First Full Year of Profitability with GAAP Earnings Per Share of
$0.03 EMERYVILLE, Calif., Feb. 23 /PRNewswire-FirstCall/ -- Onyx
Pharmaceuticals, Inc. (NASDAQ:ONXX) today reported its financial
results for the full year and fourth quarter 2008. For the full
year, Onyx recorded net income of $1.9 million, or $0.03 per
diluted share, compared with a net loss of $34.2 million, or $0.67
per diluted share, for the same period in 2007. Excluding employee
stock-based compensation expense, non-GAAP net income for the full
year 2008 was $20.7 million, or $0.37 per diluted share, compared
to a non-GAAP net loss of $20.0 million, or $0.39 per diluted
share, for the same period in 2007. Onyx reported a net loss of
$30.2 million, or $0.53 per diluted share, for the fourth quarter
2008, compared to a net loss of $11.7 million, or $0.21 per diluted
share, in the same period in 2007. Excluding employee stock-based
compensation expense, non-GAAP net loss for the fourth quarter 2008
was $25.2 million, or $0.45 per diluted share, compared to a
non-GAAP net loss of $7.8 million, or $0.14 per diluted share, for
the same period in 2007. A description of the non-GAAP calculations
and reconciliation to comparable GAAP measures are provided below
in the accompanying Reconciliation of GAAP to Non-GAAP Net Income.
Global Nexavar net sales grew 82% to $677.8 million for the full
year 2008, and grew 41% to $176.5 million for the fourth quarter
2008, compared to $371.7 million and $124.9 million in the same
periods in 2007. Onyx, with its collaborator, Bayer HealthCare
Pharmaceuticals, Inc., or 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. In
accordance with Onyx's collaboration agreement with Bayer, Bayer
recognizes all revenue from the sale of Nexavar. "This has been a
year of remarkable growth and advancement for Onyx, as we increased
year-over-year sales by 82% and achieved profitability for the
year. We've leveraged our successes to invest strategically in the
long-term growth potential of the company, creating a rich pipeline
with Nexavar and beginning to shape a diversified portfolio beyond
Nexavar through strategic but disciplined corporate development
activities," stated N. Anthony Coles, M.D., president and chief
executive officer of Onyx. "With continued sales growth from
Nexavar, a comprehensive development program with near-term value
drivers, and a strong financial position, we believe we are
well-positioned to drive growing shareholder value in 2009 and the
years to come." Revenue from Collaboration Agreement As of December
31, 2008 and for earlier periods presented, Onyx has adopted a new
financial statement presentation based on guidance from the
Financial Accounting Standards Board's Emerging Issues Task Force
(EITF) 07-1, Accounting for Collaborative Arrangements. This new
presentation changes the classification of amounts included in
specific lines in the Statement of Operations, but does not change
net income (loss) or net income (loss) per share. Under this new
presentation, the Statement of Operations includes the line item
"Revenue from Collaboration Agreement." This line item consists of
Onyx's share of the commercial profit generated from the
collaboration with Bayer, reimbursement of Onyx's shared marketing
costs related to Nexavar and Nexavar royalty revenue. Onyx's 50%
share of collaboration research and development expenses is
included in the research and development expense line item. For the
full year and fourth quarter 2008, Onyx reported revenue from
collaboration agreement of $194.3 million and $49.7 million,
respectively, compared to $90.4 million and $26.1 million for the
same periods in 2007. The increase in revenue from collaboration
agreement between periods is due to an increase in Nexavar revenue
recognized by Bayer and higher royalty revenue, partially offset by
an increase in commercial expenses related to Nexavar. Operating
Expenses Onyx recorded research and development expenses of $123.7
million in the full year 2008 and $59.9 million in the fourth
quarter 2008, compared to $83.3 million and $27.2 million for the
same periods in 2007. Research and development expenses in fourth
quarter 2008 include payments made by Onyx to S*BIO Pte Ltd under a
development collaboration, option and license agreement and to BTG
International Limited under a development and license agreement.
Research and development expenses included $3.2 million and $1.1
million of employee stock-based compensation for the full year and
fourth quarter 2008, respectively. Selling, general and
administrative expenses were $81.0 million in the full year 2008
and $22.0 million in the fourth quarter 2008, compared to $60.5
million and $16.4 million for the same periods in 2007. Higher
selling, general and administrative expenses were primarily due to
increased marketing spend and employee-related expenses to support
Nexavar, as well as, increased headcount and employee-related
expenses to support Onyx's growth. Selling, general and
administrative expenses included $15.6 million and $3.9 million of
employee stock-based compensation for the full year and fourth
quarter 2008, respectively. Cash, Cash Equivalents and Marketable
Securities At December 31, 2008, cash, cash equivalents, and
current and noncurrent marketable securities were $458.0 million,
compared to $469.7 million at December 31, 2007. This decrease was
primarily due to payments made under our agreements with S*BIO and
BTG, partially offset by positive cash flow from operations.
Management Conference Call Today Onyx will host a teleconference
and webcast to provide a general business overview and discuss
financial results. The event will begin at 5:00 p.m. Eastern Time
(2:00 p.m. Pacific Time) on February 23, 2009. The live webcast
will be available at:
http://www.onyx-pharm.com/wt/page/event_calendar or by dialing
847-413-3238 and using the passcode 23828951. A replay of the
presentation will be available on the Onyx website or by dialing
630-652-3044 and using the passcode 23828951 later in the day. The
replay will be available through March 23, 2009. 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
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 10Q. 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 Twelve Months Ended December 31, December 31,
------------------ ------------------ 2008 2007 2008 2007 --------
------- -------- ------- Revenue from collaboration agreement
$49,650 $26,101 $194,343 $90,429 Operating expenses: Research and
development (1) 59,905 27,226 123,749 83,306 Selling, general and
administrative (1) 22,008 16,406 80,994 60,546 -------- -------
-------- ------- Total operating expenses 81,913 43,632 204,743
143,852 -------- ------- -------- ------- Loss from operations
(32,263) (17,531) (10,400) (53,423) Investment income 1,999 5,829
12,695 19,256 -------- ------- -------- ------- Income (loss)
before income taxes (30,264) (11,702) 2,295 (34,167) Provision
(benefit) for income taxes (77) - 347 - -------- ------- --------
------- Net income (loss) $(30,187) $(11,702) $1,948 $(34,167)
======== ======= ======== ======= Net income (loss) per share:
Basic $(0.53) $(0.21) $0.03 $(0.67) ======== ======= ========
======= Diluted $(0.53) $(0.21) $0.03 $(0.67) ======== =======
======== ======= Shares used in computing net income (loss) per
share: Basic 56,430 55,212 55,915 51,177 ======== ======= ========
======= Diluted 56,430 55,212 56,765 51,177 ======== =======
======== ======= (1) Includes employee stock- based compensation
charges of: Research and development $1,083 $851 $3,166 $2,897
Selling, general and administrative 3,904 3,010 15,630 11,230
-------- ------- -------- ------- Total employee stock-based
compensation $4,987 $3,861 $18,796 $14,127 ======== =======
======== ======= ONYX PHARMACEUTICALS, INC. CALCULATION OF REVENUE
FROM COLLABORATION AGREEMENT (In thousands, unaudited) Three Months
Ended Twelve Months Ended December 31, December 31,
------------------ ------------------ 2008 2007 2008 2007 --------
------- -------- ------- Nexavar product revenue, net (as recorded
by Bayer) $176,503 $124,919 $677,806 $371,736 ======== =======
======== ======= Revenue subject to profit sharing (as recorded by
Bayer) $160,874 $124,919 $637,459 $371,736 Combined cost of goods
sold, distribution, selling, general and administrative expenses
76,593 81,998 298,792 223,682 -------- ------- -------- -------
Combined commercial collaboration profit $84,281 $42,921 $338,667
$148,054 ======== ======= ======== ======= Onyx's share of
commercial collaboration profit $42,141 $21,460 $169,334 $74,027
Reimbursement of Onyx's shared marketing expenses 6,415 4,641
22,185 16,402 Royalty revenue 1,094 - 2,824 - -------- -------
-------- ------- Revenue from collaboration agreement $49,650
$26,101 $194,343 $90,429 ======== ======= ======== ======= ONYX
PHARMACEUTICALS, INC. CONDENSED BALANCE SHEETS (In thousands) Dec.
31, Dec. 31, 2008 2007 (unaudited) (2) --------- --------- Assets
Cash, cash equivalents and marketable securities $418,424 $469,650
Other current assets 43,635 11,006 --------- --------- Total
current assets 462,059 480,656 Property and equipment, net 3,363
3,146 Marketable securities, non-current 39,622 - Other assets
4,723 281 --------- --------- Total assets $509,767 $484,083
========= ========= Liabilities and stockholders' equity Current
liabilities 33,304 11,441 Advance from collaboration partner,
non-current - 39,234 Other long-term liabilities 1,263 1,171
Stockholders' equity 475,200 432,237 --------- --------- Total
liabilities and stockholders' equity $509,767 $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 Twelve Months
Ended December 31, December 31, ------------------
------------------ 2008 2007 2008 2007 -------- ------- --------
------- GAAP net income (loss) $(30,187) $(11,702) $1,948 $(34,167)
Non-GAAP adjustments: Employee stock-based compensation under FAS
123R (4) 4,987 3,861 18,796 14,127 -------- ------- --------
------- Non-GAAP net income (loss) (3) $(25,200) $(7,841) $20,744
$(20,040) ======== ======= ======== ======== GAAP diluted net
income (loss) per share $(0.53) $(0.21) $0.03 $(0.67) Non-GAAP
adjustments: Employee stock-based compensation under FAS 123R (4)
0.08 0.07 0.34 0.28 -------- ------- -------- ------- Non-GAAP
diluted net income (loss) per share (3) $(0.45) $(0.14) $0.37
$(0.39) ======== ======= ======== ======== Diluted shares 56,430
55,212 56,765 51,177 (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. 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 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. These non-GAAP financial measures that our 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. (4) Employee stock-based compensation under FAS
123R: 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. DATASOURCE: Onyx Pharmaceuticals, Inc. CONTACT:
Julie Wood, Vice President, Investor Relations, +1-510-597-6505, or
Matthew K. Fust, Executive Vice President & Chief Financial
Officer, +1-510-597-6392, both of Onyx Pharmaceuticals, Inc. Web
Site: http://www.onyx-pharm.com/
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