Onyx Pharmaceuticals Inc.’s (ONXX) second quarter 2011 loss of 56 cents per share was 22 cents wider than the Zacks Consensus Estimate and 51 cents wider than the year-ago loss. Lower revenues and higher operating expenses led to the wider loss.
Quarterly Details
Quarterly revenues declined 1.2% to $68.0 million, missing the Zacks Consensus Estimate of $75.0 million.
Revenues comprise collaboration revenues under the company’s agreement with Bayer AG (BAYRY) for the development and marketing of Nexavar (sorafenib).
Global Nexavar sales, recorded by Bayer, amounted to $245.7 million in the second quarter of 2011, reflecting an increase of 4%.
We note that the drug is currently marketed worldwide as a treatment for unresectable liver cancer and advanced kidney cancer.
Onyx Pharma and Bayer are looking to expand Nexavar’s label to boost sales. Late-stage trials with the drug are ongoing for breast, lung and thyroid cancer.
Adjusted research and development (R&D) spend went up 16.2% to $50.3 million, primarily due to higher expenses for the development of carfilzomib.
Selling, general and administrative (SG&A) expenses were 43.6% higher at $38.2 million due to an increase in employee headcount and related costs, legal expenses and pre-launch costs for carfilzomib.
Our Take
We currently have a Neutral recommendation on Onyx Pharma. Going forward, we expect investor focus to remain on the approval status of carfilzomib. Onyx Pharma submitted a rolling New Drug Application (NDA) for gaining accelerated approval of carfilzomib for the treatment of patients with relapsed and refractory multiple myeloma. The company expects to complete the submission by the end of August 2011, with potential approval next year.
We believe that the approval of carfilzomib would be a major positive for Onyx Pharma, which currently has just one marketed product, Nexavar, in its portfolio.
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