com/
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