EMERYVILLE, Calif.,
Feb. 23, 2011 /PRNewswire/ -- Onyx
Pharmaceuticals, Inc. (Nasdaq: ONXX) today reported its financial
results for the full year and fourth quarter 2010. Onyx reported
non-GAAP net income of $39.2 million,
or $0.63 per diluted share, for the
full year 2010 compared to non-GAAP net income of $54.4 million, or $0.89 per diluted share, for the same period in
2009. Onyx reported a non-GAAP net loss of $17.4 million, or $0.28 per diluted share, for the fourth quarter
2010 compared to non-GAAP net income of $8.8
million, or $0.14 per diluted
share, for the same period in 2009. Non-GAAP net income excludes,
among other items, adjustments to contingent consideration expense
in connection with our acquisition of Proteolix Inc., or Proteolix;
employee stock-based compensation expense and non-cash imputed
interest expense related to the application of Accounting Standards
Codification ("ASC") 470-20.
On a GAAP basis, Onyx reported a net loss of $84.8 million, or $1.35 per diluted share, for the full year 2010
compared to net income of $16.2
million, or $0.27 per diluted
share, in the same period in 2009. On a GAAP basis, Onyx reported a
net loss of $17.1 million, or
$0.27 per diluted share, for the
fourth quarter 2010 compared to net loss of $5.5 million, or $0.09 per diluted share, in the same period in
2009. 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)."
"Strong Nexavar sales for the fourth quarter and full year 2010
provided accelerated momentum across our business," said
N. Anthony Coles, M.D., president
and chief executive officer of Onyx. "We start 2011 well positioned
to drive our Nexavar and proteasome inhibitor franchises forward.
The NDA for carfilzomib in relapsed and refractory multiple myeloma
is on track for filing as early as mid-year; our Phase 3
confirmatory trials, ASPIRE and FOCUS, are advancing; and ONX 0912,
our next generation proteasome inhibitor, is expected to advance to
Phase 2. Importantly, we are also generating additional Nexavar
data for liver cancer and exploring potential new indications to
support its expanded use in even greater numbers of patients."
Operating Revenue
Global Nexavar net sales which are recorded by Onyx's
collaborator Bayer HealthCare Pharmaceuticals Inc., or Bayer, were
$934.0 million and $257.4 million for the full year and fourth
quarter 2010, respectively, an increase of 11% and 9%,
respectively, compared to $843.5
million and $235.2 million in
the same periods in 2009. 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 full year and fourth quarter 2010, Onyx reported total
operating revenue of $324.5 million
and $70.0 million, respectively,
compared to $251.4 million and
$68.3 million for the same periods in
2009. Total operating revenue is comprised of revenue under the
Nexavar collaboration agreement and revenue under the exclusive
license agreement entered into with Ono Pharmaceutical Co., Ltd.,
or Ono. Revenue under the Nexavar collaboration agreement was
$265.4 million and $70.0 million for the full year and fourth
quarter 2010, respectively, compared to $250.4 million and $67.3
million for the same periods in 2009.
Operating Expenses
Onyx recorded research and development expenses of $185.7 million and $54.3 million for the full year and fourth
quarter 2010, respectively, compared to $128.5 million and $36.0
million for the same periods in 2009. Higher research and
development expenses between periods were primarily due to
investments in the development of carfilzomib.
Selling, general and administrative expenses were $114.2 million and $36.9 million for the full year and fourth
quarter 2010, respectively, compared to $101.1 million and $32.2
million for the same periods in 2009. Higher selling,
general and administrative expenses between periods were primarily
due to planned increases in spending as a result of the acquisition
of Proteolix and an increase in employee-related costs.
Onyx recorded $92.9 million of
non-cash contingent consideration expense for the full year 2010
and $8.2 million of non-cash benefit
for the fourth quarter 2010 associated with changes in the fair
value of the liability for contingent consideration recorded for
the potential milestone payments under the Proteolix acquisition.
The increase in the fair value for the full year 2010 resulted from
changes in the assessed probability of technical and regulatory
success (PTRS) and the passage of time, partially offset by a
benefit recorded as a result of an amendment (the "Amendment") to
the Proteolix Plan of Merger and Acquisition (the "Merger
Agreement") executed in January 2011.
The change in the PTRS was due to positive preliminary results from
the 003-A1 trial, a Phase 2b study of carfilzomib, and the 006
trial, a Phase 1b study of carfilzomib plus lenalidomide and
low-dose dexamethasone, both in patients with multiple myeloma. The
Amendment primarily modifies provisions in the Merger Agreement
related to one of the milestone events.
Interest Expense
Interest expense of $19.4 million and $4.9 million for the full year and fourth quarter
2010, respectively, primarily relates to the 4.0% convertible
senior notes due 2016 issued in August 2009 and includes
non-cash imputed interest expense of $9.0
million and $2.4 million,
respectively, as a result of the application of ASC 470-20.
Cash, Cash Equivalents and Marketable Securities
Cash, cash equivalents, and current and non-current marketable
securities of $577.9 million at
December 31, 2010 were comparable to
$587.3 million at
December 31, 2009. This excludes restricted cash of
$31.9 million and $27.6 million at December
31, 2010 and December 31,
2009, respectively.
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, 2011. Interested
parties may access a live webcast of the presentation on the
company's website at:
http://www.onyx-pharm.com/view.cfm/32/Event-Calendar
or by dialing 847-413-3362 and using the passcode 29045749#.
A replay of the presentation will be available on the Onyx
website or by dialing 630-652-3042 and using the passcode 29045749#
approximately one hour after the teleconference concludes. The
replay will be available through March 9,
2011.
About Onyx Pharmaceuticals, Inc.
Onyx Pharmaceuticals, Inc. is a biopharmaceutical company
committed to improving the lives of people with cancer. The
company, in collaboration with Bayer HealthCare Pharmaceuticals,
Inc., is developing and marketing Nexavar® (sorafenib) tablets, a
small molecule drug that is currently approved for the treatment of
liver cancer and advanced kidney cancer. Additionally,
Nexavar is being investigated in several ongoing trials in a
variety of tumor types. Beyond Nexavar, Onyx has established
a development pipeline of anticancer compounds at various stages of
clinical testing, including carfilzomib, a next generation
proteasome inhibitor, that is currently being evaluated in multiple
clinical trials for the treatment of patients with relapsed or
relapsed/refractory multiple myeloma and solid tumors. ONX
0801, an alpha-folate receptor targeted inhibitor of the
thymidylate synthase, and ONX 0912, an oral proteasome inhibitor,
are currently in Phase 1 testing. 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, the potential
expansion of Onyx's product portfolio and our 2011 guidance. 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; competition; failures
or delays in our clinical trials; dependence on our collaborative
relationship with Bayer; if approved, we may be unsuccessful in
launching, maintaining adequate supply of or obtaining
reimbursement for carfilzomib; 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 or carfilzomib; government regulation; possible
failure to realize the anticipated benefits of business
acquisitions or strategic investments, including Proteolix, Inc.;
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, 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.
ONYX
PHARMACEUTICALS, INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In
thousands, except per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Revenue from collaboration
agreement
|
|
$ 69,978
|
|
$67,317
|
|
$265,350
|
|
$250,390
|
|
License revenue
|
|
-
|
|
-
|
|
59,165
|
|
-
|
|
Contract revenue from
collaborations
|
|
-
|
|
1,000
|
|
-
|
|
1,000
|
|
Total operating
revenue
|
|
69,978
|
|
68,317
|
|
324,515
|
|
251,390
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development (1)
|
|
54,346
|
|
36,028
|
|
185,740
|
|
128,506
|
|
Selling, general and
administrative (1)
|
|
36,875
|
|
32,232
|
|
114,167
|
|
101,132
|
|
Contingent
consideration
|
|
(8,177)
|
|
1,528
|
|
92,930
|
|
1,528
|
|
Total operating
expenses
|
|
83,044
|
|
69,788
|
|
392,837
|
|
231,166
|
|
Income (loss) from
operations
|
|
(13,066)
|
|
(1,471)
|
|
(68,322)
|
|
20,224
|
|
Investment income
|
|
632
|
|
920
|
|
2,829
|
|
4,028
|
|
Interest expense
|
|
(4,933)
|
|
(4,603)
|
|
(19,400)
|
|
(6,858)
|
|
Other income
(expense)
|
|
89
|
|
-
|
|
(773)
|
|
-
|
|
Income (loss) before provision
(benefit) for income taxes
|
|
(17,278)
|
|
(5,154)
|
|
(85,666)
|
|
17,394
|
|
Provision (benefit) for income
taxes
|
|
(157)
|
|
355
|
|
(819)
|
|
1,233
|
|
Net income (loss)
|
|
$(17,121)
|
|
$ (5,509)
|
|
$ (84,847)
|
|
$ 16,161
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$ (0.27)
|
|
$ (0.09)
|
|
$
(1.35)
|
|
$
0.27
|
|
Diluted
(2)
|
|
$ (0.27)
|
|
$ (0.09)
|
|
$
(1.35)
|
|
$
0.27
|
|
|
|
|
|
|
|
|
|
|
|
Computation of diluted
shares:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
62,779
|
|
62,189
|
|
62,618
|
|
59,215
|
|
Dilutive effect of
options
|
|
-
|
|
-
|
|
-
|
|
292
|
|
Diluted
(2)
|
|
62,779
|
|
62,189
|
|
62,618
|
|
59,507
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Includes employee stock-based
compensation charges of:
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
$ 1,161
|
|
$ 1,288
|
|
$ 4,252
|
|
$ 3,574
|
|
Selling, general, and
administrative
|
|
4,364
|
|
4,858
|
|
17,865
|
|
17,506
|
|
Total employee stock-based
compensation
|
|
$ 5,525
|
|
$ 6,146
|
|
$ 22,117
|
|
$ 21,080
|
|
|
|
|
|
|
|
|
|
|
(2) 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 months ended December 31, 2010 and 2009 and the years ended
December 31, 2010 and 2009 because
their effect would be anti-dilutive.
ONYX
PHARMACEUTICALS, INC.
|
|
CALCULATION
OF REVENUE FROM COLLABORATION AGREEMENT
|
|
(In
thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Nexavar product revenue, net (as
recorded by Bayer)
|
|
$ 257,374
|
|
$ 235,175
|
|
$ 934,038
|
|
$ 843,470
|
|
|
|
|
|
|
|
|
|
|
|
Nexavar revenue subject to
profit sharing (as recorded by Bayer)
|
|
$ 214,577
|
|
$ 205,247
|
|
$ 794,977
|
|
$ 753,340
|
|
Combined cost of goods sold,
distribution, selling, general and administrative
expenses
|
|
92,805
|
|
89,674
|
|
329,989
|
|
312,205
|
|
Combined collaboration
commercial profit
|
|
$ 121,772
|
|
$ 115,573
|
|
$ 464,988
|
|
$ 441,135
|
|
|
|
|
|
|
|
|
|
|
|
Onyx's share of collaboration
commercial profit
|
|
$ 60,886
|
|
$ 57,787
|
|
$ 232,494
|
|
$ 220,567
|
|
Reimbursement of Onyx's shared
marketing expenses
|
|
6,096
|
|
7,435
|
|
23,122
|
|
23,514
|
|
Royalty revenue
|
|
2,996
|
|
2,095
|
|
9,734
|
|
6,309
|
|
Revenue from collaboration
agreement
|
|
$ 69,978
|
|
$ 67,317
|
|
$ 265,350
|
|
$ 250,390
|
|
|
|
|
|
|
|
|
|
|
ONYX
PHARMACEUTICALS, INC.
|
|
RECONCILIATION OF GAAP TO
NON-GAAP NET INCOME (LOSS)
|
|
(In
thousands, except per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$(17,121)
|
|
$(5,509)
|
|
$(84,847)
|
|
$16,161
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
Contingent
consideration
|
(8,177)
|
|
1,528
|
|
92,930
|
|
1,528
|
|
Employee stock-based
compensation
|
5,525
|
|
6,146
|
|
22,117
|
|
21,080
|
|
Imputed interest related
to the convertible senior notes due 2016
|
2,361
|
|
2,111
|
|
9,032
|
|
3,137
|
|
Acquisition related
transaction costs
|
-
|
|
4,480
|
|
-
|
|
5,491
|
|
Milestone
payments
|
-
|
|
-
|
|
-
|
|
7,000
|
|
Non-GAAP net income
(loss) (3)
|
$(17,412)
|
|
$ 8,756
|
|
$ 39,232
|
|
$54,397
|
|
|
|
|
|
|
|
|
|
|
Computation of non-GAAP diluted
net income (loss)
|
|
|
|
|
|
|
|
|
Non-GAAP net income
(loss) (3)
|
$(17,412)
|
|
$ 8,756
|
|
$ 39,232
|
|
$54,397
|
|
Add:
|
|
|
|
|
|
|
|
|
Interest and issuance
costs related to dilutive convertible senior notes
(4)
|
-
|
|
-
|
|
-
|
|
3,683
|
|
Non-GAAP net income (loss)
- diluted (3)
|
$(17,412)
|
|
$ 8,756
|
|
$ 39,232
|
|
$58,080
|
|
|
|
|
|
|
|
|
|
|
Computation of non-GAAP diluted
shares
|
|
|
|
|
|
|
|
|
Basic shares
|
62,779
|
|
62,189
|
|
62,618
|
|
59,215
|
|
Dilutive effect of options
and restricted stock
|
-
|
|
-
|
|
-
|
|
292
|
|
Dilutive effect of
convertible senior notes (4)
|
-
|
|
-
|
|
-
|
|
5,801
|
|
Non-GAAP diluted
shares (3)
|
62,779
|
|
62,189
|
|
62,618
|
|
65,308
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income (loss) per
share (3)
|
$ (0.28)
|
|
$ 0.14
|
|
$
0.63
|
|
$ 0.92
|
|
Non-GAAP net income (loss) per
share - diluted (3)
|
$ (0.28)
|
|
$ 0.14
|
|
$
0.63
|
|
$ 0.89
|
|
|
|
|
|
|
|
|
|
(3) This press release includes the following non-GAAP
financial measures: non-GAAP net income (loss), non-GAAP net income
(loss) – diluted, non-GAAP net income (loss) per share, and
non-GAAP net income (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 income (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.
|
|
|
|
|
|
Milestone payments and
acquisition related transaction costs: The
effects of milestone payments and acquisition related transaction
costs are excluded because they do not relate to the normal and
recurring transactions of Onyx's business; such exclusions allow
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.
|
|
|
|
(4) 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 months ended December 31, 2010 and 2009 and the year ended
December 31, 2010 because their
effect would be anti-dilutive.
ONYX
PHARMACEUTICALS, INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(In
thousands)
|
|
|
|
|
|
|
|
December
31,
2010
(unaudited)
|
|
December
31,
2009
(5)
|
|
Assets
|
|
|
|
|
Cash, cash equivalents and
current marketable securities
|
$
549,313
|
|
$
550,108
|
|
Other current assets
|
95,871
|
|
88,615
|
|
Total current assets
|
645,184
|
|
638,723
|
|
Marketable securities,
non-current
|
28,555
|
|
37,174
|
|
Property and equipment,
net
|
10,822
|
|
7,473
|
|
Intangible assets - in-process
research and development
|
438,800
|
|
438,800
|
|
Goodwill
|
193,675
|
|
193,675
|
|
Other assets
|
35,599
|
|
8,835
|
|
Total assets
|
$
1,352,635
|
|
$
1,324,680
|
|
|
|
|
|
|
Liabilities and stockholders'
equity
|
|
|
|
|
Current liabilities
|
$
72,860
|
|
$
107,778
|
|
Convertible senior notes due
2016
|
152,701
|
|
143,669
|
|
Liability for contingent
consideration, non-current
|
253,458
|
|
160,528
|
|
Deferred tax
liability
|
157,090
|
|
157,090
|
|
Other long-term
liabilities
|
18,952
|
|
5,059
|
|
Stockholders' equity
|
697,574
|
|
750,556
|
|
Total liabilities and
stockholders’ equity
|
$
1,352,635
|
|
$
1,324,680
|
|
|
|
|
|
(5) Derived from the audited financial statements
included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2009.
SOURCE Onyx Pharmaceuticals, Inc.