Recently, Onyx Pharmaceuticals (ONXX) has initiated a phase I study with one of its pipeline candidates, ONX 0912, an oral proteasome inhibitor, in patients with advanced refractory or recurrent solid tumors. The study, to be conducted on 50 patients in the U.S., is aimed at determining the maximum tolerated dose (MTD), dose limiting toxicities, and pharmacokinetics and pharmacodynamics profile of the candidate.
Onyx needs to strengthen its pipeline since it solely depends on Nexavar, which is co-developed with Bayer (BAYRY). Nexavar is currently approved and marketed for the treatment of liver cancer and advanced kidney cancer in the U.S., the European Union as well as other territories worldwide. The drug is also being studied for other indications including breast cancer, ovarian cancer, thyroid cancer and non-small cell lung cancer.
Onyx’s revenues from Nexavar sales during the first quarter of 2010 were below expectations due to unfavorable foreign exchange movement, increased competition in the kidney cancer market and slower growth in Japan.
In order to diversify its pipeline, Onyx has entered into several deals over the past few years. These include the 2009 in-licensing deal with Singapore-based S*BIO Pte Ltd., which brings in two Janus Kinase inhibitors. Recently, this program was expanded to include new indications for hematologic malignancies and myeloproliferative disorders.
Current investor focus is primarily on the development of carfilzomib, an advanced stage pipeline candidate, which became a part of Onyx’s portfolio following its 2009 acquisition of Proteolix, a privately held biopharmaceutical company.
While we are pleased to note that the company’s pipeline is quite diversified, development and regulatory risks remain. The majority of these candidates, being in the initial to middle stages of development, are several years away from commercialization. Any hiccups in the development process or any adverse trial results will weigh heavily on the stock. We retain our Neutral recommendation.
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