On Tuesday, one-drug wonder Onyx Pharmaceuticals (NASDAQ:ONXX) said that marketing partner Bayer (NYSE:BAY) had submitted a label-expanding application for its lead drug, Nexavar, to the European Union medical authority.

Back in February, Onyx announced that it was halting a phase 3 study of Nexavar as a treatment for liver cancer. This announcement came after an interim review of the data showed that the drug had succeeded on the overall survival endpoint in the study.

At the ASCO medical conference three weeks ago, more details of the 602-person study were presented. Patients treated with Nexavar had their overall survival extended by 44% (2.8 months at the median) versus placebo.

Nexavar is already approved to treat kidney cancer. Sales of the drug declined 4% quarter over quarter in the first quarter of 2007 as Onyx and Bayer felt the competitive sting from Pfizer's (NYSE:PFE) kidney cancer treatment, Sutent.

Even before formal approval to treat liver cancer, investors should expect to see a renewed rate of sales growth for the Nexavar when Onyx releases its second-quarter financial results, since off-label usage in liver cancer patients will have already begun. As Sutent has only completed phase 2 studies in liver cancer, Nexavar will have the liver cancer market to itself for a long while.

In addition to the EU filing, an application with the FDA to expand the Nexavar label to treat liver cancer is expected in the summer. The drug is also in late-stage testing for lung cancer, so it's possible that future label expansions in lung cancer could occur as well if the data is strong enough. Sutent has produced positive phase 2 efficacy results as a treatment for this cancer, so chances are good that Nexavar will show efficacy in this phase 3 study as well.

After ending the last part of 2006 on a bad note with the release of negative Nexavar clinical trial results in treating melanoma, Onyx has been on a roll with the drug this year. Getting a label expansion for Nexavar in the EU looks like the next positive catalyst for Onyx.

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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.