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Nexavar, the oral cancer drug marketed by Onyx (ONXX) and Bayer (OTC:BYERF) for kidney and liver cancers has very promising results. Phase 2b clinical trial data demonstrate that the drug has confirmed previous promising results on metastatic breast cancer. When combined with Xeloda, Nexavar prolonged free survival (PFS) for 6.4 months, compared to 4.1 months to Xeloda alone and to 2.9 months compared to a combination of Avastin and Xeloda.

This is good news for Onyx. The improvement in PFS is a large step forward on the road towards improving free survival of patients suffering from metastatic breast cancer. This is the first time an oral treatment demonstrates it significantly improves time to tumor growth.

Wednesday is the day of a more detailed presentation of the Nexavar study. It is expected to include a breakdown of results between first-line and second-line patients. Nevertheless, the results that we already know are encouraging and we do not exclude the possibility that oncologist would begin using the combination off-label, hence increasing Nexavar’s worldwide sales and revenues. It was said that Bayer is looking forward to generate around $3 billion a year from the drug. Imagine what Onyx would represent and how much higher its revenues would reach when the drug will be approved for lung cancer too.

Is this good news for Onyx? We believe it is the best of what we could expect.

Biocryst (BCRX): Will complete Phase 3 peramivir flu drug with HHS money

Under Emergency Use Authorization (EUA), BioCryst received a request for proposal (RFP) from the U.S. Department of Health & Human Services (HHS) for a minimum of 1,000 and a maximum of 40,000 courses of peramivir for the treatment of influenza. In the meantime, the HHS has awarded Biocryst a $77.2 million contract modification to complete Phase 3 development of peramivir.

The news today highlights the department of health’s enthusiasm for the drug. It has nothing to do with the drug’s demand, sales, or anything related to the firm’s revenues. Having said that, we believe that those who tried to claim that the revenues from the 40,000 courses of the drug are below expectations and do not justify the current stock price are misleading us. The truth is that the drug is not yet approved and the HHS promised order is not a typical full order, but tied to the RFP’s guidelines. Our expectations on the drug’s sales under these conditions were zero.

On the other hand, the press release highlights the HHS love of the product as it has demonstrated efficacy in saving flu patients from their miserable condition and saving many lives. The HHS, no doubt about it, believes in the drug. Otherwise there would be no explanation for granting BioCryst $102.6 million to develop the drug until phase 3 trial, in addition to the recent $77.2 million to complete the remaining of Phase 3 trial. As a matter of fact, the HHS $102.6 million awarded to BioCryst in January 2007, has helped the flu drug advance through Phase 2 and initial part of Phase 3 trials. Now, the $77.2 million will complete it.

Peramivir is not another vaccine, but a therapeutic intended to save the lives of flu patients who have become severely sick and hospitalized. Although some drugs for flu, like Tamiflu, Relenza and others do exist on the market, no specific anti-viral drugs have yet been approved for flu.

Disclosure: No Positions

Source: Onyx Pharmaceuticals: Nexavar Promising for Metastatic Breast Cancer