Onyx Pharmaceuticals (NASDAQ:ONXX) got the better of earnings estimates for the 3rd quarter of 2012, with non-GAAP net loss per share of $.79 compared to estimates of $.90, and revenues of $89.5M vs. $80.64M. The revenue beat was driven in part by Kyprolis, which was approved for the treatment of multiple myeloma in July and generated sales of $18.6M in its first quarter on the market – notably, not even a full quarter. Analysts were predicting less than half of that in Kyprolis’ first months on the market. PropThink covered Kyprolis’ early approval and suggested that peak worldwide sales near $2B could drive ONXX’s valuation to $6B alone, not considering additional products; share price has nearly doubled since, and we continue to add value for Onyx’s Bayer-partnered products, Nexavar and Stivarga.
ONXX’s recent pullback creates an entrance point into a quality drug franchise. With a refined tolerability profile and improved potency, Kyprolis will begin to take market share from Takeda’s segment-leading Velcade, while Onyx’s metastatic colorectal cancer drug Stivarga, which was approved in September, begins its launch ramp (peak sales estimates of more than $1B with full indications). Onyx’s $573M in cash and equivalents, plus increasing revenues, should sustain operations into profitability, and some analysts now argue that ONXX is an obvious target for a pharmaceutical takeover. Either way, Onyx’s growth supports increased returns for shareholders.
