Onyx Pharmaceuticals, Inc. (NASDAQ: ONXX) today reported its
financial results for the second quarter 2013 and provided a
business update on Kyprolis® (carfilzomib) for Injection, Nexavar®
(sorafenib) tablets and Stivarga® (regorafenib) tablets.
"Accelerating revenue from each of our products, coupled with
strategic investment to unlock the value of Kyprolis, provides a
compelling platform for the current and future growth of Onyx,"
said Tony Coles, M.D., chairman and chief executive officer of
Onyx. "With our Phase 3 program for Kyprolis across all lines of
multiple myeloma therapy, we are committed to expanding the label
globally, and we have a clear strategy to enable a filing in Europe
in the second half of 2014, pending positive results from both
ASPIRE and FOCUS. Important commercial, clinical, and regulatory
momentum across the business continues to drive Onyx's value
creation as we become an emerging global oncology leader."
For the second quarter of 2013, Onyx reported total revenue of
$153.0 million and a non-GAAP net loss of $29.0 million, or $0.40
per diluted share. On a GAAP basis, Onyx reported a net loss of
$53.2 million, or $0.73 per diluted share, for the second quarter
2013. A description of the non-GAAP calculations and reconciliation
to comparable GAAP financial measures is provided in the
accompanying table entitled "Reconciliation of GAAP to Non-GAAP
Financial Measures."
Revenue Total revenue of $153.0 million
for the second quarter of 2013 represented a 110% increase from
total revenue of $72.7 million for the comparable period in
2012.
- Revenue from the Nexavar collaboration agreement with Bayer for
the second quarter of 2013 was $81.8 million as compared to $72.7
million for the comparable period in 2012. The increase in revenue
from collaboration was primarily due to sales growth in the United
States and Asia Pacific regions as well as lower expenses.
- Kyprolis net sales for the second quarter of 2013 were $61.0
million, representing orders shipped to and received by customers
such as physician offices and hospitals. In addition, Onyx recorded
deferred revenue of $10.0 million as of June 30, 2013, representing
Kyprolis inventory at distributors which had not yet shipped to
physician offices and hospitals.
- Stivarga royalty revenue was $10.2 million for the second
quarter of 2013. Onyx receives a 20% royalty on global net sales of
Stivarga in jurisdictions that have received commercial marketing
approval. Stivarga is a Bayer compound developed by Bayer and
jointly promoted by Bayer and Onyx in the United States.
Operating Expenses Non-GAAP cost of goods
sold was $1.8 million for the second quarter of 2013. Cost of goods
sold related to sales of Kyprolis is not representative of Onyx's
future expectations of cost of goods sold because certain product
costs associated with Kyprolis sales in the second quarter of 2013
were charged to research and development expense in periods prior
to approval on July 20, 2012. On a GAAP basis, cost of goods sold
was $2.0 million for the second quarter of 2013.
Non-GAAP research and development expense was $99.4 million for
the second quarter of 2013, compared to $73.6 million for the same
period in 2012. Higher research and development expense between
periods was primarily due to the global development of Kyprolis,
particularly the ongoing Phase 3 ENDEAVOR trial, and start-up
activities associated with the front-line CLARION study, as well as
oprozomib development expense, which were partially offset by lower
Kyprolis Phase 3 FOCUS and ASPIRE trial expense. On a GAAP basis,
research and development expense was $102.8 million for the second
quarter of 2013, compared to $76.4 million for the same period in
2012.
Non-GAAP selling, general and administrative expense was $78.4
million for the second quarter of 2013, compared to $40.7 million
for the same period in 2012. Higher selling, general and
administrative expense between periods was primarily related to the
increased headcount following the hiring of the field sales force
associated with the commercial launch of Kyprolis in the United
States and adding select capabilities internationally. On a GAAP
basis, selling, general and administrative expense was $87.5
million for the second quarter of 2013, compared to $48.9 million
for the same period in 2012.
Onyx recorded amortization expense of $5.2 million for the
second quarter of 2013, which reflected the amortization of its
finite-lived intangible asset, which was acquired in the 2009
acquisition of Proteolix, Inc.
Cash, Cash Equivalents and Marketable
Securities On June 30, 2013, cash, cash equivalents and
current and non-current marketable securities were $755.9 million,
compared to $492.8 million at December 31, 2012. The increase was
primarily due to net proceeds of approximately $352 million
received from a public offering of 4.4 million shares of common
stock, completed in January 2013, offset primarily by net operating
expenses.
Six-Month Results Total revenue was $298.5
million and $144.7 million for the six months ended June 30, 2013
and 2012, respectively. Revenue from the Nexavar collaboration
agreement with Bayer was $152.1 million and $144.7 million for the
six months ended June 30, 2013 and 2012, respectively. Kyprolis net
sales were $125.0 million for the six months ended June 30, 2013.
Stivarga royalty revenue was $19.3 million for the six months ended
June 30, 2013. Non-GAAP net loss for the six months ended June 30,
2013 was $42.8 million or $0.59 per diluted share, compared to
$87.1 million, or $1.36 per diluted share for the same period in
2012. For the six months ended June 30, 2013, on a GAAP basis Onyx
recorded a net loss of $86.8 million, or $1.20 per diluted share,
compared with a net loss of $162.3 million, or $2.54 per diluted
share, for the same period in 2012.
Non-GAAP Financial Measures This press
release and the reconciliation table included herein 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, non-GAAP net income (loss) per share - diluted, non-GAAP
cost of goods sold, non-GAAP research and development expense,
non-GAAP selling, general and administrative expense and non-GAAP
operating expenses. A description of the non-GAAP calculations and
reconciliation to the comparable GAAP financial measures is
provided in the accompanying table entitled "Reconciliation of GAAP
to Non-GAAP Financial Measures."
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 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 are not prepared in accordance with, and should not be
considered in isolation of, or as an alternative to, measurements
required by GAAP.
Management Conference Call Today Onyx will
host a webcast and conference call with management to discuss
second quarter 2013 financial results, as well as provide a general
business overview, today at 5:00 p.m. Eastern Time (2:00 p.m.
Pacific Time).
To access a live audio webcast of the conference call, log onto
the Company's website at:
http://www.onyx.com/investors/event-calendar
To access the live conference call, dial 847-585-4405 and use
the passcode 35393849#. A replay of the call will be available on
the Onyx website, or by dialing 630-652-3042 and using the passcode
35393849# beginning approximately one hour after the teleconference
concludes through August 22, 2013.
About Onyx Pharmaceuticals, Inc. Based in
South San Francisco, California, Onyx Pharmaceuticals, Inc. is a
global biopharmaceutical company engaged in the development and
commercialization of innovative therapies for improving the lives
of people with cancer. The Company is focused on developing novel
medicines that target key molecular pathways. For more information
about Onyx, visit the Company's website at www.onyx.com. Onyx
Pharmaceuticals is on Twitter. Sign up to follow our Twitter feed
@OnyxPharm at http://twitter.com/OnyxPharm.
Forward-Looking Statements 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
commercial, clinical and regulatory prospects, financial results
and prospects, including accelerating revenue, future potential and
prospects of our Proteasome inhibitor franchise, Stivarga royalty
revenues, future cost of goods sold relating to sales of Kyprolis
and our prospects for current and future growth. 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® (sorafenib) tablets, Kyprolis® (carfilzomib) for Injection
and Stivarga® (regorafenib) tablets being the only approved
products from which we may obtain revenue; competition; failures or
delays in our clinical trials or the regulatory process; dependence
on our collaborative relationship with Bayer; supply of Nexavar,
Stivarga or Kyprolis; market acceptance and the rate of adoption of
Nexavar, Stivarga and Kyprolis; pharmaceutical pricing and
reimbursement pressures; serious adverse side effects, if they are
associated with Nexavar, Stivarga or Kyprolis; government
regulation; possible failure to realize the anticipated benefits of
business acquisitions or strategic investments; protection of our
intellectual property; and product liability risks. Reference
should be made to Onyx's Quarterly Report on Form 10-Q for the
quarter ended March 31, 2013, filed with the Securities and
Exchange Commission (the "Commission"), as updated by Onyx's
subsequent filings with the Commission, in particular our Quarterly
Report on Form 10-Q for the quarter ended June 30, 2013, which we
expect to file on or before August 9, 2013, 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 Six Months Ended
June 30, June 30,
---------------------- ----------------------
2013 2012 2013 2012
---------- ---------- ---------- ----------
Revenue:
Revenue from collaboration
agreement $ 81,828 $ 72,704 $ 152,135 $ 144,736
Product revenue 61,037 - 125,045 -
Royalty revenue 10,161 - 19,338 -
Contract revenue from
collaborations - - 2,000 -
---------- ---------- ---------- ----------
Total revenue 153,026 72,704 298,518 144,736
---------- ---------- ---------- ----------
Operating expenses:
Cost of goods sold (excludes
amortization of intangible
assets) (1) 2,043 - 4,011 -
Research and development (1) 102,761 76,356 194,063 157,017
Selling, general and
administrative (1) 87,512 48,907 160,057 87,851
Contingent consideration
expense 3,022 53,214 5,952 56,392
Intangible asset
amortization 5,221 - 10,441 -
---------- ---------- ---------- ----------
Total operating expenses 200,559 178,477 374,524 301,260
---------- ---------- ---------- ----------
Income (loss) from
operations (47,533) (105,773) (76,006) (156,524)
Investment income 558 619 1,160 1,377
Interest expense (2) (5,712) (5,374) (11,338) (10,670)
Other income (expense) (464) 4,464 (620) 3,559
---------- ---------- ---------- ----------
Income (loss) before
provision (benefit) for
income taxes (53,151) (106,064) (86,804) (162,258)
Provision (benefit) for
income taxes 17 (15) 35 3
---------- ---------- ---------- ----------
Net income (loss) $ (53,168) $ (106,049) $ (86,839) $ (162,261)
========== ========== ========== ==========
Basic and diluted net income
(loss) per share (3) $ (0.73) $ (1.65) $ (1.20) $ (2.54)
========== ========== ========== ==========
Shares used in computing
basic and diluted net
income (loss) per share (3) 72,951 64,209 72,113 63,953
========== ========== ========== ==========
(1) Includes employee stock-based compensation charges of:
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2013 2012 2013 2012
----------- ----------- ----------- -----------
Cost of goods sold $ 236 $ - $ 310 $ -
Research and development 3,337 2,715 5,880 4,648
Selling, general and
administrative 9,120 8,180 15,173 13,044
----------- ----------- ----------- -----------
Total employee stock-based
compensation $ 12,693 $ 10,895 $ 21,363 $ 17,692
=========== =========== =========== ===========
(2) Includes $3.2 million and $6.3 million imputed interest
expense recorded for the three months and six months ended June 30,
2013, respectively, and $2.8 million and $5.6 million for the same
periods in the prior year, related to the convertible senior notes
due 2016.
(3) 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 and six months ended June 30, 2013 and 2012
because their effect would be anti-dilutive.
ONYX PHARMACEUTICALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2013 2012 2013 2012
---------- ---------- ---------- ----------
(i) Net income
Net income (loss) - GAAP $ (53,168) $ (106,049) $ (86,839) $ (162,261)
Non-GAAP adjustments:
Contingent consideration
expense (a) 3,022 53,214 5,952 56,392
Employee stock-based
compensation (b) 12,693 10,895 21,363 17,692
Imputed interest related
to the convertible senior
notes due 2016 (c) 3,197 2,832 6,300 5,581
Proceeds received pursuant
to the sale of JAK2
inhibitors by S*BIO (d) - (4,462) - (4,462)
Intangible asset
amortization (e) 5,221 - 10,441 -
---------- ---------- ---------- ----------
Net income (loss) - Non-GAAP $ (29,035) $ (43,570) $ (42,783) $ (87,058)
========== ========== ========== ==========
(ii) Cost of goods sold
Cost of goods sold - GAAP $ 2,043 $ - $ 4,011 $ -
Non-GAAP adjustments:
Employee stock-based
compensation (b) (236) - (310) -
---------- ---------- ---------- ----------
Cost of goods sold - Non-
GAAP $ 1,807 $ - $ 3,701 $ -
========== ========== ========== ==========
(iii) Research and
development expenses
Research and development
expenses - GAAP $ 102,761 $ 76,356 $ 194,063 $ 157,017
Non-GAAP adjustments:
Employee stock-based
compensation(b) (3,337) (2,715) (5,880) (4,648)
---------- ---------- ---------- ----------
Research and development
expenses - Non-GAAP $ 99,424 $ 73,641 $ 188,183 $ 152,369
========== ========== ========== ==========
(iv) Selling, general and
administrative expenses
Selling, general and
administrative expenses -
GAAP $ 87,512 $ 48,907 $ 160,057 $ 87,851
Non-GAAP adjustments:
Employee stock-based
compensation (b) (9,120) (8,180) (15,173) (13,044)
---------- ---------- ---------- ----------
Selling, general &
administrative expenses
- Non-GAAP $ 78,392 $ 40,727 $ 144,884 $ 74,807
========== ========== ========== ==========
(v) Earnings per share
Net income (loss) - Non-
GAAP $ (29,035) $ (43,570) $ (42,783) $ (87,058)
Add:
Interest and issuance
costs related to
dilutive convertible
senior notes (f) - - - -
---------- ---------- ---------- ----------
Net income (loss) -
diluted - Non-GAAP $ (29,035) $ (43,570) $ (42,783) $ (87,058)
========== ========== ========== ==========
Computation of non-GAAP
diluted shares
Basic shares - GAAP 72,951 64,209 72,113 63,953
Dilutive effect of options - - - -
Dilutive effect of
convertible senior notes
(f) - - - -
---------- ---------- ---------- ----------
Diluted shares - Non-GAAP 72,951 64,209 72,113 63,953
========== ========== ========== ==========
Basic and diluted net
income (loss) per share -
Non-GAAP $ (0.40) $ (0.68) $ (0.59) $ (1.36)
========== ========== ========== ==========
ONYX PHARMACEUTICALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2013 2012 2013 2012
--------- --------- --------- ---------
(vi) Operating expenses
Operating expenses - GAAP $ 200,559 $ 178,477 $ 374,524 $ 301,260
Less: non-GAAP adjustments:
Contingent consideration
expense (a) 3,022 53,214 5,952 56,392
Employee stock-based
compensation (b) 12,693 10,895 21,363 17,692
Intangible asset
amortization (e) 5,221 - 10,441 -
--------- --------- --------- ---------
Operating expenses - Non-GAAP $ 179,623 $ 114,368 $ 336,768 $ 227,176
========= ========= ========= =========
These non-GAAP financial measures exclude the following
items:
(a) 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.
(b) 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.
(c) 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.
(d) Proceeds received pursuant to the sale of
JAK2 inhibitors by S*BIO: The effects of the termination of
the S*BIO collaboration agreement are excluded because they do not
relate to the normal and recurring transactions of Onyx's business;
such exclusion facilitates comparisons of Onyx's operating results
to peer companies.
(e) Intangible asset amortization: The
effects of amortization of intangible assets are excluded because
this expense is non-cash; such exclusion facilitates comparisons of
Onyx's operating results to peer companies.
(f) 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 and six months ended June 30, 2013 and 2012
because their effect would be anti-dilutive.
ONYX PHARMACEUTICALS, INC.
CALCULATION OF REVENUE FROM COLLABORATION AGREEMENT
(In thousands, unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2013 2012 2013 2012
----------- ----------- ----------- -----------
Nexavar revenue subject to
profit sharing (as recorded
by Bayer) $ 229,708 $ 214,459 $ 428,233 $ 424,159
Combined cost of goods sold,
distribution, selling,
general and administrative
expenses 75,456 82,632 141,596 158,949
----------- ----------- ----------- -----------
Combined collaboration
commercial profit $ 154,252 $ 131,827 $ 286,637 $ 265,210
=========== =========== =========== ===========
Onyx's share of
collaboration commercial
profit $ 77,126 $ 65,913 $ 143,318 $ 132,605
Reimbursement of Onyx's
shared marketing expenses 4,702 6,791 8,817 12,131
----------- ----------- ----------- -----------
Revenue from collaboration
agreement $ 81,828 $ 72,704 $ 152,135 $ 144,736
=========== =========== =========== ===========
ONYX PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30,
December
2013 31,
(unaudited
) 2012 (1)
----------- -----------
Assets
Cash, cash equivalents and current marketable
securities $ 750,456 $ 484,436
Accounts receivable, net 131,311 79,117
Other current assets 139,958 124,403
----------- -----------
Total current assets 1,021,725 687,956
Marketable securities, non-current 5,451 8,323
Property and equipment, net 32,331 25,933
Finite-lived intangible assets, net 247,528 257,969
Intangible assets - in-process research and
development 171,500 171,500
Goodwill 193,675 193,675
Other assets 7,032 6,215
----------- -----------
Total assets $ 1,679,242 $ 1,351,571
=========== ===========
Liabilities and stockholders' equity
Current liabilities $ 122,351 $ 131,369
Convertible senior notes due 2016 180,700 174,404
Liability for contingent consideration, non-current 155,115 149,163
Deferred tax liability 51,940 51,940
Other long-term liabilities 25,537 24,576
Stockholders' equity 1,143,599 820,119
----------- -----------
Total liabilities and stockholders' equity $ 1,679,242 $ 1,351,571
=========== ===========
(1) Derived from the audited financial statements, included in
the Company's Annual Report on Form 10-K for the year ended
December 31, 2012.
Kyprolis® is the brand name for carfilzomib Nexavar® (sorafenib)
tablets is a registered trademark of Bayer HealthCare
Pharmaceuticals, Inc. Stivarga® (regorafenib) is a Bayer compound
being developed by Bayer. Onyx receives a 20% royalty on global net
sales in approved markets. Bayer and Onyx are jointly promoting
Stivarga in the U.S.
Contacts: Investors Amy Figueroa, CFA Senior
Director, Investor Relations (650) 266-2398 Media Lori
Melancon Senior Director, Corporate Communications (650)
266-2394
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