The clinical trials departments at Onyx Pharmaceuticals (NASDAQ:ONXX) and Bayer (NYSE:BAY) must be working some serious overtime. Just a week after announcing that they had submitted a label-expanding application for Nexavar to the European Union Medical Authority, they're at it again.

This time, the two companies filed a supplemental New Drug Application (sNDA) with the FDA, expanding Nexavar's U.S. label to include the treatment of liver cancer. Of course, what else would employees at Onyx be doing? Nexavar is the company's only drug.

Nexavar is currently available for the treatment of kidney cancer, so many oncologists are probably already prescribing it off-label to their liver-cancer patients. After three decades and more than 100 clinical trials, it's the first drug to show a positive effect against liver cancer. On the other hand, gaining FDA approval of the label expansion will allow the companies to market to doctors who live in a bubble and can't be bothered to pick up a clinical journal, newspaper, or even the Fool to read the good news.

Part of the companies' rush to gain label expansion may involve getting as far ahead of Pfizer's (NYSE:PFE) Sutent as possible. Sutent has been taking market share from Nexavar for kidney cancer, but it's only completed phase 2 trials for liver cancer.

The sNDA will almost certainly be approved, given that the clinical trial met its endpoint before the trial was scheduled to end. But investors should be cautious about expecting a jump in stock price after the approval; most of the anticipated increase in sales of Nexevar was priced in when the trial was stopped last February.

Concurrent with the sNDA announcement, the company said that it was planning on running a phase 3 trial testing Nexavar as an adjunct treatment after surgical removal of liver cancer. If it's effective at keeping the tumor from reforming, the number of patients receiving Nexavar for liver cancer would increase substantially. Results from ongoing clinical trials for non-small-cell lung cancer and expansion of kidney cancer indications will be available first.

Onyx's future depends on getting Nexavar approved for new indications. The liver cancer expansion is a nice start, and it should bring Onyx into the black. But in order for Nexavar to reach blockbuster status, it'll need to be effective in cancers with large populations of patients -- like breast cancer.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is an Inside Value selection. The Fool's disclosure policy is only approved for one indication -- making sure you know where we stand.