On Monday, with the bright lights shining at the industry's biggest event of the year, Onyx Pharmaceuticals (NYSE:ONXX) emerged as a clear winner from the annual meeting of the American Society of Clinical Oncology (ASCO). Along with its marketing partner, Bayer (NYSE:BAY), the company announced that the phase 3 study for Nexavar demonstrated the ability to extend the lives of liver cancer patients by almost three months.

The announcement was a major jolt for Onyx shares, which rose 8.6% before the market's close on Monday. The new 52-week high attained as the result of the Nexavar study has allowed shareholders to double up on their money with a stock that is up 100% in the past year. Onyx's recent run puts it up more than 400% over the past five years, which is good enough to launch it into the top 10 performing biotechs over this period.

Given the prospects for Nexavar, yesterday may prove to be only the start of a sustained rally for this biopharmaceutical company. Onyx and Bayer are now in the process of preparing applications to seek approval from the FDA and European regulators for Nexavar to be used in the treatment of liver cancer patients. Liver cancer is the fifth most common form of cancer in the world, and more than 60,000 new cases are diagnosed per year.

Of particular importance for Onyx shareholders is the potential for the multipurpose use of Nexavar. Nexavar is the company's only drug, but it has already been approved for the treatment of kidney cancer in the U.S. and more than 50 foreign countries. The drug is being tested for potential uses in combating skin cancer, breast cancer, and lung cancer. With its breakthrough in liver cancer patients, and the prospect of Nexavar becoming a treatment option for multiple other forms of cancer, the upside for this stock could be significant.

The immediate risks of owning this stock are twofold. From a financial standpoint, the company remains in a net operating loss position and has been able to maintain its cash position primarily through new issuances of common stock. From an operations standpoint, while the company is attempting to diversify the usage of Nexavar across markets for multiple forms of cancer, the fact remains that it is the company's only drug. Onyx does not have another drug to follow up Nexavar -- its only other compound is in early-stage testing and is partnered with Pfizer (NYSE:PFE), limiting Onyx's upside.

It is readily apparent that investors in Onyx will sink or swim on the future results of Nexavar. The ASCO meeting marks an integral win for the company, but only time will tell whether the drug can push the company into the black.

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Fool contributor Billy Fisher does not own shares of any of the companies mentioned. Pfizer is an Inside Value recommendation. The Fool has a disclosure policy.