美國安進 (AMGN) 2011 Q3 法說會逐字稿

Welcome to the Onyx Pharmaceuticals third quarter results conference call.

My name is Sergio, and I will be your operator for today's calls.

(Operator Instructions.) I will now turn the call over to Onyx Pharmaceuticals.

You may begin.

Thank you, Sergio.

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

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

Leading the call today is Dr.

Tony Coles, our President and CEO.

Also providing updates are Dr.

Ted Love, Executive Vice President and Head of Research and Development and Technical Operations; Dr.

Helen Torley, Executive Vice President and Chief Commercial Officer; and Matt Fust, Executive Vice President and 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 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 10Q for the third quarter later this week.

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 the Onyx website.

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

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

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

While this has certainly been a remarkable quarter with a number of key achievements, to appreciate the progress we have made and where we are today let's go back to when I arrived at Onyx just over three years ago.

At that time we described our vision for building a leading oncology company, centered on patients' needs.

Since then we have been actively transforming Onyx, one step at a time.

Our strategy to bring innovative new therapies to patients while maintaining a robust financial position is designed to fuel further growth.

This dual commitment to financial discipline and shareholder value creation is underscored by the recent restructuring of our Bayer collaboration, which expands the number of late stage or commercial therapies we now have to three, significantly increases our financial resources, and gives us more options for creating a uniquely successful biotech company.

We look forward to developing our growing portfolio of medicines and delivering even more value to our shareholders.

As we have focused more tightly on growing our business, and implementing our strategy, we have achieved goals that have resulted in several significant accomplishments.

First and foremost, we now have two oncology platforms, or franchises.

One in kinase inhibitions, and one in proteasome inhibition.

Already, these franchises have delivered important value with one currently marketed product, Nexavar, and two additional late-stage therapies, carfilzomib and regorafenib, in development.

First, for the kinase inhibitor franchise, Nexavar is our successful oncology medicine that is delivering benefits to patients around the globe.

Recently we have added regorafenib, an exciting new agent that has already demonstrated positive Phase III survival data in colon cancer, a major tumor type.

And there is more Phase III data in gastrointestinal stromal tumors, or GIST, expected in the first quarter of next year.

For the proteasome inhibitor franchise, we have carfilzomib, our most advanced therapeutic candidate for multiple myeloma, and behind this ONX0912, an oral therapy in Phase Ib-II clinical development.

Importantly, we also have a strong balance sheet, putting us in excellent financial position to invest in and maximize our opportunities.

Taken together, these various shots on goal, could take the Company from one product in two indications today to a total of three commercial products in as many as seven different indications as early as the end of next year.

As you know, in September, we completed the submission of a new drug application for carfilzomib to the FDA, under the accelerated approval process.

We are committed.

In fact we felt obligated to get carfilzomib to patients as quickly as we can, and believe the accelerated approval pathway is the best way to do this.

As expected, we do not yet have a decision regarding the acceptance of the filing by the agency.

However, we do expect to receive notification later this month.

While we know there is ample interest surrounding the filing, we won't speculate in advance of the FDA's decision, and we won't be able to provide additional information during this review period.

In addition to pursuing accelerated approval for the use of carfilzomib to treat patients with relapsed and refractory multiple myeloma, we are conducting two large randomized Phase III trials for full US and European approval, and are evaluating additional Phase III studies for both front line use, as well as a planned head-to-head trial against Velcade.

Our goal with this multi-pronged clinical development program is to establish carfilzomib as the multiple myeloma agent of choice for patients and physicians across a variety of treatment settings.

As a mentioned a moment ago, an important component of our strategic vision centers on Nexavar.

Nexavar has changed the lives of literally tens of thousands of patients worldwide and we believe there is even more potential with this innovative medicine.

Both in its two approved indications, and in other tumor types.

As a result top line results for pivotal trials in lung and thyroid cancer are expected within the next few months.

And now we have the opportunity to build on our experience and our momentum with Nexavar to develop a robust kinase inhibitor franchise.

As you know, we recently resolved our litigation and restructured and expanded our collaboration with Bayer to ensure that together we are best positioned to meet the needs of patients.

Onyx nowhas a significant interest in regorafenib, and we look forward to collaborating with Bayer to maximum the kinase inhibitor platform and fully unlock its value.

Just last week we announced that regorafenib increased overall survival in patients with metastatic colorectal cancer.

This favorable trial result underscores the powerful opportunity we have with Bayer to advance both Nexavar and regorafenib, and to optimize development of these two agents for patients.

With these achievements, we have made significant progress in transforming Onyx into a multi-product, multi-platform company, with multiple shots on goal, and our strategic and operational decisions have put us firmly and uniquely on the path for success.

We're also ensuring that we have the critical leadership expertise to execute on our vision.

And as such it is my distinct pleasure to introduce the newest member of the Onyx executive team, Dr.

Helen Torley, as the Executive Vice President and Chief Commercial Officer.

Helen is an exceptional leader, who comes to Onyx with more than 20 years of operating and general management experience.

She has led multiple product launches, and has significant expertise throughout all stages of product development and commercialization.

In her new role, Helen will oversee our existing and emerging commercial assets, including our kinase inhibitor franchise, Nexavar and regorafenib.

She will also direct the global launches of carfilzomib and establish our European commercial organization.

We are delighted that she has joined Onyx, and certainly look forward to her many contributions.

Now let me turn the call over to Ted to review the progress we're making in our clinical development programs.

Thank you, Tom.

As you all know we completed submission of the carfilzomib new drug application for accelerated approval, primarily utilizing data from the Phase IIb 003A1 study of carfilzomib in patients with relapsed and refractory multiple myeloma.

Based upon this data, and the unmet medical need in multiple myeloma, we believe carfilzomib is an appropriate candidate for accelerated approval.

In total, theNDA includes data from more than 700 patients, evaluated for safety, and over 500 patients evaluated for efficacy, and it incorporates nine supportive studies.

Moving on to our broader development program for carfilzomib, enrollment is ongoing in ASPIRE and FOCUS, our two Phase III studies to support full US and European approval.

ASPIRE is an international Phase III combination trial with Revlimid, and low dose dexamethasone in relapsed multiple myeloma patients.

The study is being conducted under a special protocol assessment, or a SPA, from the FDA and scientific advice from the EMA.

We continue to be pleased with the rate of enrollment in ASPIRE, and expect to complete enrollment in the first half of next year.

Based on a potential interim analysis, and depending upon (inaudible), we could see data readout from this study as early as the first half of 2013.

Our FOCUS study is enrolling 300 patients with relapsed and refractory multiple myeloma, to compare the overall survival of single agent carfilzomib to best supportive care.

The trial is designed to support registration with the European Medicines Agency.

We expect to complete enrollment of FOCUS in the first quarter of 2013 or earlier.

Importantly, we also have an interim analysis built into FOCUS for ending the study ahead of schedule if we see an early survival advantage.

The American Society of Hematology conference occurs in early December, and at this meeting, we look forward to sharing new data, and updated data with carfilzomib.

Specifically we expect to present final results for the 004 Phase II study for patients with relapsed or refractory multiple myeloma who have received one to three prior treatments.

Also final data from the investigator-sponsored first line combination study with carfilzomib, Revlimid, and low-dose dexamethasone.

And finally, early investigator sponsored, European data that includes carfilzomib as part of an induction regimen prior to high-dose melphalan in newly diagnosed patients.

Our second proteasome inhibitor, ONX912, is an orally available agent.

We recently began a Phase Ib-II study assessing optimal dosing in patients with hematologic malignancies.

We also continue clinical development with Nexavar with our partner Bayer in additional potential indications, including non-small cell lung cancer, thyroid cancer, and breast cancer, as well as an approved indication which Helen will discuss in a moment.

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

This study completed enrollment at the end of last year, and we expect to share top line overall survival data in early 2012.

The Phase III thyroid cancer, DECISION, is designed to confirm the efficacy in multiple single arm Phase II studies with Nexavar monotherapy.

For this study we expect data readout in the first half of 2012.

The Phase III breast cancer trial, RESILIENCE, is currently enrolling.

This is an international, randomized, placebo-controlled trial assessing Xeloda with or without Nexavar in patients with locally-advanced or metastatic HER2 negative breast cancer.

Building on the success we have seen in this class of agents with Nexavar, there is now a second kinase inhibitor in the pipeline, regorafenib.

As Tony mentioned, one of Bayer's two ongoing pivotal Phase III trials was recently stopped based on positive data from a preplanned interim analysis.

This randomized, double-blind, placebo-controlled trial evaluated the efficacy and safety of regorafenib in 760 patients with metastatic colorectal cancer who had progressed after approved therapies.

The trial met its end point demonstrating statistically significant improvement in overall survival.

The safety and tolerability profile of regorafenib was consistent with what was expected.

Additional data from the study will be presented at an upcoming scientific meeting, and Bayer is continuing discussions with regulatory authorities to file this agent for approval.

In addition regorafenib has been granted orphan drug status for the treatment of patients with gastrointestinal stromal tumors, or GIST.

An ongoing pivotal Phase III trial is evaluating regorafenib in patients with metastatic and/or unresectable GIST, whose disease has progressed despite prior treatments.

This trial is anticipated to readout in the first quarter of next year.

In summary, we are managing a number of clinical trials designed to bring valuable new therapies to cancer patients.

Pending acceptance, and prior to review of the NDA filing, we continue to believe that carfilzomib could potentially be approved in the US in the first half 2012.

Stay tuned for updates.

Also the activity of regorafenib, a second kinase inhibitor, has now been demonstrated in colorectal cancer, potentially expanding our ability to treat patients with other solid tumors in the near future.

And we have pivotal trials with Nexavar in new tumor types, nearing completion.

All of this has created meaningful clinical momentum with data from multiple trials, from multiple compounds, becoming available in 2012.

Now I would like to turn the call over to Helen for a commercial update.

Thank you, Ted.

Let me begin by saying how excited I am to be part of ONYX.

A company singularly focused on driving innovation in cancer therapy.

Since arriving I have been drawn to the passion and the commitment to patients that I have witnessed throughout the organization, and I'm pleased to be a part of this team and the great growth that I believe lies ahead.

Now I would like to share with you an overview of the business.

Nexavar global net sales in the third quarter increased to $250 million, compared with $226 million in the same period in 2010.

This 11% year-over-year growth has been driven by the continued uptake in liver cancer across the globe.

Specifically, third quarter sales included $62 million from the US, and $188 million in sales from the rest of the world.

In the Asia-Pacific market, Nexavar's promise continues to be demonstrated as evidenced by robust sales.

This region is key to Nexavar's market expansion due to the demographics and epidemiology of liver cancer.

On a territory basis, Asia-Pacific performance was led by Japan, with year to date sales of $123 million, and by China with sales of $57 million, an increase of 28% and 33% respectively compared to the same period in 2010.

We're expecting continued strong growth in this region, where economic expansion is serving as an important driver for Nexavar sales.

In the US and Europe, this is a dynamic time in the liver disease space.

With the approval of two new agents for the treatment of hepatitis C and more possibly on the way, there is a strong focus on increased screening and detection, and with that an expectation that there may be an opportunity to increase detection of liver cancers at all stages.

Our strategy to reach additional liver cancer patients is based on data expected from three late-stage liver cancer trials.

Firstly the Phase II SPACE trial will provide clinical data combining Nexavar with TACE, Transcatheter Arterial Chemoembolization, with results to be reported in the first quarter of 2012.

Secondly, SEARCH, which evaluates the combination of Nexavar plus Tarceva in unresectable liver cancer patients is estimated to readout in 2012.

Together, if successful, these two trials could provide important data that could give us access to patients that we are not reaching today.

And finally, in the adjuvant setting, the data from the Phase III STORM trial, expected to readout later, and if positive would give us access to patients earlier in the course of their disease.

Turning now to carfilzomib, with the filing of the NDA which focuses on the treatment of patients who are relapsed and refractory to therapy, including an [imid] and a proteasome inhibitor, Onyx is potentially one step closer to bringing this important (inaudible) into the patients with greatest need, and the least number of options.

As part of our preparation for the global commercialization and launch of carfilzomib, we're implementing our plan to establish critical competencies in Europe, including market access, regulatory, and technical operations capabilities.

Both regorafenib and carfilzomib present exciting and potentially near term new opportunities for us to build on our existing commercial success with Nexavar and to broaden our footprint in oncology.

In the coming months, we look forward to providing further strategic updates on our program.

These product candidates have the potential to create an inflection point in Onyx's growth.

And I'm invigorated by the opportunity to implement a global commercialization strategy that will bring our product to greater numbers of patients worldwide.

Now I'll turn the call over to Matt to review the financials.

Thank you, Helen.

Nexavar continues to provide a solid operating contribution, to support investment across our oncology portfolio, and provided increased cash flows in the third quarter.

Global net sales of Nexavar in third quarter 2011 were $250 million with sales growth in the quarter driven primarily by the Asia-Pacific and US regions.

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

With full year sales likely at the lower to midpoint in that range.

Variables that could influence sales in the fourth quarter include potential impact of continuing global pressure on pricing and discounts, healthcare reform in various countries, and currency exchange rate movements.

Nexavar collaboration cost of goods, distribution, and SG&A expense of $77 million was lower than spending in third quarter 2010,primarily due to timing of certain commercial expenses, resulting in a Nexavar commercial margin of 63% in third quarter 2011, and 60% for 2011 year to date.

We continue to expect Nexavar commercial margins of 60% or better for full year 2011.

Third quarter research and development expense of $59 million, declined slightly from second quarter 2011, reflecting normal quarter-to-quarter variation in R&D expenses.

Third quarter R&D was primarily comprised of the cost of the ASPIRE and FOCUS trials for carfilzomib, investments in carfilzomib manufacturing, and Nexavar development.

We are maintaining guidance in a range of $225 million to $250 million in net research and development expense for 2011.

Third quarter 2011, selling, general, and administrative expense was $43 million, and we are trending to expect fourth quarter SG&A expense consistent with our spending level in the third quarter of this year.

For third quarter 2011, Onyx reported a non-GAAP net loss of $119 million, or $0.31 per share on a fully diluted basis.

In comparing this result against the same period last year, recall that third quarter 2010 included $59 million in revenue, associated with the license of carfilzomib development and commercial rights in Japan to Ono Pharmaceutical.

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

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

I'll turn next to a review of the major financial highlights of the recently announced Bayer settlement.

First, Onyx received a $160 million payment from Bayer in October, and can receive up to an additional $15 million during 2012 to 2013 in exchange for Onyx's rights to receive royalties on Nexavar sales in Japan after the end of 2011.

As a result ONYX will no longer receive Nexavar royalties on sales in Japan, beginning in January, 2012.

Subject to a final review with our auditors, we expect this $160 million payment to flow through the P&L in fourth quarter 2011.

Second, Onyx will receive quarterly royalty payments, representing 20% of global net sales of regorafenib, beginning with its first commercial sale and continuing on a country-by-country basis through the later of either the expiration of the last to expire relevant patent or the expiration of regorafenib's exclusivity in each country.

Third, Bayer will compensate Onyx for its costs to provide sales and medical affairs support for regorafenib in the US, if Onyx chooses to do so.

Fourth, Onyx has no obligation to pay past or future development or commercialization costs of regorafenib, although Onyx does have the option of pursuing and paying for the development of any indications that Bayer does not take on if we so choose.

And finally, the change control provision in the collaboration agreement has been deleted, which means profit sharing, co-development and co-promotion of Nexavar and royalties due on regorafenib sales, would survive a change of control of Onyx.

With the Bayer settlement now complete, we reaffirm our expectation to be profitable in 2011 on a non-GAAP basis.

Financially we're in a strong position with operating cash flow from Nexavar that gives us the strength and flexibility to move our portfolio forward with a healthy balance sheet.

We ended third quarter with approximately $530 million in cash and investments and since that time have received the $160 million payment from Bayer in connection with the settlement.

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

Thanks, Matt.

As you've heard, two years ago as a young company, Nexavar was our only asset.

Since then, Onyx has grown and matured and today we have got a total of three late stage therapies in our portfolio, with the potential for multiple new indications by the end of next year.

In 2011, we made significant progress in achieving our corporate strategy to build franchises in cancer, and we did this by, one, submitting the NDA for carfilzomib; two, completing enrollment for key trials which could drive additional data for Nexavar, and with our partner, Bayer, announcing data for regorafenib in its first major tumor type.

Three, restructuring our relationship with Bayer by expanding and reinvigorating our global collaboration for our new kinase inhibitor franchise products.

And four, by building a strong financial profile to give us strategic leverage and flexibility.

We look forward to speaking with you in December, to discuss data that we plan to present at the upcoming ASH meeting.

Operator, we'll now open the call to questions.

Thank you.

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

(Operator Instructions).

Our first question comes from Cory Kasimov.

Please go ahead.

Hi, there it's actually Matt Lowe in for Cory today.

Just a couple of questions.

First one, assuming the carfilzomib filing is accepted, when would you look to ramp up the commercial infrastructure?

And then secondly, if you could make any comments at all about the level of interaction with the FDA since the carfilzomib filing?

Thank you.

So thanks for the question.

To the first one for the carfilzomib launch expectations, I think we have talked extensively about the sequence of events.

The first is obviously the FDA's acceptance of the filing, and we'll have word on that, we expect, later this month.

Should the file be accepted and we have a successful ODAC and gain (inaudible) approval, we would expect to be up and running in time to launch as quickly as possible.

I made the point in my opening comments that we're not prepared and aren't going to actually provide any updates or front run the FDA's process.

We haven't received a decision on the acceptance of the filing, and as quickly as we do, we'll come back to you?Next question, operator?

Our next question comes from Ling Wang, please go ahead.

Thank you for taking my questions.

Congratulations on the progress.

A few questions on the Phase III focus study for carfilzomib.

Can you clarify whether there is one or two interim analyses?

And what will be the time line for an interim update?

Thank you.

Okay.

Ling, thanks very much for that question.

We agree.

It really was a terrific quarter.

So thanks for the recognition.

I'm going to ask Ted to comment on that.

I think it's a question about focus and whether there are one or two interim analyses.

So thanks for the question.

There are two interim analyses in the trial, and it's still too early for us to project anything more than what we have already said which is we expect to complete the enrollment either by the end of this year or the beginning of next year, or a little bit earlier, depending upon obviously the initiation of sites and enrollment.

Okay.

Very good.

Thank you, Ted.

Next question, operator?

Our next question comes from Biren Amin, please go ahead.

Yes.

Thanks for taking my question.

I wanted to ask you with the C-MAP expanded access program how many patients have enrolled to date?

I don't think we actually have that number in front of us.

We can certainly follow up with you.

I think what I would say is that the response to C-MAP has been overwhelming.

Within the first 48 hours the call centers were lighting up with patient and physician phone calls of people who were highly interested in participating in this.

And that continues unabated even today.

So there's a high degree of interest in this program.

We're really very pleased with the progress we are making, and we have got a very enthusiastic group of investigators who are helping us identify patients for [the program] .

So stay tuned for more updates, and if you like, we can certainly follow up with the specifics about the number of patients, but it does seem to be going very, very well.

Next question,

Our next question comes from Tim Birchenough, please go ahead.

Hi, guys, let me add my congratulations on the progress.

I'm trying to get a sense of where the spend is going.

And I know you can't give specific guidance, but we have a lot of Phase III trials completing next year for Nexavar, you have got an alternate kinase inhibitor for Bayer to invest in, without you guys sharing the expense, and the offset is you are probably going to have carfilzomib expense ramping up.

So how should we think about that in general terms in terms of your expense discipline?

Thanks.

Sure.

I'll ask Matt to address that, Jim.

Thanks.

Hi, Jim.

Yes, I think you have hit on the key points, which is, as Tony mentioned in his opening comments, we are viewing the business in terms of the two franchise areas, the kinase inhibitor franchise, and the proteasome franchise.

In the kinase inhibitor arena, as you correctly point out, there is still a sizable set of late stage clinical development programs underway for Nexavar, and those will be continuing on into next year.

We expect that both for Nexavar, as we have been doing, and for regorafenib going forward, we'll be making clinical development decisions in collaboration with Bayer.

And I probably can't get out much beyond that in terms of R&D expense guidance detail as we'll be coming back to you likely on our year-end earnings call with more details for 2012.

In the protease inhibitor franchise, the majority of our spend as Ted outlined in his remarks is being directed toward our Phase III trials, the ASPIRE trial, and the Focus trial, along with a smaller set of investment directed against 0912, and some of the earlier phase carfilzomib development.

Probably another thing I would highlight in the R&D arena is a reminder that our investment in ramping up carfilzomib manufacturing does flow entirely through the R&D expense line until such point as we have commercial traction and approval for carfilzomib.

So that's also a key contributor on the R&D expense line, especially here in the back half of 2011.

Thanks, Matt.

So stay tuned for further details when we do the year-end call, and we'll provide guidance for the full year next year.

Operator, we'll take the next question.

Our next question comes from George Farmer.

Please go ahead.

Hi, good afternoon.

Thanks for taking my questions.

Tony, can you comment on two things regarding regorafenib.

One, is Bayer precluded from evaluating regorafenib in clinical trials compared head to head against Nexavar as part of your agreement?

And number two, actually Ted, you mentioned that the side effects on the colorectal cancer were as expected.

What is expected?

Okay.

George, on the first one, regarding regorafenib and Nexavar, the beauty of managing these two compounds together as a franchise, is that we'll be able to approach the market in the best way that obviously makes sense from a development point of view, but also for patients.

We've had -- I have had personal experience managing multiple brands within a class, and find it very effective to be able to leverage these brands together for the broadest set of opportunities for patients and for value creation.

The agreement actually is silent on the specifics surrounding a head-to-head comparison, and we're not sure that that actually from where we stand today makes very much sense, since we really are doubling our shots on goal by having both compounds that can aim at more diseases.

Witness, for instance, what we're doing with colorectal cancer with regorafenib, which is a place we're not developing Nexavar.

So the idea here is to expand the indication opportunities, and really work not to contract them, but to cover more patients on that basis.

And then in terms of the side effects for regorafenib, Ted, do you have any comment on that?

Yes, what I would add is that we just, as you know, completed the settlement with Bayer, and are just beginning to get into the regorafenib data.

And obviously we also don't want to front run the presentation of the data, which we anticipate will be at a major medical meeting in the first quarter of next year.

What is meant by that statement, essentially is that there was a safety profile that was seen in the earlier trials, and the observations in the CORRECT study aligned with those observations.

Okay.

Very good.

Operator, next question?

Our next question comes from Terence Flynn.

Please go ahead.

Hi, thanks for taking the question and congrats on all of the progress this quarter.

Just had a question regarding the carfilzomib 003 filing, and was wondering in the NDA if you included any data on what happened to the patients following treatment with carfilzomib?

Meaning if they went on to get any additional treatment?

Do you have that data and it was it included in the NDA filing?

Thanks a lot.

Okay, Terence, I think that question probably is for Ted.

Thank you, again, for the recognition for the quarter.

Ted, any comments?

That was not part of the study design but we did continue to follow patients.

As you know we're following patients for overall survival.

So that data is being collected.

It was not very mature at the time of submission, but it is being collected.

Okay.

Operator, next question?

Our next question comes from Yale Jen, please go ahead.

Congrats on a good quarter as well.

Thank you, Yale.

Just a quick housekeeping question.

Number one, is that -- can you give us the sales number of -- sales dollar value of Nexavar in Europe, and the follow-up is that the last time that you mentioned that the carfilzomib potentially would have another deal before the year end.

Would the $160 million buy back from -- by -- the Japanese (inaudible) be the one, or something else that we should anticipate.

Let me take your second one first.

And then I'll ask Matt to comment on the sales of Nexavar in Europe.

The great thing about the expansion of our agreement with Bayer is that the inflow of $160 million for the balance sheet and the P&L really does address our commitment to keep the Company profitable in 2011.

So you should not be expecting any other corporate development transactions this year, for any of the territories or other regions for carfilzomib.

The wonderful thing about where we sit today is that we certainly have enough cash to develop carfilzomib and the rest of the pipeline, and we don't need another transaction in order to keep the Company cash flow positive for this year.

So I think that you can consider us done on that front for 2011, but do stay tuned, we have been successful by surveying the landscape for great opportunities.

Matt, Nexavar in Europe?

Hi, yes, following up on the geographic breakdown, we pass along to our investors the level of detail we receive from Bayer on Nexavar sales.

The key points I can lay out for you were sales in the US in the third quarter, which were $62 million, in Japan, which were about $42 million, and in rest of world combined at about $146 million.

Bayer did not provide a Europe specific breakout for this quarter, but did provide qualitative information that sales volumes in fact grew both in Asia Pacific and the US, but declined in Europe compared to what they characterized as a strong third quarter 2010.

Thank you.

Operator next question, please?

Our next question comes from Mike King.

Please go ahead.

Good afternoon.

Thanks for taking my question.

I wanted to pick up where Jim Birchenough left off with respect to financing.

I know you guys aren't going to guide into the 2012 year, but I'm just wondering if there is, given the spend, if there's a level of top line that you think you need to get to in order to hit profitability?

Or if there is a time line in the future, or how ever many years out where you would expect to be profitable?

Thanks.

So Matt, why don't you take that one.

Hi, Mike, obviously that does reach out several years in the future, which is probably further than we can take our guidance at this point.

I think what I would suggest thematically, as I think about the businesses, is that as we have expressed previously, we and Bayer are aligned in looking for improving margins on the Nexavar business.

We certainly look forward to the opportunity to launch new indications for Nexavar as those data mature, and expect that that should be a significant source of cash flow and improving profitability within the Nexavar business.

The regorafenib business from Onyx's perspective as outlined by our settlement will take the form primarily of the royalty stream on regorafenib sales, and then obviously Onyx's participation here in the US commercialization, both from a medical affairs standpoint as well as from a commercial standpoint.

I mean, carfilzomib I think it's very clear we are in investment mode.

We have an exciting set of trials as Ted outlined, and more clinical trials to come in carfilzomib, as well as readiness for launch next year.

So I think we tend to think about the business in those components, and expect that Nexavar in the near term, and regorafenib and carfilzomib in the longer term will be driving that top line that you referenced.

Okay.

Very good.

Thanks, Mike.

Operator, next question?

Our next question comes from David Moskowitz.

Please go ahead.

Thanks, guys.

And thanks for taking my questions.

I have three.

First is on Nexavar.

The sales were very strong in the US based on what Bayer reported, it looked like about 14% growth.

Matt could you just repeat that number?

Because it sounded like you said $62 million, which would be 12%, still a strong quarter in the US.

So the main question there is can you just characterize what drove that in the quarter, and should we expect that growth to be sustained?

Second question would be on the oral proteasome inhibitor.

When could we expect the Phase II results from that trial, if you haven't mentioned it already.

And lastly, can you give us a little bit of color with respect to the ASPIRE Phase III results?

Thanks.

Okay.

Let's -- why don't we do these in order.

Matt, if you can take the US sales question.

Sure, hi, Dave.

Yes, we were pleased to see US sales of $62 million in the third quarter.

That was up about 13% from third quarter last year.

And that is driven both by unit growth as well as higher price as compared to last year.

A slight discrepancy, probably from Bayer's report, is that Bayer does report on growth in Euros, so that probably accounts for the difference between the two numbers.

Okay.

And I think Ted will take your next two on the trials.

David, on the cancer and hematologic malignancies that we began, it's important to emphasize that we just began that trial.

It is a dose-ranging study, and it is in patients with hematologic malignancies, so we can begin to look at response rate.

But we're so early in that trial, it's really too early for us to give you any kind of indication on when you can expect data (inaudible) to completed.

And then I think David's last question had to do with ASPIRE and the readout for ASPIRE.

So, I think we mentioned that we would expect to complete the enrollment in the ASPIRE in the first half of next year, and there is a possibility that the interim readout could occur approximately a year later at the beginning of 2013.

Terrific.

Thank you, guys.

Operator let's move to the next question.

Our next question comes from Phil Nadeau.

Please go ahead.

Good afternoon, let me add my congratulations on the progress you made in the last quarter.

Thanks, Phil.

Three questions on regorafenib.

First what is the IP?

How long do you expect that to be protected in the US and Europe?

Second, why in the press release, and then on your prepared remarks tonight, do you mention discussions with the regulatory agency?

I would think that a trial that was stopped early should be clearly eligible for filing.

So I'm wondering if you could give us some clarity there.

And then the third thing, I would just be curious to hear your thoughts on the size of the second line colorectal cancer market.

Okay.

I'm going to -- let me take the -- I'll take the first couple and then I'll ask Helen, I think, to talk a little bit about the colorectal opportunity.

The IP for regorafenib runs through 2024.

So you get a nice extension, if you will, for the entire franchise given that Nexavar ends in 2020 in the US and Europe.

With regards to discussions with regulatory agency, really out of respect for Bayer who are leading on this particular end of the process, they provided this guidance on their call last week, and I think they are obviously -- as all companies are, in a set of discussions with the regulatory agencies constantly.

Witness the fast track designation, for instance, that this compound has for GIST as a symbol of the ongoing discussions they are having with the US and European regulatory agencies.

Those discussions, we expect will continue, now that we've got this data, and I think our colleagues at Bayer have said that the trial was stopped earlier than anyone had expected because of these results.

And I think they want to continue digesting these results, finish the data analysis, and then devise the best regulatory plan that gets us to market as quickly as possible.

So I'm sure that between Bayer and ourselves we'll have an update for you soon.

But just stay tuned.

We do want to digest the data, and our commitment is to get it to market as rapidly as we possibly can.

And then just on the size of the population, globally there are about 650,000 cases of colorectal cancer diagnosed every year.

If we look at the population that were in the correct study, who were third and fourth line patients, that would be about 5% of the total population.

Just to give you a flavor for the number of patients we'd be talking about being addressable here.

Okay.

Very good.

Phil, thanks for your question, and for your congratulations.

Operator, let's take the next question.

Our next question comes from Stephen Willey, please go ahead.

Yes.

Thank for taking my question.

Again, congratulates on the quarter.

Thanks, Steve.

I was just wondering, and I think Ted you alluded to the fact that you are just getting into the regorafenib data now, but can you maybe share with us about what you know about the powering the assumptions behind the Phase III CORRECT trial?

Maybe the pre-specified number of events that was required to unblind that, and maybe some of the assumptions around the control arm, and maybe if you, what percentage of the events had accrued when the trial was unblinded at that scheduled interim look?

Thanks.

Ted, why don't you go ahead.

Stephen, I don't think we'll be able to say a whole lot on that one, but Ted, can you provide any color to that question?

Yes, I don't want to front run the meeting, because I think almost every question that you asked will be answered at the meeting in early next year.

What I would say is to emphasize what Tony said, which was that the trial did stop prematurely, so obviously they did not have all of the events that they would have had at the completion of the trial, and I think we said that the benefit was highly statistically significant, so this was not a chance finding, and obviously was a mortality benefit.

So I think the credibility of the end point is certainly the highest standard that one could go after.

So stay tuned for more data at a major meeting early next year.

Coming soon.

Coming soon.

Okay.

Next question, operator?

Our next question comes from Ryan Martin.

Please go ahead.

I have two regorafenib related questions.

First one is Bayer has a Phase II ongoing in Nexavar refractory liver cancer, I was hoping you could provide some color on Bayer's thinking for regorafenib in liver cancer, and the second one is probably for Matt.

In the case where you do choose to pay for development in an indication that Bayer is not pursuing, what do your economics look like there?

So, I think I'll just cover both of those quickly.

Certainly on the development, Matt made the point in his prepared comments that we have the option to develop an indication as Onyx, and obviously the expenses there would depend upon which indication we chose.

As -- at the moment, we are prepared to move forward with Bayer to design a development program beyond colorectal cancer and GIST, and to do this in concert from a strategic point of view on that basis, so I'm confident that we'll have very good discussions as a collaboration about the best way to address the patient needs.

In terms of the study that's ongoing regarding Nexavar refractory patients for regorafenib, it's probably premature to comment on that.

That is a Phase II trial that is up and running, and, again, I think is a great expression of the franchise management opportunity we have with both compounds.

Nexavar in the earlier stages, and obviously when it fails, it would make perfect sense to try to understand if there is an additional opportunity for regorafenib.

So we see great synergies here with this development program.

I think, operator, we have got time for just one last question.

Let's take the last question.

Then we'll wrap up.

Our last question comes from Gene Mack.

Please go ahead.

Hi, this is actually Kim in for Jean.

Thanks for taking our questions.

Maybe one last thing on regorafenib.

We were wondering if you could contextualize your thinking about the overall opportunity for regorafenib at this point, given what you are thinking about all of the possible indications of what it is being studied in right now, maybe in comparison to Nexavar?

Is it going to be significantly larger, around the same thing, given that Nexavar is now around $1 billion a year?

Any color in that direction would be appreciated.

Thank you.

Okay.

I think Helen gave a little bit of a context for the opportunity in colorectal cancer.

It's a valuable tumor type.

There is a lot of unmet need in this space, and in the patients that we're studying in the CORRECT trial, no clear standard of care.

So I think we have got clear opportunity there.

We probably won't speculate on forecast potential of peak sales, but let's just keep going through what we know today.

So clearly for colorectal cancer a great opportunity for patients and for the companies.

In GIST, if you think a little bit about that, that has been an indication where there seems to be some unmet need and you could compound the revenue opportunity on top of colon cancer with that, and we just made the comment about the Phase II data that is being developed for Nexavar failures in liver cancer.

That would give us an opportunity in that very deadly disease to reach even more patients.

We'll be studying the additional indication opportunities ahead and we'll come back with you in a pipeline update at some point to talk a little bit about where we want to put both drugs next as we move forward.

So it's too early to speculate on the forecast, but I think we're just scratching the surface with a really powerful opportunity of these two compounds together in one franchise by the two partners.

So I think that's all we have time for, and it has been a great call, and we sincerely appreciate the commendations and the warm well wishes that you guys have provided .

It's been a remarkable quarter for us, and very exciting on multiple fronts.

Filing the NDA, reaching an expanded and restructured agreement with our colleagues at Bayer, and of course and the very exciting colon cancer data for regorafenib, which was a very nice upside surprise for all of us.

We're really happy with the way the Company is developing, with the way the Company has expanded with the growing clinical momentum that we have, and would really encourage you to stay tuned for next year, where we have a number of key events on the clinical front to look forward to, the opportunities for MISSION data in early 2012, DECISION in the first half of 2012, the GIST data for regorafenib in early 2012, and as Ted commented the completion of the enrollment for ASPIRE.

Let me acknowledge all of our employees and the patients who work with us, for their work in making this quite a momentous quarter and year, and thank you and thanks to everyone for joining us today.

Good

Thank you very much, ladies and gentlemen.

This concludes today's conference.

Thank you for participating.

You may now disconnect.