美國安進 (AMGN) 2007 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the first quarter financial results conference call.

At this time, all participants are in a listen-only mode.

Later we will conduct the question-and-answer session.

Please note that this conference is being recorded.

I will now turn the call over to Onyx Pharmaceuticals.

Good afternoon, I'm Julie Wood, Vice President of Investor Relations and Corporate Communications at Onyx Pharmaceuticals.

We thank you for joining us today for our first-quarter financial results conference call.

Please note that this call being held on May 9th, 2007 is the property of Onyx Pharmaceuticals.

Any redistribution, retransmission, or rebroadcast of the call in any form without the express written consent of Onyx Pharmaceuticals is strictly prohibited.

The order of our prepared comments will be as follows: After Hollings Renton, our CEO, makes some brief introductory remarks, Ed Kenney, our Executive Vice President and Chief Commercial Officer, will talk about ongoing commercialization activities.

Then Hank Fuchs, our Executive Vice President and Chief Medical Officer, will provide a clinical update.

Next, Greg Schafer, our Chief Financial Officer, will discuss our first-quarter financial results.

Finally, Hollings will make a few closing comments and then open up the call for Q and A with the management team, including Laura Brege, our Executive Vice President and Chief Business Officer.

Please note that we will be making forward-looking statements during this teleconference that could include financial, clinical or commercial projections.

Statements that are not historical fact are forward-looking.

References to what we expect, believe, intend to do, plan, estimate or other statements referring to future events or results are intended to identify these statements as forward-looking.

Forward-looking statements are inherently subject to risks and uncertainties.

For a discussion of these risks and uncertainties, we refer you to our annual report on Form 10-K for the year ended December 31st, 2006, specifically the section entitled Business Risks, as well as to our more recent filings with the SEC.

Additionally, our 10-Q for the first quarter 2007, including updated risk factors, is expected to be on file tomorrow.

Also note that the forward-looking statements statements are based on our beliefs and assumptions as of today.

These beliefs and assumptions may change as a result of future events or the passage of time, which would cause these forward-looking statements to be outdated and no longer our view.

We undertake no duty to update these forward-looking statements.

Now I'd like to turn the call over to Hollings.

Thank you, Julie.

This is a very exciting time.

As we believe that we are only just beginning to realize the full potential of Nexavar as a broadly useful anticancer agent.

Nexavar has been shown to prolong survival and its efficacy has been seen in two difficult tumors as a monotherapy.

We have also observed that Nexavar augments the activity of two different chemotherapies in randomized Phase II studies.

Therefore, we are increasingly confident that we can take advantage of Nexavar's potential to benefit patients with many different types of cancer.

We believe Nexavar's activity, tolerability and convenience will provide substantial value to patients who are living with cancer.

We, and our collaborator Bayer, got off to a very strong start in 2007 with a positive recommendation from the Independent Data Monitoring Committee upon review of our Phase III SHARP trial in liver cancer.

Their recommendation, made following a planned interim analysis was to stop the trial early due to superior overall survival for the patients receiving Nexavar versus those on placebo.

Based on this recommendation, we initiated activities to end the pivotal trial and are now in dialogue with various regulatory agencies as we prepare a supplemental filing for approval to market Nexavar in liver cancer around the world.

If the dossier, once submitted, is favorably reviewed, Nexavar could be available for patients with this deadly disease early next year, or possibly as soon as late this year.

The data from the Phase III SHARP trial will be presented during the plenary session at the ASCO meeting in Chicago next month.

The independent data -- data monitoring committee also recommended that we stop the randomized Phase II liver cancer trial in combination with doxorubicin.

The committee determined, based on the interim results of the Phase III trial and the observed overall survival and time to tumor progression results in the Phase II trial, that the Phase II results, though immature, indicated that the patients randomized to receive doxorubicin only might be at a considerable disadvantage.

Data from this trial will be presented at a scientific meeting in the second half of the year.

In advanced kidney cancer we have established Nexavar as a standard of care.

Worldwide net sales for the first quarter were $61 million.

In the U.S., the advanced kidney cancer market appears to be maturing after a very rapid uptake of the targeted agents.

In the rest of the world, we see continued growth, fueled by ongoing approvals and launches.

In addition, we continue to generate data in the adjuvant setting at higher doses and in combination with other therapies.

In melanoma, we have seen further evidence of Nexavar's potential utility in combination with chemotherapy.

In a randomized Phase II trial combining Nexavar with DTIC, a commonly used chemotherapeutic in this disease, we observed an encouraging increase in progression-free survival for those patients that received Nexavar plus chemotherapy.

Data from this study will also be presented at ASCO.

In non-small cell lung cancer, we will soon complete enrollment in a large international Phase III study.

This trial, which was designed to enroll non-small cell lung cancer patients with both types of the disease, squamous and adenocarcinoma cell cancers continues to be regularly monitored for safety.

Currently, the only antiangiogenic approved in the U.S.

is limited to adenocarcinoma cell patients due to a higher rate of serious bleeding events seen per squamous patient taking that drug.

While the Nexavar trial began in early 2006, will continue to be monitored for safety, we are pleased that we have been able to enroll in this trial patients with both types of non-small cell lung cancer.

In addition, there are more lung cancer studies underway, including a second Phase III trial currently enrolling patients in Europe.

While drug development is complex and sometimes unpredictable, as we generate more data on Nexavar's efficacy and tolerability, we are increasingly confident in its potential to help many different types of cancer patients.

Its efficacy and tolerability in the advanced renal cancer has already helped thousands of patients worldwide.

Its convenient oral delivery and flexible dosing schedule allow physicians to maximize Nexavar's clinical benefit and tolerability.

And we hear directly from patients how treatment with Nexavar has allowed them to live longer with their cancer.

A supplemental new drug application for liver cancer should be filed mid-year.

We are pleased that enrollment in our pivotal Phase III lung cancer trial is moving ahead nicely.

Additionally, Bayer has started a second randomized trial in this disease in the frontline setting.

Other randomized Phase 2 studies are planned 3 to start soon in lung cancer and in breast cancer.

With this flurry of commercial and clinical activity, it remains an exciting time as we execute on our business strategy and work toward achieving our vision of changing the way cancer is treated.

Now I'll turn the call over to Ed, to discuss our commercial success and ongoing activities with Nexavar.

Thanks, Hollings.

Today Nexavar is in use throughout the world to treat patients suffering from advanced kidney cancer.

The kidney cancer market, which has historically been considered relatively small due to a limited number of patients, with few therapeutic options available to them, has grown dramatically.

As the number of useful treatments grows, patients and physicians now have choices available to them and as patients live longer with their disease, they are being treated sequentially with multiple agents.

With additional agents expected to enter the market, we will continue to focus on Nexavar's unique combination of features.

Including its proven efficacy, tolerability, combinability, and convenient oral delivery, they benefit an increasing number of patients.

Nexavar is currently being tested in a large adjuvant trial in kidney cancer in the U.S.

with another adjuvant trial about to begin in Europe.

We will also continue to evaluate Nexavar in combination with other therapies.

More recently, we have begun to explore interim patient dose escalations.

The tolerability that I mentioned permits many patients who have stabilized on Nexavar to tolerate increasing doses over time.

Some of this promising early data will be presented at ASCO next month.

Nexavar is currently approved in approximately 50 countries for advanced kidney cancer.

It is marketed jointly by Bayer and Onyx in the U.S., and by Bayer outside the United States.

After a rapid uptake following the launch of Nexavar, international sales are continuing to grow.

In the U.S., net sales of Nexavar were somewhat lower in the first quarter of 2007 as compared to the previous quarter.

The fourth quarter of 2006 included a one-time order of $5 million, as well as slightly stronger patient demand at year-end.

The phenomenon that the data suggests is both seasonal and reimbursement related and it obscured what had been an essentially stable market for Nexavar in the U.S.

The new Bayer-Schering pharma commercial organization continues to demand outside of the U.S.

with particular strength in Western Europe and Asia.

Outside of the United States, first-quarter sales increased 22% over those recorded in the fourth quarter of 2006.

Bayer has now launched in the five largest markets in Europe, Nexavar's approved worldwide at prices that are generally at parity with the U.S.

Our plan is to seek regulatory approvals in liver cancer will solidify the global establishment of Nexavar as a highly useful anticancer therapeutic.

Particularly in the ex-US setting where the epidemiology indicates that liver cancer is much more prevalent than kidney cancer.

As a result of the positive outcome from the liver cancer trial, the joint U.S.

marketing teams as well as their counterparts on the Bayer global team, have been busy developing comprehensive launch plans and physician education programs in anticipation of favorable regulatory reviews.

As you know, those suffering from advanced liver cancer have virtually no treatment options beyond surgery or other local procedures, with surgery the only curative treatment for some of these patients.

However, it is estimated that fewer than 20% of patients are eligible for surgery, either transplantation or resection, and of those who undergo surgery, a significant percentage ultimately have their cancer recur.

Given these circumstances, we are extremely optimistic about the potential of Nexavar in this new market as we gain more visibility and after regulatory approval and labeling are obtained, we will be able to provide more definitive guidance on this market potential.

I would now like to turn the call over to Hank Fuchs.

Thanks, Ed.

After the last year or so, patients and physicians alike have been able to gain broad exposure to Nexavar.

With dozens of trials underway in a variety of tumor types and settings, we are amassing a comprehensive database that we believe will ultimately lead to more and better treatment options for cancer patients.

An advanced kidney cancer, two long-term phase III adjuvant studies are planned.

One in the United States that is now underway, and one in Europe that is scheduled to begin enrolling patients shortly.

Those studies are sponsored by co-operative groups.

In liver cancer, we have a broad international program intended to benefit people suffering with this particularly deadly cancer.

At the recommendation of the data monitoring committee we initiated the conclusion of the pivotal Phase III trial based on superior overall survival in the Nexavar group as compared with the placebo group with no imbalance noted in the serious adverse event rate between the two arms.

We are now working with Bayer and health authorities globally to file a supplemental application for the syndication as quickly as possible.

At the same time, we and Bayer accepted the recommendation of the independent monitoring committee to stop a 100-patient randomized Phase II study comparing Nexavar plus doxorubicin to doxorubicin alone in liver cancer patients.

Based on the data monitoring committee's assessment that patients receiving chemotherapy alone, were at considerable disadvantage.

In addition, there is an Asian Pacific liver cancer study that has fully enrolled and is intended to provide supportive evidence for an Asian filing.

In Japan, Bayer has a study enrolling patients with liver cancer who have received TransArterial Chemo Embolization, or TACE, for their disease.

Looking across the competitive horizon, we believe that Nexavar is very well positioned.

As for our knowledge there are no ongoing randomized registrational Phase III studies in this disease.

In advanced melanoma, we continue to collect data from the randomized Phase II trial combining Nexavar with DTIC or dacarbazine.

This small independently reviewed trial enrolled first-line patients.

Top line data from the trial showed that combination with Nexavar, versus chemotherapy alone, extended progression-free survival to 21 weeks, from 12 weeks in the control arm.

The hazard ratio was 0.67 which means there was a 50% overall improvement in progression-free survival in the Nexavar plus DTIC arm.

The latest data from the study will be presented at ASCO.

In addition, the Phase III melanoma trial, sponsored by ECOG, continues to enroll first-line patients comparing overall survival of those treated with the chemotherapeutics carboplatin and paclitaxel to treatment with those agents plus Nexavar.

However given the size of the study it will be some time before we know the outcome.

Both the early randomized Phase II data in liver and melanoma suggest the potential benefit of Nexavar in combination with other anticancer agents.

Building on this finding, a major initiative has been underway to explore the utility of adding Nexavar to existing drug regimens to treat more common malignancies, specifically those where proof of concept for antiproliferative and antiangiogenic drugs exist.

We're focusing initially on advanced lung cancer and breast cancer,two diseases that affect large patient populations and are associated with poor prognosis.

We believe that Nexavar may have important advantages for patients with these diseases, due to its low rate of mild suppression, making it combinable with traditional cytotoxic agents and its oral administration providing convenience for patients, particularly in settings where oral therapy is the standard of care.

Our 900 patient pivotal Phase III trial in advanced non-small cell lung cancer is nearing completion of enrollment.

In the study, previously untreated patients receiving Nexavar or placebo in combination with carboplatin and paclitaxel.

Since we can not rule out the safety issues that the only approving of the angiogenesis drug experienced in the squamous cell patient population, and independent data monitoring committee has been routinely monitoring this study, since shortly after the trial started in February 2006.

Recently, another first line randomized study was initiated in Europe that is expected to enroll 350 patients who will receive Nexavar or placebo in addition to the background chemotherapies of gemcitabine and cisplatin.

We believe that Nexavar may be well positioned to enter the lung cancer market, not only because of the increasing use of targeted therapies to treat earlier stages of non-small cell lung cancer, but also because of Nexavar's oral administration and tolerability as well as its potential combinability with other agents.

In breast cancer we are initiating a broad multinational program of randomized phase 2 trials in collaboration with renowned experts in breast cancer.

Breast cancer is a disease in which antiangiogenic and antiproliferative agents have shown significant promise, in combination with standard therapies.

Given Nexavar's low rate of mild suppression and lack of other overlapping toxicities, its good tolerability, its oral delivery, and its additional activity against the potentially important RAF kinase, a potential target in breast cancer, the clinical community has expressed keen interest in exploring Nexavar in combination with chemotherapy, hormonal therapy, and other targeted agents.

Remember that advanced breast cancer is an incurable disease, and quality of life considerations, such as allowing patients to be treated with oral medications with manageable side-effects are a important component of treatment decision.

We plan to provide further details about our breast cancer program in the coming months.

Now I'll turn the call over to Greg.

Thanks, Hank.

Net worldwide sales of Nexavar were $60.9 million for the first quarter of 2007, with U.S.

sales of approximately $26 million and sales outside of the U.S.

of approximately $35 million.

As a reminder, Onyx and Bayer share profits worldwide except in Japan and all Nexavar revenue is recorded by Bayer.

For the three months ended March 31st, 2007, Onyx reported a net loss of $12.2 million or $0.26 per share, which included stock-based compensation of $3 million, or $0.06 per share.

Onyx has net payment due from the unconsolidated collaboration with Bayer was $3 million for the first quarter of 2007.

This represents the collaboration balancing payment due from Bayer for the quarter.

This is the first quarter we have recognized an amount due from Bayer, and it is recorded as a contraexpense on our statement of operation.

In the quarter, Bayer's development and commercial expenses dipped, which helped drive the balancing payment in our direction.

Going forward, we expect this line item to fluctuate as a function of Nexavar sales and the relative commercial and development expenses incurred by Onyx and Bayer.

As a reminder, Onyx's direct expenses associated with Nexavar are included with our other direct expenses and the R&D, and SG&A line items of our income statement.

Total share development expenses under the collaboration were $33.3 million for the first quarter of 2007, and were less than those incurred in the fourth quarter, due to the winding down of certain kidney cancer and melanoma activities and quarterly fluctuations.

Shared Nexavar sales and marketing expenses, including cost of goods sold and distribution expense, were $36.5 million for the first quarter of 2007.

This was a decrease over the fourth quarter of 2006, and resulted primarily from a reduction in Bayer's launch activities outside of the U.S.

Given our continued investment in Nexavar, we anticipate 2007 share development expenses to be at approximately the same level as they were in 2006, or slightly higher.

We expect shared SG&A to annualize at levels in the fourth quarter of 2006 as we prepare for the global launch of Nexavar in liver cancer.

Onyx's direct SG&A of $13.2 million for the first quarter of 2007, was essentially the same as they recorded in the fourth quarter of $2006.

Our SG&A expense line item includes the costs of our U.S.

sales force, the portion of shared Nexavar marketing expenses that we incur directly and the costs that we incurred for general and administrative support of the company.

Total stock-based compensation for the first quarter was $3 million or $0.06 per share, $2.5 million of this is reflected in the R&D line item and $500,000 is a SG&A line item.

At March 31st, 2007, we had cash, cash equivalents, and marketable securities of $261.8 million, as compared to $271.4 million at the end of 2006.

Included in the 2006 amount is $4.4 million of marketable securities classified as long term on the condensed balance sheet.

Now we'll turn the call back over to Hollings.

Thanks, Greg.

We are very clearly executing against the 2007 goals we highlighted on our last teleconference.

During that discussion, we called out five very specific activities that encompassed both commercial and clinical milestones.

First, we intend to make substantial progress in our liver cancer program.

And we are already well on our way to achieving this with the early completion of the pivotal trial.

One of the principal clinical investigators will report results from the Phase III liver study at ASCO during the plenary session next month.

Second, our discussions with the regulatory authorities and plans for a supplemental filing in liver cancer are moving forward rapidly.

At the same time, our marketing groups are preparing worldwide launch plans in anticipation of favorable regulatory reviews.

We believe this could culminate in a launch of Nexavar in early 2008 or possibly sooner in its second indication.

Third, in advanced kidney cancer, Bayer is continuing to grow the international business.

In the U.S., we are competing effectively as a growing number of kidney cancer patients benefit from Nexavar.

We also -- we are also generating additional data on drug sequencing, interpatient dose escalation, and potential use of Nexavar in the adjuvant setting.

Fourth, in melanoma, we plan to report results from our Phase II study combining Nexavar with DTIC at ASCO and articulate our next development steps in this disease later this year.

Fifth, in lung cancer, we are nearing completion of enrollment of a pivotal Phase III study, which is enrolling all histologies.

With a commitment to a broad lung development program, Bayer has already started a second Phase III study in Europe, and additional randomized Phase IIs are planned, and in breast cancer, we are poised to initiate our first randomized Phase II trials soon with much to come in this indication over the year.

The excitement in the clinical community, the testimonials we hear from patients and the statistical and clinical significance of our data, are increasing our confidence in our strategic investment in Nexavar to maximize its full potential on a worldwide basis.

We set out to change the way cancer is treated and we are beginning to deliver on that.

We and Bayer are investing in the clinical trials necessary to support our hypothesis that Nexavar can be a broadly useful anticancer agent, with activity across tumor types and in combination with multiple agents.

As monotherapy, Nexavar has proven efficacy in kidney cancer and now has demonstrated overall superior survival in liver cancer, a second tough to treat tumor, we're increasingly confident that Nexavar's differentiation from other therapies and its distinct advantages as an oral, well tolerated combinable agent with flexible dosing and a dual mechanism of action provide Onyx with a franchise for future growth that has only just begun.

We are executing on the first phase of our business strategy in tough to treat cancers, and have already begun our expansion into the larger scale clinical work in more common solid tumors, moving toward achieving Phase II of our long term strategy for sustained growth and profitability.

Thank you for your continued interest in our success.

We would now like to take your questions.

Thank you.

(OPERATOR INSTRUCTIONS) Howard Lang from Leerink Swann's on the line with a question.

Please go ahead.

Thanks very much.

Can you talk about what was the contribution of sales in HBC to the first quarter numbers?

I think it's too early to say anything's really changed off label use in the first quarter since, obviously, the data -- the top line of having met the trial result on survival wasn't announced until the middle of the quarter.

Our expectation is that there will be a pickup on offlabel usage in liver cancer after the data is presented at ASCO.

Okay.

Good.

And in the -- for the European, Phase III trial in non-small cell lung cancer what was the primary end point a,uh, also, is there interim analysis for the U.S., on the small cell lung cancer trial.

Yes.

The primary end point is progression-free survival.

And all of our Phase III clinical trials tend to have independent data monitoring committees but we don't like to comment on is the -- the timing and the scope of the specific interim analyses.

I think it's important to recognize that, that we have had trials stop early due to efficacy success, but we don't -- that's not something that we would specifically point to or predict.

Okay.

Thanks very much.

Next question.

Steve Harr from Morgan Stanley is on the line.

Please go ahead with your question.

Hi.

Can you give us some idea of, what's driving the European growth?

In -- what I want to get at is, in the -- in Europe have you seen a similar very rapid plateau like you did in the U.S.?

Have you -- some -- some pressure as -- as -- particular up and has some recommendations?

And the growth is driven, more by country by country launches, or are you having success and continue to grow the drug in individual countries?

I think there's some of both.

I mean it's pretty early days in Europe, Steve.

Clearly new launches do account for, a big chunk of the increased use but also we're -- we're holding up reasonably well in terms of market share in a number of the countries.

But it's very much a country by country determination.

Great.

Thank you.

George Farmer from Wachovia Securities is on the line with a question.

Please go ahead.

Hey.

How's it going.

Good.

Let's see.

regarding the lung cancer trial, and your decision to include both, adenocarcinoma and squamous pathologies.

What gives you the confidence that you're not going to see hemostasis that other agents like Avastin have caused in the squamous population?

Well, hi George, Hank.

Hi.

The -- you know, we treated a fairly large number of patients and reported at ASCO both, adenocarcinoma patients as well as squamous cell carcinoma patients.

The -- what we observed so far was, an efficacy signal both in monotherapy as well as in combination therapy that warranted starting the Phase III trial as well as sufficient safety data in the squamous cell population, to give us confidence that we could include squamous cell cancer patients.

As far as constantly predicting the outcome of that.

I think we've been fairly careful to say at every turn that the study is being overseen by an independent data monitoring committee.

And, you know, we continue to watch that trial, expectantly.

I think the important, thing is that if the trial is successful, we'll have something very different from our competitors.

That is, we'll have the hope of making a claim that Nexavar benefits all non-small cell lung cancer patients regardless of our underlying histology.

So far, so good in the sense that we could do a trial and that we've gotten this far in the enrollment, but, again we wait for the results.

Okay.

That's encouraging.

And, let's see.

You mentioned the European study had a primary end point of PFS.

Just to clarify.

The U.S.

study has an end point of overall survival?

That's correct.

Finally, is it -- Nexavar approved in all E.U.

countries right now?

Not every E.U.

Most of the E.U.

countries.

It is approved in the top five, all of the top five.

But there still are some countries not only in Europe but around the world that are still launching.

And you're aiming for Japanese approval?

It's not yet approved.

It was filed around the middle of last year, just takes a little longer in Japan.

Thanks very much.

Thank you.

Next question.

Jason Zhang from Prudential is on the line.

Please state your question?

Hi, Jason.

Jason, are you there?

Actually, this is Brett Kelly sitting in for Jason.

I'm just wondering about the choppiness of the COG costs.

Did I hear you say right correctly that the, the COGS in SG&A costs for the year are going to be very similar to '06?

What we've said was, we expect the -- them to be at annualized levels of the fourth quarter of '06.

Annualized at the fourth quarter.

Fourth quarter just to remind you was about $49 million, combined.

Sure.

Sure.

And, developmental costs of -- same thing?

Or is that harder to predict?

Yes, on the development, the guidance is, -- on an annual basis, looking at -- 2007should look like 2006.

Maybe slightly higher, but in a that range.

And I might have missed it on the, on the initial call, but can you give some color as to why, the large reductions this quarter?

A little bit further?

Yes Well, as you can see in the supplemental table in the press release, what drives the -- the net expense, but on the SG&A line item, what we're seeing is the completion of some of the -- the launch activities outside of the U.S.

and those are really, led by Bayer.

And on the development side the winding down of some of the kidney and melanoma trials.

So, we see it as a temporary dip in the development.

And there's always a little bit of year-end fluctuation in these, but the fourth quarter has always been a little higher and the expenses coming from Bayer than in the first quarter of the year.

Sure.

As is the trend in '06.

Right.

Okay.

Thank you, guys.

Yes.

Next question?

Mona Shea from JPMorgan is on the line with a question.

Please state your question?

Hello?

Pardon me, Mona Shea with JPMorgan is on the line with a question.

Please state your question?

All right.

Let's go to the next one.

William Sargent from Banc of America Securities is on the line with a question.

Please state your question.

Hi, Will.

Hi.

How's it going?

Getting some background noise I'll mute as soon as I ask my question.

I was wondering in the non-small cell lung trial, if it was stratified with the adeno and squamous cells to reflect the current population to split single non small cells, and then also as far as enrollment.

Does soon mean earlier than you had anticipated the last time we had an update?

Yes.

So we do stratify randomization based on, histology and some other thing,Uh, a,uh, soon means we had given I think earlier in the year some general direction that we expected enrollment to complete in the second half of the year.

Here it is, May, and we're using the word soon.

So I think that -- that's -- you know, soon.

Bottom line, the accruals have gone very well.

That was my question.

Thank you very much.

Yes, thanks.

Next.

Andrew Burns with Merrill Lynch is on the line.

Please state your question.

Hi.

Thanks for taking the question.

Sure.

I want to ask two questions.

One is about the Azimuth line of credit, the equity line, what the status of that is.

And also how should we think about possible price increases going forward?

Well, first of all, on the line, we did draw down some additional capital of about $30 million.

Just bottom line for us is we want to make sure that the company is well capitalized and has a strong balance sheet to make sure that personally we are fully capitalized on both the commercial and the clinical development opportunities with Nexavar.

We're more encouraged than ever with the data that we have in putting the survival data.

That was 150 million and how much of that is still left?

About 50, I think it is.

50 is left.

40.

44 million.

Okay.

All right.

And then the second question is on pricing.

We took a 6% price increase in the middle of January in the U.S.

Okay.

And how would pricing be, as you go further east, have you done market research?

Well, in general, Bayer has done a very good job of, establishing pricing around the world that is in a narrow band around the U.S.

pricing.

So at parity within a narrow band.

Okay.

Thanks.

Mona Shea with JPMorgan is on the line with a question.

Hi.

Can you hear me?

It's Richard Smith.

Just a quick question on Japan.

I know you're doing the -- sorry, the liver cancer trial in post TACE patients.

Is there a frontline patient arm?

In naive patients I'm thinking.

Yes.

So this is -- this trial designed -- this SHARP trial that was run, the short trial was in patients that might have had some prior local treatment.

this particular protocol in Japan is they get their chemoembolization and that's immediately followed with administration of Nexavar.

Is there a -- is there an arm that does prechemo embolization.

Not in that case.

The trial design as Hollings said is everybody that's eligible for trends dough chemoembolization gets two cycles of -- and then they're randomized with Nexavar placebo and these are systemic treatment naive patients.

All right.

Okay.

Thanks.

Phil Nadeau from Cowen and Company is on line with a question.

Please go ahead.

Hi, Phil.

Hi.

Good afternoon.

Thanks for taking my questions.

A couple.

First, the U.S.

sales.

I know you mentioned one of the reasons for the decrease versus, , the Q4 level was obviously the $5 million, one-time order last quarter but even if you -- backed that out, there was still a sizeable decrease quarter over quarter.

You mentioned something about pricing or reimbursement.

But a skeptic might say that the reason why there is that is because more people are aware of the Nexavar versus interferon data and therefore they foresee it as taking more share than it did maybe in the fourth quarter.

What gave you confidence that share loss scenario isn't happening and what was the reimbursement issue and how much could that have affected Q1

Yes.

The reported sales are net factory sales and as Ed said there were two things.

One was a $5 million payment and then there is a seasonal, issue that exists because patients with the various reimbursement plans looks to get an extra order in before the end of the year so there is just that fluctuation.

But then it gives us confidence is we have underlying demand numbers.

And what we're saying is that demand is stable.

And we've been able -- we've been very pleased that we gave that guidance for some time ago and we've been able, Ed's group has done a phenomenal job of holding up in a competitive situation where Nexavar -- people are very comfortable using Nexavar.

It's used upfront and it's -- in a reasonable number of patients because it's not one size fits all in the upfront, in the first line setting.

And it's moved to the community and the community really, is used to -- is used to using the agent.

So we're quite comfortable with where we stand with the drug as we say, in addition to the U.S., there's growth occurring outside of the U.S.

and just let me mention that obviously we're very enthusiastic about the growth opportunities that liver cancer represents.

Right, so you -- it seems that the $4 million decrease could have been attributed just to the Medicare seasonal stuff --

Yes.

And again it's because we have the underlying demand and we can look at it and say that's the case yes.

Okay.

My second question is on liver cancer.

Given that your phase 3 versus placebo was stopped for positive efficacy and now a second Phase II trial was stopped versus doxal.

It really seems like, the FDA would consider most trials versus placebo or an active chemotherapy to be, unethical given that the Nexavar data.

Is that fair and what implications does that have for the development of any competitors in liver cancer?

Will they have to go in combination with you or head to head against you in future trials?

That's a really important question, Phil.

And I'm not sure that the issue is so much a regulatory issue because -- and I wouldn't want to speak for the FDA or any other health authority, but just to say that what we hear from clinicians is that given that we've proven that Nexavar prolongs survival in liver cancer, they're not planning on doing any placebo controlled studies in the advanced liver cancer patient population.

And what we hear, from clinicians, is that very strong, -- very, very strong recommendations that Nexavar does represent the control arm and whether people go sort of head to head or try to add and combine, I think are all things that are in front of us, and we'll just have to see how that plays out.

I think that, that it's also important to recognize we have a sizeable advantage and time terms between us and the competition.

Nobody was in Phase III and we hadn't seen really a lot of Phase II data from our competitors.

So part of what's going on is everybody is recomputing what their development programs are because we are now established as -- as an effective agent and I think most clinicians aren't interested in any comparison that doesn't include Nexavar.

Okay.

That's very helpful.

Thank you.

Thanks, Phil.

Next question?

At this time, we have no further questions.

I will now turn the call back to Onyx Pharmaceuticals for closing remarks.

Okay.

Great.

Well, thank you, everybody, for tuning in again this afternoon.

We very much look forward to seeing you at ASCO and having a dialogue following the data presentation there.

So thanks a lot.

And see you at ASCO.

Thank you, ladies and gentlemen.

This concludes today's conference.

Thank you for participating, and you may all disconnect.