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Onyx Pharmaceuticals, Inc. (ONXX) Is “One To Watch”

|Includes: ONYX Pharmaceuticals, Inc. (ONXX)

Onyx Pharmaceuticals, the globally-focused biopharma out of southern San Francisco that has assembled a broad-spectrum pipeline of cancer therapies targeting multiple molecular pathways, with their primary developments in kinase and proteasome inhibitors, has become an extremely hot property with several of the top biotech/biopharma firms gunning for them.

According to a recent Wall Street Journal report on ONXX following last month's unsolicited buyout offer from biotech heavyweight Amgen (which was subsequently rejected by the company for being too light), Pfizer, Bayer AG, and Eli Lilly have all been sniffing around as well, with the stock now trading comfortably in the $130 range since it rallied around 50% on such interests. The market is clearly telegraphing signals here about the strength of Onyx's portfolio of cancer therapies, and the company's Board gave the go ahead to their financial advisory firm to begin scooping up potential deals that would be in the shareholder's best interests, obviously emboldened by the market's warm reception of key expansions to their pipeline made recently, as well as two notably successful product launches.

The start of July saw Onyx and long-time associate, Bayer HealthCare, putting in a supplemental New Drug Application to the FDA as well as its EU equivalent, the European Medicines Agency, for their new oral anti-cancer drug Nexavar® (sorafenib, developed and marketed in collaboration with Bayer). Available in tablet form, this multi-kinase inhibitor, currently approved to treat liver and kidney cancers, has shown great potential in clinical studies for treating differentiated thyroid cancers (represents 94% of all thyroid cancer cases) that no longer respond to the standard radioactive iodine therapy.

The capacity of sorafenib to inhibit multiple kinases associated with both of the primary cancer growth factors spells a great boon for those afflicted with what is the fastest-increasing cancer on earth in recent years (thyroid), as well as to breast (for which sorafenib is currently in late-stage studies) and other difficult-to-treat cancer sufferers. Given a new incident rate for thyroid cancer of some 213k patients per year, alongside the progression-free survival performance of sorafenib in the Phase 3 DECISION trial, interest by larger industry players is likely reflecting the potential of sorafenib, as well as the other therapies and indications in the ONXX pipeline.

The other leading kinase inhibitor on the radar here is Stivarga® (regorafenib). Also distributed in tablet form, this Bayer-developed compound is used to treat colorectal cancer and a rare gastrointestinal cancer that spreads easily and can't be treated with surgery, in patients where other medicines have failed. Stivarga is a particularly sweet deal for ONXX, as the company receives a royalty of 20% on all global net sales of the drug in oncology by Bayer. Across the board really, ONXX's existing therapies show massive potential to span different types of cancer and lines of therapy, proving the value of their kinase and proteasome inhibitor technology.

Kyprolis® (carfilzomib), designed for injection, is the company's chief proteasome inhibitor and is approved by the FDA for multiple myeloma patients (abnormality of plasma cells in the bone marrow and the second-most common hematologic cancer) who have failed to halt progress within 60 days of at least two prior therapies (including the current leader, bortezomib). With some 100k new cases diagnosed annually worldwide and over twice that currently living with the disease, multiple myeloma is a sizeable and growing target for ONXX, but the company also has a rapidly emerging set of other proteasome inhibitors.

First among the other proteasome inhibitors is Oprozomib, an oral indication which has shown broad anti-tumor activity in preclinical work and is distinct from the injected carfilzomib technology, despite being based upon the same selective-targeting chemistry used to develop Kyprolis. Good extant traction here in recurrent or refractory solid tumors and hematologic malignancies (includes multiple myeloma) will likely be borne out by ongoing Phase 1 and 2 trialing and confidence is high at ONXX that the broad therapeutic window seen in preclinical work will develop nicely.

Rounding out the Onyx lineup is a potent immunoproteasome inhibitor named ONX 0914 that shows an incredibly bright future in handling autoimmune disorders. The goal with this indication was to harness the selective targeting capability in immune cells of proteasome function, while seriously delimiting impact to proteasome in other tissue systems, a profile which offers tantalizing possibilities for treating lupus and rheumatoid arthritis, as well as inflammatory bowel disease via the blockage of a variety of inflammatory cytokines. It is also important to note the collaborative work on Palbociclib done by Onyx with another industry leader, Pfizer. Palbociclib is the lead compound out of their joint program to study several such important compounds that modify how certain, crucial enzymes help to regulate the overall cellular lifecycle. Palbociclib is an oral small molecule kinase inhibitor currently in Phase 3 for which ONXX stands to gain an 8% royalty off of all Pfizer's global sales.

Needless to say the company is attracting serious attention in the markets on the strength of this oncology pipeline, and the unsolicited offer by Amgen is a tip of the hat regarding the company's technology for robustness and broad future applicability. ONXX has their hands on winning technology here with a very bright future that could ultimately save countless lives and markets know it.

For more information on Onyx Pharmaceuticals, visit Onyx.com

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