Onyx Pharmaceuticals Reports First Quarter 2010 Financial Results; Nexavar Global Net Sales Increase 20% Over First Quarter 2009

EMERYVILLE, Calif., May 4 /PRNewswire-FirstCall/ -- Onyx Pharmaceuticals, Inc. (Nasdaq: ONXX) today reported its financial results for the first quarter 2010. Global Nexavar net sales as reported by Onyx's collaborator Bayer HealthCare Pharmaceuticals, Inc., or Bayer, were $214.4 million for the first quarter 2010, a 20% increase compared to $178.1 million in the same period in 2009. Onyx and Bayer are marketing and developing Nexavar ® (sorafenib) tablets, an anticancer therapy currently approved for the treatment of unresectable liver cancer and advanced kidney cancer in over 90 countries worldwide.

Onyx reported a non-GAAP net loss of $1.5 million, or $0.02 per diluted share, for the first quarter 2010 compared to non-GAAP net income of $8.1 million, or $0.14 per diluted share, for the same period in 2009. Non-GAAP net income excludes employee stock-based compensation expense, non-cash imputed interest expense related to the application of Accounting Standards Codification ("ASC") Subtopic 470-20 and adjustments to contingent consideration liability expense in connection with our acquisition of Proteolix, Inc., or Proteolix. The net loss for the first quarter 2010 reflected an increase in research and development expenses primarily due to the development efforts of carfilzomib and interest expense on the convertible senior notes issued in August 2009. These expenses were partially offset by an increase in cash flow from the Nexavar collaboration. On a GAAP basis, Onyx reported a net loss of $12.0 million, or $0.19 per diluted share, for the first quarter 2010 compared to net income of $4.1 million, or $0.07 per diluted share, in the same period in 2009. A description of the non-GAAP calculations and reconciliation to comparable GAAP measures is provided in the accompanying table entitled "Reconciliation of GAAP to Non-GAAP Net Income (Loss)."

"We are pleased with the progress of our business and are especially proud of the expansion of our pipeline over the last several months. Our recently acquired product candidates and their momentum in the clinic give us multiple ways to build on our success with Nexavar and secure our position as an oncology leader," said N. Anthony Coles, M.D., president and chief executive officer of Onyx. "We have several significant opportunities for near-term value creation with a variety of business and clinical milestones in the months ahead. We are focused on driving the success of Nexavar and advancing the business to take advantage of these opportunities."

Revenue from Collaboration Agreement

For the first quarter 2010, Onyx reported revenue from its Nexavar collaboration agreement of $62.9 million compared to $53.7 million for the same period in 2009. The increase in revenue from collaboration agreement between periods resulted from higher net sales and a growth of Nexavar brand profitability.

Operating Expenses

Onyx recorded research and development expenses of $43.6 million in the first quarter 2010, compared to $28.8 million for the same period in 2009. Higher research and development expenses in the first quarter 2010 were primarily due to planned investments to develop carfilzomib. Selling, general and administrative expenses were $24.7 million in the first quarter 2010, compared to $22.0 million for the same period in 2009. Higher selling, general and administrative expenses were primarily due to headcount-related expenses resulting from the integration of Proteolix and increased legal fees. Onyx recorded $3.4 million of non-cash expense in the first quarter 2010 associated with the increase in the fair value of the liability for contingent consideration related to the acquisition of Proteolix.

Interest Expense

Interest expense of $4.7 million for the first quarter 2010 primarily relates to the 4.0% convertible senior notes due 2016 issued in August 2009, and includes non-cash imputed interest expense of $2.2 million as a result of the application of ASC Subtopic 470-20.

Cash, Cash Equivalents and Marketable Securities

On March 31, 2010, cash, cash equivalents, and current and non-current marketable securities were $585.2 million, compared to $587.3 million at December 31, 2009, excluding $27.6 million of restricted cash at both dates.

Management Conference Call Today

Onyx will host a teleconference and webcast to provide a general business overview and discuss financial results. The event will begin at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on May 4, 2010. The live webcast will be available at: http://www.onyx-pharm.com/view.cfm/32/Event-Calendar or by dialing 847-619-6547 and using the passcode 26940268. A replay of the presentation will be available on the Onyx website or by dialing 630-652-3044 and using the passcode 26940268 approximately one hour after the teleconference concludes. The replay will be available through May 18, 2010.

About Onyx Pharmaceuticals, Inc.

Onyx Pharmaceuticals, Inc. is a biopharmaceutical company committed to improving the lives of people with cancer. The company, in collaboration with Bayer HealthCare Pharmaceuticals, Inc., is developing and marketing Nexavar ® (sorafenib) tablets, a small molecule drug that is currently approved for the treatment of liver cancer and advanced kidney cancer. Additionally, Nexavar is being investigated in several ongoing trials in a variety of tumor types. Beyond Nexavar, Onyx has established a development pipeline of anticancer compounds at various stages of clinical testing, including carfilzomib, a next-generation proteasome inhibitor, that is currently being evaluated in multiple clinical trials for the treatment of patients with relapsed or relapsed/refractory multiple myeloma and solid tumors, and ONX 0801, a targeted alpha-folate inhibitor, currently in Phase 1 testing. For more information about Onyx, visit http://www.onyx-pharm.com.

Nexavar® (sorafenib) tablets is a registered trademark of Bayer HealthCare Pharmaceuticals.

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 sales trends and commercial activities, the timing, progress and results of clinical development, and the creation of opportunities for value creation. 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 being our only approved product; competition; failures or delays in our clinical trials; dependence on our collaborative relationship with Bayer; market acceptance and the rate of adoption of our products; pharmaceutical pricing and reimbursement pressures; serious adverse side effects, if they are associated with Nexavar; government regulation; possible failure to realize the anticipated benefits of business acquisitions or strategic investments; protection of our intellectual property; the indebtedness incurred through the sale of our 4.0% convertible senior notes due 2016; product liability risks; and the anticipated benefits of the acquisition of Proteolix. Reference should be made to Onyx's Annual Report on Form 10-K for the year ended December 31, 2009 filed with the Securities and Exchange Commission, under the heading "Risk Factors" for a more detailed description of these and other risks, as well as the company's subsequent quarterly report on Form 10-Q. 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.

(See attached tables.)

SOURCE Onyx Pharmaceuticals, Inc.