Onyx Pockets $59M Upfront From Japanese Partner, to Market Myeloma Drugs

9/8/10Follow @xconomy

Onyx Pharmaceuticals has found a new partner to help sell its lead drug candidate for multiple myeloma in Japan, less than two months after it unveiled some promising clinical trial results.

The Emeryville, CA-based developer of cancer drugs (NASDAQ: ONXX) is announcing today that it has struck a new partnership with Japan-based Ono Pharmaceutical, in which Onyx will get about $59 million in upfront cash and potentially another $280 million in development and milestone payments based on today’s currency exchange rates. In return, Ono will get exclusive rights to develop and commercialize two Onyx drugs for cancer patients in Japan. The deal includes Onyx’s lead drug candidate, carfilzomib for multiple myeloma, as well as another drug at an earlier stage of development for the same condition, called ONX 0912.

The deal comes a little more than six weeks after Onyx released results from a mid-stage clinical trial that said carfilzomib was able to at least partially shrink tumors in one-fourth of patients with multiple myeloma and keep them in check for a median time of seven months—even when patients were so sick they had essentially run out of other options. Onyx had told investors it would seek a partner in Asia to help commercialize the drug there, but it has retained full ownership rights in the U.S. and Europe. The company is now in the midst of preparing a new drug application to the FDA, which it plans to turn in by year’s end.

“This is a Japan-only deal, and it’s a very valuable one,” says Onyx CEO Tony Coles. He noted that the latest round of clinical trial results strengthened his company’s bargaining position. “The results reinforced [Ono's] commitment to the compound,” he says.

Onyx, as I noted in a story back in July, has been seeking for some time to diversify itself beyond its current position as a one-drug company driven by sorafenib (Nexavar). That drug, approved by the FDA for kidney and liver cancers, generated $843 million in sales last year for Onyx and its partner, Bayer. But Onyx sought to expand its horizons, specifically through last year’s the acquisition South San Francisco-based Proteolix for $535 million. That deal gave Onyx full worldwide ownership of carfilzomib, an intravenously delivered therapy for multiple myeloma.

What few people noticed at the time was that Onyx also acquired an oral pill that is designed to work against the same molecular target as carfilzomib, which is known as a proteasome inhibitor. The oral drug, now called ONX 0912, was an important piece of the package in this deal with Ono, Coles says. Both drugs are being designed to treat multiple myeloma patients, with the IV version for use in hospitals, and the oral pill able to be taken when patients are sent home.

“We believe these two products can co-exist nicely inside and outside the hospital,” Coles says.

Ono isn’t exactly the first company that jumps to mind when I think of Japanese pharma companies, but Coles says he’s confident they will be a good partner. The company currently markets a drug for cancer patients in Japan called aprepitant (Emend) that was originally discovered by Merck. Ono also has oncology R&D programs, and a specialty sales force of 960 people, Onyx says.

While the folks at Ono get up to speed on the new compounds for the Japan market, Onyx is continuing to push ahead on its own in the U.S. and Europe. The company is focusing on getting its carfilzomib application together for the FDA by year’s end, with a goal of winning approval and starting U.S. sales as soon as possible.

Coles noted that the combination of safety, effectiveness, and a clear patient population in need puts his company in a strong position to have a second cancer drug on the U.S. market. But as all biotechies know, nothing can ever be certain when it comes to getting permission from the FDA. And Coles wanted to make sure he mentioned that before hanging up the phone yesterday. “Ultimately it’s the FDA’s call,” he says.

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