Last week oncology-focused biotech Onyx Pharmaceuticals (NASDAQ:ONXX) released its first-quarter financial results following an exciting couple of months for its cancer compound, Nexavar.

Nexavar has been sold by Onyx and partner Bayer (NYSE:BAY) as a treatment for kidney cancer since its U.S. marketing approval in 2005. In the first quarter, sales of Nexavar increased by nearly $40 million versus the first quarter of 2006 to $61 million, but most of this sales growth occurred internationally.

In the conference call Onyx's management stated that the advanced kidney cancer targeted treatment market in the U.S. was becoming "mature" considering that U.S. Nexavar sales were nearly flat year over year. Translated, this means that Pfizer's (NYSE:PFE) Sutent is hampering Nexavar sales growth.

Despite lower U.S. sales of Nexavar, sales in the rest of the world are still increasing. In addition, Nexavar sales in the U.S. should pick up again following the positive phase 3 clinical trial results for the drug in liver cancer that Onyx announced in February. Based on these positive study results, Onyx plans on filing a supplemental New Drug Application to treat this indication in the middle of the year, which puts the label-expanding approval date in late 2007 or early 2008.

As one biotech executive said so succinctly, "oncology is a data driven market." Therefore Onyx's future is going to be defined as much by positive clinical trial results and presentations of Nexavar at upcoming major medical conferences like ASCO in June as by the current sales trends for the drug, since it is positive study results that will drive future prescription and sales growth for Nexavar.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy. Pfizer is an Inside Value recommendation.