Onyx Pharmaceuticals Inc. (ONXX) reported first quarter 2012 loss per share of 79 cents, wider than the Zacks Consensus loss Estimate of 68 cents and the year-ago loss of 31 cents per share. Despite higher revenues, increased operating expenses led to a wider loss.
Quarterly revenues climbed 7% to $72.0 million, beating the Zacks Consensus Estimate of $70 million. Strong sales of Nexavar (sorafenib) boosted revenues.
Quarterly Details
Onyx Pharma books revenues entirely from royalties received from its collaboration with Bayer (BAYRY) for the development and marketing of Nexavar. The drug is currently marketed worldwide as a treatment for unresectable liver cancer and advanced kidney cancer.
Global Nexavar sales, recorded by Bayer, amounted to $210 million in the reported quarter, up 9%. Impressive sales in the US along with increased demand in the emerging markets, especially Asia Pacific led to the upside.
Onyx Pharma and Bayer are looking to expand the drug’s label to boost sales. Late-stage trials with Nexavar are ongoing for lung and thyroid cancer.
Quarterly research and development (R&D) expenses went up 29.1% to $80.7 million, primarily due to increased investment on the development, manufacturing and launch of Kyprolis (carfilzomib).
Selling, general and administrative (SG&A) expenses climbed 13.0% to $38.9 million, due to an increase in employee headcount and related costs, legal expenses and pre-launch expenses for Kyprolis.
Our Take
We currently have a Neutral recommendation on Onyx Pharma. The stock carries a Zacks #3 Rank (Hold rating) in the short-run. We expect investor focus to remain on the approvability of Kyprolis. The company is seeking to get the candidate approved as a treatment for patients with relapsed and refractory multiple myeloma. The US Food and Drug Administration (:FDA) has granted a standard review designation to Kyprolis’ new drug application (:NDA) and set a target date of July 27, 2012.
We believe that the approval of Kyprolis would be a major positive for Onyx Pharma, which currently has just one marketed product, Nexavar, in its portfolio.
Read the Full Research Report on BAYRYRead the Full Research Report on ONXX
More From Zacks.com
