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8-K - FORM 8-K - ONYX PHARMACEUTICALS INC | f58451e8vk.htm |
Exhibit 99.1
Contact:
Julie Wood
Vice President, Public Affairs
510-597-6505
Vice President, Public Affairs
510-597-6505
Onyx Pharmaceuticals Reports Full Year and Fourth Quarter 2010 Financial Results
Global Nexavar Sales Increase 11% to $934 Million for 2010 Over 2009; Including Record Sales of $257 Million for Q4 2010
Global Nexavar Sales Increase 11% to $934 Million for 2010 Over 2009; Including Record Sales of $257 Million for Q4 2010
EMERYVILLE, CA February 23, 2011 Onyx Pharmaceuticals, Inc. (NASDAQ: ONXX) today reported its
financial results for the full year and fourth quarter 2010. Onyx reported non-GAAP net income of
$39.2 million, or $0.63 per diluted share, for the full year 2010 compared to non-GAAP net income
of $54.4 million, or $0.89 per diluted share, for the same period in 2009. Onyx reported a non-GAAP
net loss of $17.4 million, or $0.28 per diluted share, for the fourth quarter 2010 compared to
non-GAAP net income of $8.8 million, or $0.14 per diluted share, for the same period in 2009.
Non-GAAP net income excludes, among other items, adjustments to contingent consideration expense in
connection with our acquisition of Proteolix Inc., or Proteolix; employee stock-based compensation
expense and non-cash imputed interest expense related to the application of Accounting Standards
Codification (ASC) 470-20.
On a GAAP basis, Onyx reported a net loss of $84.8 million, or $1.35 per diluted share, for the
full year 2010 compared to net income of $16.2 million, or $0.27 per diluted share, in the same
period in 2009. On a GAAP basis, Onyx reported a net loss of $17.1 million, or $0.27 per diluted
share, for the fourth quarter 2010 compared to net loss of $5.5 million, or $0.09 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).
Strong Nexavar sales for the fourth quarter and full year 2010 provided accelerated momentum
across our business, said N. Anthony Coles, M.D., president and chief executive officer of Onyx.
We start 2011 well positioned to drive our Nexavar and proteasome inhibitor franchises forward.
The NDA for carfilzomib in relapsed and refractory multiple myeloma is on track for filing as early
as mid-year; our Phase 3 confirmatory trials, ASPIRE and FOCUS, are advancing; and ONX 0912, our
next generation proteasome inhibitor, is expected to advance to Phase 2. Importantly, we are also
generating additional Nexavar data for liver cancer and exploring potential new indications to
support its expanded use in even greater numbers of patients.
Operating Revenue
Global Nexavar net sales which are recorded by Onyxs collaborator Bayer HealthCare Pharmaceuticals
Inc., or Bayer, were $934.0 million and $257.4 million for the full year and fourth quarter 2010,
respectively, an increase of 11% and 9%, respectively, compared to $843.5 million and $235.2
million in the same periods 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 100 countries worldwide.
For the full year and fourth quarter 2010, Onyx reported total operating revenue of $324.5 million
and $70.0 million, respectively, compared to $251.4 million and $68.3 million for the same periods
in 2009. Total operating revenue is comprised of revenue under the Nexavar collaboration agreement
and revenue under the exclusive license agreement entered into with Ono Pharmaceutical Co., Ltd.,
or Ono. Revenue under the Nexavar collaboration agreement was $265.4 million and $70.0 million for
the full year and fourth quarter 2010, respectively, compared to $250.4 million and $67.3 million
for the same periods in 2009.
Operating Expenses
Onyx recorded research and development expenses of $185.7 million and $54.3 million for the full
year and fourth quarter 2010, respectively, compared to $128.5 million and $36.0 million for the
same periods in 2009. Higher research and development expenses between periods were primarily due
to investments in the development of carfilzomib.
ONYX
PHARMACEUTICALS REPORTS FULL YEAR AND FOURTH QUARTER 2010 FINANCIAL
RESULTS
FEBRUARY 23, 2011
PAGE 2
FEBRUARY 23, 2011
PAGE 2
Selling, general and administrative expenses were $114.2 million and $36.9 million for the full
year and fourth quarter 2010, respectively, compared to $101.1 million and $32.2 million for the
same periods in 2009. Higher selling, general and administrative expenses between periods were
primarily due to planned increases in spending as a result of the acquisition of Proteolix and an
increase in employee-related costs.
Onyx
recorded $92.9 million of non-cash contingent consideration expense for the full year 2010 and $8.2 million of non-cash
benefit for the fourth quarter 2010 associated with changes in the fair value of the liability for
contingent consideration recorded for the potential milestone payments under the Proteolix
acquisition. The increase in the fair value for the full year 2010 resulted from changes in the
assessed probability of technical and regulatory success (PTRS) and the passage of time, partially
offset by a benefit recorded as a result of an amendment (the Amendment) to the Proteolix Plan of
Merger and Acquisition (the Merger Agreement) executed in January 2011. The change in the PTRS
was due to positive preliminary results from the 003-A1 trial, a Phase 2b study of carfilzomib, and
the 006 trial, a Phase 1b study of carfilzomib plus lenalidomide and low-dose dexamethasone, both
in patients with multiple myeloma. The Amendment primarily modifies
provisions in the Merger Agreement related to one of the milestone events.
Interest Expense
Interest expense of $19.4 million and $4.9 million for the full year and fourth quarter 2010,
respectively, primarily relates to the 4.0% convertible senior notes due 2016 issued in August 2009
and includes non-cash imputed interest expense of $9.0 million and $2.4 million, respectively, as a
result of the application of ASC 470-20.
Cash, Cash Equivalents and Marketable Securities
Cash, cash equivalents, and current and non-current marketable securities of $577.9 million at
December 31, 2010 were comparable to $587.3 million at December 31, 2009. This excludes restricted
cash of $31.9 million and $27.6 million at December 31, 2010 and December 31, 2009, respectively.
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
February 23, 2011. Interested parties may access a live webcast of the presentation on the
companys website at:
http://www.onyx-pharm.com/view.cfm/32/Event-Calendar
ONYX
PHARMACEUTICALS REPORTS FULL YEAR AND FOURTH QUARTER 2010 FINANCIAL
RESULTS
FEBRUARY 23, 2011
PAGE 3
FEBRUARY 23, 2011
PAGE 3
or by dialing 847-413-3362 and using the passcode 29045749#. A replay of the presentation will be
available on the Onyx website or by dialing 630-652-3042 and using the passcode 29045749#
approximately one hour after the teleconference concludes. The replay will be available through
March 9, 2011.
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. ONX 0801, an alpha-folate receptor targeted inhibitor of the
thymidylate synthase, and ONX 0912, an oral proteasome inhibitor, are currently in Phase 1 testing.
For more information about Onyx, visit the companys website at www.onyx-pharm.com.
Nexavar® (sorafenib) tablets is a registered trademark of Bayer HealthCare Pharmaceuticals, Inc.
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,
the potential expansion of Onyxs product portfolio and our 2011 guidance. 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; we may never receive marketing approval for carfilzomib;
competition; failures or delays in our clinical trials; dependence on our collaborative
relationship with Bayer; if approved, we may be unsuccessful in launching, maintaining adequate
supply of or obtaining reimbursement for carfilzomib; 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 or carfilzomib; government regulation; possible failure to realize
the anticipated benefits of business acquisitions or strategic investments, including Proteolix,
Inc.; protection of our intellectual property; the indebtedness incurred through the sale of our
4.0% convertible senior notes due 2016; and product liability risks. Reference should be made to
Onyxs Annual Report on Form 10-K for the year ended December 31, 2010 filed with the Securities
and Exchange Commission, under the heading Risk Factors for a more detailed description of these
and other risks. 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.
ONYX PHARMACEUTICALS REPORTS FULL YEAR AND FOURTH QUARTER 2010 FINANCIAL RESULTS
FEBRUARY 23, 2011
PAGE 4
FEBRUARY 23, 2011
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ONYX PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenue: |
||||||||||||||||
Revenue from collaboration agreement |
$ | 69,978 | $ | 67,317 | $ | 265,350 | $ | 250,390 | ||||||||
License revenue |
| | 59,165 | | ||||||||||||
Contract revenue from collaborations |
| 1,000 | | 1,000 | ||||||||||||
Total operating revenue |
69,978 | 68,317 | 324,515 | 251,390 | ||||||||||||
Operating expenses: |
||||||||||||||||
Research and development (1) |
54,346 | 36,028 | 185,740 | 128,506 | ||||||||||||
Selling, general and administrative (1) |
36,875 | 32,232 | 114,167 | 101,132 | ||||||||||||
Contingent consideration |
(8,177 | ) | 1,528 | 92,930 | 1,528 | |||||||||||
Total operating expenses |
83,044 | 69,788 | 392,837 | 231,166 | ||||||||||||
Income (loss) from operations |
(13,066 | ) | (1,471 | ) | (68,322 | ) | 20,224 | |||||||||
Investment income |
632 | 920 | 2,829 | 4,028 | ||||||||||||
Interest expense |
(4,933 | ) | (4,603 | ) | (19,400 | ) | (6,858 | ) | ||||||||
Other income (expense) |
89 | | (773 | ) | | |||||||||||
Income (loss) before provision (benefit) for income taxes |
(17,278 | ) | (5,154 | ) | (85,666 | ) | 17,394 | |||||||||
Provision (benefit) for income taxes |
(157 | ) | 355 | (819 | ) | 1,233 | ||||||||||
Net income (loss) |
$ | (17,121 | ) | $ | (5,509 | ) | $ | (84,847 | ) | $ | 16,161 | |||||
Net income (loss) per share: |
||||||||||||||||
Basic |
$ | (0.27 | ) | $ | (0.09 | ) | $ | (1.35 | ) | $ | 0.27 | |||||
Diluted (2) |
$ | (0.27 | ) | $ | (0.09 | ) | $ | (1.35 | ) | $ | 0.27 | |||||
Computation of diluted shares: |
||||||||||||||||
Basic |
62,779 | 62,189 | 62,618 | 59,215 | ||||||||||||
Dilutive effect of options |
| | | 292 | ||||||||||||
Diluted (2) |
62,779 | 62,189 | 62,618 | 59,507 | ||||||||||||
(1) Includes employee stock-based compensation charges of: |
||||||||||||||||
Research and development |
$ | 1,161 | $ | 1,288 | $ | 4,252 | $ | 3,574 | ||||||||
Selling, general, and administrative |
4,364 | 4,858 | 17,865 | 17,506 | ||||||||||||
Total employee stock-based compensation |
$ | 5,525 | $ | 6,146 | $ | 22,117 | $ | 21,080 | ||||||||
(2) Under the if-converted method, interest and issuance costs and potential common shares related to the Companys convertible senior notes were excluded in the computation of diluted per share amounts for the three months ended December 31, 2010 and 2009 and the years ended December 31, 2010 and 2009 because their effect would be anti-dilutive.
ONYX PHARMACEUTICALS REPORTS FULL YEAR AND FOURTH QUARTER 2010 FINANCIAL RESULTS
FEBRUARY 23, 2011
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FEBRUARY 23, 2011
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ONYX PHARMACEUTICALS, INC.
CALCULATION OF REVENUE FROM COLLABORATION AGREEMENT
(In thousands, unaudited)
CALCULATION OF REVENUE FROM COLLABORATION AGREEMENT
(In thousands, unaudited)
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Nexavar product revenue, net (as recorded by Bayer) |
$ | 257,374 | $ | 235,175 | $ | 934,038 | $ | 843,470 | ||||||||
Nexavar revenue subject to profit sharing (as
recorded by Bayer) |
$ | 214,577 | $ | 205,247 | $ | 794,977 | $ | 753,340 | ||||||||
Combined cost of goods sold, distribution,
selling, general and administrative expenses |
92,805 | 89,674 | 329,989 | 312,205 | ||||||||||||
Combined collaboration commercial profit |
$ | 121,772 | $ | 115,573 | $ | 464,988 | $ | 441,135 | ||||||||
Onyxs share of collaboration commercial profit |
$ | 60,886 | $ | 57,787 | $ | 232,494 | $ | 220,567 | ||||||||
Reimbursement of Onyxs shared marketing expenses |
6,096 | 7,435 | 23,122 | 23,514 | ||||||||||||
Royalty revenue |
2,996 | 2,095 | 9,734 | 6,309 | ||||||||||||
Revenue from collaboration agreement |
$ | 69,978 | $ | 67,317 | $ | 265,350 | $ | 250,390 | ||||||||
ONYX PHARMACEUTICALS REPORTS FULL YEAR AND FOURTH QUARTER 2010 FINANCIAL RESULTS
FEBRUARY 23, 2011
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FEBRUARY 23, 2011
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ONYX PHARMACEUTICALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME (LOSS)
(In thousands, except per share amounts)
(unaudited)
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME (LOSS)
(In thousands, except per share amounts)
(unaudited)
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
GAAP net income (loss) |
$ | (17,121 | ) | $ | (5,509 | ) | $ | (84,847 | ) | $ | 16,161 | |||||
Non-GAAP adjustments: |
||||||||||||||||
Contingent consideration |
(8,177 | ) | 1,528 | 92,930 | 1,528 | |||||||||||
Employee stock-based compensation |
5,525 | 6,146 | 22,117 | 21,080 | ||||||||||||
Imputed interest related to the convertible senior notes due 2016 |
2,361 | 2,111 | 9,032 | 3,137 | ||||||||||||
Acquisition related transaction costs |
| 4,480 | | 5,491 | ||||||||||||
Milestone payments |
| | | 7,000 | ||||||||||||
Non-GAAP net income (loss) (3) |
$ | (17,412 | ) | $ | 8,756 | $ | 39,232 | $ | 54,397 | |||||||
Computation of non-GAAP diluted net income (loss) |
||||||||||||||||
Non-GAAP net income (loss) (3) |
$ | (17,412 | ) | $ | 8,756 | $ | 39,232 | $ | 54,397 | |||||||
Add: |
||||||||||||||||
Interest and issuance costs related to dilutive convertible senior notes (4) |
| | | 3,683 | ||||||||||||
Non-GAAP net income (loss) diluted (3) |
$ | (17,412 | ) | $ | 8,756 | $ | 39,232 | $ | 58,080 | |||||||
Computation of non-GAAP diluted shares |
||||||||||||||||
Basic shares |
62,779 | 62,189 | 62,618 | 59,215 | ||||||||||||
Dilutive effect of options and restricted stock |
| | | 292 | ||||||||||||
Dilutive effect of convertible senior notes (4) |
| | | 5,801 | ||||||||||||
Non-GAAP diluted shares (3) |
62,779 | 62,189 | 62,618 | 65,308 | ||||||||||||
Non-GAAP net income (loss) per share (3) |
$ | (0.28 | ) | $ | 0.14 | $ | 0.63 | $ | 0.92 | |||||||
Non-GAAP net income (loss) per share diluted (3) |
$ | (0.28 | ) | $ | 0.14 | $ | 0.63 | $ | 0.89 |
(3) | This press release includes the following non-GAAP financial measures: non-GAAP net income (loss), non-GAAP net income (loss) diluted, non-GAAP net income (loss) per share, and non-GAAP net income (loss) per share diluted. 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 FULL YEAR AND FOURTH QUARTER 2010 FINANCIAL RESULTS
FEBRUARY 23, 2011
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FEBRUARY 23, 2011
PAGE 7
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 Onyxs operating results to peer companies.
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 Onyxs 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 Onyxs cash operating results
to peer companies.
Milestone payments and acquisition related transaction costs: The effects of
milestone payments and acquisition related transaction costs are excluded because they do not
relate to the normal and recurring transactions of Onyxs business; such exclusions allow for
a better representation of the ongoing economics of the business, facilitates comparison to
peer companies and is reflective of how Onyx management internally manages the business.
(4) | Under the if-converted method, interest and issuance costs and potential common shares related to the Companys convertible senior notes were excluded from non-GAAP diluted per share amounts for the three months ended December 31, 2010 and 2009 and the year ended December 31, 2010 because their effect would be anti-dilutive. |
ONYX PHARMACEUTICALS REPORTS FULL YEAR AND FOURTH QUARTER 2010 FINANCIAL RESULTS
FEBRUARY 23, 2011
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FEBRUARY 23, 2011
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ONYX PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
(unaudited) | (5) | |||||||
Assets |
||||||||
Cash, cash equivalents and current marketable securities |
$ | 549,313 | $ | 550,108 | ||||
Other current assets |
95,871 | 88,615 | ||||||
Total current assets |
645,184 | 638,723 | ||||||
Marketable securities, non-current |
28,555 | 37,174 | ||||||
Property and equipment, net |
10,822 | 7,473 | ||||||
Intangible assets in-process research and development |
438,800 | 438,800 | ||||||
Goodwill |
193,675 | 193,675 | ||||||
Other assets |
35,599 | 8,835 | ||||||
Total assets |
$ | 1,352,635 | $ | 1,324,680 | ||||
Liabilities and stockholders equity |
||||||||
Current liabilities |
$ | 72,860 | $ | 107,778 | ||||
Convertible senior notes due 2016 |
152,701 | 143,669 | ||||||
Liability for contingent consideration, non-current |
253,458 | 160,528 | ||||||
Deferred tax liability |
157,090 | 157,090 | ||||||
Other long-term liabilities |
18,952 | 5,059 | ||||||
Stockholders equity |
697,574 | 750,556 | ||||||
Total liabilities and stockholders equity |
$ | 1,352,635 | $ | 1,324,680 | ||||
(5) | Derived from the audited financial statements included in the Companys Annual Report on Form 10-K for the year ended December 31, 2009. |