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ONYX Pharmaceuticals Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 3, 2011 05:26PM

ONYX Pharmaceuticals Inc. (ONXX) filed Quarterly Report for the period ended 2011-09-30. Onyx Pharmaceuticals Inc. has a market cap of $2.5 billion; its shares were traded at around $39.3 with and P/S ratio of 7.7.



Highlight of Business Operations:

We and Bayer are commercializing Nexavar, for the treatment of patients with unresectable liver cancer and advanced kidney cancer. Nexavar has been approved and is marketed for these indications globally. In the United States, we co-promote Nexavar with Bayer. Outside of the United States, Bayer manages all commercialization activities. For the three and nine months ended September 30, 2011, worldwide net sales of Nexavar as recorded by Bayer were $250.3 million and $731.5 million, compared to $226.2 million and $676.7 million in the same periods last year.

Our operating results for the three and nine months September 30, 2011 included revenue from the Nexavar collaboration agreement of $75.0 million and $210.1 million, as compared to $63.7 million or $195.4 million for the three and nine months ended September 30, 2010 primarily driven by increased net sales of Nexavar as recorded by Bayer.

Nexavar commercial margins were consistent during the three and nine months ended September 30, 2011 and 2010. Sales of Nexavar, as recorded by Bayer, in countries around the world increased from $226.2 million and $676.7 million for the three and nine months ended September 30, 2010, respectively, to $250.3 million and $731.5 million for the three and nine months ended September 30, 2011, respectively. The strong growth is driven primarily by the increased sales in the Asia-Pacific region, particularly Japan and China.

Nexavar, our only marketed product, was approved in the United States in December 2005. In accordance with our collaboration agreement with Bayer, Bayer recognizes all revenue from the sale of Nexavar. Accordingly, for the three and nine months ended September 30, 2011 and 2010, we reported no product revenue. For the three and nine months ended September 30, 2011, Nexavar net sales recorded by Bayer were $250.3 million and $731.5 million, respectively, primarily in the United States, the European Union and other territories worldwide and includes the impact of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act. This represents an increase of $24.1 million, or 11% and $54.8 million, or 8%, over Nexavar net sales of $226.2 million and $676.7 million recorded by Bayer for the three and nine months ended September 30, 2010, respectively.

Our share of the research and development costs incurred for Nexavar include 93% and 87% of the costs incurred by Bayer for Nexavar for the three and nine months ended September 30, 2011, respectively, and 90% and 87% of the costs incurred by Bayer for Nexavar for the three and nine months ended September 30, 2010. Our share of the research and development, as a result of the cost sharing arrangement between us and Bayer for research and development costs, was a net reimbursable amount of $19.9 million and $60.8 million due to Bayer for the three and nine months ended September 30, 2011, respectively, and $22.7 million and $57.7 million due to Bayer for the three and nine months ended September 30, 2010, respectively. Such amounts were recorded based on invoices and estimates we receive from Bayer. When such invoices have not been received, we must estimate the amounts owed to Bayer based on discussions with Bayer. For the periods covered in the financial statements presented, there have been no significant or material differences between actual amounts and estimates. However, if we underestimate or overestimate the amounts owed to Bayer, we may need to adjust these amounts in a future period, which could have an effect on earnings in the period of adjustment. As of September 30, 2011, our share of the Nexavar development costs incurred to date under the collaboration was $666.1 million.

Read the The complete Report



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