NEW YORK (AP) -- Onyx Pharmaceuticals Inc. shares rose Thursday after a Bernstein Research analyst started covering the stock with an "Outperform" rating, saying he thinks the company's blood cancer drug candidate will reach $1 billion in annual sales by 2016.
THE SPARK: Analyst Geoffrey Porges said he thinks that the drug, Kyprolis, will win broad marketing approval from regulators in 2014. He said sales could reach $2 billion annually by 2020.
THE BIG PICTURE: The South San Francisco, Calif., company's annual revenue in 2011 was $477.2 million, so that would be a big increase. Onyx sells a liver and kidney cancer drug, Nexavar, through a partnership with German drugmaker Bayer AG.
Kyprolis, or carfilzomib, is an experimental treatment for multiple myeloma, a type of cancer that affects plasma cells in bone marrow. In November, Onyx asked the Food and Drug Administration to approve the drug for multiple myeloma patients who have gone through several other treatments. The FDA is scheduled to make a decision on that application in July. Onyx is conducting additional trials to win further approvals of the drug.
Onyx and Bayer are also studying an experimental colon cancer drug called regorafenib.
THE ANALYSIS: Porges began covering the stock with a price target of $74 per share.
SHARE ACTION: Onyx shares rose $2.45, or 5.6 percent, to close at $46.41 Thursday. The stock has traded between $35.73 and $47.80 in 2012.