Onyx Pharmaceuticals surprised a lot of people yesterday at an FDA advisory panel, and its stock is booming today as a result.
The South San Francisco-based biotech company (NASDAQ: ONXX) saw its shares rocket up $16.22, or about 36 percent, to $60.80 in pre-market trading today. That’s way beyond its previous 52-week high of $47.80.
Onyx’s shares are up today because its multiple myeloma drug carfilzomib (Kyprolis) won a unanimous 11-0 recommendation for approval yesterday from a panel of cancer drug experts who advise the FDA. The drug is designed to treat patients whose disease has gotten worse after at least two prior rounds of therapy, usually with big-selling treatments from Millennium: Takeda and Celgene. While the FDA isn’t required to follow the advice of its panels, it usually does. The agency’s deadline to complete its review of the new Onyx drug is July 27.
Many analysts had been expecting the agency to delay Onyx’s application for what is known as “accelerated approval,” which the FDA sometimes grants to drugs with lifesaving potential. Instead of wagering on an accelerated approval for Onyx, which based its application heavily on a study of 266 patients, many investors expected the FDA would want to wait for results of more ongoing studies before giving the green light to let the company start selling. But Onyx apparently persuaded the panel that the evidence it has now makes a strong case that its drug fulfills a need for patients who have essentially run out of other options.
About 20,000 patients are diagnosed in the U.S. with myeloma each year, and about 10,000 die from it, according to the American Cancer Society.
“We’ve long stressed that approval of ONXX’s multiple myeloma candidate Kyprolis (carfilzomib) was a question of when, not if,” said Cory Kasimov, an analyst with JP Morgan, in a note to clients yesterday. “Well, following an overwhelmingly positive vote and discussion at this afternoon’s FDA ODAC panel, we think that “when” may indeed be quite soon (as in July).”
Kasimov followed up today in a note to clients that Kyprolis has a 90 percent chance of winning accelerated approval from the FDA and that the product has “blockbuster sales potential” as it should gain broader usage over time among patients getting initial rounds of treatment. Kasimov forecasts peak annual sales of the new myeloma drug at $900 million in the U.S. and $600 million in the European Union, based partly on an assumption that Onyx will charge about the same price as its key competitor, Millennium’s bortezomib (Velcade).