美國安進 (AMGN) 2012 Q1 法說會逐字稿

Welcome to the Onyx Pharmaceuticals first quarter 2012 conference call.

My name is Trish, 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 would now like to turn the call over to Onyx Pharmaceuticals.

Please go ahead.

Hello.

I'm Amy Figueroa, Senior Director of Investor Relations at Onyx Pharmaceuticals.

We thank you for joining us for our first quarter 2012 financial results conference call.

Leading the call today is Dr.

Tony Coles, our President and Chief Executive Officer.

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.

Also, joining the call is Dr.

Barb Klencke, Senior Vice President of Clinical Development.

Please note that we will be making forward-looking statements during this conference call that could include financial, clinical, regulatory 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 discussion of the risks and uncertainties, we refer you to our 10-K for the year ended December 31, 2011 as well as to our other filings.

We expect to file our 10-Q for the first quarter ended March 31, 2012 by the end of this week.

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

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 information on this conference call is also available on the Onyx website.

The presentation is located on the Financial Information page of the Investors section.

I would like to turn the call over to Tony.

Thanks, Amy.

Good afternoon, and thanks for joining us today.

At the beginning of the year, we shared our vision of building a leading oncology company with two franchises, multiple therapies, and a variety of ways to serve even greater numbers of patients.

By the end of this year 2012, our goal is to take Onyx from a company with one therapy, Nexavar, which is approved for two types of cancer, to potentially three therapies in as many as seven types of cancer with either Phase 3 data or regulatory approvals.

This transformation of our Company is driven by our two franchises, one kinase inhibition and one in proteasome inhibition.

For the kinase inhibitor franchise we have created a successful global business with Nexavar as the cornerstone and now have a second drug, Regorafenib, with the potential to deliver benefit to additional patients around the world.

With the important addition of Regorafenib to the Onyx portfolio, Nexavar's continued leadership in liver cancer, and cash flow generation from our lead product, our business has never been stronger.

With this critical foundation and operating leverage, we are making this strategic investment necessary to build and establish our proteasome inhibitor franchise and unlock the value of all of our therapies across the treatment landscape for myeloma.

Beginning with our kinase inhibitor franchise, Nexavar currently reaches patients in more than 100 countries around the world.

We now have a unique opportunity to grow Nexavar further, with potential registration enabling data expected soon in two additional tumor types.

If positive, these trials could mean additional sales growth for Nexavar in untapped indications.

It was only a year ago that Nexavar was the only therapy in this franchise, as we did not yet have any rights to Regorafenib.

Onyx now has a significant economic interest in Regorafenib, a Bayer compound that we believe has the potential to be a second oncology blockbuster.

Already, we have seen two pivotal trials for Regorafenib meet their primary endpoints in two different types of GI tumors.

And, Bayer is on track to complete global regulatory filings for metastatic colorectal cancer in the first half of this year and for GIST somewhat later.

Onyx will receive a 20% royalty on global net sales of Regorafenib; and importantly, we recently informed Bayer of our decision to co-promote Regorafenib in the US, which Helen will describe in greater detail later on the call.

Turning to our proteasome inhibitor franchise, we are executing a comprehensive global development program to seek approvals for and realize the potential of Kyprolis, the proposed brand name for carfilzomib.

As the fastest path patients, we are pursuing accelerator approval with our current NDA filing and look forward to presenting efficacy and safety data on Kyprolis in relapsed and refractory myeloma patients at the ODAC meeting in June.

At the same time, we are driving forward and expanding our global development program for Kyprolis.

We have two on going Phase 3 trials, and our near-term plans include launching two head-to-head trials versus Velcade, designed to evaluate Kyprolis's superiority, which Ted will discuss next.

Since the beginning of the year, we have achieved several very important objectives.

Contributing to the evolution of our Company and creating optionality for our business.

To date, our operating business has been driven by Nexavar, and as we plan for future growth, our pipeline of Phase 3 therapies has never been more robust.

As always, as we pursue multiple streams of product-driven revenue, we remain committed to operating Onyx with financial discipline, and moving quickly, as we execute our clinical and regulatory strategies for our pipeline.

Now, let me turn the call over to Ted to review our clinical development programs.

Thanks, Tony.

As Tony mentioned, our clinical develop programs are nearing important data and regulatory events.

Starting with our proteasome inhibitor franchise, we are executing a comprehensive global development strategy for Kyprolis, a drug we believe has demonstrated promise across a variety of patient treatment settings.

Our immediate focus is preparing for an ODAC meeting, where we look forward to having dialogue on Kyprolis's efficacy and safety in relapse and refractory multiple myeloma.

While we acknowledge accelerated approval is the high bar, particularly for single-arm trials, we believe there is a significant clinical need that has not been met for multiple myeloma patients whose therapies have failed.

We look forward to the ODAC panel in June and PDUFA date of July 27.

In addition to our accelerated approval strategy, we are conducting two Phase 3 studies, known as ASPIRE and FOCUS.

The ASPIRE study is designed to support full approval for Kyprolis, in the US and Europe, in the relapse setting in patients who have had one to three prior therapies.

ASPIRE is a 700 patient, global, Phase 3 trial of Kyprolis, in combination with Revlimid and low-dose dexamethasone, versus Revlimid and dex alone.

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

We completed patient enrollment ahead of expectations.

And, based on a plan interim analysis, we could have data in the fist half of 2013, depending upon the rate of event accrual.

If the trial goes to full completion, we would expect final data readout in the first half of 2014.

The FOCUS trial is designed to support registration for Kyprolis in relapsed and refractory multiple myeloma outside the US.

In this study, 300 patients are being enrolled to compare the overall survival of patients receiving Kyprolis, versus best supportive care.

We expect to complete patient enrollment in the first quarter of 2013.

Our development plan for Kyprolis is also focused on evaluating our molecules' superiority over existing therapies.

By mid next year, we will initiate a global Phase 3 trial called ENDEAVOR.

This study is a multi-center, open label, randomized trial in patients with multi-myeloma who had relapsed disease after one to three prior treatments.

The trial will compare Kyprolis at 56 milligrams per meter squared, administered over 30 minutes, in combination with low-dose dex versus subcu, or ib Velcade, in combination with low-dose dex.

As usual, patients will receive 20 milligrams per meter squared of Kyprolis the first two days of cycle one before escalating to the full dose.

The primary endpoint of the trial is progression free survival.

Finally, we also are completing our plans for a head-to-head trial in the front line setting, and we expect to initiate this trial in 2013.

For our oral proteasome inhibitor, oprozomib, a therapy we believe could play a role in all lines of treatment, including maintenance, we have already seen clinical activity in the Phase 1b Trial.

And, we expect preliminary data from our ongoing Phase 1b/2 Trials before year-end.

Turning now to our kinase inhibitor franchise, there are two on going Phase 3 studies, that could result in supplemental regulatory filings for Nexavar.

The MISSION trial is a Phase 3 study, evaluating Nexavar as monotherapy in third and fourth line non-small cell lung cancer, where the primary end-point is overall survival.

We expect to have top-line results this quarter.

The DECISION trial is a Phase 3 study in patients with differentiated thyroid cancer, where primary end-point is progression-free survival.

We now expect to have top-line data from DECISION in the second half of this year, based upon the current rate of event accrual.

For Regorafenib, we previously discussed positive data from the Phase 3 correct trial in metastatic colorectal cancer for Regorafenib improve overall survival by 29%.

This indication has been granted fast track designation by the FDA, and Bayer is seeking regulatory approval with global filings planned for the first half of this year.

In the second Phase 3, known as the GRID trial, Regorafenib also met its primary endpoint.

In this study, Regorafenib improved progression-free survival in patients with metastatic and, or unresected gastrointestinal stromal tumors, following progression after treatment with Sutent or Gleevec.

There will be a presentation at ASCO next month, as data from the GRID trial were accepted as a late breaking abstract.

In addition to orphan drug status, Regorafenib in GIST has also been granted fast track designation by the Food and Drug Administration.

In summary, we have an active development portfolio, and we look forward to updating you as we deliver on multiple important clinical and regulatory milestones.

We expect 2012 will be a year of significant pipeline developments producing more opportunities to help even more patients.

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

Thank you, Ted.

Let me begin with Nexavar performance.

In the first quarter of 2012, Nexavar global net sales, excluding Japan, grew to $210 million, an increase of 9% compared to the same quarter last year.

In the US, net sales were $63 million, and for the rest of the world, excluding Japan, net sales were $146 million, increasing 17% and 5%, respectively, compared to the first quarter of last year.

Growth in the US was from a combination of increased demand, notably in liver cancer, and price, with a modest increase in wholesaler stocking.

In the rest of the world, growth was primarily demand-driven, with continued strong growth in the Asia Pacific region.

As Ted mentioned, this is a busy time for our kinase inhibitor franchise.

As we assess and prepare for data readouts and potential new indication approval for Nexavar in lung and thyroid and with a [panel] approval on long-term Regorafenib in metastatic colorectal cancer as well as GIST.

Lung cancer remains the deadliest form of cancer, with approximately 50% of newly diagnosed patients with non-small cell lung cancer progressing following treatment with currently approved therapies.

[50%] of patients who go on to receive a second line of therapy will also progress, leaving an important unmet need for the 50,000 patients in the US and major European countries alone in the third and four line setting are MISSION trial populations.

Turning to thyroid cancer, there will be no new therapies available for patients with differentiated thyroid cancer in over 30 years.

New options are needed for those patients with locally advanced or metastatic differentiated thyroid cancer who have radioactive iodine-refractory are DECISION trial population.

If the data from these Phase 3 trials are positive, and if we are successful in gaining approval, Nexavar's commercial opportunity could grow substantially.

Moving now to Regorafenib, with positive data in colorectal cancer and GIST, we are working with our Bayer colleagues to identify and prioritize additional new indications to study.

At the same time, we are preparing for a potential launch in metastatic colorectal cancer, where with regulatory success, Regorafenib could be on the market in the US as early as late 2012 or early 2013.

As Tony mentioned, we have recently made the decision to exercise our option to co-promote Regorafenib in the US upon approval.

The Onyx and Bayer sales representatives would promote both Nexavar and Regorafenib.

As many of the physicians we call on today for liver and kidney cancer also manage colorectal cancer patients, we anticipate only a modest increase in the size of the sales team will be needed to effectively reach the majority of physicians managing these patients.

As part of our agreement with Bayer, we will be reimbursed on a fee-for-service basis for Regorafenib promotion provided by our sales team, along with receiving a 20% royalty on global net sales of Regorafenib.

Turning to our proteasome inhibitor franchise, as we approach our PDUFA date in July, our team is focused on being prepared for potential launch of Kyprolis.

We are continuing to make good strides and finalizing our coverage, reimbursement, and patient support services plans as well as the plan for drug distribution.

We have a plan in place to implement upon approval.

As we indicated previously, this field sales team will be added based on regulatory progress.

We look forward to the significant opportunities to expands our kinase inhibitor franchise and establish our proteasome inhibitor franchise, as we grow our business in 2012 and beyond.

Now, I will hand the call over to Matt.

Thank you, Helen.

We began 2012 with solid sales and cash flow from Nexavar, driving our operating business and enabling important investments in our proteasome inhibitor franchise.

Nexavar global net sales, excluding Japan, of $210 million in the first quarter 2012, grew 9% compared to first quarter 2011.

Global sales grew 11% on a currency-neutral basis, after adjusting for 4% adverse change this the dollar euro exchange rate.

Nexavar collaboration revenue was $72 million for first quarter 2012, a 7% increase from $67 million in first quarter 2011.

Excluding the royalty payment on sales in Japan, which was $3 million in first quarter 2011 and will not be recorded beginning in 2012, the comparable growth in collaboration revenue was 12%.

Nexavar's commercial margin expanded to 64% for first quarter 2012, from 62% for first quarter 2011, and growth was consistent with our 2012 guidance for commercial margin improvement.

Non-GAAP research and development expenses were $79 million for first quarter 2012, as enrollment continued in the ongoing Phase 3 clinical trials for Kyprolis.

First quarter R&D expense also included cost associated with clinical supplies and the ramp-up of pre-launch commercial manufacturing activities.

As a reminder, costs associated with manufacturing of commercial supplies will continue to be reported as R&D expense until marketing approval has been obtained.

In our kinase inhibitor franchise, we continue to expect R&D expenses will decline by 10% to 15% in 2012, compared to 2011, as we reach completion of multiple Phase 3 clinical trials for Nexavar.

Recall that Onyx does not incur expenses for the development of Regorafenib.

Non-GAAP selling, general, and administrative expenses were $34 million for first quarter 2012.

We ended the quarter with over $620 million in cash and investments, which together with expanding cash flow from Nexavar, driven both by sales and by increasing commercial margin, allows us to invest strategically in advancing the development of Kyprolis and oprozomib.

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

Thanks, Matt.

We are pleased indeed with the progress of the business as we continue the transformation of Onyx into an oncology leader.

We look forward to multiple upcoming events including first, regulatory action on our NDA for Kyprolis, with a PDUFA date of July 27; second, reporting Nexavar data from registration enabling trials in lung in the second quarter and thyroid cancer in the second half of this year, based on actual event accrual; third, announcing Regorafenib data in GIST at ASCO and Bayer's global regulatory filings in the first half of this year for metastatic colorectal cancer and for GIST somewhat later; and finally, achieving first patient, first visit for the Kyprolis Phase 3 ENDEAVOR head-to-head trial in relapsed patients in the middle of this year.

We look forward to talking to you in the coming weeks, and we will now open the call to your questions.

Operator?

Thank you.

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

(Operator Instructions)

Jim Birchenough, BMO Capital.

A couple of quick questions on Kyprolis, just trying to see whether you guys have yet data on the triple refractory population from the 003 study?

On the MISSION study, I'm wondering if you know what proportion of patients have tumor samples available and whether you look at K-ras status and if we will get that data initially?

And, just housekeeping what proportion of the R&D spend was related to clinical supply and manufacturing?

Thanks.

Okay.

Jim, why don't we have Matt talk through the last question, and then Ted will circle back on the two clinical questions.

Hi, Jim.

On the R&D expense in the quarter, we don't do specific breakout of the components of R&D.

I will flag for you that here in the first quarter we had combination both clinical trials related expenses, as well as drug supply costs on the clinical trial side, as we mentioned on our year-end call.

The Kyprolis ASPIRE trial has completed enrollment.

We have ongoing enrollment for FOCUS, and have begun incurring costs associated with the ENDEAVOR trial, which as Ted said, we expect to initiate mid this year.

And on the drug supply side, in addition to clinical supplies for that set of trials, we are running through R&D expense line cost associated with the pre-launch commercial scale of activities for Kyprolis in anticipation of potential US launch later this year.

So, coming to -- following your questions in reverse order again, starting with MISSION.

The answer is yes, we are collecting retrospectively, or -- we are collecting previous assessments of tumor K-ras status.

So, we will have that data when the trial is complete.

We have generally had high rates of those data being available, but I don't know exact percentage to give you to date.

But, we've generally had a high percentage of that data available in the trials.

Coming back to 003 subgroups, what I say is to reemphasize something that we have said in the past, which is we have really looked at all of the important subgroups.

And, we've been quite pleased with the consistency of the treatment activity of carfilzomib, or Kyprolis, and this is important subgroup.

So, stay tuned, that data will be coming out at some point, and I think you will be pleased to find that they are consistent.

Look for some of that data at ASCO.

We will, obviously, have some the subgroup data there, which is just coming up in a few weeks.

Okay, Operator, we will take the next question.

Michael King, Rodman & Renshaw.

Hello, team, congrats on the quarter.

This is Carter filling in for Mike.

I think it would be helpful for us if you could quickly review, in advance of the ODAC coming up in June, the aspects of the 003 study supporting your NDA for bortezomib?

Okay.

Carter, I think that we will ask Ted to just provide an overview.

All of what Ted is about to share is publicly available, and we will, obviously, be happy to get you some of the supporting publications and abstracts.

Ted, if you could give a quick overview.

Sure, I would be happy to do that.

As you know, 003 was designed as a study to look at the response rate in relapsed and refractory multi-myeloma patients.

That's a strategy that was pursued for accelerated of bortezomib.

And, the key thing about the refractory nature of the patients, is that in these patients it's hard to achieve a response.

So, a response rate is considered to be important; and in, fact it's considered to be predictive of overall survival in these patients, as has been proven in the past.

The response rate that we observed, we were pleased to report was 23%.

We also looked at the important secondary endpoint of duration of response, and we reported that the duration of those responses was 7.8 months.

Those were the key things that we were focused on, looking at highly pre-treated relapsed refractory patients trying to produce responses and responses which are durable, which is what we think we showed.

That's a great summary.

Carter, one thing I will point out, Ted gave you the 23% number, which was the number for the full population of 266 patients.

The 257 in valuable patients was 24%, you can see the consistency that Ted mentioned in his earlier comment about the various subgroups and the response rates that we observed across the various slices of the data.

Okay terrific, we will take the next question, Operator.

Ling Wang, Summer Street Research.

Couple of questions, first one follow-up on Jim's question about the 003-A1 study.

Are we -- should we expect to see additional subgroup analysis at ASCO this year?

Secondly, for to comparison study versus Velcade, could you tell us how many patients trial scheduled to enroll, and when should we see data from this trial?

Thank you.

Okay, sure.

On the subgroup analysis for 003-A1, yes, we do plan to have some additional data available at ASCO, so stay tuned for that.

We will have some other information at ASCO as well, including the overall results for the GRID trial, the Phase 3 CORRECT trial, which is Regorafenib and metastatic colorectal cancer, we have got some subgroup analysis and bio market data.

It should be chock-full of additional information for the various products in our portfolio.

In terms of head-to-head, the ENDEAVOR trial, Ted maybe your could overview ENDEAVOR, the size, see if we can't provide some color there.

I don't think we typically release the details of the size of the trial until we actually initiate them.

But, I can tell you that it will be a very large trial, hundreds of patients.

The primary endpoint, as we've already mentioned, is progression-free survival.

And, in this trial we are looking at directly comparing 56 milligrams per meter squared of Kyprolis to the standard approved dose of bortezomib.

We have also mentioned that we will allow patients to receive the bortezomib at IV or subcu, we don't care, as long as that regimen is approved in the geography that is being studied.

So, it's a head-to-head study that we think will demonstrate the superior advantages of carfilzomib, both on the efficacy side as well as neuropathy.

Okay, very good.

Thanks, Ling.

Operator, next question.

Ryan Martins, Lazard Capital Markets.

Just a question on ENDEAVOR, do physicians have the option of using the weekly Velcade schedule in ENDEAVOR?

Also wanted to hear about what your assumptions may be for the Velcade dex, given that you may have patients whose get subcu with lower PN rates and potentially could be staying on the drug longer?

You could look at the literature, as well as I can, to look at the published pfs rates for various regimens of Velcade in combination with dexamethasone.

We have looked at those, we have made some assumptions, obviously, based upon an expectation that some of the patients will in fact have subcu administration and we would expect those patients, as you point out, to have lower rates of peripheral neuropathy and potentially longer durations.

All of that has been factored in to the trial design.

I will remind you, however, that even with subcu dosing of bortezomib -- the rate of grade 3, 4 peripheral neuropathy is still well above what we have seen with carfilzomib, and the total rate of neuropathy is also much, much higher than what we have seen with carfilzomib, or Kyprolis.

Okay, very good.

Operator, we will take the next question.

Marshall Urist, Morgan Stanley.

Three questions for me.

One is just, first, what was Nexavar in China this quarter?

Second, is -- it would be helpful if you talk about, I know you can't talk about the regulatory process in detail, but what some potential issues might be discussed at ODAC, and should we be thinking that those are not inconsistent with some of the feedback you guys talked about from FDA around when the carfilzomib filing was accepted back in December?

Third, Ted, just on the selection of the dose, the 56 milligram per meter squared dose for ENDEAVOR, what did you guys assume, and how confident are you on PN rates there with chronic dosing?

And, if you can tell us anything about the powering of what you assumed for the carfilzomib bar versus Velcade?

That would be great, thanks.

I'm thinking, Matt, perhaps if you could take the Nexavar China question, and then we will move on to the two clinical questions.

You know, Marshall, there is really not a lot that we can offer in terms of ODAC or the preparation, except to say that we have been focused on it for the last several months in expectation that we would get an ODAC.

Ted may have a few more comments, but just know that there is really this is not a whole lot that we will be able to say.

But, he will certainly be able to answer your other question about ENDEAVOR dosing.

Marshal for the first quarter 2012, Bayer disclosed about EUR16 million, which translates to about $21 million for sales in China.

So, coming back quickly, just to touch on ODAC, really all I can say is what Tony said, which is we have had, obviously, extensive discussions and dialogue with the FDA since we filed the application, and we can't really comment on the details.

But, I would emphasize that we are looking forward to the opportunity to go there and to present the safety and efficacy of carfilzomib.

We recognize, going in to this, that accelerated approval is a high bar, particularly when one has a single-arm study.

Turning to the dose selection, we did a dose selection strategy, which was presented at ASH, where we treated patients with multi-myeloma with doses as high as 70 milligrams per meter squared.

70 milligrams was determined to be the DLT, so we backed down to the 56 milligram per meter squared dose, where we treated an additional 24 patients.

An you'll recall that the ORR rate in those patients was 60%.

And notably, the safety profile looked very similar to what we have seen previously.

So, we do not expect to see an increase in peripheral neuropathy at the higher dose, and that's based, again, upon the specificity of the drug and the mechanism of peripheral neuropathy.

Terrific.

All right, Operator, we will have the next question.

Terence Flynn, Goldman Sachs.

Thanks for taking my question and apologies if one of these was answered as I jumped on the call a little bit late.

Can you add any additional color on the decision to co-promote Regorafenib in terms of incremental sales reps you would potentially add on and how much overlap there is in terms of the physicians you would be targeting with the current sales force versus the two indications of Regorafenib currently?

And then I have an ASCO question, too.

Okay.

Why don't you go ahead and ask a ASCO question as well, Terence, if you can.

Sure.

So, on ASCO I was wondering, we obviously saw the titles were published and I know you guys can't talk about content of data, but it looked like there was a subset analysis from 003 that's going to be presented in the dual refractory patients.

So, I was wondering if you could confirm that and walk us through thoughts behind presenting that this year at ASCO versus prior years, and any thoughts there?

Thanks.

Okay.

Why don't I take the ASCO question.

I think the idea there, Terence, is -- Ted has already commented on the notion that there are a number of subgroups that we've analyzed.

And, one of the most important questions that clinicians are asking, is this question of what do the overall response rate for new therapies is in the dual refractory population?

So, we thought it was important to answer the clinical question that's being asked of all the myeloma therapies.

I think once you do see the data at ASCO, and we certainly don't want to front-run that data on this call, but once you do see the data at ASCO, I think you will understand that Ted's comment about the consistency of the overall response rate across the various subgroups will hold up.

Stay tuned for that, and as I said, it should be a busy ASCO for all of us.

Helen, I think you are well-suited to the take the Regorafenib co-promote question.

Thanks, Tony, and thanks for the question on this.

We certainly are excited to have Regorafenib now in the portfolio and have the option to have a launch as early as the end of 2012, or early 2013.

As we look to where the patients with metastatic colorectal cancer are treated, there really is a very large overlap with the physicians we currently call on today for renal and liver cancer, so we didn't give a specific number as to the degree of overlap, but it is a large degree.

The majority of physicians are caring for all three types of those patients.

Similarly, as we think about the addition of sales representatives, because there is so much overlap, it's only going to be a modest increase.

We are not giving the number at this time for competitive reasons.

But, a modest increase will allow us to cover the physicians we cover to date for kidney and liver cancer as well as now being able to also cover colorectal cancer.

I will just highlight this, Helen made these comments in her prepared remarks, but I will highlight this, Terence, as you may not have been on.

The economics are, as you know, the 20% worldwide royalty overall, and Bayer will provide cost per detail for the Regorafenib and Nexavar sales force contribution.

So, there will be no additional P&L burden for Onyx on that basis.

All right, we will take the next question, Operator.

Gene Mack, Mizuho Securities.

On the NDA, I wonder now that you've got an ODAC panel scheduled, I'm wondering, obviously, the basis of the filing of the 003-A1 study, and the efficacy data there, but does the 006 study take on any sort of added prominence now that you are going be in front of ODAC?

And, that study really does serve as the basis of the ASPIRE trial, and how are you thinking about the relative importance of that study during the panel versus the others?

Then, did you -- is there going to be, I think there was still another interim look at last year's ASCO, I don't know if there's anything at ASH -- where is that trial at this point, the 006 study?

Then, on the ENDEAVOR trial, what sort of allowances are you making for dose reductions if need be in the carfilzomib bar?

Thanks.

Okay.

Gene, I think what we will ask Ted to do is just provide a frame look for the 006 study, just to remind everyone about it.

It's been a while since we've talked about it.

He'll give some of the details on how that study was set up and what it was designed to do.

And then, how we are using it in our regulatory discussions.

I will start by saying first, no, not from an efficacy standpoint, the 006 data really isn't relevant for consideration at this ODAC.

It's really focused on the 20,27 dose, and it's focused specifically on the relapse refractory patient population.

In terms of ongoing reports from 006, as you know, it was obviously an important study that provided the basis for the design of the ASPIRE trial.

I don't think there is much more in the way of additional updates.

There could be additional reports and additional abstracts.

But, I think the meaningful data there, we've largely presented and we are encouraged by that sufficiently to actually launch into the ASPIRE trial, which as you know, we've completed enrollment and look forward to sharing the data as soon as we hit the required number of events.

I would also, Gene has got a second question on ENDEAVOR and dose reductions.

I will just underscore Ted's comments by reminding everyone that the overall response rate observed in the 006 study, which was carfilzomib, rev, and dex, was 78%.

That is quite impressive, given the population that Ted outlined.

That has gone as a major underpinning in our design for the ASPIRE study, and it is the basis of a full approval program on a worldwide basis.

His second question was dose reductions for ENDEAVOR and how we might be treating that?

It is a fairly standard approach.

We wouldn't obviously release all the details in our protocol, but it's quite standard in these trials to have a step-down that you obviously see, for example, in the bortezomib label, based upon (inaudible).

So that is, in fact, anticipated and built into the protocol.

Again, I would emphasize though that we were quite pleased with the tolerability of the 56 milligram per meter dose, actually in a more heavily pre-treated population.

Okay.

Thanks, Ted.

All right, Operator, we will have the next question.

Biren Amin, Jefferies.

Thanks for taking my questions, I have two.

First on ENDEAVOR, you know the Papadopoulos poster at ASH showed, or reported pfs of 7 months with the 56 milligram per square meter dose in patients that are relapse and refractory.

Could you share with us pfs from the trial in patients that were only relapse, which is the same population as in ENDEAVOR study?

So, you are right.

That's not the population that we are focused on in the ENDEAVOR study.

There we are focused on patients who are relapsed, not relapsed and refractory, and patients are limited to having received one to three prior therapies.

We anticipate that the pfs will be longer than the 7 months that you reference.

I think it's realistic to think something in the 10 to 12 months would be a reasonable estimate.

Again, those are numbers that you can get out of the literature as well as we can.

The real issue is that we are anticipating a substantial improvement.

That's probably the biggest factor in terms of driving our sample size estimates.

Okay, very good.

Operator, I think we will move to next in queue, please.

Howard Liang, Leerink Swann.

Just to follow up on the ASCO abstract by Dr.

Siegel dual refractory and dual intolerant patients from 003-A1.

Can you talk about if these data have any regulatory significance.

Second, I recall that in giving TDM1, the refuse to file letter, FDA said the patients must have exhausted all available therapies.

Has the FDA acknowledged that 003-A1 meets this requirement?

Okay.

Ted?

So coming first to your first question about the dual refractory, or the dual refractory intolerant population.

We anticipate that all of these important subgroups will be examined.

And, that's why we've examined them, and again, as we've said on most locations we have been pleased with the consistency of treatment effect, no matter which important subgroup we look at.

So, I suspect they will be looked at.

But, our anticipation is that the focus will be on the overall population that the study was designed to show efficacy in, specifically based on the response rate and the duration of those responses.

Getting to your question about exhausted all available therapies, that's certainly an important dialogue that we've had with the Food and Drug Administration.

We can not fully anticipate what the FDA will do and how they will come out on this specific topic.

What I would reemphasize, though, is that we think that based upon the literature in 2008 when our trail was designed 003 trial was designed, this was, in fact, the standard for what would be an unmet medical need population.

That's what we designed the study to show, and it showed, what we think, is a very impressive response rate and duration of response.

Okay, very good.

Operator?

Ying Huang, Barclays.

First of all, can you give us the breakdown for pricing growth versus demand growth in the US for Nexavar last quarter?

Secondly, what is your thought on the future competitive landscaping HCC now that we know Abbott's [lafinib] has failed and also brivanib has failed in second line, although we are still waiting for the fist line against Nexavar in HCC here.

Thank you.

Yes.

I will ask Helen to comment on price growth versus demand in the US.

I will say, just in terms of competitive HCC therapies, this has been an interesting field to watch evolve over the last few years.

We have seen other kinase inhibitors come and go at the end of Phase 2 and sometimes Phase 3 trials.

We know that there is a delicate balance required of both efficacy and safety in this particular tumor because every HCC patient also has underlying liver disease, and that's a primary basis for the metabolism of all of these drugs.

There is something about the balance between safety profile and efficacy that's really important.

And so far, no one seems to be able to come close to the balance that Nexavar has demonstrated in these patients.

The Sutent trials were not successful, the Abbott trials have not been successful, the brivanib trial in the second line also apparently not successful.

We will wait and see what happens in the front line.

For the moment, Nexavar remains the undisputed leader in this particular therapy.

We will see what comes down the pike.

Price growth versus demands in the US, Helen?

As we look at the first quarter, three were components I mentioned.

It was price, it was demand, and it was wholesaler stocking.

As you are thinking about it, price and demand were pretty much the similar degree, so similar weighting for price and demand, with wholesaler stocking being a much smaller component of the growth.

Okay, perfect.

Operator, I think we are ready to take the next one.

Biren Amin, Jefferies.

I just wanted a clarification on Ted's comments on MISSION with regards to the K-ras.

Is the subgroup analysis pre-specified?

And, is the trial power to show [OS.SIG] on K-ras subgroup?

No, the trial is not powered for these subgroups.

We did specify that we would look at these outcomes, but it's not a stratification.

It's really a -- it's an analysis based upon really a retrospective look on samples.

Thanks, Biren.

Operator, we will move on.

I think we have time for two or three more questions, quickly.

Stephen Willey, Stifel Nicolaus.

Just a quick question regarding ODAC.

I think we have seen the FDA previously emphasize post-study patient responses in these single-arm refractory [hemon] trials.

I'm just wondering if that's data you provided to the FDA, and if that is something that you anticipate seeing them focus on at the upcoming meeting?

So, I can tell you that we have looked at all of the important questions, including that question, but I don't think I would be comfortable going into any speculation about what will the focus of the FDA.

What I can tell you is that we have looked all of the important questions, and we're prepared to engage in a productive dialogue on those.

Terrific.

Unfortunately, the ODAC is just not going to be a topic that we'll have a lot of speculation on in this call, and certainly don't want to front-run the FDA's deliberation.

Know that we are very carefully planning and are working very closely with the FDA on that.

Operator, two more questions.

Nicholas Bishop, Cowen and Company.

Two quick ones on carfilzomib and just two quick ones on Nexavar commercial.

On carfilzomib, I know this question was asked before on ENDEAVOR, but I didn't catch the answer if you said it.

That is will the control arm be allowed to use once weekly Velcade?

Also, on carfilzomib in the front line planning, are you able to challenge Revlimid, given its current approval status directly, or are there limitation there?

Moving to Nexavar, I wonder if there are any comments on the challenges that may have been faced in the EU this quarter, and less relevantly, but out of curiosity, also in Japan?

Thanks.

Okay.

Let's see, I think I can do the quick one on the Velcade control arm.

We call it dealer's choice.

The investigators will have the option to administer Velcade by their choice route of administration, and we know that it is labeled now for both IV twice weekly and subcu.

So as not to restrict their standard practice, they will have the flexibility to make that choice.

And, we will analyze the outcomes.

I know there is a question on Japan, which Matt will take.

And then, you've got one final question on the first line planning for the head-to-head trial that we will clarify in just a minute.

For Nexavar, as Bayer disclosed last week, we did see some quarter-to-quarter variable by geography, with very strong growth in the US and in Asia Pacific, and less strong performance in Europe.

We know that that sales performance does vary from quarter-to-quarter, so I don't know that there's a lot more insight I can share on that.

Several European countries including France, Italy, Germany, Spain, remain among the largest contributors to Nexavar sales.

As I allude to my prepared comments, Onyx no longer receives royalty tied to sales in Japan for Nexavar.

So, I think nothing specific from us on Japanese progression.

Okay.

I think the last question was about first line and the design for that trial which is underway.

I think the question is would we ever take on Revlimid?

But, we will answer the way we see the market.

Yes.

Let me go back and make sure you understand that the way the bortezomib is given is per its label, so pull out the label and that's how we are giving it.

We are giving it in the way that the FDA and Europe and regulatory authorities prescribe.

So, once weekly would only be indicated as per label.

In terms of challenging Revlimid, I think it is fair to first acknowledge people really like using our proteasome inhibitor and [inimid] in combination.

That tends to be a very effective regimen, as we have shown, and others have shown as well.

So, I think that's really likely to be the design.

Certainly, one could do a trial where you have something like Kyprolis and dex against rev and dex, but that's probably not the most relevant way to get the highest level of activity.

We have no such trial of that nature in our current plans.

Very good.

Operator we have time for one final question.

Then I will have some closing comments at the end of that.

Cory Kasimov, JPMorgan.

I will spare you any more Kyprolis questions, a couple others instead.

First of all, Ted, can you expand at all on what you mean when you said that you have already seen evidence of preliminary activity of oprozomib in the Phase 1 study, I believe that's a solid tumor trial?

Then, on Regorafenib, was there any cost on your end to exercise that co-promote?

And, you mentioned that you are discussing potential subsequent indications with Bayer, anything you can share with us on that front at this point?

Thanks a lot.

Clinical activity, we obviously don't want to front-run scientific presentations, but that trial actually enrolled patients with multiple different types of tumors, both solid tumors as well as hemologic tumors.

And, the signals of activity would be the standard signals, ranging from standard disease, or potentially responsive typically in the liquid form.

Okay, I think that's that one.

Cory, this is Matt.

On the Regorafenib opt-in for the US co-promotion activities, there was no cost to Onyx to exercise that option.

The economics going forward, in addition to the 20% royalty on global sales of Regorafenib to which Onyx will be entitled, are that Onyx will be reimbursed for the costs of our co-promotion activities in the US.

Helen, on the Bayer question?

Yes, by having both Nexavar and Regorafenib, we are now in a great position to look at a broad range of potential additional indications that we could explore, using the franchise and trying to match the tumor type with where we think we are going to get the most activity.

We are looking broadly, we've made no decisions.

But, if you, for example, were to look at the types of studies where you have ongoing in Phase 1-2, earlier lines of colorectal cancer might be something we would consider, second line (inaudible) cancer, those are the types of ideas.

But, that's just two examples, we really are doing a systematic analysis and will be working with our Bayer colleagues to make the decisions in the coming months.

Okay.

Just a few closing comments, if I may.

We have really made a lot of progress in the business, with some significant strides.

We have got a successful operating business, we've got significant optionality built into the business, growing sales and cash flow from Nexavar, liver cancer leadership for that therapy and two new potential indications on the horizon.

Regorafenib global filings expected in the first half for colorectal, and later for GIST.

It's a year filled with both optionality, flexibility, and strength in the base business.

And, we look to deliver that and more for shareholders in the coming months.

Thanks for joining us on this call.

We look forward to seeing you at ASCO and delivering on our commitment to transform Onyx into a growing oncology leader.

Thank you.

Thank you, ladies and gentlemen.

This concludes today's conference.

Thank you for participating.

You may now disconnect.