美國安進 (AMGN) 2011 Q1 法說會逐字稿

Welcome to the Onyx Pharmaceuticals conference call.

My name is Sandra and I will be your operator for today's 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.

Please go ahead.

Thank you.

Hello, I am Julie Wood, Vice President of Public Affairs at Onyx Pharmaceuticals.

We thank you for joining us for our first quarter 2011 financial results conference call.

We're holding today's call before the market opens in the US, because some of the management team is attending the International Myeloma Workshop in Europe.

At the meeting are Dr.

Tony Coles, Onyx's President and Chief Executive Officer, Dr.

Ted Love,

Executive Vice President and Head of Research and Development and Technical Operations, and Laura Brege, Executive Vice President and Head of Corporate Affairs.

On the line from our South San Francisco office is Matt Fust, our Executive Vice President and Chief Financial Officer.

While we don't anticipate any technical difficulties with this international call, if we do experience any, please be patient and stay on the line as we resolve them.

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 10-K for the year ended December 31, 2010, as well as to our other filings.

We expect to file our 10-Q for the first quarter next week.

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

For reconciliation of these non-GAAP financial measures to the corresponding GAAP measures, please see today's 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 within the Investor section of on the Financial Information page.

I would now like to turn the call over to Tony Coles.

Thanks, Julie.

Good morning to all of you in the US, and good afternoon to those of you here in Paris attending the International Myeloma Workshop.

Thank you for joining us today.

2011 is a pivotal year of both execution and growth for Onyx, as we build and accelerate momentum across our business with a number of significant near-term events.

With our next corporate milestone, we will see the culmination of months of hard work, prioritization, and disciplined decision-making.

This summer, we intend to file the NDA for accelerated approval of our second potential blockbuster therapy, carfilzomib.

Carfilzomib, the next generation proteasome inhibitor for the potential treatment of patients with relapsed and refractory multiple myeloma, could expand our presence in hematology and oncology, and enhance our ability to serve even greater numbers of cancer patients worldwide.

While attending this important myeloma meeting, we have been interacting with and engaging many of the key international thought leaders in the field.

It has been exciting to see data presentations that further cement our belief that carfilzomib will play a unique and a critical role in treating people with multiple myeloma and even more exciting, to listen to the enthusiasm that is building in the physician community around carfilzomib.

Recapping the highlights of the first quarter, we announced earlier this year that the FDA has granted fast-track designation for carfilzomib, and that we initiated a rolling NDA submission for potential accelerated approval of carfilzomib.

We are on track with our filing activities, and intend to complete our NDA submission on time.

In addition, we are ramping up our activities related to the commercialization of carfilzomib in the United States.

In anticipation of a product launch in the first half of 2012, we are hiring select individuals who will be involved in the market preparation for carfilzomib.

As we update on a the regulatory process in the second half of the year, we will provide more details on our commercialization plans and efforts.

With regard to European registration, at the end of the first quarter, we made a proactive strategic decision to amend and enhance the Phase 3 FOCUS trial to assess overall survival in order to strengthen the data package for EU registration.

Ted will provide greater detail on that later in the call.

Despite macroeconomic pressures impacting companies worldwide, demand for Nexavar continues to be strong and remains foundational to our business.

With Nexavar, we have a drug that is entering what could be the most profitable and productive years of its life cycle, as evidenced by strong growth in the Asia-Pacific markets.

In the US and certain other markets, the combined impact of healthcare reform, including pricing pressures and some seasonality in the business, affected sales in the first quarter.

Laura will elaborate on the growth trends we are seeing in the Nexavar franchise and provide an update on the ongoing trials in liver cancer.

As we think about what is on the horizon for 2011 and beyond, we believe the Onyx transformation is unfolding nicely.

In just 36 short months, we have grown from a single-asset Company to a portfolio-based, pipeline-driven Company with multiple compounds and multiple opportunities to help cancer patients.

Looking toward the top priorities we laid out at the beginning of the year, we are well positioned to execute on each 1, including completing the filing the NDA for accelerated approval of carfilzomib as quickly and effectively as possible, continuing our commercial expansion of Nexavar in liver cancer and preparing to access additional revenue streams through potential new indications, and maintaining the financial discipline that aligns our strategic investment in clinical development and our commercialization goals with the Onyx P&L.

We are energized to be participating in the ongoing meeting here in Paris, and are looking forward to hearing more about the exciting new developments in the multiple myeloma space, particularly the potential of carfilzomib.

Now I will turn the call over to Ted for a review of the progress we're making in our clinical development programs.

Thank you, Tony.

As Tony mentioned, we are excited to be here at the IMW and have the opportunity to meet with many of the key opinion leaders who are in attendance.

Dr.

Andreas Jakubowiak will participate in a summary session tomorrow discussing new proteasome inhibitors, such as carfilzomib.

His talk will also include more data from our front line experience.

And Dr.

David Siegel will participate in a plenary session on Friday, presenting the 003-A1 data.

I'd like to highlight our decision to increase the size of FOCUS.

In late March, we announced our plans to expand the Phase 3 European trial which is evaluating the efficacy and tolerability of carfilzomib compared to the best standard of care, which includes steroid and if appropriate, Cytoxan.

The trial is designed to support a registrational filing in the EU in patients with relapsed and refractory multiple myeloma following treatment with at least 3 prior therapies.

The FOCUS trial modification includes 3 key enhancements.

Number 1, we changed the primary endpoint to overall survival from progression-free survival.

Number 2, we increased the patient enrollment to 300 from 84.

And thirdly, we added 2 interim analyses.

Given the strength of the 003-A1 overall survival data presented at ASH last December, and the ability to leverage an ongoing and actively enrolling study, we felt it was logical to take advantage of the opportunity to differentiate carfilzomib by demonstrating its potential life-saving advantage.

Since enrollment curves for the expanded trial are not yet mature, it is too early to provide an accurate prediction of when we expect the FOCUS trial to complete.

However, we do have the interim analyses built into the trial, so there is the possibility that we could see data read-out prior to full completion of the study.

We will keep you apprised of our expectations, as we know more.

We are pleased to share the most important milestone of the year for Onyx; the submission of the NDA for accelerated approval is on track.

As planned, we have continued communications with the FDA, specifically the CMC Division, and we feel confident about our NDA timeline and filing strategy.

We expect to have all necessary data, as well as additional efficacy and tolerability data from front-line patients, as part of a comprehensive filing.

We intend to file this summer, in the July/August time frame, and reaffirm our belief that carfilzomib could potentially be approved in the US in the first half of 2012.

Let me highlight some of our other clinical programs and plans for our proteasome inhibitor franchise, and then provide an update on Nexavar and what these studies may mean for our ongoing efforts.

We are pursuing clinical trials of carfilzomib in combination with Revlimid and low-dose dexamethasone in earlier stage myeloma.

Encouraged by strong Phase 2 data, we initiated an international Phase 3 study, the ASPIRE trial.

In this trial, patients with relapsed disease are randomized to receive combination treatment with or without carfilzomib.

We expect that the trial environment will be complete in the first half of 2012.

The second molecule in our proteasome inhibitor franchise is ONX 0192, an orally available agent we believe may also play an important role in the treatment of hematological cancers.

We intend to begin Phase 1B2 studies in hematologic malignancies in the second half of this year.

With Bayer, we are developing Nexavar in additional potential indications, including non-small cell lung cancer.

In the Phase 3 lung cancer trial known as MISSION, we are assessing the single-agent activity of Nexavar in the third and fourth line setting.

The study completed enrollment at the end of last year, and depending upon event accrual it is possible that we may be able to share top line survival data by late this year or early next year.

In thyroid cancer, the ongoing Phase 3 study called the DECISION trial is designed to confirm the efficacy seen in multiple Phase 2 studies with single agent Nexavar.

To remind you, preliminary Phase 2 data suggested that overall survival with Nexavar is 140 weeks.

Historically, survival with chemotherapy has been approximately 40 weeks.

DECISION is expected to complete enrollment this year.

As part of our Onyx's (inaudible) breast cancer program, we look forward to seeing new data from the randomized Phase 2 study evaluating Nexavar plus Gemcitabine, or kekcytovene, in the second line setting, following progression on Avastin.

We expect this data to be presented at ASCO in June.

Also in our breast cancer program, we are building on the compelling Phase 2 data reported with Nexavar in combination with kekcytovene in women with metastatic HER2 negative breast cancer.

The resilience trial will randomize advanced and metastatic breast cancer patients worldwide through the Nexavar plus kekcytovene or placebo plus kekcytovene to assess progression-free survival.

Turning now to ONX 803 and ONX 805, our JAK2 inhibitors.

We've made the strategic decision not to exercise our option to develop and commercialize these compounds, and have restructured our agreement with S*Bio.

Consistent with this restructuring, we continue to exercise financial discipline and have prioritized our R&D spending on the highest value compounds in our portfolio.

We believe in S*Bio's platform and we wish them well as they move forward.

In summary, we are executing on a development strategy that is aimed at bringing valuable new therapies to cancer patients.

We believe success in any 1 of these high potential areas could bring significant benefit to patients and shareholders.

Now I'd like to turn the call over to Laura for a business update.

Thank you, Ted.

As Tony mentioned, Nexavar global net sales in the first quarter were $235 million, up 10% as compared to the first quarter of 2010.

First quarter sales include approximately $54 million in the United States, and $181 million in sales from the rest of the world.

In the Asia-Pacific market, we are unlocking Nexavar's potential and its promise, as evidenced by robust first quarter sales in that region.

Led by Japan with sales of $42 million, and China with sales of $17 million, we are witnessing the kind of growth opportunity that the Asia-Pacific represents, and we expect to see continued strong performance in this region, where more than half of all liver cancer cases occur.

China, a market currently driven largely by private payers, is a leading contributor to Nexavar sales.

This strong trend, and healthy sales dynamic, speak to the therapeutic need and to the market demand, as well as the economic expansion underway in that region of the world.

Turning to the United States, our ongoing outreach to non-oncologists as well as our comprehensive program focus on the interdisciplinary healthcare teams that treat patients with unresectable liver cancer, continue to make good progress.

As the only targeted systemic therapy approved in liver cancer, we believe there are significant growth opportunities ahead for Nexavar in this disease.

We are pleased that our SPACE, STORM, and SEARCH trials have all completed enrollment, bringing us even closer to helping a greater number of liver cancer patients.

We believe that data from the Phase 2 SPACE trial will demonstrate the safety and utility of Nexavar in combination with TACE.

We project that top line data from the SPACE trial could be available by year-end.

And in the Avastin setting, the Phase 3 STORM trial completed enrollment at the end of last year, and we could see data from this trial as early as next year.

SEARCH, the combination of Nexavar plus Tarceva, is also due to read out next year.

So there are a number of high potential trials maturing that could generate important new Nexavar data in the near term.

As we plan for the commercialization and launch of carfilzomib, and consider the activity and tolerability of this new compound observed to date, we are confident it can become a leading therapy in the growing multiple myeloma market.

Taken together, we believe that carfilzomib and ONX 0912 could exceed $2.5 billion in sales in multiple myeloma alone.

Now I'd like to turn the call over to Matt, who will review the financials.

Thank you, Laura.

Global net Euro sales of Nexavar in the first quarter 2011 grew 11% over first quarter 2010 to EUR172 million.

Measured in dollars, growth was 10% to $235 million.

The average exchange rate for first quarter 2011 was $1.37 per Euro.

Sales growth was driven primarily by the Asia-Pacific region, where Nexavar sales in Japan, measured in Euros, increased 35% compared to first quarter 2010, and sales in China grew 50%.

In the US, healthcare reform impacted first quarter net sales, specifically reserves taken for the Medicare Part D Donut Hole coverage.

We expect the Medicare Part D impact will be most significant in the first half of the year, as Nexavar patients reach their contribution threshold.

The Medicare Part D impact in first quarter was consistent with the full year 2011 net sales guidance we have provided.

In line with historical sales patterns in the US, the first quarter also reflected a modest decline in inventory levels.

For the remainder of the year, we expect Nexavar sales to be driven by double-digit growth in the Asia-Pacific region.

Variables that could influence sales growth in 2011 include new clinical data, global pressure on pricing and discounts, healthcare reform in various countries, the dynamics of an increasingly competitive kidney cancer market, and currency exchange rate movements.

Our annual guidance remains unchanged.

We continue to expect global Nexavar sales of approximately $975 million to $1.25 billion for full-year 2011.

Nexavar collaboration in cost of goods, distribution and SG&A expense of $74 million was modestly lower than spending in first quarter 2010.

Lower collaboration expense and higher Nexavar revenues resulted in an improved Nexavar commercial margin of 62% in first quarter 2011.

Research and development expense of $63 million in first quarter 2011 included a non-cash charge of $12.7 million.

This amount is excluded from first quarter non-GAAP net income.

R&D expense also reflects our expanded carfilzomib development program, notably the ASPIRE and FOCUS trials you heard Ted describe earlier.

For full year 2011, we continue to expect $225 million to $250 million in net research and development expense, excluding the 1-time charge in this quarter associated with the S*Bio agreement, with R&D spending likely to be higher in the second half of the year.

Our first quarter 2011selling, general and administrative expense was $34 million, in line with our full-year 2011 guidance of approximately $130 million.

Later this year, when we have more clarity on the US regulatory pathway for carfilzomib, we will update you on plans for the US sales force and for further commercial expansion.

In first quarter 2011, contingent consideration expense of $11 million, which is a non-cash charge, included the impact of an increase in the probability of technical and regulatory success of the amended FOCUS carfilzomib trial.

As a result, for full-year 2011 we are revising guidance on this line, and now expect approximately $30 million of contingent consideration expense.

For first quarter 2011, Onyx reported a non-GAAP not loss of $14 million, or $0.23 per share on a fully diluted basis.

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

The income calculation excludes non-cash items, the details of which are described in today's press release and posted on our website.

Financially, we are in a position of strength, both in terms of our operating cash flow from Nexavar sales that gives us the financial flexibility to move our product portfolio forward, and on our balance sheet.

We ended first quarter with approximately $560 million in cash and investments.

With this strong foundation, we have both the resources and the strategic flexibility to deliver compelling results, while at the same time continuing to build value for our future.

Thank you, and I will now turn the call back over to Tony.

Thanks, Matt.

We expect to achieve a number of important milestones across our business, including, for our proteasome inhibitor franchise, we anticipate first, completing the full NDA submission of carfilzomib for accelerated approval, continuing enrollment in the FOCUS Phase 3 trial to support European registration, and continuing enrollment in ASPIRE Phase 3 trial to support full approval of carfilzomib.

And finally, to initiating a Phase 2 study with ONX 0912 later this year.

For Nexavar, we look forward to first, driving Nexavar's revenue and commercial contribution in approved indications, sharing the full data set from the Phase 2 breast cancer trial evaluating Nexavar plus Gemcitabine or kekcytovene in the second line setting following progression on Avastin, providing data from our SPACE trial with Nexavar and TACE by year-end, announcing top line overall survival data late this year or early next year, depending on event accrual in the MISSION lung cancer trial, and continued enrollment of the Phase 3 breast cancer trial RESILIENCE and completing enrollment in the DECISION trial in thyroid cancer.

Before we conclude our prepared remarks, and open the call to questions, I would like to take a moment and comment briefly on our litigation with Bayer.

We are approaching the June trial date, and are confident in our case and the substantial evidence supporting our claims.

Last week, at a summary judgment hearing, the judge indicated that she would issue an order denying Bayer's motion for summary judgment, further supporting our belief in the merits of our position and our claims.

We look forward to the resolution of this matter, and will certainly keep you updated.

As you've heard today, we are making clear pipeline prioritization decisions and advancing our most promising portfolio candidates.

Our financial performance strikes a balance between expanding our top line revenues, targeting our investment in R&D, and building new capabilities to ensure commercial success.

As always, we are committed to disciplined management of both commercial and development spending, as we pursue the opportunities with the greatest potential.

We look toward the remainder of 2011 with excitement and, in keeping with our mission of making a difference in the lives of patients, we will be pleased to share these moments with you.

We will now open the call to your questions.

Operator?

Thank you.

We will now begin the question-and-answer session.

(Operator Instructions)

Gene Mack from Mizuho Securities.

Hello.

Thanks for taking the question.

I hope you guys can hear me.

Just two things, real quick.

On the enrollment of the FOCUS trial, or rather the interim looks, what is going to drive those interim looks, is it just enrollment, is it going to be numbers of patients in the door?

And then, is there any possibility that some of that data is going to be in the US filing?

And then on the second question, on F-Sorafenib, appreciate the update.

Is there any new data coming for that compound, that you know of?

Thanks.

Gene, thanks for the question.

Let me take the Fluoro Sorafenib question first.

And then I will ask Ted to comment specifically on the FOCUS study.

For Fluoro Sorafenib, it is our understanding from available public documents, and we have to be mindful that we know only what's in the public domain today, that they are running two Phase 2 trials, one in [Gist] and one in colorectal cancer, that are both ongoing.

It's unclear when they will have final data from these trials.

But of course, we will be following along with everyone, as we learn more about Fluoro Serafenib.

Ted, on the FOCUS trial?

Sure.

Thanks, Gene.

So first I will say about FOCUS, the enrollment has been going very well.

We are in the process, as I mentioned, of adding new sites to achieve the target of 300 patients.

Specifically, in terms of the interim looks those are driven by events.

So in this case, survival events.

And we don't anticipate that this would be part of our NDA submission, because the NDA submission is coming quite quickly as we mentioned, the July/August time frame, and we obviously would not expect to complete FOCUS part of that.

All right, operator, next question.

Rachel McMinn from Bank of America Merrill Lynch.

Good morning.

This is Masha Chapman for Rachel.

Could you please provide a little bit more color on the enrollment of the ASPIRE study, and whether or not all sites are currently active.

And my second question is the front-line dating for carfilzomib, could you give us some of the update thoughts on the development of carfilzomib in this setting, and what trials are you currently considering?

Okay.

Thank you, Masha.

Ted, would you mind answering both of those?

First, just a little more color on the ASPIRE enrollment and how well that is progressing.

And then secondly, on our plans for carfilzomib in other studies in earlier stages of treatment.

In terms of ASPIRE, the enrollment has gone quite well.

We have not yet fully got all the sites up yet, but despite that, we actually are enrolling at the rate that we projected for having all the sties up.

So it's actually gone very well, and we are continuing to add new sites.

So we are very confident in our guidance that we will complete the enrollment in the first half of 2012.

With regard to front-line, I think everyone walked away from the ASH meeting feeling very excited about the addition of carfilzomib to reb-dex in the front-line, primarily because we were able to generate such rapid and deep responses.

Specifically, if you will recall, at 4 weeks -- after 4 cycles,we were able to generate a complete response in 36% of the patients.

Of course, 100% of the patients had some level of response by then.

And if you look at the overall outcomes, the best response overall for the study was 55% of the patients were able to achieve a complete response.

So the tolerability of the drug, the deep and rapid responses, is something that we were very impressed with, and we expect that to be updated at this meeting.

Thanks, Ted.

Specifically, Dr.

Jakobowiak will be providing updated interim data tomorrow, here at the IMW meeting.

So do stay tuned for that.

I don't think you'll want to miss what he has to say.

Operator, next question.

Cory Kasimov from JPMorgan.

Hello.

Good morning, guys, or I guess I should say, good afternoon.

Thanks for taking the question.

My question is also on the FOCUS trial and the decision to expand it in Europe.

And I realize this is a study for EU registration, but I'm wondering what kind of input, if any, the FDA had on this decision, and also whether that you can say anything about the powering of the trial?

The FDA did not have any input into the trial.

The EMEA did, however.

And that was a discussion that Proteolix had, had prior to Onyx's acquisition of Proteolix.

We actually think the trial significantly reflects an improvement based upon those discussions with EMEA.

Specifically, the EMEA felt like overall survival would be the most robust end point that we could present.

And we decided to do that.

And in terms of the powering, I don't think we'd comment specifically.

But obviously, we have been relatively conservative and thoughtful in the powering, and thus the increase in the size from 84 to 300 patients.

And we also have the interim looks, which gives us the flexibility to be able to terminate the trial earlier for patients' benefit, as well as for timeline benefit, if we are seeing the magnitude of effect that we think we could possibly see.

Cory, one of the things I would add is that, one of the great parts about this particular meeting is we have been interacting with investigators and key opinion leaders, and having a lot of discussion about the FOCUS trial in general.

I will tell you, they are actually quite pleased that we have modified the trial and changed the endpoint to overall survival, and feel very confident that this is exactly the kind of study that the EMEA will want to see as we move towards registration.

So that's been a great point of validation for us.

Operator, we will take the next question.

David Moskowitz from Roth Capital.

Yes.

Thanks and good morning, everyone.

In terms of the filing for carfilzomib for accelerated review, when and how will you announce when you have completed your application, and how will we know whether or not the FDA has accepted it for accelerated review?

And then on the Bayer collaboration, can you talk about the 62% margin on that business and whether or not that's sustainable?

Thanks.

David, on that one, we are going to actually ask Matt to comment specifically on the Bayer collaboration.

But let me take your first question, which is the filing and when and how.

As Ted mentioned in his prepared remarks, we are expecting to complete the NDA filing on schedule, and we clearly are on track and this reflects additional input that we have received from the FDA notably the CMC Reviewing Division.

So we feel very comfortable with the process we have in place, and with the completion of the 2 additional modules, the clinical module and the CMC module, and expect all of this to come together in the July/August time frame.

We will certainly make sure that once we've reach that critical milestone for our business, that we advise you and let everyone know that the filing has been completed.

And we will also likely advise you of important FDA commentary around that, including the acceptance to file.

So stay tuned for all of that in the second half of the year.

Do recall that we have a fast track designation, and as part of that, we are able to ask the FDA for priority review, which generally takes 6 months or so.

And on that basis, while we will never speak for the FDA's timetable for reviewing applications, we would expect to hear from the FDA in a timely fashion, as the application gets reviewed.

Matt, would you mind providing an answer on the Bayer collaboration margin of 62%, and sustainability?

Sure.

Hello, David.

The margin, as Tony mentioned, of 62% commercial margin in first quarter 2011 compares to a 57% commercial margin in the fourth quarter of last year, and a 59% margin in the first quarter of 2010.

Commercial margin on Nexavar is a function both of top line revenues as well as the global cost of goods and commercial expenses.

We had a very favorable number in Q1, and consistent with our full-year guidance of 60% or better, we do expect we will see quarter-to-quarter variability in that margin, but remain comfortable that we should see 60% or better margins through full year 2011.

Operator, next question.

Howard Liang from Leerink Swann.

Thank you very much.

Was there a change on the type of application that you are seeking from Europe, as a result of the change in the FOCUS trial design?

I was wondering -- I assume that you are now seeking, clearly, full approval with survival data, was it previously conditional approval, on PFS?

And second, could you just confirm that there's no regulatory input from the EMEA when you changed your trial design?

Yes, Howard.

We'll ask Ted to take both of those.

Howard, thanks for the question.

You are correct.

Now that we have changed FOCUS, we think that, that would be the basis for full approval in Europe.

It's obviously a randomized controlled experience now, with mortality as the endpoint.

So we think that would not be appropriate for conditional approval, rather be appropriate for full approval.

We had very thoughtful feedback from the EMEA in writing, and we actually made changes to the protocol which we think really reflect the most critical input that we got back from them.

So we have not gone back and had additional discussions with the EMEA recently, but we did make sure we updated the trial with their input in mind.

So we feel very good about the modifications and how we anticipate they will be received by it the EMEA.

Thank you, Ted.

Next question, operator.

Yale Jen from Maxim Group.

Good afternoon, guys.

Thanks for taking the questions.

Two questions here.

The first one is that for Nexavar, it has received the reimbursement in Korea and anticipate to get that in Taiwan.

Could you comment on the potential market of both areas and do you see any uptick in terms of revenue so far?

Laura, would you take that one?

Sure.

Thank you.

We did in fact receive reimbursement for Nexavar in South Korea, which was achieved at the beginning of 2011.

So it's early days for seeing the opportunity in South Korea.

And you can see that Asia-Pacific has really grown very dramatically and nicely over the last couple of years.

It has tremendous growth ahead of it.

As we look forward, both for South Korea, which has just begun its reimbursement, Taiwan, we may see as early as later this year.

And they are both important large markets with 11,000 deaths a year in Taiwan, 14,000 in South Korea.

Importantly, over half of all liver cancers in Asia-Pacific were in China and Japan, as you look year over year.

We saw 50% growth in the first quarter of 2011 as compared to the first quarter of 2010.

So we think that represents great opportunity.

So Yale, I think it's fair to say that the Asia-Pacific opportunity is finally opening up for Nexavar.

And with the continued reimbursements and launch success that we are finding in these markets, we do expect additional growth for Nexavar in the highest density number of cases worldwide.

Operator, we will take the next question.

[R.

Lynn] Lee from Barclays.

Hello, guys.

I had a question about, one of our calls last week with an expert suggested that expanded access would be available and could be available in Europe if the US -- you got accelerated approval in the US.

And I was wondering whether that would be impacted at all by some of the changes you have made in your European trial?

I think, I want to make sure that I've got your question.

I think there are a couple in there.

First, we would separate the recent changes that we've made in the FOCUS trial and, as Ted has already indicated, that was a proactive strategic decision on our part to enhance that particular study, and really strengthen it and find a differentiation opportunity for carfilzomib in this population.

So we think all those changes are very good, will strengthen the European registration process, but are not related in any way with any plans we have for an expanded access program.

We have initiated the planning for an expanded access program.

We do expect to begin one later this year, so you can stay tuned for more on that front, but do believe that these kinds of programs, extended access programs, are consistent with the focus we have on patients and making the drug available on an as-needed basis in those settings.

So we do plan to proceed with that, but not related in any way to the European registration effort.

All right, operator, next question.

Ling Wang from Brean Murray.

Thank you for taking my questions.

I've got two questions.

First one is with regard to the SPACE trial.

You guided the data should be available by the end of this year.

I was wondering whether the timeline is tracking your expectation, and at what conference we might see the data?

And the second question is on the Bayer litigation.

Congratulations on a positive development there.

Just wanted to get a clarification whether the June trial will be the final resolution for this litigation, and maybe you can also comment on the different scenario, the potential impact from the different outcomes from this trial.

Thank you.

Okay, Let me actually start with the Bayer litigation, and then I will ask maybe Laura or Ted to comment specifically on the SPACE trial and where we think the upside will come there.

With regard to the Bayer litigation, as we said in our prepared remarks, there was a summary judgment hearing last week, and the judge has already indicated her intent to deny that motion by Bayer.

The trial will begin in June, so just a few short weeks away, and it will be a jury trial.

Our expectation is that this should provide, certainly a final verdict and a resolution to this particular dispute.

Of course, any company can always appeal that particular judgment, and so we won't to try to predict what could happen in these -- in this case, but it is our expectation that we will have a lot of clarity after the trial concludes at the end of June, or beginning of July.

So, remind everyone that the trial is being conducted in Northern California in Federal District Court, and it's probably too early to speculate on potential scenarios or outcomes.

As I mentioned in my prepared comments, we feel very strongly about our case, about the weight of the evidence that is on our side, and will certainly continue prosecuting this case to the fullest extent, based on we know today.

Comments on the SPACE trial.

Laura?

On the SPACE trial, we are in fact tracking to what our expectations are this year.

It is event-driven, and we are looking forward to results by the end of the year.

What meeting it will be at will really be a function of both when the events occur and what is available on the calendar.

Rest assured, there will be a lot of interest in it, as part of our expansion of the liver cancer opportunity.

So stay tuned.

Operator, next question.

Philip Nadeau from Cowen.

Good morning.

Thanks for taking my questions.

Did you, first, did you say what US sales were?

And if you didn't, could you let us know what sales were, specifically in the United States?

And then second, could you talk about more about your decision to drop the S*Bio compound, it seems like the early data there was promising.

I'm curious whether there was something you saw in the data or whether it was more the market and the potential competition that dissuaded you from opting in to that compound?

Okay.

I think we did comment on US sales.

Laura, US sales specifically?

-- were $54 million, Phil.

With regard to the JAK inhibitors, one of the great things about S*Bio is their scientific platform.

They have done very strong work in a number of areas, and with a number of targets.

This particular option agreement was struck to give us maximum flexibility to invest in this program, if and when we saw the right kind of data.

I'd say that given the -- both the nature of this molecule and the competitive landscape, we made a strategic decision to invest our precious R&D dollars in some of our other programs.

Namely, in our proteasome inhibitor franchise, which would be carfilzomib and 0912.

The data for 0803 are intriguing, but we do believe that it's better for us to invest our R&D dollars in a very focused, very targeted way to build the greatest value we can from some of the compounds that are on the near-term horizon.

Next question, operator.

Shiv Kapoor from Morgan Joseph.

Good afternoon, guys, and thanks for taking my question.

It's actually just a housekeeping question.

Most of my questions have been answered.

In your non-GAAP adjustments you have a couple of lines saying advance funding to S*Bio and impairment of equity investment in S*Bio.

Can you tell me which lines they correspond to on GAAP?

Sure.

Matt, I will ask if you could to help Shiv find those lines.

Hello, Shiv.

Sure.

The easiest place to look is probably in our press release, in the reconciliation of GAAP to non-GAAP net loss.

There were 2 components in our GAAP to non-GAAP adjustments for the first quarter, which reflect the termination of the S*Bio agreement.

The first appears in the R&D expense line.

It's approximately $12.7 million, and it reflects a write-down of the prepaid R&D expense, which we had recorded in the context of the S*Bio agreement.

And the second is an adjustment in the carrying value of our equity investment in S*Bio.

That appears in other expense, and was approximately $3 million in the quarter.

Okay.

Thanks, Matt.

Operator, I think we may have time for just one or two more questions.

Let's take the next one.

Stephen Willey from Stifel Nicolaus.

Good morning.

Just a couple quick questions on the long cancer front, actually.

Can you remind us what the powering assumptions are behind the MISSION trial?

And then the number of death events that's required to occur before the trial unblinds.

Thanks.

I'll take that, Tony.

We actually don't release the detail data, but I can remind you that MISSION is an 800-patient study, and the endpoint is survival.

And as we typically do in these trials, they are event-driven.

But with 800 patients, we have good confidence and good power to see clinically meaningful benefits and survival.

All right.

And operator, just one more question.

Joel Sendek from Lazard Capital Markets.

Hello.

Thanks a lot.

Two questions, actually.

When I look at how -- on the FOCUS trial, not only on 0912.

On the FOCUS trial, when I look at how quickly you enrolled the first 84 patients, I'm wondering -- I know you can't give us precise guidance, but is it reasonable to assume that under normal circumstances you would be able to complete the enrollment by the end of the year, this year?

And then on 0912, I am wondering when might we see some data, and your level of confidence in the drug and whether there is a backup oral?

Thanks.

I think Ted's best suited to take on the FOCUS enrollment question, and I think the 0192 data question, as well.

I'll just remind everyone that we like very much the notion that we've got both of these compounds as part of a proteasome inhibitor franchise.

We make this point often.

But we make it because it's actually quite nice to have both the intravenous carfilzomib, the oral 0912, and the opportunities that 0912 can open up for us in the maintenance setting.

So, Ted, could you take both of those?

Sure.

With regard to FOCUS, we did get a very nice rate of enrollment, but the infrastructure that we put together was really targeted for 84 patients.

300 patients is obviously a substantial increase in size, and we've also changed the endpoint to overall survival.

So we don't think it is likely that we would complete enrollment of all 300 patients by the end of this year.

But we'll give you more guidance as we get more information.

But fundamentally, with the interim analyses in, it really is going to be event-driven, not necessarily enrollment driven, to begin with.

With regard to 0912, we do not have a back-up molecule.

We are focused on moving forward with the molecules that we obtained with the Proteolix acquisition, and there was no back-up molecule there.

But we have been very impressed with what we have seen with 0912, specifically in the trial that we begin last year and we've already announced some data earlier this year.

We've seen very nice absorption of the compound orally, and we've seen very high levels of proteasome inhibition.

And we've had patients on the drug for a very prolonged period of time.

And while these are solid tumor patients, it's very meaningful data in the circumstance that you are able to achieve absorption sufficiently to hit proteasome inhibition and the patients tolerate it well.

The next step for us is in fact to generate some efficacy data, and that's why we are excited to be moving into hematologic cancers later this year.

And it's too early to give an estimate of when that data will be available, but we are excited to be moving into patients with multiple myeloma and other hematologic disorders.

Thanks, Ted.

Let me close the call by making a few comments.

I would say this was a great quarter for making progress with our business.

Not only were we able to advance carfilzomib's NDA application, and the clinical trials that we have there, we made very good progress, I think, in redefining the endpoints for FOCUS and continuing with strong enrollment for ASPIRE.

We were also able to make clear and proactive decisions for our portfolio and the prioritization of our R&D spend.

That's been our commitment to you all along, and it's consistent with our focus on financial discipline in how we are investing in our business.

And the beauty of the way we structure our transactions gives us the kind of flexibility to make clear go and no-go decisions on a timely basis.

We were also able to advance Nexavar in the Asia-Pacific markets through our partner, Bayer.

And this, as you know, is the greatest next opportunity for liver cancer for Nexavar, and should be an important driver of growth in the months and the years to come.

And we gained additional clarity on our lawsuit with Bayer, with support and confidence for this particular activity in our business.

So we are pleased with the evolution of the Company, our growing clinical momentum and our innovative pipeline.

Thank you for joining us today.

We hope to see those of you attending IMW at our reception this afternoon.

And for more information, please do feel free to reach out to the IR team in South San Francisco, who will be available and standing by following the call today.

Thanks again for joining us.

Thank you, ladies and gentlemen.

This concludes today's conference.

Thank you for participating.

You may now disconnect.