ONXX Onyx Pharmaceuticals, Inc. (MM)

Bayer Yakuhin Ltd., the Japanese subsidiary of Bayer AG (BAYRY), submitted a marketing authorization application for regorafenib to the Ministry of Health, Labour and Welfare (MHLW) in Japan.

Bayer is looking to get regorafenib approved for treating patients suffering from metastatic and/or unresectable gastrointestinal stromal tumors (GIST). The company had earlier submitted a marketing application for the candidate in Japan for the treatment of colorectal cancer (CRC) and received priority review in August this year.

Bayer is seeking approval for regorafenib on the basis of encouraging data from a phase III study (GRID), which evaluated patients suffering from metastatic and/or unresectable GIST. The company conducted the phase III study across the globe including eight sites in Japan.

Bayer is looking for the US approval of regorafenib for the GIST indication. A decision from the US Food and Drug Administration (FDA) should be out in February 2013.

We remind investors that in October this year, the FDA approved regorafenib, under the trade name of Stivarga, for treating patients suffering from metastatic colorectal cancer (mCRC). The company is also looking for EU approval of the drug in this indication.

We note Bayer will have to make royalty payments on global sales of Stivarga to Onyx Pharmaceuticals, Inc. (ONXX), per an agreement inked last year.

Our Recommendation

We remind investors that the oncology market is intensely competitive with the presence of companies like Roche Holding (RHHBY), Pfizer (PFE) and Novartis (NVS).

We have a Neutral recommendation on Bayer. The stock carries a Zacks #3 Rank (Hold). However, other pharma companies like Sanofi (SNY) carry a Zacks #2 Rank (Buy).

 
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