Onyx Pharmaceuticals Inc. (ONXX) recently announced that it has entered into an agreement with a Japanese company, Ono Pharmaceutical Co. Ltd., for the development and commercialization of two of Onyx Pharma’s compounds, carfilzomib and ONX 0912, in Japan.
Carfilzomib is currently in multiple trials for the treatment of patients with multiple myeloma and other cancers, and Onyx Pharma plans to file a New Drug Application with the US Food and Drug Administration (FDA) by the end of 2010 for accelerated approval of the candidate. ONX 0912, which is a follow-on drug of carfilzomib, is currently in phase I testing.
As per the terms of the agreement, Ono Pharma will have full rights to develop and market both the compounds for all oncology indications in Japan, while Onyx Pharma retains the marketing rights for the rest of the world.
For the deal, Ono Pharma will make an upfront payment of ¥5 billion ($59 million) to Onyx Pharma and the company will also be entitled to receive up to $280 million on the achievement of certain development and sales milestones. Onyx Pharma will also receive double-digit royalty payments on the sales of these drugs, when approved and marketed in Japan.
Japan-based Ono Pharmaceutical Co. Ltd. is primarily engaged in the manufacture and sale of pharmaceutical products. The company’s products include oral medications for the treatment of bronchial asthma, disturbances of peripheral circulation, chronic pancreatitis and overactive bladder, as well as injectable drugs for the treatment of acute lung injury, generalized intravascular coagulation syndrome, acute phase cerebral thrombosis and blood pressure regulators used during surgical operations.
We currently have a Neutral recommendation on Onyx Pharma, which is supported by a Zacks #3 Rank (short-term Hold rating). We view this deal as a positive for Onyx Pharma, as this partnership allows the company to benefit from Ono Pharma’s drug development experience in Japan.
Moreover, the agreement has brought in cash, which should come in good use as Onyx Pharma conducts pre-launch activities for carfilzomib. Carfilzomib could hit the US market as early as 2011 if it is granted accelerated approval by the FDA.
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