Feb 23 2012
Onyx Pharmaceuticals, Inc. (NASDAQ: ONXX) today reported its financial results for the full year and fourth quarter 2011. Onyx reported non-GAAP net income of $42.0 million, or $0.66 per diluted share, for the full year 2011 compared to non-GAAP net income of $39.2 million, or $0.63 per diluted share, for the same period in 2010. Onyx reported a non-GAAP net income of $102.8 million, or $1.50 per diluted share, for the fourth quarter 2011 compared to non-GAAP net loss of $17.4 million, or $0.28 per diluted share, for the same period in 2010.
“2011 was a remarkable year, with Nexavar sales growth driven by continued leadership in liver cancer, expansion of our portfolio with regorafenib, and a New Drug Application filing acceptance for carfilzomib,” said N. Anthony Coles, M.D., president and chief executive officer of Onyx. “We begin 2012 well-positioned to advance multiple therapies that could serve even greater numbers of patients with cancer. By the end of this year, we hope to transform Onyx from a company with one product in two types of cancer to as many as three products in seven types of cancer with either Phase 3 data or regulatory approval. Our cash position and the cash flow from Nexavar sales further enable strategic investment in our proteasome inhibitor franchise as we advance our carfilzomib development program across a variety of treatment landscapes for patients with multiple myeloma.”
On a GAAP basis, Onyx reported a net income of $76.1 million, or $1.19 per diluted share, for the full year 2011 compared to net loss of $84.8 million, or $1.35 per diluted share, in the same period in 2010. On a GAAP basis, Onyx reported a net income of $216.7 million, or $3.16 per diluted share, for the fourth quarter 2011 compared to net loss of $17.1 million, or $0.27 per diluted share, in the same period in 2010. 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).”
Operating Revenue
Global Nexavar net sales which are recorded by Onyx’s collaborator, Bayer, were $1.008 billion and $276.8 million for the full year and fourth quarter 2011, respectively, an increase of 8% in both periods, compared to $934.0 million and $257.4 million in the same periods in 2010. 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 100 countries worldwide.
For the full year and fourth quarter 2011, Onyx reported total operating revenue of $447.2 million and $237.0 million, respectively, compared to $324.5 million and $70.0 million for the same periods in 2010. Total operating revenue is comprised of revenue under the Nexavar collaboration agreement and contract revenue from collaborations. Revenue under the Nexavar collaboration agreement was $287.0 million and $76.8 million for the full year and fourth quarter 2011, respectively, compared to $265.4 million primarily and $70.0 million for the same periods in 2010. Contract revenue from collaboration agreement in the fourth quarter 2011 related to the sale of the Nexavar royalty rights in Japan for $160.0 million.
In the third quarter 2010 Onyx recorded license revenue of $59.2 million, reflecting a fee earned as a part of the consideration under the September 2010 exclusive license agreement with Ono Pharmaceutical Co., Ltd.
Operating Expenses
Onyx recorded research and development expenses of $268.1 million and $84.0 million for the full year and fourth quarter 2011, respectively, compared to $185.7 million and $54.3 million for the same periods in 2010. Higher research and development expenses between periods were primarily due to investments in the development of carfilzomib, particularly the Phase 3 ASPIRE and FOCUS trials as well as increased investment in the manufacturing of carfilzomib.
Selling, general and administrative expenses were $168.0 million and $52.6 million for the full year and fourth quarter 2011, respectively, compared to $114.2 million and $36.9 million for the same periods in 2010. Higher selling, general and administrative expenses between periods were primarily due to planned increases in employee headcount and related costs, higher legal costs, and selected pre-launch spending for carfilzomib.
The liability for contingent consideration in connection with the Amended Agreement and Plan of Merger with Proteolix, Inc. was reduced from $276.7 million at September 30, 2011 to $160.0 million at December 31, 2011. Based on the July 27, 2012 Prescription Drug User Fee Act (PDUFA) date set by the U.S. Food and Drug Administration (FDA) for completion of its review of the Company’s New Drug Application (NDA) for carfilzomib, Onyx believes the milestone payment for accelerated approval in the U.S. that could be owed to former Proteolix, Inc. shareholders is $80.0 million. In addition, based on current development timelines for the European Union (EU), the Company does not believe that the marketing approval for relapsed/refractory multiple myeloma will be obtained in the EU prior to the milestone expiration date outlined in the merger agreement. As a result of these revisions to the potential milestones owed, Onyx recorded a benefit relating to the re-measurement of the contingent consideration liability of $93.5 million and $116.7 million were recorded for full year 2011 and fourth quarter 2011, respectively.
Interest Expense
Interest expense of $20.2 million and $5.1 million for the full year and fourth quarter 2011, respectively, primarily relates to the 4.0% convertible senior notes due 2016 issued in August 2009 and includes non-cash imputed interest expense of $10.2 million and $2.6 million, respectively, as a result of the application of ASC 470-20.
Cash, Cash Equivalents and Marketable Securities
On December 31, 2011, cash, cash equivalents, and current and non-current marketable securities were $668.4 million compared to $577.9 million, excluding restricted cash of $31.9 million, at December 31, 2010. This increase was partly due to receipt of $160.0 million received in October 2011 from the sale of Nexavar royalty rights in Japan, to Bayer.
SOURCE Onyx Pharmaceuticals, Inc.
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