It's sad when investors can't get excited about a company doubling its earnings per share and posting 19% growth in sales of its drug, but that's exactly the spot that Onyx Pharmaceuticals
Despite having a drug on the market, Onyx is more analogous to drugless companies like Exelixis
For instance, Nexavar was recently shown to lengthen the time it takes for breast tumors to start growing again when used in combination with Roche's Xeloda. Assuming that result holds up in a phase 3 trial, I see a potential to double Nexavar's sales from the current level, where it's approved to treat liver and kidney cancer.
The drug is also in (or will soon be in) phase 3 trials for thyroid and lung cancer and earlier-stage trials for ovarian and colorectal cancers. There's no guarantee for success -- competitor Pfizer
In keeping with its baby-biotech look, Onyx even announced, in conjunction with its earnings release, an offering of stock and convertible senior notes to raise additional cash. Because of regulations, management was hesitant to discuss what it's going to do with the cash, but it seems likely that the one-drug wonder will use it to beef up its barren pipeline.
It's a good move for the long-term health of the company, but it's not likely to change investors' feelings for it.
Use the comments box below to let your fellow Fools know what you think about the love situation at Onyx.
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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 pick. The Fool owns shares of Exelixis. The Motley Fool's disclosure policy is contemplating getting rid of its thimble collection.