Slight Setback for Onyx

Shares of one-drug wonder Onyx Pharmaceuticals (Nasdaq: ONXX  ) fell 30% yesterday as the drug developer announced disappointing news for its cancer treatment Nexavar. Nexavar is partnered with Bayer (NYSE: BAY  ) .

Nexavar is already approved to treat advanced kidney cancer, and has been in testing as a potential treatment for numerous other types of cancers at various stages. Shares declined yesterday on the news that, in its most advanced phase 3 trial, the drug failed to show any survival benefit versus a placebo for patients as a treatment for advanced melanoma.

This failure is strike one for Onyx's late-stage clinical trials for Nexavar. The other two important -- and possible label-expanding -- phase 3 trials for the drug are for lung and liver cancer. The liver cancer study results are expected by the end of 2007, and the lung cancer trial is currently still enrolling patients, so there are plenty of opportunities for Nexavar to be approved in new indications.

With so many trials being run for the drug, research and development expenses have outpaced revenues during Nexavar's first year on the market; therefore, Onyx hasn't brought in any profits from the drug. Sales are growing rapidly even in the face of competition from a similar drug by Pfizer (NYSE: PFE  ) that was approved in January of this year.


Q-O-Q Growth

Q3 2006



Q2 2006



Q1 2006



*Onyx receives roughly half of sales; revenue is recorded by Bayer.
**Figures in millions.

Bayer gave no estimates for what fourth-quarter sales of the drug will look like, except to say that 2006's sales will be upward of $130 million. Fortunately, 90% of Nexavar sales are for on-label usage, so this negative announcement today shouldn't hurt near-term sales growth.

Details were light on the results of the failed melanoma trial, since Onyx was waiting to present the data at a scientific meeting. Regardless, the takeaway from today is that Nexavar is not dead as a treatment for melanoma, since the drug is in another phase 3 and phase 2 trials for the disease, but its chances of becoming a successful treatment in this indication are greatly diminished.

Pfizer is anInside Valueselection. For more information on companies with great growth opportunities, try out the newsletter free for 30 days.

Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (7)

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: 517812, ~/Articles/ArticleHandler.aspx, 10/26/2016 7:24:51 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 10 hours ago Sponsored by:
DOW 18,169.27 -53.76 -0.30%
S&P 500 2,143.16 -8.17 -0.38%
NASD 5,283.40 -26.43 -0.50%

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: **
PFE $32.28 Up +0.15 +0.47%
Pfizer CAPS Rating: ****