8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 30, 2003

ONYX PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

0-28298	94-3154463
(Commission File No.)	(IRS Employer Identification No.)

3031 Research Drive
Richmond, California 94806
(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (510) 222-9700

TABLE OF CONTENTS

	ITEM 12.   RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
	SIGNATURES
EXHIBIT INDEX
Exhibit 99.1

ITEM 12.   RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

     On October 30, 2003, Onyx Pharmaceuticals, Inc., or Onyx, issued a press release addressing financial results for its third fiscal quarter and nine months ended September 30, 2003. The press release dated October 30, 2003, titled “Onyx Pharmaceuticals Reports Third Quarter and Nine Month Financial Results,” is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

     The information in this Current Report, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by Onyx Pharmaceuticals, Inc., whether made before or after the date hereof, regardless of any general incorporation language in such filing.

     This Current Report and the exhibit furnished herewith contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act, as amended, regarding expectations as to timing and amount of any restructuring charges; cost savings or clinical development expenses; the company’s plans as to the development of its product candidates, including further clinical testing and the timing of such clinical trials; and the company’s expectations or beliefs of the commercial potential of its product candidates. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those referred to in the forward-looking statements. These risks include, but are not limited to, those associated with the timeline for clinical activity, results of pending or future clinical trials, dependency on third parties to manufacture its products, changes in the status of the company’s collaborative relationships and the company’s expectations or beliefs of the commercial potential of BAY 43-9006. More information about Onyx Pharmaceuticals and these and other risks related to Onyx is detailed in Onyx’s most recent annual report on Form 10-K for the fiscal year ended December 31, 2002 and subsequent quarterly reports on Form 10-Q as filed with the Commission. Onyx cannot guarantee any future results, levels of achievement or performance. Onyx does not undertake an obligation to update forward-looking statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ONYX PHARMACEUTICALS, INC.
Dated: November 3, 2003
	By:	/s/ Marilyn E. Wortzman
		Marilyn E. Wortzman
		Vice President, Finance

EXHIBIT INDEX

Number	Description
99.1	Press Release titled “Onyx Pharmaceuticals Reports Third Quarter and Nine Month Financial Results,” dated October 30, 2003.

EX-99.1 3 f94155exv99w1.htm EXHIBIT 99.1

EXHIBIT 99.1

Contact:	Julie Wood
	510-262-8757

ONYX PHARMACEUTICALS REPORTS
THIRD QUARTER AND NINE MONTH FINANCIAL RESULTS

RICHMOND, CALIF. (October 30, 2003) — Onyx Pharmaceuticals, Inc. (Nasdaq: ONXX) announced today the results of operations for the third quarter and nine months ended September 30, 2003. The company reported a net loss of $11.1 million, or $0.40 per share, for the quarter ended September 30, 2003 compared with a net loss of $10.8 million, or $0.50 per share, for the same quarter in 2002. During the third quarter of 2003, Onyx reported restructuring costs of $944,000 related to its previously announced decision to discontinue the company’s therapeutic virus program. Without the restructuring charge, the results would show a non-GAAP net loss of $10.1 million, or $0.36 per share, for the third quarter of 2003.

As of September 30, 2003, the company had cash, cash equivalents and marketable securities of $94.9 million compared to $39.8 million at December 31, 2002. In July 2003, the company raised net proceeds of $73.8 million in a public offering of 5,179,000 shares of its common stock at $15.25 per share. Last week, the company announced with its collaborator, Bayer Pharmaceuticals Corporation, the initiation of a Phase III clinical trial in the treatment of kidney cancer for its investigational drug, BAY 43-9006. The start of the Phase III trial will result in a $15 million creditable milestone-based payment that the company anticipates will be received in the fourth quarter of 2003.

For the quarter ended September 30, 2003, Onyx reported no revenue as compared with revenue of $1.2 million for the third quarter of last year. The revenue recorded in the third quarter of 2002 reflected research funding received from Warner-Lambert, a subsidiary of Pfizer Inc, for the therapeutic virus collaboration that concluded in September 2002.

Research and development costs decreased by $1.9 million in the third quarter of 2003 versus the comparable period last year. This was the result of decreased expenses associated with the therapeutic virus program, partially offset by an increase related to the development of BAY 43-9006. During the third quarter of 2003, Onyx recorded $944,000 of severance-related restructuring expenses. Total operating costs decreased to $11.3 million in the third quarter of 2003, or $10.4 million on a non-GAAP basis excluding the restructuring expenses, from $12.3 million in the comparable period last year.

Nine-month Results
For the nine months ended September 30, 2003, the company reported a net loss of $33.2 million, or $1.34 per share, compared with a net loss of $32.5 million, or $1.61 per share, for the same period in 2002. There were no revenues recorded in the first nine months of 2003 as compared to $2.7 million recognized during the comparable period last year as the Warner-Lambert collaboration concluded in September 2002. Operating expenses decreased by $2.9 million during the nine-month period ended September 30, 2003 as compared to the same period in the prior year. This change reflects lower operating expenses as a result of the company’s decision to terminate its virus program, offset by increases in clinical development costs associated with BAY 43-9006.

Year to date, the company has recorded $4.1 million of restructuring expenses including $2.5 million related to termination of the XOMA process development and manufacturing agreement and $1.6 million related to severance costs. In addition, the company recorded $1.1 million for milestone payments to XOMA related to the agreement. Without the restructuring charges and milestone payments, the results

would show a non-GAAP net loss of $27.9 million, or $1.13 per share, for the nine months ended September 30, 2003.

Onyx believes that the non-GAAP results in this release provide useful information to investors, as they exclude the effects of non-recurring costs related to restructuring that Onyx believes are not indicative of its ongoing operations. The non-GAAP information is provided as a complement to results provided in accordance with GAAP and should not be considered superior to, or as a substitute for, GAAP measures.

Onyx Pharmaceuticals is engaged in the development of novel cancer therapies that target the molecular basis of cancer. With its partners, the company is developing small molecule drugs, including BAY 43-9006 with Bayer Pharmaceuticals Corporation. For more information about Onyx’s pipeline and activities, visit the company’s web site at www.onyx-pharm.com.

     This news release contains forward-looking statements regarding expectations as to timing and amount of any restructuring charges; cost savings or clinical development expenses; the company’s plans as to the development of BAY 43-9006, including further clinical testing and the timing of such clinical trials; and the company’s expectations or beliefs of the commercial potential of BAY 43-9006. These forward-looking statements involve a number of risks and uncertainties that could cause actual events to differ from the company’s expectations. These risks are addressed in the company’s periodic reports filed with the Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K filed on March 25, 2003 and its Quarterly Reports on Form 10-Q.

— Financials Attached —

ONYX PHARMACEUTICALS, INC.
SUMMARY FINANCIAL INFORMATION

CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)

		Three Months Ended
		September 30,
		2003									2002
		GAAP (1)			Adjustments			Non-GAAP (2)			GAAP
Total revenue		$	—		$	—		$	—		$	1,178
Operating expenses:
	Research and development		9,036			—			9,036			10,921
	General and administrative		1,353			—			1,353			1,407
	Restructuring		944			(944	) (3)		—			—
Total operating expenses			11,333			(944	)		10,389			12,328
Loss from operations			(11,333	)		944			(10,389	)		(11,150	)
Interest income			254			—			254			272
Other income (expense)			—			—			—			60
Net loss		$	(11,079	)	$	944		$	(10,135	)	$	(10,818	)
Basic and diluted net loss per share			($0.40	)					($0.36	)		($0.50	)
Shares used in computing basic and diluted net loss per share			27,777						27,777			21,593

(1)	Reflects operating results in accordance with U.S. generally accepted accounting principles (or GAAP).
(2)	Non-GAAP amounts exclude restructuring costs.
(3)	Amount represents severance-related restructuring costs for the discontinuation of the company’s therapeutic virus program.

ONYX PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share data amount)
(unaudited)

		Nine Months Ended
		September 30,
		2003									2002
		GAAP (1)			Adjustments			Non-GAAP (2)			GAAP
Total revenue		$	—		$	—		$	—		$	2,715
Operating expenses:
	Research and development		25,097			(1,100	) (3)		23,997			32,027
	General and administrative		4,218			—			4,218			4,349
	Restructuring		4,145			(4,145	) (4)		—			—
Total operating expenses			33,460			(5,245	)		28,215			36,376
Loss from operations			(33,460	)		5,245			(28,215	)		(33,661	)
Interest income			562			—			562			936
Other income (expense)			(275	)		—			(275	)		235
Net loss		$	(33,173	)	$	5,245		$	(27,928	)	$	(32,490	)
Basic and diluted net loss per share			($1.34	)					($1.13	)		($1.61	)
Shares used in computing basic and diluted net loss per share			24,791						24,791			20,178

(1)	Reflects operating results in accordance with U.S. generally accepted accounting principles (or GAAP).
(2)	Non-GAAP amounts exclude restructuring costs and milestone payments to XOMA related to the company’s process development and manufacturing agreement that was terminated as a result of the therapeutic virus program discontinuation announced in June 2003.
(3)	Amount represents milestone payments to XOMA related to the terminated process development and manufacturing agreement.
(4)	Amount represents restructuring costs related to the January 2003 reduction in force and the discontinuation of the therapeutic virus program announced in June 2003.

ONYX PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEET
(in thousands)

			Sept. 30,		Dec. 31,
			2003		2002
			(unaudited)		(1)
Assets
	Cash, cash equivalents and marketable securities		$	94,910	$	39,833
	Other current assets			2,689		1,351
		Total current assets		97,599		41,184
	Property and equipment, net			2,092		2,834
	Other assets			408		2,223
		Total assets	$	100,099	$	46,241
Liabilities and stockholders’ equity
	Current liabilities		$	13,072	$	12,457
	Advance from partner			5,000		5,000
	Stockholders’ equity			82,027		28,784
		Total liabilities and stockholders’ equity	$	100,099	$	46,241

(1) Derived from the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002

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EX-99.1

exv99w1