美國安進 (AMGN) 2007 Q2 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the Second Quarter Financial Results Conference Call.

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

Later, we will conduct a question-and-answer session.

Please note that this conference is being recorded.

I will now turn the call over to Onyx Pharmaceuticals.

Thank you.

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 Second Quarter Financial Results Conference Call.

Joining me on our call today are Onyx CEO, Hollings Renton, Ed Kenney, our Executive Vice President and Chief Commercial Officer, Hank Fuchs, our Executive Vice President and Chief Medical Officer, Laura Brege, our Executive Vice President and Chief Business Officer, and Greg Schafer, our Chief Financial 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 10-K for the year ended December 31, 2006, and our more recent filings with the SEC.

Our 10-Q for the second quarter of 2007, including updated risk factors, is expected to be on file tomorrow.

Now I'd like to turn the call over to Hollings, who will provide a brief overview of the quarter, and then turn it over to the management team to walk through the commercial, clinical and financial highlights.

Thank you, Julie, and welcome everyone.

Onyx had a tremendous second quarter.

In fact, it was our strongest quarter to date.

Nexavar net sales grew 34% over the first quarter, and more than 150% over the second quarter of last year.

This growth was driven by increased domestic sales, as well as continued expansion of the Nexavar franchise outside of the U.S.

that lead to a particularly strong rest-of-the-world performance.

In addition to Nexavar's impressive sales performance, 2007 continues to be a year of value-building achievements, including clinical results from Phase III and II trials, as well as worldwide regulatory filings and actions, culminating in the anticipated launch of Nexavar's second indication, liver cancer, by early next year.

With Bayer, we have established an important worldwide oncology business in advanced kidney cancer.

And we are poised to leverage that success in liver cancer, a second larger indication where we have a first-in-class lead.

Our upcoming milestones combined with continued momentum in our top-line performance make this an exciting time for Onyx and our shareholders.

Onyx continues to deliver on our vision to change the way cancer is treated with Nexavar, a proven differentiated multi-targeted oral therapy.

To date, Nexavar has shown to be efficacious in too-tough-to-treat tumors as a monotherapy in pivotal Phase III trials, as well as to augment the activity of two different chemotherapies in randomized Phase II studies.

With our collaborator Bayer, we are proactively pursuing a comprehensive development strategy across many tumor types in order to leverage Nexavar's unique properties of efficacy, tolerability, combinability, and convenience.

On the clinical development side, Onyx and Bayer had an extremely successful ASCO, with over 40 individual data presentations, highlighting the widespread investigator enthusiasm for evaluating Nexavar in different tumor types and combination regimens.

A highlight of the plenary session was the presentation of our Phase III liver cancer study, showing an unprecedented 44% improvement in overall survival for patients treated with Nexavar.

Based on the clinical and statistical significance of these data, U.S.

and EU regulatory filings were submitted in June, and additional filings in other territories are under way.

In advanced kidney cancer, Bayer and Onyx have established Nexavar as a foundational agent in this growing global market.

And we are continuing to generate data in this indication, including in the adjuvant setting.

During the second quarter, we made major progress in our development program, including completing enrollment in our first Phase III non-small cell lung cancer study, enrolling all histologies, and initiating the first two randomized Phase II trials in our comprehensive breast cancer program.

Bayer and Onyx are keenly focused on maximizing Nexavar's full potential.

Already, our drug is being successfully marketed around the world for patients suffering from advanced kidney cancer.

We intend to leverage this important market position as we prepare for possible launches in liver cancer, a disease that kills thousands of people every year and for which there is no approved systemic therapy in this country or in Europe.

Beyond these current and near-term business drivers, we are investing in a broad clinical program, supporting our belief that Nexavar may have therapeutic activity across an increasing number of tumor types.

With a proven drug and a commercial team that has demonstrated its expertise, we are delighted to be approaching another pivotal period in Nexavar's ongoing growth and development.

Now, I'll turn the call over to Ed to highlight our commercial progress with Nexavar.

Thanks, Hollings.

As Hollings mentioned, the second quarter was marked by continued upward momentum in the sales of Nexavar, both domestically and internationally.

Together with Bayer, we've established Nexavar as a cornerstone agent in the treatment of renal cell carcinoma.

In the U.S.

alone, over 5,000 physicians have prescribed Nexavar for more than 15,000 patients since the drug's approval in December of 2005.

Additionally, Bayer has leveraged its international presence to drive approvals in more than 50 countries.

As new kidney cancer therapies enter the market place, creating increased competition, Bayer and Onyx will continue to focus on Nexavar's unique combination of features, including its proven efficacy and tolerability and convenient oral administration.

We believe Nexavar will continue to be an important component of the oncologist's therapeutic armamentarium in the treatment of advanced kidney cancer.

And with the advent of Nexavar and other agents, patients are expected to live longer and to be treated sequentially with multiple agents.

Based on the strength of the pivotal Phase III data, U.S.

and EU supplemental applications have been submitted to regulatory agents to market Nexavar for the treatment of patients with liver cancer.

Liver is the fifth most common tumor worldwide, and the third leading cancer killer globally.

In the U.S., approximately 15,000 people die from the disease each year.

And in the five largest European countries, approximately 30,000 die annually.

In all of Europe, death attributed to liver cancer approached 60,000.

Beyond the U.S.

and Europe, over half a million people die annually from this disease.

With few patients diagnosed early enough to be cured, and no systemic therapy approved in either the U.S.

or Europe, Nexavar represents a real hope to thousands of patients worldwide.

As a result, we anticipate Nexavar to be rapidly and widely adopted as the standard of care for patients suffering from this disease, once it has been approved for this indication.

We had an extremely enthusiastic response from the treatment community to the plenary session at ASCO.

And Bayer and Onyx are supporting an important medical education program to share the details of the study with the broader physician community.

And the companies are working to publish the data in a major medical journal.

On the commercial side, we're moving rapidly to ensure clinicians and patients will have access to Nexavar immediately upon approval, which we hope to achieve by early 2008.

With that in mind, commercial launch preparation activities are ongoing in both organizations.

Bayer and Onyx are also reaching out to key advocacy groups as we explore ways to collaborate.

We believe that Nexavar has a meaningful lead in time-to-market over other therapies in this indication.

And we intend to leverage this first-to-market status to drive top-line growth.

In the U.S., we have made only minimal changes to the existing joint Onyx/Bayer field sales force in anticipation of this potential second indication.

We expect that, as is the case with kidney cancer, this will become a predominately community-based market.

In some other ex-U.S.

territories, there will be additions to field force capabilities to accommodate local market conditions and treatment patterns.

We are very confident that Bayer's significant reach and demonstrated strength in these markets will enable our partner to secure approvals rapidly and, post-approval, maximize the significant commercial opportunity in liver cancer as they've done so successfully in kidney cancer.

Now, I'd like to turn the call over to Hank Fuchs, who will review our development program.

Thanks, Ed.

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

With approximately 150 trials completed or under way in a variety of tumor types and settings, we are amassing a comprehensive database that we believe will ultimately lead to additional treatment options for patients suffering from many different kinds of cancer.

In liver cancer, we demonstrated an unprecedented survival benefit for patients taking Nexavar.

Data presented in a plenary session at ASCO showed a 44% improvement in overall survival in the Nexavar group as compared to the placebo group.

Median survival was extended to 11 months in the Nexavar-treated group, from 8 months in the placebo-treated group.

This is a highly statistically and clinically significant result, with a P-value of 0.0006 and a hazard ratio of 0.69.

In this study, the median duration of treatment with Nexavar was over five months.

Furthermore, there were no major differences in the rate of serious adverse events between the two arms.

The most common adverse event associated with Nexavar were diarrhea and hand/foot skin reaction.

Based on this powerful efficacy and safety data, we believe that Nexavar will become the new standard of care for these patients.

At the same time the Phase III trial was stopped, we and Bayer accepted the recommendation of the Independent Monitoring Committee to also stop a 100-patient randomized Phase II study comparing treatment with Nexavar and Doxorubicin to Doxorubicin alone in liver cancer patients.

These data have been accepted for presentation at the European College of Clinical Oncology Congress, or ECCO, in Barcelona during September.

In Asia, two studies are under way to provide supportive evidence for regulatory filings in those regions.

A fully enrolled Asia-Pacific liver cancer study is evaluating patients in China, Korea and Taiwan, and a study in Japan is enrolling liver cancer patients following transarterial chemoembolization, or TACE.

Moving next to lung cancer, our 900-patient pivotal Phase III trial in advanced non-small cell lung cancer has completed enrollment.

This trial enrolled patients with all histologies, including squamous cell carcinoma, an important difference from earlier studies in non-small cell lung cancer patients.

Previously untreated patients have been randomized to receive Nexavar or placebo in combination with the chemotherapies Carboplatin and Paclitaxel.

As with all our programs, a data monitoring committee routinely monitors the study for safety.

A second Phase III lung cancer study was initiated in Europe earlier this year.

Patients enrolling in this trial are receiving Nexavar or placebo, plus the chemotherapies 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 advanced melanoma, the Phase III trial sponsored by the Eastern Cooperative Oncology Group continues to enroll first-line patients.

This study is designed to compare overall survival of those patients treated with the chemotherapeutics Carboplatin and Paclitaxel, to treatment with these agents plus Nexavar.

It is estimated that this study will complete enrollment next year.

At ASCO, data from a randomized Phase II melanoma trial combining Nexavar with DTIC, Dacarbazine, was presented.

This independently reviewed trial enrolled approximately 100 first-line patients.

The Nexavar combination versus patients administered chemotherapy alone showed a strong trend in progression-free survival, and a significance in time-to-progression favoring Nexavar, though no significant difference in overall survival was seen in this study.

We are discussions about a possible path forward, and we expect to make a decision on how to proceed, as well as to determine a filing strategy, in the latter part of this year.

For kidney cancer, investigators presented data at ASCO from our expanded access study, demonstrating real-world experience with Nexavar that showed important clinical benefits for both first and second-line patients with advanced kidney cancer.

Also, at that meeting, data was presented from an intra-patient dose escalation study conducted at a single site.

The data showed some intriguing signs of partial and, very importantly, complete responses at higher doses of Nexavar in advanced kidney cancer.

There were also several studies at ASCO showing that sequential use of multikinase inhibitors benefited patients and did not create cross resistance.

In addition, Bayer and Onyx have two long-term Phase III adjuvant studies under way in renal cancer.

One enrolling in the United States, and one beginning in Europe.

Both studies are sponsored by cooperative groups and have the potential to significantly expand the use of Nexavar in kidney cancer.

In breast cancer, we have developed a multinational program of randomized trials in collaboration with renowned experts.

Late in the second quarter, we started enrolling patients in two of the programs' planned trials.

One of the studies compares Nexavar and Paclitaxel to Paclitaxel alone.

The study is expected to enroll approximately 200 treatment-nave patients.

The second trial compares Nexavar and Gemcitabine to Gemcitabine alone in Avastin-progressors, and has a similar patient enrollment target.

Both of these trials are placebo-controlled trials.

As Nexavar establishes itself in the clinic, we have seen an increase in the types of tumors being studied in important randomized trials, and an increase in the number of combinations being studied, and an increase in the sponsorship of studies by leading investigators.

Now, I'll turn the call over to Greg.

Thank you, Hank.

Net worldwide sales of Nexavar (inaudible) 34% to $81.3 million for the second quarter of 2007, as compared to sales of $60.9 million in the second quarter.

Second quarter sales included approximately $32 million, generated in the U.S., and approximately $49 million in ex-U.S.

sales.

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 June 30, 2007, Onyx reported a net loss of $10.8 million, or $0.22 per share.

This included employee stock-based compensation of $3.6 million, or $0.08 per share.

Onyx's net payment due from the unconsolidated collaboration with Bayer was $7.5 million for the second quarter.

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

This is the second quarter we have recognized an amount due from Bayer, and is recorded as a contra expense on our statement of operation.

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

Total share development expenses under the collaboration were $34.9 million for the second quarter of 2007, and were slightly higher than those incurred in the first quarter of 2007.

Shared Nexavar sales and marketing expenses, including cost of goods sold and distribution expenses, were $49.3 million for the second quarter of 2007.

This represents an increase from $36.5 million in the first quarter of 2007, as Nexavar's use continued to expand throughout the world, and as Bayer and Onyx prepare for anticipated launches in liver cancer.

Given our continued investment in Nexavar, we anticipate full-year 2007 share development expenses to increase in the third and fourth quarters, and to be in line with the 2006 level for the full year.

We expect shared SG&A expenses to continue to increase in the second half of the year, as we prepare for the global launch of Nexavar in liver cancer.

Onyx's direct SG&A expense of $15.7 million in the second quarter of 2007 was higher than that recorded in the first quarter of 2007, primarily due to an increase in marketing expenses at Onyx.

Our SG&A expense line 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 incur for general and administrative support of the company.

Total employee stock-based compensation expense for the second quarter of $3.6 million included $2.9 million in SG&A, and $700,000 in R&D.

At June 30, 2007, we had cash, cash equivalents, and marketable securities of $454.4 million, as compared with $271.4 million at December 31, 2006.

Included in the June 2007 balance is $174 million of net proceeds resulting from a public offering that we concluded in June.

Now, I will turn the call back over to Hollings.

Thanks, Greg.

At Onyx, we continue to execute against our stated 2007 goals that we laid out earlier this year.

At that time, we outlined six very specific objectives that encompassed both commercial and clinical milestones.

The first and second objectives are related to completing our pivotal study in liver cancer, and submitting regulatory filings.

Based on the Phase III pivotal data demonstrating the first ever significant improvement in overall survival in liver cancer for a targeted therapy, we feel confident that, following approval, Nexavar will be a standard of care agent in this disease.

Supplemental regulatory applications for liver cancer were submitted in both the U.S.

and EU during June.

And we anticipate launching Nexavar for this indication by early 2008.

Third, in advanced kidney cancer, Bayer is continuing to grow the international business as several new approvals have been garnered and uptake increases in worldwide markets.

We are also intrigued by the promising data presented on drug sequencing in intra-patient dose escalation.

And the ongoing trial evaluating the potential use of Nexavar in the adjuvant setting may provide another avenue for expanding our presence in this market.

Fourth, in melanoma, we presented Phase II results in combination with DTIC, demonstrating a strong efficacy trend for time-to-progression.

ECOG, a U.S.-based cooperative group, is also exploring Nexavar in combination with Paclitaxel and Carboplatin in an ongoing Phase III trial.

Fifth, in lung cancer, we completed enrollment in our pivotal Phase III study, which enrolled all histologies.

With a commitment to a broad lung development program, a second Phase III study has been started in Europe, and additional randomized Phase II studies are planned.

Sixth, in breast cancer, we have initiated the first two randomized Phase II studies of our comprehensive development program, with much more to come in this indication over the year.

We have established a strong position in the global oncology market in just 18 months from our initial approval in kidney cancer.

We expect significant top-line growth from liver cancer, following its approval, and significant operating leverage from our and Bayer's existing infrastructure.

In addition, we look forward to data from ongoing clinical trials, including the randomized Phase II trial in liver cancer in combination with chemotherapy, as well as results in the pivotal lung cancer trial in the second half of 2008, and the continued expansion of our broad clinical development program.

Thank you for your continued interest in our success.

We will now take your questions.

Thank you.

We will now begin the question and answer session.

(OPERATOR INSTRUCTIONS).

Jim Bergenoff, Lehman Brothers.

Please go ahead.

Hey, Jim.

Hey, guys, and congratulations on the quarter.

Thank you.

So, a couple of questions.

Just on the U.S.

growth we're seeing, was there any inventory stalking in the absence of that?

Where were you seeing Nexavar use and, specifically, any off-label use in hepatocellular or melanoma?

I'd say that stalking doesn't contribute to really any variation for us because that's managed pretty tightly through the distribution system that we have.

And I'd say it's also very early to draw any statements about HCC.

As you know, the data was just presented in June.

We are seeing some new scripts being written for it, but too early to say how much is being contributed.

We do expect more in the second half of the year outside of the label.

We're only, obviously, promoting in kidney cancer, as well as clearly the major opportunity based on approvals in the U.S.

and in Europe.

And just a follow-up question, looking ahead to the liver cancer opportunity.

When you look at the enrollment criteria, and specifically some of the exclusions in the Phase III trial, how do you think that might limit you commercially?

And I guess the question, specifically, is do you think you can expand beyond the patient group you studied in Phase III?

Well, in general, I would say that argue is that, unfortunately, for these liver cancer patients, where there's really nothing available other than local therapies and very little is available as a curative treatment, that our sense of it is most of these patients will have an opportunity to receive Nexavar at some stage during their treatment.

So, we do view that the drug will be broadly applicable as a standard of care.

And we look to benefit patients throughout the course of their disease with liver cancer.

Thanks, Hollings.

George Farmer, Wachovia Securities.

Please go ahead.

Yes, hi.

Thanks for taking my questions.

Let's see.

The Asian studies evaluating Nexavar in hepatocellular, you mentioned a number of them including a Japanese trial in patients following TASE.

Are those trials necessary to win approval in the various Asian countries?

Yes, hi, George.

This is Hank.

Bayer has entertained meetings with regional health authorities, both in China and in Japan, and have reached an agreement with the regional health authorities that the efficacy data from the SHARP's clinical trial can serve as substantial evidence of efficacy in support of registration.

And also, as part of those discussions, have agreed to provide an additional study, one in China and one in Japan, to support registration in China and Japan respectively, whose purpose is primarily to gather experience on the safety of the product.

There's not an additional requirement that we're aware of for additional efficacy to be demonstrated.

Okay, fair enough.

And how about, Hank, the Phase II breast cancer trials, randomized, it seemed like pretty good patient numbers.

Do you think those are suitable for registration?

Well, as we put it out, their design is Phase II screening trials.

And the outcome of Phase II screening trials can be -- there's four potential outcomes.

One is you don't see any efficacy signal, and you decide that that's not an avenue for further investment.

When you see an efficacy signal, but it requires a Phase III confirmatory trial.

You see a strong signal, in which case you can begin to negotiate with FDA about maybe having smaller requirements for Phase III and registration.

And the fourth possible outcome is that the trials actually could stand alone and serve as the basis for independent registration of the product.

Now, to get into that last category, which is the essence of your question, it does require a fairly robust clinical effect.

I would say an effect that's probably on the order of what was observed in the TARGET's clinical trial in kidney cancer.

It might begin to raise people's interests, but it really is too early to talk about what results from the trial could support registration.

Suffice it to say, we're conducting these at a quality standard that will give us meaningful information for either further development or early registration, if that's appropriate.

Okay.

And finally, do you think we'll see lung cancer data at ASCO next year?

We don't talk about when studies are going to be presented because these are event-driven trials.

And so, we have to wait for the events to accrue, and then for the data to be analyzed and cleaned.

We did complete enrollment, as we've talked about.

We're excited about the study because it enrolled all histologies.

There is a data safety monitoring board that's overseeing the safe conduct of the trial, to make sure that the problems in squamous cell cancer patients that it had previously observed are not recurring in the trial.

And overall, we're just very pleased with the conduct of the trial.

And we're looking forward to the data whenever it's mature and ready for presentation.

Yes.

And I think we'd probably want to guide to the expectation that the final analysis, we're pointing to the second half of 2008, which would be past the last of the data, early abstract submission deadlines.

Sure, okay.

Thanks, Hollings.

Thanks, Hank.

Uh-huh.

Yes, thanks, George.

Next question?

Gene Mack, HSBC Securities.

Please go ahead.

Hi, thanks for taking my questions, a couple of quick ones.

The TASE trial that's being run in Japan, or in Asia, is there any chance that could be used for a U.S.

filing?

That's something that we've undertaken a discussion of.

I will say that that's a trial that begins Nexavar or placebo about 60 days after TASE is administered.

And one of the things that we're evaluating as we think about next steps for Nexavar would be to do a study literally in combination with TASE.

And that study could be a study that's conducted to support registration.

We haven't made any final decisions about that.

But, we are certainly looking at our development and registration strategy to provide additional data to support the use of Nexavar, as Hollings described, at any stage in a patient's life.

And would that sort of trial also include patients that have gotten some sort of surgery, as well?

Or is it hard to pick those patients out, or is it pretty clear?

Well, the TASE patient may or may not have had a prior surgery and recurred.

But, I think what your question's sort of getting at is we see sort of three fairly distinct segments.

A group of patients who the disease is identified relatively early in the course of the cancer, and for whom a potentially curative outcome can be contemplated.

And those, that setting would be an adjuvant application.

And the company is very committed to adjuvant studies with Nexavar in liver cancer.

The next segment is the segment that was studied in the SHARP's clinical trial.

Those are patients who have a little bit more advanced liver cancer, and who are not presently candidates for TASE.

They have maybe progressed beyond TASE.

And then, there's this group in the middle.

And as the first drug to show a survival advantage in liver cancer, we want to extend the benefit to as broad a patient population as possible.

And we're working with the lead investigators in the world to identify the clinical trial program that will support the adoption and the use of Nexavar as broadly as possible.

Okay.

Is there any evidence that you can point to showing some adoption of higher doses of the drug in renal cell, sort of in line with what was presented at ASCO?

I think it's really early for that.

That study was one site.

What we're doing is we're moving that protocol to three additional sites to see if it can be replicated.

And if so, then we have plans for further investigation.

I think that would probably be necessary before you'd see any major change in treatment practices.

Okay, okay.

And then, could I have one last thing?

Just can I get you to repeat the guidance on costs of good and SG&A assumptions going forward?

Did I hear you right say they more or less would turn back to 2006 levels, or did I get that wrong?

No, that was for the R&D.

So, we--.

--Okay--.

--Expect the R&D to be at the levels of 2006 for the full year.

Okay, okay.

And SG&A, we've kept our guidance that it would be increasing to the third and fourth quarter, and annualizing at the Q4 2006 level, which was about $49.2 million.

Great.

Thank you very much, appreciate it.

Okay, next question?

Brian Rye, Janney Montgomery.

Please go ahead.

Well, good afternoon, and congratulations on the quarter, Hollings.

I guess just a couple of housekeeping items.

First, I'm going to apologize if I missed this.

But, could you give the specific breakdown between U.S.

and rest-of-the-world, in terms of sales for the quarter?

And then, secondly, I was wondering if there's an update on initial approval in Japan?

This is Greg.

Net U.S.

sales were $32, and ROW $49 million.

Okay.

And yes, no update.

Bayer's still in discussions with the regulatory folks, and don't have any guidance at this stage.

Okay.

Thanks, Hollings.

Thanks, Brian.

Next?

Howard Liang, Leerink Swann & Company.

Please go ahead.

Thanks very much.

Can you talk about the growth of the ex-U.S.

sales in local currencies?

So, basically, what is the demand growth?

What is the contribution of foreign exchange?

On the revenue side -- well, from a net standpoint, it's not significant because we have significant expenses also in foreign currencies.

So, it would be in the low single digit, the effect on a net basis.

For the revenue, in Europe, we derived about two-thirds of the revenue coming out of Europe.

And you can track the Euro exchange rate.

Obviously, the dollar's weakened throughout the year.

Okay.

And have you seen any impact with the launch of Toricel in RCC?

I guess, there, have you seen a decreased use, for example, in second-line?

And also, is there any combination use with the mTOR inhibitor?

No, no real presence in the second quarter.

I mean, what about the third quarter currently?

I think it's really early at this stage.

They've really just begun to launch in the market.

And I think the key thing here is that the two oral therapies have clearly established themselves in this market place.

And as Hank mentioned, they're used in sequence.

They're convenient, and moved into the community setting.

All of those things favor an ongoing strong position for Nexavar.

And again, I think the other key thing is -- it was pretty clear that the data presented at ASCO really just supported the use of Toricel in the high-risk patients.

Okay.

And just lastly, what can you say about any interim analyses for the non-small cell lung cancer Phase III trial?

We do not announce interim analyses or timing of interim analyses, and guide people to expect that the normal course of definitive data is on the full and final analysis.

But, can you say whether there are interim analyses now?

There are standard interim analyses in almost every trial for efficacy and safety.

Great, thanks very much.

Yes, thanks a lot, Howard.

Next?

Jim Reddock, Friedman Billings Ramsey.

Please go ahead.

Hi, this [Samish] for Jim.

Thanks for taking my questions.

I have a couple of questions.

With regards to your European sales, was the drug launched in new territories this quarter, or is there kind of another reason for the step up in sales?

Well, there's a mix.

And again, I would not -- I'd just talk about it general, ex-U.S.

as opposed to breaking it out by territory.

And it's a mix of things.

There is some new reimbursement approvals.

There is, obviously, also additional uptake in almost every territory.

So, a very solid performance across the board ROW.

Okay.

And do you think you're getting more use in first-line, or is it more second-line use?

Well, I think, in general, if you looked at the market in aggregate, it breaks down among the two orals, about two-thirds on a dollar basis to Sutent, and about a third to Nexavar, with them having more of the first-line and us having more of the second-line.

Okay, all right.

And my second question is with regards to your breast cancer program, are you going to be enrolling any other additional trials later this year?

Yes, we have plans for several more clinical trials.

And we can talk about the details of those as those trials unfold.

But, I think, in broad breast strokes, we've talked about -- they're all randomized trials.

They're all about 200 patients, 100 plus events.

They're all placebo-controlled trials.

And probably the next three that I would look for are a trail in combination with the oral chemo therapeutic Capecitabine, a trial in combination with the oral hormonal therapies, the anti-estrogen hormonal therapies, and finally a trial that's essentially a combination of both of those trials, which would be a trial in patients treated with either chemotherapy or hormonal therapy.

And all of these trials would be conducted under the leadership of one of the world key opinion leaders who are part of our multi-national advisory board, who have been designing and owning the conduct of the breast cancer clinical program.

Okay, thanks.

And my last question is did you guys have a price increase in the U.S.?

6% in the first quarter.

Okay, great.

Thank you.

Thanks.

Next question?

Richard Smith, J.P.

Morgan.

Please go ahead.

Yes, good evening, and congratulations on a good quarter.

Thank you, Richard.

Just a follow-up on the Japanese, just so I'm clear.

Bayer has talked about filing it in the second half for HCC in Japan.

You mentioned the SHARP data would support registration.

What is the other data, the data from the additional Japanese trial you just mentioned?

Is that correct?

Yes, the TASE study that was discussed.

So, it will be the TASE study data that will be included in the initial package?

Right.

Okay.

So, if that trial is enrolling at the moment, are you expecting data in the second half then?

It's enrolling.

We haven't got it to when we expect data.

But, we can assume it's going to be in the second half, given the filing.

I don't think we're in the midst -- since we're in the midst of a regulatory discussion, we don't comment on the exact specific requirements to support registration, in terms of what specific data they would require.

Okay.

All right, okay.

Thank you.

Next question?

William Sargent, Banc of America Securities.

Please go ahead.

Hey, Will.

Hi, thank you for taking my call.

This is actually [Unidentified Participant] for Will Sargent (inaudible).

Okay.

My question (inaudible) and Nexavar, U.S.

revenues between renal cell and hepatocellular?

Yes, we don't have any real basis of breaking that out, as I mentioned earlier.

It's very early it the days, just post-ASCO disclosure of the data.

We are seeing increases in new scripts, but I would say it's just a few weeks experience in the second quarter.

We would expect that to increase in the second half.

And clearly, the major ability to penetrate that market will be on approval, and our ability to promote the drug in that indication.

Okay, thank you.

And I have one more question.

What will be the run rate for the operating expenses in terms of buyer partnership?

The guidance is on the shared development expenses.

We expect them to be at approximately the level they were in 2006.

Um-hmm.

And that was about $160 million, and that's on a full year shared.

And on SG&A, we are guiding to the Q4 2006 run rate annualized, and the Q4 level was $49.2 million.

Thank you.

Okay.

Well, again, thank you all for your interest.

We were very pleased with the performance of our commercial teams, both Onyx as well as Bayer's teams, and look forward to increases in our top-line, and lots of data coming out of our clinical programs.

So, stay tuned, and I appreciate your interest.

Thanks.

Thank you for participating in Onyx Pharmaceuticals Second Quarter Financial Results Conference Call.

This concludes the conference for today.

You may all disconnect at this time.