Onyx, Bayer’s Colon Cancer Drug Helps Extend Lives; Stock Climbs
Onyx Pharmaceuticals and Bayer settled a dispute a couple weeks ago about ownership of a certain colon cancer drug in development, and suddenly that colon cancer drug is looking like it could be pretty valuable.
South San Francisco-based Onyx (NASDAQ: ONXX) said that its partner, Bayer, has stopped a pivotal clinical trial of regorafenib as a treatment for colon cancer after it met its goal of improving overall survival time compared to a placebo. The study enrolled 760 patients with colon cancer that had spread through the body, and which had worsened after getting the existing therapies, leaving them few options. No details were made public in a company statement today, but Onyx said safety and tolerability of the drug were “generally as expected” and that more data will come out at a scientific meeting.
Shares of Onyx climbed by $5.89 a share to $41.91, about a 16 percent gain, in early trading before the market opened this morning.
“While actual data was not disclosed, we believe approval probability is high given an overall survival benefit and estimated a global $300-$400 million market opportunity,” for Onyx through a royalty stream, said Biren Amin, an analyst with Jefferies & Co., in a note to clients this morning. “Regorafenib provides another near-term revenue diversification opportunity from Nexavar.”
Just a little more than two weeks ago, Onyx and Bayer settled a long-running dispute over who owns what part of regorafenib. The two companies have long had a 50/50 partnership to co-market sorafenib (Nexavar) as a treatment for kidney and liver cancers, and Onyx argued that the next member of that class of kinase inhibitors also fell under the 50/50 agreement. Onyx didn’t get that much, but it wasn’t left empty-handed. As part of the settlement announced earlier this month, Bayer agreed to pay Onyx a 20 percent worldwide royalty on sales, and Onyx will have the right to co-promote the product in the U.S.
Onyx is also seeking FDA approval for another cancer drug, carfilzomib, for multiple myeloma. That drug is owned by Onyx, and not part of the Bayer partnership.