Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX)
Lazard Capital Markets Healthcare Conference
November 14, 2012 11:00 AM ET
Julie Wood – VP, Public Affairs
Barb Klencke – SVP, Clinical Development
Jason Kantor - Credit Suisse
Jason Kantor – Credit Suisse
Good morning and welcome to this session of the Credit Suisse Healthcare Conference. My name is Jason Kantor. I am a newest Biotechnology Analyst on the platform. It’s my pleasure this morning to welcome to the podium Onyx Pharmaceuticals. This is an evolving and very, very exciting story, not a lot of times when you see company with two drug approvals back to back, but that’s what we have here. And I think as we look into next year into the drug launches that are ongoing and the clinical data that’s coming up, the profile here is one that’s very robust and interesting, and I’m sharing the stage with three folks from Onyx, but I am going to welcome Julie Wood to the podium and she is going to take it from here, so Julie?
Good morning everyone. It’s a pleasure to be here today. It’s certainly been an exciting year for Onyx already and we have as you’ll see in this presentation much more to come in the months and years ahead, but let me begin by introducing my colleagues that are here. I am Julie Wood. I am the Vice President of Public Affairs. Dr. Barb Klencke is our Senior Vice President of Clinical Development at Onyx and next to her is Warren DeSouza. Warren is our Vice President of Finance at Onyx.
So with the introductions, we will do the presentation in this room and then I think we’re in Grand for the breakout session and we’ll do the Q&A in Grand. Of course we can't do a presentation without the forward-looking statement that you’re all aware of. We will be making forward-looking statements and we always direct you to the filings that we do with the SEC, the most recent being our third quarter Q, so for more detailed information on business risks please refer to our SEC documents.
So anyone that has been following Onyx for any period of time knows what an exciting year 2012 has been. We started in January with Nexavar. Already approved, Nexavar is a globally successful product approved in two indications, liver cancer and kidney cancer. As we move through the year, we’ve had a number of important achievements. We have the approval of Kyprolis for multiple myeloma and we’ve had the approval of Stivarga, a Bayer compound and I’ll talk about the economics of that medicine in a bit, so both were approved this year.
So that is really exciting time for us to be involved in different launches, but the good news doesn’t stop there. We have a number of clinical and regulatory milestones that are near-term that are going to keep momentum moving in the stock as we continue to move forward.
The way we like to look at the business is a way for you to analyze and think about both parts, is to think about our kinase inhibitor franchise and to think about our proteasome inhibitor franchise. If you think about the kinase inhibitors, as I said we have Nexavar. Nexavar is approved in over 100 countries for kidney cancer and liver cancer. For liver cancer, we maintain our leadership. As you know, there have been a number of other compounds that have tried to enter this marketplace but they’ve not been successful.
The important part for Nexavar is the continued growth in emerging markets, particularly Asia Pacific. And we’ll talk about additional clinical trials for Nexavar that are currently ongoing namely the Thyroid trial and the Breast Cancer trial which Barb will talk to you about in a minute. Stivarga as I mentioned was approved in September, a month ahead of its PDUFA date. It is approved for metastatic colorectal cancer and again Barb will go over some of the details of this trial that led to that registration.
There is a number of regulatory reviews ongoing both in Europe and Japan for colorectal cancer. There is also an SNDA that has been filed for a second potential indication GIST and subsequent to that approval, there will be again a global registration strategy. If you turn to the other side of the business, the proteasome inhibitors, Kyprolis is our wholly-owned product. It was approved on an accelerated basis in July and we are in the midst of launching that product now. We also have a number of additional clinical trials underway because we start with treating the sickest patients and move to those less sick patients. And we think that this is a medicine to decide daily suited to help these patients across the disease background.
We also have an oral proteasome inhibitor, Oprozomib that’s in clinical development and you’ll get a little bit more data on that particular compound at the upcoming ASH meeting. So let's talk for a minute about the proteasome inhibitor franchise. This is what Kyprolis looks like for those of you who haven't seen the bottle. As you know the indication is for patients who have received two prior therapies. They have had to have received Velcade and an IMiD and progressed on or within 60 days. This is an accelerated approval based on a single-arm trial where response rate was used as the mechanism for approval. We do have our confirmed tour study well underway, ASPIRE and again Barb will be talking to you about that in a moment.
So we talked a lot about the launch on our third quarter call. We’ve been very, very pleased and just this first quarter of launch and if you recall since the approval happened in July, we really have just two months of sales ongoing. We’ve booked $19 million or $18.6 million in sales for Kyprolis. We’re very pleased with that initial launch period through the end of September. We had prioritized as our Head of Commercial shared with you, 2,000 accounts to treat high volumes of multiple myeloma patients and we have penetrated 50% of those accounts and we estimate that our market share coming out of September was approximately 10%.
If you look at the number of patients each year in the U.S. that would be within that label, we estimate it to be 10,000 to 15,000 patients annually in the United States and these are patients that really had limited to no treatment options before Kyprolis was approved.
I talked to you a little bit about our sales team of the commercial force. We are very prudent on how we brought the field team on, knowing that we were going after an accelerated approval. You heard us say many times that that’s a very high bar. So we hired the sales leadership before ODAC, but we didn’t hire the field team until post ODAC, till we have that favorable vote. So by the time they were trained and out in the fields, they were really deployed fully in the second half of August.
We also have a full support program in place, Onyx 360 that helps patients with reimbursement, with social issues, disease education and this was a program that has been very, very warmly received. So thinking about where we are and how we move forward, as I said we believe Kyprolis and Oprozomib can play and help patients across the whole spectrum of this disease which remains fatal even with the medicines that are available today. Kyprolis, we’ve taken the first step with the accelerated approval in the U.S. but complementing our commercial efforts is a broad development program that will enable international registrations.
Oprozomib as I said is our oral formulation and we believe that it could have opportunity even beyond multiple myeloma and we’ve got some early clinical testing going on to probe that question. We believe that in multiple myeloma the opportunity exceeds $2 billion across these treatment settings and we believe that not only in the U.S but we are obviously selling directly but planning to sell directly in Europe as well.
We have a small presence in Europe currently, really for long lead time, core competencies like reimbursement, regulatory, those kinds of activities. And then of course in areas where we don’t have the expertise to get Kyprolis to patients as quickly as we like, we were willing to partner with people who have expertise in that area and you’re familiar with our partnership with Ono Pharmaceuticals. They are doing the clinical development in Japan and moving forward to get that to Japanese patients as quickly as possible.
We estimate the value of that agreement could be approximately $300 million plus royalties on sales in Japan. So that’s a quick overview. I am now going to turn it over to Barb and she is going to talk about a little bit about clinical development for both programs.
Thank you Julie, and good morning. So I’ll give you a high level overview of the clinical program, go into a little bit more detail and then turn it back over for Julie for some final comments. So Kyprolis carfilzomib, the one of the two proteasome inhibitors that’s the most advanced in the clinic, already approved in the U.S. The ongoing Phase 3 trials, I’ll say a few words about both ASPIRE and FOCUS are fully enrolled and ASPIRE is going to help us move up into earlier lines of therapy. ASPIRE is in the relapsed patient population and minimum of one prior line is a combination with Revlimid/dex. That’s fully enrolled and we’ll have an interim analysis that could read out as early as the end of 2013.
FOCUS is a population that’s very similar to our U.S. approved patient population. It’s an ongoing study that would be required in Europe from our first approval and it has a survival endpoint. That also has an interim analysis with an interim anticipated in the second half of next year. The next two studies on this are both directed against Velcade where we have opened our ENDEAVOR study this year. ENDEAVOR is carfilzomib/dex versus Velcade dexamethasone and this plus our front-line study that we’re just in the activation phase and hope to have first patient in, in the first quarter, these are folks having – they both have an assumption of a superiority endpoint which I think gives you a little sense of our optimism for Kyprolis and its role in multiple myeloma in general.
Finally, I’ll say a few words about Oprozomib. It’s our oral proteasome inhibitor and it’s Phase 1 but we’ll have some exciting preliminary data at ASH with an oral presentation of both, safety and pharmacokinetics as well as some preliminary efficacy in this dose escalation study.
So this just gives you an overview of what I’ve said. We have an approval in the last line in the late line in patients who have received both Velcade in the past as well as an immunomodulatory agent and who have progressed on or within 60 days, but what we want to do in our ongoing development program where we’ve invested quite heavily is to enter earlier lines of therapy compared to Velcade to determine if there is superiority both with efficacy and safety endpoints and also to move into the oral study in which really gives patients the convenience, the flexibility of dosing.
Now turning to the kinase franchise. We’ve got both the Nexavar and Stivarga drugs to talk about. Stivarga just recently approved in past quarter for colorectal cancer in the United States, still undergoing regulatory review in Europe, but it’s for patients who had exposure to all of the five classes of approved therapies, fluoropyrimidine, oxaliplatin, irinotecan, VEGF and for patients who have KRAS wild type EGFR. So this also is a last line therapy but it did show a survival advantage where no drug has shown a survival advantage in the last 15 years.
So this was suggestive of strong efficacy of this drug as a monotherapy. It does have a black box warning just to mention due to hepatotoxicity. Those are the opportunities for this drug. I’ll stay on the Stivarga theme for a moment, so looking at the bottom of the slide we also had data in GIST, gastrointestinal stromal tumor and where the data was extremely strong also as a monotherapy against best supportive care. The NDA application under review in the U.S, and will be subsequently filed with the EU. This is based on a PFS endpoint but with a hazard ratio of 0.27 for about a four or five fold increase in median PFS in patients who had received both Gleevec and Sunitinib.
Now turning back to Nexavar, Julie mentioned where we have our approval in the unresectable hepatocellular carcinoma and renal carcinoma lines, as has been true for quite sometime but we have adjuvant trials underway in both of these indications and we’re expecting within the next six weeks before the end of the year data from the randomized DECISION trial. I’ll move to a slide in a few moments with a bit more about that as well as the RESILIENCE trial which is still enrolling but we hope to finish enrollment in the first half of next year.
So this is a DECISION trial, the randomized Phase 3 with a PFS endpoint, 419 patients. Some mature events [ph] have been reached and we’re just in the final weeks of data cleaning. It’s based on very strong Phase 2 effort as referenced at the bottom here, the PFS is 96 weeks so one of the advantages here is, if this trial is successful, it’s the support of very long durations of dosing for those patient population albeit relatively small indication that a long duration of therapy is possible.
And this just tells you a little bit about the incident rate but we are looking for patients who are relapsed after initial therapy which is really surgery, local therapy such as radiation and radioisotope, radiated iodine.
The RESILIENCE trail in Breast Cancer finishing enrollment in the first half of next year. It’s also based on pretty strong Phase 2 data from José Baselga as referenced at the bottom. That Phase 2 data was published in JCO earlier this year and had a PFS advanced with hazard of 0.57. So this is probably a second line study for the most part, its silent as line of therapy but patients must have received prior anthracyclines and taxanes in combination with capecitabine.
And then the CORRECT trial is the colorectal cancer program that led to the recent U.S. approval and is undergoing EU regulatory review now for a survival advantage for the hazard of 0.77 in the third and fourth line settings. And the GRID trial, again I mentioned that the significant improvement in PFS. Safety events listed on both the bottom of this slide and the prior slide is fatigue and hypertension and hand-foot syndrome, and a variety of things that are not too dissimilar from the safety profile that’s well known from Sorafenib [ph].
So I think here, I’ll turn it back over to Julie to close.
Thanks Barb. So as we talk about. it’s very exciting not to have just one launch but two launches in a single quarter. The Stivarga approval came at the end of the September, a month ahead of the PDUFA date and if you followed our third quarter reporting, we have one sales day for Stivarga recorded. This is a very important compound for us. It’s another strategic addition to our kinase inhibitor franchise because it allows the Onyx and Bayer teams to go in and talk to oncologists about two compounds and talk to them about liver cancer, talk to them about kidney cancer, talk to them about colorectal cancer.
Barb already talked to you about the overall survival results, so I won't go into those, but our estimate of the number of patients annually in the U.S based on the label is approximately 20,000 to 30,000 so we think it’s a significant opportunity and I would again underscore what Barb said about this is the first drug in this setting in 12 years, so much needed by patients that are suffering with this disease.
Bayer is preparing for regulatory actions outside of the U.S. in 2013. They currently have an application for metastatic colorectal cancer pending in the EU and in Japan where we see priority review. Let's talk a little bit about the economics of Stivarga because it’s a little bit different than Nexavar. As you recall, with Nexavar it’s a profit split, we share equally in the investments and the profit associated with Nexavar. Stivarga, we have a 20% royalty on net sales globally. So every country in the world, we have no obligation for any investment in commercial or development expenses and we do co-promote in the U.S, on a fee for service basis so actively involved in the sales effort in the U.S.
We believe and Bayer has stated that across indications this product could have opportunity in excess of $1 billion. And as Barb commented, there is not only the two Phase 3 trials that have already read out but there is additional trials planned to continue to be able to help more patients suffering with cancer. If you look at Nexavar. Nexavar has been a globally successful product for some time now. Since it was first launched, it’s generated over $4 billion in sales and this is important because this is cashed that is coming into the business that we can deploy to serve other areas in investment like the proteasome inhibitor franchise where we’re doing additional clinical trials for Kyprolis.
We are focusing on increased commercial margins and those have been increasing over time as you heard on our recent quarterly call. If you think about the business, it’s just graphically depicts what I just told you. On the left hand side, or my left, your left too is the kinase inhibitor franchise. Nexavar again is providing operating cash to the business. We also have opportunities to further grow that franchise with trials in breast cancer and kidney cancer, increasing commercial margins and decreasing investments in R&D, our CFO said on the last call that on a year-over-year basis, we expect the investment in R&D for Nexavar to decrease 10% to 15%.
Stivarga, 20% royalty worldwide. No responsibility for investments and potential new indications. Kyprolis, busy with launch. Excited about that, investing in new trials to serve more patients, so a global development program. And Oprozomib, moving that forward in clinical development. So if you think about how I started my presentation, I came up here and talked about how unusual it was for a company to launch two new products in a single quarter, not only for a biotechnology company, but I think even for a pharma company and yet the things that we have put in place create momentum for the months and years to come.
So not only do we have launches in the U.S., if you look at the 2012 there, the launches are ongoing additional clinical data and if you look to the future, we have any number of clinical trials or read out continued regulatory actions. So there is a whole wealth – depth and breadth in the pipeline that has not existed previously. So we’re excited. This was a great time on every aspect of our business and for those of you who joined us on the breakout session, we look forward to taking your questions. Thanks again for inviting us here today.
[No Q&A session for this event]
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