EX-99.1 2 f55682exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
     (ONYX PHARMACEUTICALS LOGO)
Contact:
Julie Wood
Vice President, Investor Relations
510-597-6505
Onyx Pharmaceuticals Reports First Quarter 2010 Financial Results;
Nexavar Global Net Sales Increase 20% Over First Quarter 2009
EMERYVILLE, CA — May 4, 2010 — 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.

 

 

ONYX PHARMACEUTICALS REPORTS FIRST QUARTER 2010 FINANCIAL RESULTS
MAY 4, 2010
PAGE 2
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.)

 

 

ONYX PHARMACEUTICALS REPORTS FIRST QUARTER 2010 FINANCIAL RESULTS
MAY 4, 2010
PAGE 3
ONYX PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
                 
    Three Months Ended  
    March 31,  
    2010     2009  
Revenue:
                
Revenue from collaboration agreement
   $ 62,903     $  53,717  
 
            
Total revenue
     62,903       53,717  
Operating expenses:
                
Research and development (1)
     43,575       28,820  
Selling, general and administrative (1)
     24,721       21,953  
Contingent consideration
     3,448       —  
 
            
Total operating expenses
     71,744       50,773  
 
            
Income (loss) from operations
     (8,841 )     2,944  
Investment income
     789       1,121  
Interest expense
     (4,724 )     —  
 
            
Income (loss) before provision (benefit) for income taxes
     (12,776 )     4,065  
Provision (benefit) for income taxes
     (732 )     —  
 
            
Net income (loss)
   $ (12,044 )   $ 4,065  
 
            
             
Net income (loss) per share:
                
Basic
   $ (0.19 )   $ 0.07  
 
            
Diluted (2)
   $ (0.19 )   $ 0.07  
 
            
             
Shares used in computing net income (loss) per share:
                
Basic
     62,353       56,715  
 
            
Diluted (2)
     62,353       57,197  
 
            
             
(1) Includes employee stock-based compensation charges of:
                
Research and development
   $ 912     $ 652  
Selling, general, and administrative
     4,030       3,351  
 
            
Total employee stock-based compensation
   $ 4,942     $ 4,003  
 
            
             
(2) Computation of net income (loss) used in computing diluted per share amounts:
                
Net income (loss)
   $ (12,044 )   $ 4,065  
Add: interest and issuance costs related to dilutive convertible senior notes (3)
     —       —  
 
            
             
Net income (loss) used in computing diluted per share amounts
   $ (12,044 )   $ 4,065  
 
            
             
Basic shares
     62,353       56,715  
Dilutive effect of options
     —       482  
Dilutive effect of convertible senior notes (3)
     —       —  
 
            
Diluted shares
     62,353       57,197  
 
            
 
(3)   Under the “if-converted” method, interest and issuance costs and potential common shares related to the Company’s convertible senior notes were excluded in the computation of diluted per share amounts for the three months ended March 31, 2010 because their effect would be anti-dilutive.

 

 

ONYX PHARMACEUTICALS REPORTS FIRST QUARTER 2010 FINANCIAL RESULTS
MAY 4, 2010
PAGE 4
ONYX PHARMACEUTICALS, INC.
CALCULATION OF REVENUE FROM COLLABORATION AGREEMENT
(In thousands, unaudited)
                 
    Three Months Ended  
    March 31,  
    2010     2009  
Nexavar product revenue, net (as recorded by Bayer)
   $ 214,361     $ 178,069  
 
            
 
                
Revenue subject to profit sharing (as recorded by Bayer)
   $ 185,867     $ 166,974  
Combined cost of goods sold, distribution, selling, general and administrative expenses
     75,698       71,879  
 
            
Combined collaboration commercial profit
   $ 110,169     $ 95,095  
 
            
 
                
Onyx’s share of collaboration commercial profit
   $ 55,084     $ 47,547  
Reimbursement of Onyx’s shared marketing expenses
     5,824       5,393  
Royalty revenue
     1,995       777  
 
            
Revenue from collaboration agreement
   $ 62,903     $ 53,717  
 
            

 

 

ONYX PHARMACEUTICALS REPORTS FIRST QUARTER 2010 FINANCIAL RESULTS
MAY 4, 2010
PAGE 5
ONYX PHARMACEUTICALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME (LOSS)
(In thousands, except per share amounts)
(unaudited)
                 
    Three Months Ended  
    March 31,  
    2010     2009  
GAAP net income (loss) per share — basic
   $ (0.19 )   $ 0.07  
GAAP net income (loss) per share — diluted (4)
   $ (0.19 )   $ 0.07  
 
                
GAAP net income (loss)
   $ (12,044 )   $ 4,065  
Non-GAAP adjustments:
                
Employee stock-based compensation
     4,942       4,003  
Imputed interest related to the convertible senior notes due 2016
     2,157       —  
Contingent consideration
     3,448       —  
 
            
Non-GAAP net income (loss) (5)
   $ (1,497 )   $ 8,068  
 
            
 
                
Computation of non-GAAP diluted shares
                
Basic shares
     62,353       56,715  
Adjustments for dilutive effects:
                
Dilutive effect of options
     —       482  
Dilutive effect of convertible senior notes (6)
     —       —  
 
            
Non-GAAP diluted shares (5)
     62,353       57,197  
 
            
 
                
Non-GAAP net income (loss) per share (5)
   $ (0.02 )   $ 0.14  
Non-GAAP net income (loss) per share — diluted (5)
   $ (0.02 )   $ 0.14  
 
(4)   Under the “if-converted” method, interest and issuance costs and potential common shares related to the Company’s convertible senior notes were excluded in the computation of diluted per share amounts for the three months ended March 31, 2010 because their effect would be anti-dilutive.
 
(5)   This press release includes the following non-GAAP financial measures: non-GAAP net income (loss), non-GAAP diluted shares and non-GAAP net income (loss) per share. The foregoing table reconciles these non-GAAP measures to the most comparable financial measures calculated in accordance with GAAP.
 
    Onyx management uses these non-GAAP financial measures to monitor and evaluate our operating results and trends on an on-going basis and internally for operating, budgeting and financial planning purposes. Onyx management believes the non-GAAP information is useful for investors by offering them the ability to better identify trends in our business and better understand how management evaluates the business. These non-GAAP measures have limitations, however, because they do not include all items of income and expense that affect Onyx. These non-GAAP financial measures that management uses are not prepared in accordance with, and should not be considered in isolation of, or an as alternative to, measurements required by GAAP.
 
    These non-GAAP financial measures exclude the following items from GAAP net income (loss) and diluted per share amounts:

 

 

ONYX PHARMACEUTICALS REPORTS FIRST QUARTER 2010 FINANCIAL RESULTS
MAY 4, 2010
PAGE 6
    Employee stock-based compensation: The effects of employee stock-based compensation are excluded because of varying available valuation methodologies, subjective assumptions and the variety of award types; such exclusion facilitates comparisons of Onyx’s operating results to peer companies.
 
    Imputed interest related to the convertible senior notes due 2016: The effects of imputed interest related to the convertible senior notes due 2016 are excluded because this expense is non-cash; such exclusion facilitates comparisons of Onyx’s cash operating results to peer companies.
 
    Contingent consideration expense: The effects of contingent consideration expense are excluded due to the nature of this charge, which is related to the change in fair value of the liability for contingent consideration in connection with the acquisition of Proteolix; such exclusion facilitates comparisons of Onyx’s operating results to peer companies.
 
(6)   Under the “if-converted” method, interest and issuance costs and potential common shares related to the Company’s convertible senior notes were excluded in non-GAAP diluted per share amounts for the three months ended March 31, 2010 because their effect would be anti-dilutive.
ONYX PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
                 
    March 31,     December 31,  
    2010     2009  
    (unaudited)     (7)  
Assets
                
Cash, cash equivalents and current marketable securities
   $ 547,865     $ 550,108  
Other current assets
     83,418       88,615  
 
            
Total current assets
     631,283       638,723  
Marketable securities, non-current
     37,368       37,174  
Property and equipment, net
     6,898       7,473  
Intangible assets — in-process research and development
     438,800       438,800  
Goodwill
     193,675       193,675  
Other assets
     8,583       8,835  
 
            
Total assets
   $ 1,316,607     $ 1,324,680  
 
            
 
                
Liabilities and stockholders’ equity
                
Current liabilities
   $ 97,761     $ 107,778  
Convertible senior notes due 2016
     145,826       143,669  
Liability for contingent consideration, non-current
     163,976       160,528  
Deferred tax liability
     157,090       157,090  
Other long-term liabilities
     4,871       5,059  
Stockholders’ equity
     747,083       750,556  
 
            
Total liabilities and stockholders’ equity
   $ 1,316,607     $ 1,324,680  
 
            
 
(7)   Derived from the audited financial statements included in the Company’s Annual Report on Form 10-K for the year-ended December 31, 2009.