Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



FDA Approval and a Trial Failure: Which Is More Important?

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Onyx Pharmaceuticals (Nasdaq: ONXX  ) announced on Friday that the Food and Drug Administration had approved its multiple myeloma drug Kyprolis. Today, Onyx announced a clinical trial failure for Nexavar.

Which one is more important? The Kyprolis approval. It isn't even close.

Kyprolis represents the first drug that Onyx owns fully -- it shares profits on Nexavar with its partner Bayer (OTC: BAYRY). The approval isn't all that surprising given the 11-0 FDA advisory committee endorsement of Kyprolis and how the agency supported the drug during the meeting. But there are approval issues not discussed in an advisory committee meeting, like manufacturing, which can derail a drug, so the approval is never a sure thing.

Kyprolis will be used after other therapies -- Celgene's (Nasdaq: CELG  ) Revlimid or Thalomid and Takeda's Velcade -- so the market won't be all that large. Still, an approval now allows Onyx to capture some sales instead of having to wait for a confirmatory phase 3 trial to gain FDA approval.

Switching gears, the Nexavar clinical trial tested the drug in combination with Tarceva, compared to Nexavar alone in liver cancer patients. Interestingly, even though this trial seems like it was designed to expand Tarceva into liver cancer, Tarceva isn't sold by Onyx or Bayer. The Nexavar owners would benefit indirectly if the trial had worked because the combination product would set a new higher standard that new drugs would have to reach.

With the failure of Bristol-Myers Squibb's (NYSE: BMY  ) brivanib last week, there's less of an immediate threat to Nexavar's stronghold in liver cancer. ArQule's (Nasdaq: ARQL  ) tivantinib will enter a phase 3 trial for its oncology drug in second-line liver cancer patients, but tivantinib would be used after Nexavar, so it won't be an immediate threat until ArQule tests it as a first-line treatment.

With a new drug approved and a fairly meaningless clinical trial completed, investors can get back to speculating when Onyx will be taken out by Bayer.

However, these three Dow stocks don't need a buyout to capture their value; they've got an X factor that makes them stand out from their illustrious Dow peers. Find out what it is in the Fool's new free report: "The 3 Dow Stocks Dividend Investors Need."

Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool has a disclosure policy.
We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1953751, ~/Articles/ArticleHandler.aspx, 10/22/2016 3:13:34 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 5 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
ONXX.DL $0.00 Down +0.00 +0.00%
Onyx Pharmaceutica… CAPS Rating: **
ARQL $1.50 Up +0.08 +5.63%
ArQule CAPS Rating: ***
BMY $50.02 Down -0.34 -0.68%
Bristol-Myers Squi… CAPS Rating: ****
CELG $98.91 Down -1.11 -1.11%
Celgene CAPS Rating: *****