美國安進 (AMGN) 2010 Q3 法說會逐字稿

Welcome to the Onyx Pharmaceuticals conference call.

My name is Mike and I will be your operator for today's call

I would now like to turn the call over to Onyx Pharmaceuticals.

Onyx, you may begin.

Thank you.

Good afternoon.

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

We thank you for joining us for our Third Quarter 2010, financial results conference call.

Leading our call is Onyx's President and Chief Executive Officer, Dr.

Tony Coles.

Also, providing updates are Dr.

Ted Love, [inaudible] Laura Brege, Chief Operating Officer and Matt Fust, Chief Financial Officer.

Also, available during the Q&A session is Dr.

Michael Kauffman, our Chief Medical 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 facts 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 10K, for the year ended December 31, 2009, as well as to our other filings, including our most recent 10Q.

In addition, we will be presenting and discussing non-GAAP financial measures during the teleconference.

For a reconciliation of these non-GAAP financial measures, to the corresponding GAAP measures, please see today's press release, which is posted on the Onyx website within the news and media section.

A slide presentation that supplements the financial information in this teleconference is also available on our website.

The presentation is located on the financial information page within the investors section.

I would now like to turn the call over to Tony Coles, who will begin the discussion with an overview of our business.

Tony?

Thanks, Julie good afternoon and thanks for joining us today.

Since arriving at Onyx two years ago, we have been putting a new plan into action to take Onyx to the next stage of growth and development and make the company bigger than just Nexavar.

At that time we laid out four specific business objectives that we believe were essential value drivers.

One, increase Nexavar's commercial margins.

Two, produce cash flow to support the business.

Three, generate more data for Nexavar improved indication and potential new indications to drive further sales.

And four, build a more diversified pipeline capable of delivering at least one additional commercial product in the near term with blockbuster potential.

We've achieved each of those objectives through a series of strategic decisions and actions that now position us for the next Phase of corporate growth.

Including the opportunity, for our second blockbuster product with the acquisition of prodiokes.

This month marks the one-year anniversary of this transformative acquisition for Onyx.

Which brought us global rights to Carfilzomib and other earlier stage assets including ONX 0912 an oral proteasome inhibitor.

This one acquisition alone, has made Onyx into a company with multiple potential near-term products.

We believe that Carfilzomib by itself, has the potential to be a cornerstone of care in the $4 billion multiple myeloma market across, multiple lines of therapy.

In his comments, Ted will detail some of the important ongoing clinical trials supporting this conviction.

And, our intent is to make these compounds the foundation of a franchise in multiple myeloma.

Carfilzomib, along with ONX 0912 has the potential to change the treatment landscape from myeloma and make Onyx the key player in this rapidly growing field.

Carfilzomib has also given us the flexibility to value the corporate transactions.

For example, our Japan partnership with Ono Pharmaceutical has a total was exceeding $300 million for just one country and a single region of the world.

It is transactions at this point, that enable us to accelerate development of this exciting new agent in a region of the world that is new for us.

While at the same time preserving significant worldwide rights for Onyx, in other important countries and markets.

Today is avery different Onyx story, then that of the past.

We are at a new flection point and I would encourage you to view us in a new way, as we've become a multi-product, innovation driven company with a much more interesting and diverse story.

As Nexavar enters which what could the most profitable and conduct of years of his life cycle the main foundational to our story and our business.

And while it is fundamental to our business success, it is only one aspect of the story and not the defining metric of success.

We now have Carfilzomib and other proteasome inhibitors in addition to Nexavar.

As well as an exciting pipeline that we believe will bring significant value creation, for years to come.

As proof, Nexavar sales have already exceeded $2.7 billion, since its launch.

Enabling us to benefit patients around the world and to invest strategically in the growth of our business while remaining non-GAAP positive.

As an oncology company and a business, Onyx is unique within our industry.

We have built an asset in Nexavar that is delivering cash to unlock even more value for shareholders and patients as we expand our business into other areas.

While we expect some variability in Nexavar's near-term sales, we stand to part as an emerging oncology leader with a commercially successful business in Nexavar and the means to grow and sustain ourselves organically because of it.

As Onyx diversified and expand our priorities have involved and they now include first, establishing Carfilzomib as an improved standard of care in the treatment of multiple myeloma globally and expanding a franchise with potentially the first oral proteasome inhibitor.

Second, sustaining and increasing margins and commercial contribution of Nexavar and third, leveraging our multiple pipeline assets to take advantage of major global market opportunities through strategic corporate development transactions.

Now, let me turn the call over to Ted, for discussion of our clinical development programs.

Thank you Tom.

As Tony mentioned, we are generating extensive clinical data with Carfilzomib as well as with Nexavar in a number of tumor types and settings.

Underscoring our growing clinical momentum in multiple large cancer indications.

Let me begin by highlighting some of our current programs and plans with Carfilzomib and then provide an update on Nexavar and what the studies may mean for our ongoing efforts to maximize the potential of these key therapies.

Starting with Carfilzomib.

For European registration, this quarter we began the focus study.

An 84 patient, Phase 3 study, of single agent Carfilzomib, in relaxed refractory resetting.

Comparing that agents advocacy to that best supportive care.

It is a small trial and we are encouraged by the progress to date.

Based on the primary endpoint of progression for survival, we believe will have a topline data from this trial in early 2012.

We are also pursuing approval of Carfilzomib administered in combination with Revlimid and low-dose Dexamethasone to patients with earlier-stage disease.

This strategy received an important boost, when data of Phase 1 b study, called the 006 trial, was reported as ASCO showing 75% overall response rate in previously treated myeloma patients who received Carfilzomib and Revlimid, in combination.

No new side effects were seen with the combination and those seen were manageable.

Importantly, no overlapping toxicities were observed.

Encouraged by these data, we initiated an international 700 patient pivotal Phase 3 study.

The ASPIRE trial.

In this trial, patients with relapsed disease after 1 to 3 prior treatment regimens, are being randomized to receive standard Rev/Dex versus the combination of Rev/Dex plus Carfilzomib.

The study is being conducted under a special protocol assessment from the FDA and scientific advice from the European medicine [inaudible].

We expect to complete enrollment into the first half of 2012.

As part of the NDA package for the Excel in the improvement of the US.

We will include data from the 004 Phase 2 study that was presented at ASCO in June.

Investigators who participated in the study, reported that [inaudible] Carfilzomib, exhibited one of the highest, ever reported single-agent overall response rate.

And longest duration of responses in patients with multiple myeloma who had one to three prior to treatment regimens.

We will of course also include, our pivotal Phase 2 b trial data, known as the 003-A1 study.

Which posted exciting top reference results of over 24% overall response rate and 7.4 months median duration response and a highly refractory and heavily pretreated patient group.

We anticipate presenting full data from the trial and other new data at the upcoming American Society of Hematology meeting, in Orlando, in December.

Last month, we announced that we could file an NDA for potential accelerated approval as early as mid- 2011.

And we will continue to share information with the FDA on an ongoing basis as we prepare for the following.

We are very excited about the potential of Carfilzomib.

As it represents a tremendous potential new treatment for patients suffering from multiple myeloma.

Turning to our new potential indications for Nexavar.

In breast cancer, we are building on the compelling Phase 2 data reported last fall, with Nexavar in combination with Capecitabine in women with metastatic breast cancer.

Encouraged by these results, we expect to begin the pivotal Phase 3 for breast cancer study, called the Resilience Trial Eminently.

In lung cancer, we are completing enrollment of mission our pivotal third and fourth monotherapy Phase 3 study.

In thyroid cancer, our ongoing Phase 3 study, called The Decision trial, is designed to confirm the advocacy in multiple Phase 2 studies with single-agent Nexavar.

Thyroid cancer, is an exciting area of potential expanded benefit with Nexavar.

The Phase 2 data demonstrated an impressive progression-free survival of 84 weeks.

Representing potentially dramatic patient benefit, with a prolonged duration of treatment.

In summary, we are advocating a broad development strategy that is generating strong momentum across our pipeline, bringing valuable new therapies fair to cancer patients.

With success in any one of these high potential areas we can bring meaningful benefit, to more patients and unlock more value for shareholders.

Now I would like to turn the call over to Laura Brege, for discussion of our business operations.

Thank you, Ted.

Next, for global net sales in the Third Quarter, were $226 million.

Down 1% your-over-year.

Excluding the effect of foreign currency, sales were up 2% as compared to the same period in 2009.

Third-quarter sales include approximately $55 million in the United States.

$171 million from sales for the rest of the world.

As the only target systemic therapy approved and liver cancer, we believe there are significant growth opportunities ahead for Nexavar.

And over time, we expect worldwide double-digit to resume based on a brave factors.

Including our ability to expand Nexavar penetration and liver cancer, by reaching more patients early in their disease and more patients in the [inaudible] setting.

As part of our commitment to sustained leadership in this indication, we established a broad clinical program to designed to generate additional data in liver cancer.

Before the end of the year, we expect three important trials to complete enrollment, including Storm, an [inaudible] study with global registration potential.

Search, a combination study with Traceva also, with global registration potential and space.

A combination trial with the local regional therapy case, which I am happy to announce has actually completed enrollment in the Third Quarter.

In the US, our ongoing outreach to oncologist, as well as our comprehensive program, focused on the interdisciplinary healthcare teams that treat liver cancer take patients, continues to make good progress.

In the Third Quarter, commercial units prescribed by non-oncologist grew 28% year-to-date.

Compared to the same period last year.

And productivity of these prescribers grew by 40%.

Despite flatness in reported US sales in the quarter, we saw continued growing demand for the brand.

Specifically, liver cancer patients and we saw an increase in the kidney cancer market.

In addition to macro economics pressures we seen and impact from health-care reform affecting US sales.

In the near term in the US, we expect to grow--we expect to continue growth in a single digits in net sales.

We also expect inventory levels to fluctuate quarterly.

Outside the United States, foreign currency exchange rates reduced our reported sales in dollars and pricing actions in certain European countries contributed to softness in the quarter.

We continue to expect single digit growth in the major European markets in the near term.

Augmented by expansion and penetration and emerging secondary European markets.

Turning to the Asia-Pacific region, Japan saw growth of 18% in the quarter.

We are expecting even better performance in future quarters.

As we believe there are significant untapped market opportunity in that country.

China, with its leading incidence of liver cancer worldwide, it's an important market for Nexavar and continues to be a top contributor of Nexavar sales.

Driven by just sales-type markets.

This strong trend and healthy dynamic, speaks to the therapeutic need and opportunity in this region of the world, were half of all liver cancers instances occur.

We expect double-digit growth in the Asia-Pacific region, driven by continued economic growth.

And eventually reimbursement in key countries.

But as you know these actions are significantly dependent on each respective government.

Turning to Carfilzomib, we are excited about the prospect of entering the $4 billion and growing multiple myeloma market, where we believe there is significant opportunity.

Multiple myeloma is the second most common hematologic cancer.

With more than 180,000 people living with myeloma and approximately 86,000 new cases diagnosed annually.

Researchers have made treatment advances in the last decade and lives are being extended.

However, myeloma remains a fatal disease.

The emergent potential of this compound, reinforces our enthusiasm of the Carfilzomib becoming a standard care in this important market.

For that reason, we are continuing to invest in the development across multiple lines of therapy.

With the goal of creating a corner store in therapy, in the treatment of this disease.

No matter the stage.

We seen multiple avenues for commercial growth in Nexavar and a real franchise opportunity in myeloma.

Both for the expansion of the Nexavar business as well as potential of new pipeline products.

Such as Carfilzomib and ONX 0912, which together gives us a true franchise ownership opportunity in multiple myeloma.

Many companies on the sector and beyond are feeling the impact of difficult economic conditions.

But, as Tony said, we have a commercially successful business and several assets that enable us to focus on developing new indications and new drugs to continue serving the cancer community.

Now, I would like to turn the call over to Matt to review the financials.

Thank you Laura.

Before discussing Third Quarter financial results, let me begin by reviewing our licensing arrangement with Ono Pharmaceutical that was announced in September.

With worldwide rights to Carfilzomib, this transaction represents an example of how we can leverage these assets for the benefit of patients and shareholders alike.

We entered into an exclusive agreement, under which, Ono will commercialized in Japan, two compounds from Onyx's proteasome inhibitor program, Carfilzomib and ONX 0912.

The total value of the transaction has the potential to exceed $300 million.

Including, development and sales based payments, plus royalties on future sales.

The transaction includes an upfront payment of $59 million, which was recognized as contract revenue in the Third Quarter.

In addition, Ono reimburses a portion of Carfilzomib and ONX 0912 development expenses, which is reflected as a reduction of R&D expense.

We are excited to be working with Ono as a partner to maximize the potential of Carfilzomib and ONX 0912 by advancing near-term development in Japan.

And to further driving our worldwide strategic development plan, for these two important compounds.

Turning to Third Quarter results.

I am pleased to report that Onyx was profitable on a non-GAAP basis for Third Quarter and year-to-date 2010.

For Third Quarter 2010, we reported non-GAAP net income of $55 million or $0.84 per share on a fully diluted basis.

As a reminder, we report non-GAAP information is a meaningful measurement of core, corporate performance.

The non-GAAP net income calculation excludes non-cash items.

The details of which, are described in today's press release and posted on our website.

Year-to-date, worldwide Nexavar sales, measured in US dollars, have grown 11% percent, compared to the same period last year.

Largely, driven by growth in Japan.

As [bear] reported in the Third Quarter, global net sales of Nexavar of Euro175 million increased 9% compared to Third Quarter last year.

The dollar euro exchange rate, has weakened about 10%, compared to Third Quarter 2009.

And was $1.29 per Euro in Third Quarter 2010.

The global recession continues to impact Nexavar sales growth.

In the US, macroeconomic pressures some impact from health-care reform and increased competitive pressure in the kidney cancer market affected US sales during the first three quarters of 2010.

Reducing commercial sales of Nexavar.

Outside the US, and particularly in Europe, government pressure on pricing is slowing revenue growth.

And Nexavar sales growth in Japan continues to fall short of our expectations.

Based on these impacts, and year-to-date sales, we are reducing our Nexavar global net sales guidance for 2010.

To a range of $905 million to $925 million.

Combined cost of goods, distribution selling and G&A expenses for Nexavar were $79 million dollars in Third Quarter 2010.

Roughly [flats] of the same period last year and down about 5% from second quarter 2010.

As the collaboration continues to focus on obtaining commercial leverage for the brand.

Net R&D expense was $45 million for Third Quarter 2010.

On track with our guidance of roughly $165 million to $180 million for the full year.

And was driven primarily by advancement of our cartels of development program, including the ASPIRE and focus registration trials in the US and Europe.

Investment in Nexavar development, including [inaudible] trials and programs new indications, increased slightly compared to the first two quarters of the year.

Primarily reflecting progress in the liver and breast cancer development programs.

Onyx's SG&A expense, was $26 million for Third Quarter 2010.

Roughly flat to spending in Second Quarter.

Finally, we ended the quarter with approximately $588 million in cash and investments.

Maintaining financial strength and flexibility for the company.

We continue to demonstrate disciplined message that both partial and develop and spending and are on plan to deliver full-year non-GAAP profitability consistent, with our guidance.

Our underlying business fundamental, support the growth strategy that positions us as a future leader in oncology.

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

Thanks Matt.

Our goal today was to convey our conviction that Onyx is at that the next significant value and influction point along our growth trajectory.

Our story is multifaceted and unique in our industry.

Having a commercially successful business that supports the development and given the exciting topline data for Carfilzomib, announced this summer the near-term launch of a second potential blockbuster drug.

This is the Onyx of today and we expect that you will begin to think about our business from this perspective as we remain focused on delivering the goals and news-flow we've share this afternoon.

We look forward to talking with you again in December, to discuss exciting new data on Carfilzomib being presented at [Ash].

And I also want to mention that we plan to hold a conference call during [Ash], so the Carfilzomib investigators can have the opportunity to review their findings, for those of you unable to attend the conference.

Finally, we will be hosting our annual investor day meeting in New York, on December 14, so please look for the details of those activities over the coming weeks.

Thanks for joining today.

And we will now open the call to your questions.

Operator?

Thank you.

(Operator Instructions)

Our first question comes to us from Karen Jay of JPMorgan.

Karen please go ahead.

Good afternoon, this is Karen for [inaudible] JPMorgan.

I had a couple questions on the Carfilzomib.

Is there something that you can point us to that we should be focused on?

On the day that it will be presented at Ash?

The exact timing of when the abstracts will be available is not yet out, at least to my knowledge but it will be coming out relatively soon.

More in the since of additional data and what we can expect and something or anything to highlight?

Sure.

The abstracts Ted's referring to, will come out next week, we expect.

But, specifically, there will be a presentation of a full data set, from the Phase 2 b study.

And we have committed that would be presented at a medical meeting this year and that abstract has been for oral presentation at ASH.

There is interesting information for Carfilzomib in earlier lines of therapy that will also be presented.

So that is something that we think is very exciting and could be very interesting to watch.

This would be even ahead of the relapse population 4--1 to three prior therapies that the focus of the current ASPIRE studies.

We have looked at Carfilzomib and earlier lines of therapy--I see within the frontline and we think you will find that interesting.

Our next question comes to us from Gene Mack of Soleil Securities.

Thanks for taking my question.

Trying to get a little sense of what is going on sequentially with Nexavar sales.

You mentioned you expect inventories to fluctuate.

A little bit.

And also, there is something that you said about the productivity of liver prescribers.

And I was wondering if you could tell us first, do you expect or can you give us an idea of what kind of inventory fluctuation you may have seen this quarter versus last quarter?

And then, on the productivity piece.

Can you give is a bit of a better handle on what you mean by productivity of the liver prescribers?

Thanks.

Let's talk about some of the key drivers for Nexavar sales in the quarter.

Matt will talk about the inventory piece and Laura will give more color on the productivity of the non-oncology segment, which we actually find very interesting metrics of success in that segment.

So, Matt?

In the US, we did see some inventory variability quarter-to-quarter.

It looks like there was a small inventory build in the US at the end of Second Quarter.

Which we estimate to be about $3 million, consistent with the quarter-over-quarter fluctuations that we typically see.

As the look to the marketplace particularly in the great growth opportunity that liver cancer has for Nexavar.

The non-oncologists are very interesting, important indicator.

We talk about the productivity of the broader team prescribing for a liver cancer patient.

What we talk about that is that patients tend to be treated earlier, in their disease and longer.

We talk about a patient, which is prescribed Nexavar by just to have the opportunity on drugs for longer as they are prescribed earlier in their disease.

Next question, operator?

The next question comes from Joel Sundeck.

Joel, please go ahead.

High, thanks a lot.

Two questions, the first is, on the Carfilzomib filing and your discussions with FDA is there any chance there is a pathway whereby you can file earlier than the middle of next year?

Well, we went through this pretty carefully on the last call and there really hasn't been anything new since that.

Based upon the discussion we had with FDA, we really felt it the best guidance that we could give, was what we said which was as early as the middle of next year.

We remain committed to that.

But really don't have any way to update that at this point.

Okay, and the next question is on the ASPIRE trial--as far as the timing there.

For the second half of next year.

Can you give us any more clarity there and would the data be--is it possible to see that at ASH next year?

So, what I think we said in the script is that data from the ASPIRE trial, which keep in mind is a very large trial.

700 patients international study.

Comparing the combination of Carfilzomib and Rev/Dex to Revan Dex and in patients that have relapsed ar least one to three times.

It is a big program and I think what we have is, we might have data and we might be able to complete the enrollment as early as the first half of 2012.

I think the other thing told, I would point out has to do really with some of the near-term for Carfilzomib.

We are presenting the full data set from the Phase 2 b trial at ASH.

We talk a moment ago about some of the earlier lines of therapy data that we'll have at ASH, so stay tuned for those they are only about six weeks or so away.

The following of NDA as early as the mid-next year.

We will also have a data from the focus of trial which is a trial supporting European registration.

Next year as well.

There is a number of key events and that is just on Carfilzomib.

In addition to completing enrollment for aspire which Ted mentioned a moment ago.

Our next question comes to us from Phil from Colin and company.

Good afternoon and thanks for taking my question.

To questions on the next-- Nexavar trials and indications.

First, on thyroid cancer.

Can you give us more of an update and when you see expectancy data and automatically if the trial is successful how many patients are there in the US and worldwide?

And Nexavar would be appropriate.

Secondly, it seems like a timeline is by at least six or eight months depending on what's you gave us the last investor meeting in December of 09.

I was curious about that.

I can start with a couple.

Maybe I will start with backwards and then I will ask for help on the commercial elements related to thyroid.

With regard to the resilient timeline I think it is important to keep in mind that the process that we have executed is to have discussions with a lot of regulatory authorities around the trial designed we have completed those efforts.

But that did take some time.

And I think we are very happy that we are in a position to say that program which is very program will begin shortly.

I don't have the historical perspective I wasn't here.

At the end of 2000 and 2009.

I don't know if we have changed this my understanding is that the dates that I described out are consistent with what we have been thinking for the last year anyway.

High ROI.

With regard to thyroid, what I would say is that we've generated very impressive data.

That is showing a dramatic improvement.

In progression force of I will.

In the Phase 2 program it was 84 weeks of improvement of progressive survival.

Even though the number of patients is not as large as some of the larger indications like long obviously the absolute to ration of therapy really makes this a more substantial work it opportunity.

You have to keep that in mind when you think about firewood to ration of patients to be on their be.

I don't know if anyone wants to add that -- commercial element

Just put a couple numbers on your worldwide looks the just over 140,000 patients were thyroid cancer and annually on 35,000 deaths.

It's really important to emphasize what Ted said, was looking at the progression for survival.

Which today the trial were very would have a chance beyond the Nexavar for long-term.

Okay.

Very good.

Operator the next question please.

Our next question comes to us from Jason Zang of be a multiple markets.

Can you hear me?

Barely.

Can you speak up or get closer to the speaker?

Is this better?

We will work with it.

Let's see if we can hear it if not we will ask you to repeat.

Okay.

Okay.

I wanted to come back .

Particularly on the manufacturing I don't know how much you talk about the call.

I came to the call a little late.

Anything that has changed and do you have as soon you don't have meetings with the FDA since you announced that last time.

Anything that you could update us on that and particularly you know how much how much change you think might have to do with your manufacturing process or is it more of a data collecting or a buildup of some of the consistency of the data to satisfy the

Okay.

Let me just say a couple of things.

We did have a brief conversation on the call of this.

But, I think it is very fair because it's an important point to highlight a few things.

One, the timing is as early as mid-next year.

We do view this as a timing issue, Jason.

There are always ongoing conversations with various review in groups with the FDA and putting the clinical group and the group etc.

We are engaged on those with a routine basis.

But there is nothing that has come out of those that is sick the ticket enough to report.

To you.

Nothing is changed in terms of our projections for timing.

And because we do believe that this is largely an issue of some of the changes that were implemented in one of the runs we did.

We believe that this will be a matter of data collection and that data collection will take a little bit of time.

But, there is no significant change at all from the last time we communicated on this and we remain confident in our as early as mid year 2011 guidance.

For the filing of the NDA.

Okay.

Operator?

I think we are ready for the next one.

Our next question comes from David M.

of Williams.

David please go ahead.

To give very much.

A couple questions.

One, on the sequential Carfilzomib earlier.

There is an opportunity to do a rolling NDA's.

Is there any reason why you haven't chosen to go down that path and supplement what the CMC data later.

And you also keep talking about midyear but you've also said as soon as Mickey are I think you said that several times.

We really set on mid-year or is it still as soon as mid year and then on Nexavar , you call off the guidance pretty significantly.

There's only one quarter left for the year.

Calculating it looks like it could be $25 to $40 million, or so--later than you expected.

That is the date it other one quarter.

Can you talk about where you are seeing that in your expectations in

Okay.

Let's start with the next piece.

Matt I will ask Matt to ask to the Carfilzomib Sure.

Hi David.

First, on Nexavar tightens, the key driver as we look at guidance for the rest of the year as it has been throughout the year.

Has been that impact of foreign exchange as you saw on announcement I euro basis.

Nexavar performance is actually meaningfully stronger and we see here in Q3 for example that we are in a position where the dollar is still about 10% off from the headwind standpoint relative to what we saw in Q3 last year.

In addition, we certainly look to the impact of the global that grow economic conditions and particularly that has ever faced with health care reform in Europe in particular.

We are saying strong level of price pressure in countries like turning and insane.

And, globally initially felt here in the US.

We've increased kidney cancer market.

So, we felt it was appropriate to the results we've seen year-to-date against that backdrop to update our guidance your if we have come into the Fourth Quarter.

And, to your question I think you asked two questions one about rolling NDA and the other about the following pie timing.

I will start with the rolling NDA.

It if you are lobbying for a position regulatory.

It certainly is a good thought.

One of the things to keep in mind is that filing for a rolling NDA is something that you can do if you have asked track approval.

As of today we do not have fast tracked for Carfilzomib it is certainly a thought.

Keep in mind when trials for Nexavar NDA.

The thought is the date only starts once you submit last module.

While it's a good strategy we think about, and I thought about carefully and continuously quick Brinkley it's important to think in mind is the mutations.

With regard to the filing, what we have done is sense and before we had our last call, is interact with the FDA understand what they are issues were around our CMC process and out of that carefully model out work and data that we need to generate very a process for mitigating with the FDA and getting in with the FDA and it is really that process model about that took us to mid-as early as mid-2011.

So, there really isn't anything new that allows us to update that we are very committed and do good about that today.

I think just before we take the next question I probably would want to put that last question in context.

You've heard about the sales mix for our revised expectations for the full year.

What we also want you to focus on the bottom line contribution that Nexavar is delivering to the business in conjunction with the corporate development activities.

Which are the queue ways we are investing in the pipeline.

And continuing to deliver non-GAAP net income.

To keep the two pieces in mind.

The sales we do expect will continue to grow.

I think Laura said in her prepared remarks continue to grow in the AI states and in Europe and we are looking to continued growth to both of those key segments as well as the Asia-Pacific markets.

All of which, should accelerate if and when we get additional indications based on the current things we have it for Nexavar.

There's still a lot of potential for Nexavar but immediately and most important to try her attention to the cash flow for Nexavar which it is at the same time return operating non-GAAP operating income.

All right operator let's take the next one.

Our next question comes from Jason Kantor of RBC Capital Markets.

Jason please go ahead.

Thanks a lot.

My questions have been asked but maybe you can clarify two things.

When you talk about Japan sales still say that they are falling short of expectations.

Maybe you can give us a sense of exactly what you think is not happening and how quickly you think those things can be remedied.

And also questions you might update focus next year.

I saw in your prepared reminds he said pulmonary data would be early 2012.

Can you verify that?

That is exactly what we said.

As early as mid-2012 for the data.

I apologize in Rome at -- enrollment will be finished next year.

Laura do you want to comment on Japan?

Yes, Japan represents over 40,000 patients per year.

Who are diagnosed with liver cancer and most of them dying in the same year with over 35,000 deaths.

If you look at the opportunity with Nexavar the only approved systemic liver cancer.

It is only about the curve looks like to get to the opportunity that went in front of us.

We see strong opportunity that has yet to unlock.

We are doing all the things that we should be doing in order to go forward which is get very committed to be sure that we do everything we can to unlock the opportunity and to our partner to do that.

Okay.

Operator?

The next question comes from Howard of --

Thanks very much.

I apologize if you are to discuss this.

But for the JAK inhibitor.

What should we expect and d these three next year.

Can you remind us when you have to do decision to opt in and whether the license fee has been already been negotiated.

So, it is important to keep in mind we have not exercised our option.

After our buyout continues to be in control of the two compounds.

It is my understanding from conversations after our buyout that there will be presentation of the Phase 2 data at ASH.

I think you can look forward to that.

In terms of the triggers.

I don't think we actually of are communicated the specific triggers.

But, it is obviously as we gain more and more information to have more and more confidence in the compound.

It would drive our decisions.

Okay.

Operator?

Our next question comes from [inaudible] with Green Beret please go ahead.

Thank you for taking my questions.

A couple questions for -- I was wondering whether the medical division of FDA you know asked you for any feedback with regard to whether the patient population might go under the standard for approval.

Then, you mentioned the frontline of at ASH wasn't too familiar with this trial.

If you can give us some or detail on that, that would be great.

Then, Nexavar , I apologize if you have discussed about it.

What should we expect the breast cancer to breast cancer trials this

Okay I will start at the back and I will ask Mike for help on the Carfilzomib create in terms of what you can expect, this year.

We do expect to have at the San Antonio breast meeting, there will be additional data related to the overall survival from the combination as well as the combination.

The South and crush our study.

Great and on Carfilzomib.

As we mentioned before we had extensive discussions with the FDA.

The initiation of the Phase 2 trial as well as throughout its carrying out and more recently with the FDA.

We all remained confident that this patient population has exhausted all classes of available therapies including many experimental therapies.

And this patient population has disease that is refractory to the most recent regiment which usually includes two or more drugs.

Often three or four drugs.

We do think this patient population does have disease that would meet and I'm not a medical -- I would remind you that accelerated approval is about approval based on the surrogate endpoint only.

That is the issue for accelerated approval not admit patient population per se.

And that again, response rate has been a consistent and regulatory really admitted and in fact successful endpoint for accelerated approvals for several drugs in myeloma in both and in that disease.

We are committed again to this population for the approval towards filing approval for accelerated approval with the NDA in the timeframe we discussed.

On the second question, we have mentioned before that there are ongoing studies investigator response of studies with Carfilzomib and newly diagnosed.

And we do expect to see some data coming up for the most advanced of those studies which Carfilzomib regiment dexamethasone study on the Frost line of the trial bench before is being led by Andre the University of Michigan.

Operator I think we have time for just two more questions.

Next one please.

The next one comes from of Morgan Joseph.

These go ahead.

Thanks for taking my question.

Could you talk about the need and capacity for doing additional do business developing deals for Onyx in the next near-term or the medium-term please?

Yes.

I think we have been very thoughtful public kind of business development that we have done to bring new assets into the company.

And, we are clear on that is the position that we want to focus on getting the NDA filed.

That is exactly what we have done throughout 2010 and what we expected to through the first half of 2011.

A couple of expanded comments on that however, we have been very successful in the company expanding the pipeline when we have been opportunistic.

And I think we can and should does continue to be opportunistic because we don't have internal discovery and we have to continue to think about the ways in which we take hands the pipeline and we have that that is driven a lot of our success.

But our number one goal remains to one, filed the and that does take a fair good a man judgment in time and to not just about the end license opportunities but the outlines in the territory of licensing activity.

That you can expect quite similar to the deal that was signed earlier this year.

That will continue to be an important part of our business mix and important part of our operating statement and an important part of how we recover some of our initial expenditures for the acquisition.

The transaction is a very good example for how we get the compound in a market that we wouldn't be in.

On time and if not ahead of schedule that we could do it.

And on an accelerated basis to make sure drugs good to all people as quickly as possible.

So, we will continue to be active and thinking about ways we can leverage Carfilzomib that I'll license basis.

Last question operator?

The last question comes to us from Jim of Barclay's capital.

Jim please go ahead.

Can you hear me?

Yes we can Jim thanks.

So a few questions.

First, I noticed that the contingent consideration liability for -- went up this quarter I am assuming part of that was passage of time.

But it doesn't look like the probability of success went down.

And that is in the context of having a delay of the CMC issues.

What gives you the cost to maintain the same probability and have that liability goal up and could you be more specific at what you done in terms of resolving issues that were raised in subsequent loss and I have a quick follow-up.

Alright.

What we have you to each of your questions and we'll take them in turn.

The other question was just on Nexavar and the expose her to renal cancer.

We have data had you had and I think is helpful for investors to get a sense of what exposure you have to a percentage of sales that are for Nexavar and renal failure.

So, Jim, this is Matt.

Part one A of your question on Carfilzomib you are correct the increase in the community consideration and areas and expense in Q3 only reflect the passage of time.

We have not reduced ability of technical and regulatory success which is inherent in that measure.

And that is consistent with characterization we feel we have a good understanding of the issues that need to be addressed for purposes of submitting the NDA.

And have only question that out further in time.

In terms of where we are making about the kidney Cancer market.

We call that a growth opportunity really is driven by liver cancer.

Today.

RCC representing a small portion of our visits it has been a competitive market as you know with incorporated but the comments they made about the potential new as well as the competitive landscape we face today in our guidance.

I think that we have given careful thought as we have faced the marketplace.

And are pleased that Nexavar continues to deliver benefit to kidney cancer patients as well as liver cancer patients.

I think the only thing I would close all that up with particular question is competition exists.

It happens as marketplaces become attractive and that is one of those Phases.

Clearly the demand indicate the Cancer market look exactly like every other competitive market I have ever been in associated with.

Our job is to grow the most significant port growth opportunity which is liver cancer as Laura points out.

And to make sure that we defend our position in keeping cancer which we feel quite comfortable with we can do.

Since we're maintaining about a 15% market share on a worldwide basis.

And we think that, that has been relatively steady.

For the last several quarters and it should just on a worldwide basis, we have an effective way of managing competition.

But, the pick have the competitive pressure will continue to heat up and I think it makes is committed to growing the liver cancer is this as rapidly as we can as well is launching indications is in order to take advantage of the growth it is possible here.

Just a few closing comments.

I just want to say that this was a slightly different call that we usually have done because we wanted to take a step back and talk about the business is the way we see it and the way we run the business and the opportunity ahead.

This is a very different company and it is fundamentally a pipeline story where is two years ago it was a product story.

On that basis, we have been responsible for both to running the business to improve non-GAAP operating income.

As well as expanding the pipeline without internal discovery.

And we are quite comfortable and happy that the progress that we're making.

Still a lot of work to do but the near-term house Jones coming up at -- with the new data, with the full data set from the Phase 2 house Jones coming up at -- with the new data, with the full data set from the Phase 2B and the end at the end of the Newark should give you a sense of multi-dimensionality of this business.

And multiple options that we put into play to continue steady revenue growth across all products beyond Nexavar and the cash flow.

For the business.

Things for joining us.

Today as we really really do look forward to seeing you later.

And to bring you more news on Carfilzomib and Nexavar in the months and weeks ahead.

Things a lot.

Thank you for listening base and gentlemen that concludes today's conference thank you for participating you may all disconnect.