美國安進 (AMGN) 2013 Q2 法說會逐字稿

Welcome to the Onyx Pharmaceuticals second quarter 2013 financial results conference call.

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

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

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

Please note that this conference is being recorded.

I will now turn the call over to Onyx Pharmaceuticals.

You may begin.

Good afternoon.

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

Thank you for participating on our second quarter 2013 financial results conference call.

Leading the call today is Dr. Tony Coles, Onyx's Chairman and Chief Executive Officer.

After Tony's introductory comments, Dr. Helen Torley, Executive Vice President and Chief Commercial Officer, will discuss the commercial performance in our proteasome inhibitor and kinase inhibitor franchises.

Next, Dr. Pablo Cagnoni, our Executive Vice President of Global Research and Development and Technical Operations will provide an update on our global clinical program.

Finally, Matt Fust, Executive Vice President and Chief Financial Officer will review our financial results.

We will then open the call to questions.

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 a discussion of these risks and uncertainties we refer you to our 10-K for year ended December 31, 2012 as well as to our other filings.

We expect to file our 10-Q for second quarter ended June 30, 2013 later today.

During today's call we will be discussing Kyprolis (carfilzomib)for injection, Bayer's Stivarga (regorafenib) tablets, and Nexavar (sorafenib) tablets.

For full prescribing information on Kyprolis we refer you to the package insert posted at www.kyprolis.com.

For full prescribing information on Bayer's Stivarga we refer you to the package insert posted at www.stivarga-US.com.

And for Nexavar full prescribing information is available at www.nexavar-US.com.

In addition we'll be presenting and discussion non-GAAP financial measures.

For a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures, please see today's press release and slide presentation which are posted on the Onyx website at www.onyx.com.

For additional information please visit our website or follow us on twitter at onyxpharm www.twitter.com/onyxpharm.

I'll now turn the call over to Tony.

Thanks Amy.

With two successful product launches in just the last year Onyx has transformed from a company with a single product approved to two indications to an emerging global oncology leader with three approved therapies and five different cancer indications, a sixth indication under regulatory review, and additional potential registration enabling data being generated.

For the second consecutive quarter, total revenue for Onyx more than doubled to greater than $150 million compared to the same time last year thanks in large part to Kyprolis and the continued growth of Nexavar.

This significant top line growth was the result of the strategies we have executed to build Onyx into a company with a pipeline of products and multiple revenue streams to drive our business.

Before beginning our quarterly update I would like to briefly address the ongoing strategic process that we announced on June 30th.

As you know the Board in response to an unsolicited proposal and consistent with its fiduciary duty has engaged financial and legal advisors in order to assess the opportunities for a strategic transaction.

We have provided under NDA nonpublic information to participants in our process.

The process is ongoing with multiple parties currently engaged in discussions and with the outcome, timetable, and end date dependent upon the actions of interested parties and the Board's review of its options.

At this time I would like also to recognize our employees who despite the initial distraction of this announcement have shown an unwavering commitment to our business and the patients we serve.

We realize there are likely many questions on the ongoing process.

However, as activities are continuing, we will not be providing any additional information or comments on this topic today.

Back to our business.

We remain focused on delivering new cancer therapies to patients globally, and importantly remain committed to creating value by maximizing each of the pipeline opportunities in front of us.

We have built a business with multiple sources of revenue, both current and future, that supports the strategic investment required to unlock the full value of our portfolio.

For Kyprolis we expect continued demand growth for the year.

Kyprolis has generated cumulative net sales of $189 million since its approval in July 2012 and is off to a really great start.

Our comprehensive development program for Kyprolis seeks to expand the label across all lines of multiple myeloma therapy and extend our reach to patients around the world.

As Pablo will describe later, in order to expand our reach geographically we now have greater clarity in our planned regulatory filing strategy for Europe.

For oprozomib, the second potential product in this franchise we continue to advance the new extended release oral tablet formulation into multiple clinical trials to move this program forward as quickly as we can.

And Pablo will make comment on this in just a moment.

Turning now to our kinase inhibitor franchise, Nexavar, the therapy which remains a key cornerstone of our business, achieved both sales growth and commercial margin expansion in the second quarter.

Currently approved in two indications, Nexavar continues to maintain its leadership in liver cancer and generates increasing cash flow for our business with a significant increase in commercial margin.

An SNDA in the US and a filing in the EU in a third potential indication, radioactive iodine refractory thyroid cancer, were submitted in June.

Bayer's Stivarga is the second therapy in this franchise and was our second US launch last year.

The US launches for the first two indications, metastatic colorectal cancer and advanced GIST, have been exceeding expectations.

Stivarga is now approved in several countries outside of the US as Bayer continues to pursue additional registrations globally.

And this is just the beginning for this therapy as Bayer is also starting new Phase III trials, setting the stage for more potential value creation.

In addition to Kyprolis, Nexavar, Stivarga and oprozomib, we retain an important economic interest in Pfizer's palbociclib, which is advancing in a Phase III trial.

Pfizer's compound has demonstrated promise in breast cancer leading to the FDA's break through therapy designation.

We will receive an 8% royalty on future sales of palbociclib and look forward to reporting on Pfizer's progress in getting this therapy to patients.

I would now like to turn the call over to Helen for a review of our commercial progress.

Thank you Tony.

I'm pleased to report a second consecutive quarter of significant revenue growth across our business with total product revenue more than doubling over the same period last year.

We reported $61 million in net sales for Kyprolis in the second quarter of 2013 representing a 6% increase in demand over the first quarter driven by growth in patient share.

We are very pleased with our performance which met our plans.

The $61 million in net sales reflects pure demand and excludes any inventory.

There is also $10 million of commercial product in the channel reflected on the balance sheet as deferred revenue.

And more than 99% of the reported sales were generated from the United States.

Let me begin by providing some color on the US demand growth resulting from patient share gain.

These data are from our end of June market research involving approximately 1,000 blinded patient records.

Kyprolis share increased to over 40% of the prevalent eligible third line plus patient population at the end of the second quarter, comparing favorably to the more than 30% patient share at the beginning of this year.

As a point of reference the next agent had approximately 20% patient share at the end of the second quarter.

Kyprolis is clearly established as a leading agent in third line plus multiple myeloma.

Kyprolis's share of second line patients doubled to approximately 10% at the end of the second quarter.

In this setting the majority of patients had already received Revlimid, Velcade, and dexamethasone in the front line.

We estimate that the greatest number of Kyprolis new patient starts in the second quarter occurred in the larger third line and second line populations.

Finally and as expected we continued to see expansion of novel agent use in the third line plus setting.

Moving now to adoption, our user base grew from greater than -- sorry, to more than 2,400 clinics and hospitals and increased over 300 in the second quarter.

Depth of adoption as measured by repeat ordering also continues to increase.

Based on the trends and the momentum we are seeing we project continued quarter on quarter demand growth for Kyprolis in 2013 driven by new patient starts from our large base of prescribers as Kyprolis continues to displace retreatment and the use of older agents.

Turning to Europe which represents the largest opportunity outside the United States our preparations for launch are continuing.

Following approval we plan to directly commercialize in approximately 12 markets establishing operating affiliates in Germany, France, Italy, Spain, and the United Kingdom.

Similarly to how we approach the US launch we have detailed readiness plans in place and will add resources based on pre-defined gates related to established regulatory milestones.

Switching now to our kinase inhibitor franchise, Nexavar global net sales, excluding Japan, were $230 million in the second quarter with growth occurring in all regions.

Global sales, excluding Japan, increased by 7% over last year's second quarter and by 16% sequentially quarter-over-quarter.

Sales performance for this global product was driven by demand growth in all regions and inventory replenishment following the first quarter draw down in the United States.

Nexavar is currently under regulatory review in the United States and in Europe for radioactive iodine refractory differentiated thyroid cancer.

We estimate that there are approximately 3,000 to 4,000 of these patients annually in the United States and a similar number in Europe.

If we are successful in gaining approval we believe Nexavar's commercial opportunity would continue to grow.

For Stivarga, Bayer reported global net sales of $61 million in the second quarter of 2013, an increase of 15% sequentially from the first quarter.

We project continued growth of Stivarga from new country launches and from increasing adoption by physicians treating high numbers of our indicated colorectal cancer patients.

We estimate that Stivarga could reach $1 billion in peak sales across all indications globally with Onyx receiving a 20% royalty on net sales in approved markets.

In summary, we see continued momentum across our brands in 2013, with growth and creation of additional value in our proteasome inhibitor and our kinase inhibitor franchises, both in the United States and internationally.

Let me now turn the call over to Pablo.

Thank you Helen.

Beginning with the proteasome inhibitor franchise we have a broad registration enabling Phase III program in place for Kyprolis intended to support label expansion and global registrations for the treatment of myeloma patients across all lines of therapy.

Today I will provide you with an update on our multiple Phase III trials as well as our EU filing strategy for Kyprolis.

The goal of our regulatory strategy in Europe is to file as quickly as possible with a comprehensive data package.

Assuming positive data we expect to file this package in the second half of 2014.

This submission could include data for patients with relapsed and refractory disease who are enrolled in the FOCUS study, as well as data for patients with relapsed multiple myeloma as currently being studied in the ASPIRE trial.

Beginning with the FOCUS trial and relapse and refractory patients.

Recall that patients in the FOCUS study were randomized to receive either Kyprolis as a single agent therapy or best available care, which includes steroids and optional cyclophosphamide.

The primary end point of the study is overall survival.

In late July, the Independent Data Monitoring Committee met and determined that the study should continue as planned without modification.

As a result of this recommendation we are continuing to follow the event accrual until we reach the needed number of events to conduct the final analysis.

We expect to have final results for this trial in the first or second quarter of next year.

Turning to a second global registration enabling study, the ASPIRE trial is in relapse patients who have received one to three prior therapies.

Patients in this trial have been randomized to receive Kyprolis with Revlimid and low dose dexamethasone or Revlimid and low dose dexamethasone alone.

Designed to support regulatory filings around the world in the relapsed patient population, the primary end point of the study is progression free survival.

The ASPIRE trial is based on the encouraging results from the OO6 study.

The final results of the OO6 study were recently presented at ASCO, showing encouraging results overall.

And in particular for patients who were Revlimid naive where the medium progression free survival was 28.7 months.

The KRD combination had an acceptable safety and tolerability profile.

For ASPIRE, based on the current timing of event accrual we now expect that we will reach the interim data analysis point for the study in the first or second quarter of 2014.

Having the result of these two studies approximately at the same time, if positive, will strengthen the package for initial regulatory filing in Europe by allowing us to conduct a simultaneous rather than sequential submission of the two studies.

As you will recall in Europe two submissions cannot be under review at the same time which results in at least a year lag time between two sequential submissions.

We plan to file in the EU for indications in both the refractory and larger relapsed patient populations studied in the FOCUS and ASPIRE trials in the second half of 2014.

Our global regulatory strategy also includes two head to head studies versus Velcade.

The ENDEAVOR study, also in relapse patients, is designed to evaluate the superiority of Kyprolis over Velcade.

In this ongoing study patients are being randomized to assess a higher dose of Kyprolis at 20 milligrams and 56 milligrams per meters squared with both arms including dexamethasone in addition to one of the two proteasome inhibitors.

Since our last quarterly call, we have also begun actively enrolling patients in the second head to head trial, CLARION, designed to assess superiority over Velcade in newly diagnosed transplant ineligible patients.

A melphalan-prednisone backbone, which is the global regulatory standard for transplant ineligible patients is included in both study arms with progression free survival as the primary end point.

We also have a broad range of company-sponsored and investigator-sponsored trials complementing our development program for Kyprolis.

These trials provide a growing body of clinical data indicating the potential broad combinability of Kyprolis with different therapies as well as across several lines of multiple myeloma therapy.

Switching to our oral proteasome inhibitor, oprozomib, encouraging early data from the new tablet formulation were presented at EHA in June as we continue to advance this program.

We are generating additional data from the study including more patients treated at higher doses and for longer durations and look forward to sharing this data in the future.

We are also initiating two Phase 1b studies designed to evaluate oprozomib in combination therapy for multiple myeloma.

The first trial which has already begun enrollment will focus on relapsed and/or refractory multiple myeloma patients assessing the combination of oprozomib and dexamethasone.

The second will evaluate oprozomib with Revlimid and dexamethasone in newly diagnosed myeloma patients and we expect to begin enrolling shortly.

Turning to the kinase inhibitor franchise and Stivarga, Bayer is executing a development program to support additional approvals.

The first of two planned Phase III trials began earlier this year and is evaluating Stivarga in second line liver cancer patients after progression on Nexavar.

The second, scheduled to begin in the second half of this year will include patients with colorectal cancer following resection of liver metastases.

For Nexavar, based on positive top line data from the DECISION study, regulatory submissions have been filed with both the FDA and EMA for approval in radioactive iodine refractory differentiated thyroid cancer.

We anticipate additional submissions globally for this potential new indication.

We are proud of Nexavar's continued leadership in liver cancer.

Despite multiple clinical trials conducted in this setting no other therapy has succeeded in showing survival improvement in this patient population.

We have multiple opportunities for clinical and regulatory success as we advance our pipeline and we look forward to continued momentum across our programs with additional milestones in the months ahead.

I will now turn the call over to Matt.

Thanks Pablo.

Our strong top line growth and significant margin expansion in the second quarter and first half of 2013 continue to enable strategic investments in Kyprolis and in oprozomib.

Second quarter total revenue of $153 million was more than double the $73 million reported in second quarter 2012.

Kyprolis net sales in second quarter 2013 were $61 million.

Approximately $10 million in Kyprolis gross deferred revenue was carried on the balance sheet at quarter end.

Recall that for Kyprolis we use the "sell through" record of revenue recognition and record net sales upon shipments to hospitals and clinics.

Shipments to distributors are recorded as deferred revenue.

This is in contrast for our oral products where we use the "sell in" method of revenue recognition, which includes both demand and commercial product in the channel.

For second quarter 2013, the Kyprolis gross to net adjustment was 12%.

For full year 2013 we continue to expect a gross to net adjustment of between 10% and 15%.

Kyprolis gross margin on net sales was 97% for second quarter and we now expect full year 2013 gross margin of approximately 95%.

Nexavar collaboration revenue for second quarter 2013 was $82 million with a significantly increased commercial margin of 67% compared to 61% in second quarter 2012.

For Stivarga, Bayer reported $61 million in second quarter net sales yielding $10 million of royalty revenue to Onyx based on worldwide sales in countries where Stivarga is approved and commercially available.

Non-GAAP net R&D expense was $99 million in second quarter comprised primarily of Kyprolis development expenses, including the ongoing fully enrolled FOCUS and ASPIRE trials and the actively enrolling ENDEAVOR and CLARION studies, along with oprozomib development expense.

Non-GAAP SG&A expense was $78 million in second quarter driven primarily by Kyprolis US commercial expense.

We ended second quarter with $756 million in cash and investments and we are maintaining the financial guidance provided on our year end results call in February, which is outlined in the web slides that accompany today's call.

With accelerating revenue from multiple products and upcoming clinical and regulatory milestones across the portfolio we remain committed to investing in the proteasome inhibitor franchise to position Onyx for continued growth.

Now I will turn the call back to Tony.

Thanks Matt.

Well this has been another terrific quarter with doubling of our revenues because of each of our products, important progress, momentum across the board portfolio.

Clearly Kyprolis continued to grow this quarter with strong market share gains, Nexavar has delivered one of its best sales quarter to date, and our global registration enabling trials for Kyprolis, which are ongoing, provide us with two paths to European registration, which now have converged enabling a quicker broader package to reach a greater number of patients sooner in this important market.

Looking ahead we've got several upcoming commercial regulatory and clinical milestones which will extend ability to reach even more cancer patients with our therapies, which is our mission and our goal.

In the near term here is what we expect.

First, continuing quarter on quarter demand growth for Kyprolis in the US and prudently building our capabilities to support a European launch based on regulatory progress.

Second, advancing the global registration enabling development program for Kyprolis across all lines of treatment in myeloma with both interim ASPIRE results and final FOCUS results anticipated in the first or second quarter of 2014 leading to European filing in the second half of 2014 as we continue enrollment for ENDEAVOR and CLARION.

Third, expanding Nexavar's reach with anticipated regulatory actions here and in the EU for the potential new thyroid cancer indication.

And finally, sharing with you Pfizer's progress on palbociclib, which we're quite excited about, and Bayer's advancement of Stivarga with global commercial, regulatory and clinical milestones.

That concludes our prepared remarks.

Operator, we will now open the call to questions.

(Operator Instructions)

Phil Nadeau with Cowen & Company.

Good afternoon.

Thanks for taking my question.

My question's actually on the FOCUS interim analysis that you announced.

Can you remind us was there a futility look at that analysis and were you communicated any other information other than the trial is going to go to completion?

Was there any sense of the trend lines in the study, the efficacy or the safety nets being observed?

Thanks.

Phil, on that one Pablo may have additional some additional context, but no there was not a futility analysis and the DMC only advised that the study can continue.

That's all we got.

Operator, next question.

Cory Kasimov with JPMorgan.

Good afternoon.

Thanks for taking the question.

Quick follow up on that FOCUS question, can you comment now that it did not hit the interim how high of a hurdle there was for that interim look?

And then a follow up I guess for Helen is, I am wondering if there was impact you saw in the quarter from the compendia listing for Kyprolis in the front line setting and maybe impact from the launch.

Thanks.

Okay.

Pablo why don't you take the first question on FOCUS?

I don't know that there is much we can offer, but we will let you do that one and then Helen will follow with the Kyprolis question.

Certainly, I think the quick answer is that we don't comment to the design of ongoing trials so I have nothing to add to Tony's initial comments on FOCUS.

Helen.

Specifically to the impact of the NCCN guidelines, as a reminder that doesn't change our label and we are not indicated in the front line setting.

As we look at our chart audit we really did not see any front line use of Kyprolis at this point in time.

In terms of our performance in the second quarter we met our expectations in terms of our performance.

Growing share as I mentioned to more than 40% of the third line plus population which was exactly in line with what we'd expect it to do.

Thank you Helen.

Thank you Pablo.

Operator, we'll take the next question.

Geoff Porges with Sanford Bernstein.

Operator let's take the next question please.

Gene Mack with Brean Capital.

Thanks for taking the question.

I wonder Pablo or Tony if you can give us a sense off on the CHAMPION trial which is basically a dose escalation trial for Kyprolis, will you have any of that data at the upcoming ASH conference, number one.

Number two, are you looking at cardiovascular effects in those patients, and is there anything notable that you've seen so far?

Thanks.

Pablo.

Yes, as you know the CHAMPION 1 study is the study where we're conducting dose escalation of weekly Kyprolis and the study is going well and we will present an updated ASH later this year.

I will not comment on the results of an ongoing study but we are looking, obviously part of the study design is to safety evaluation as well as efficacy.

And the study is still in dose escalation phase, but we look forward to sharing results with you at ASH.

Okay, very good.

Operator we'll take the next question.

Geoff Porges with Sanford Bernstein.

I'll try again.

Welcome back Geoff.

Thank you, thank you.

I'm still learning how to use these devices you know.

You mean the telephone?

Exactly.

I have to ask about the obvious question which is you're engaged in this sort of fairly public auction process.

Have you put in place any retention programs or any incentives to keep staff at the firm in place and focused on the job at hand?

I just wanted to also ask about the financials.

Matt, you made a point of CLARION is underway now and so is ENDEAVOR.

Is this about the R&D run rate that you need to support the full portfolio of Kyprolis studies or would you expect there to be further step up in subsequent quarters as those studies get fully enrolled?

Thanks.

Okay.

Geoff I think on the first question, no we actually haven't needed retention programs for the employees.

Employees obviously have a clear understanding of the process and that the Board is engaged in this process.

Yet they come to work everyday and they are intensely focused on what we have to get done so we have not needed to put a retention program in place.

I think they are all committed to what we are trying to get accomplished.

We are ensuring that the field representatives and everyone that meets our clients and customers everyday have the appropriate incentives in place based on performance, but I would say that everyone is really clear about what our job is.

How about the second one Matt on financials?

Sure.

So Geoff, you've hit on the key drivers exactly.

Our R&D expense is overwhelmingly concentrated at this juncture on support for the proteasome inhibitor programs, and in particular, the increasing investment behind ENDEAVOR and CLARION, as well as the CHAMPION program as Pablo just mentioned, offset to some degree by the flat to falling expenditures on FOCUS and ASPIRE, both of which are fully enrolled, as well as anticipated reduction in our investment in the Nexavar development program.

I'll also note that we did reaffirm our full year non-GAAP R&D expense guidance.

That's in the range of $400 million to $450 million for the full year which would suggest that our second quarter run rate will probably tick up just a little bit in the second half of the year.

Okay.

Thank you.

Thanks for the questions.

Operator, next question.

Howard Liang with Leerink Swann.

Thanks very much.

Can you talk about where you are in building European infrastructure and whether the build out is effected by the ongoing discussions, and can you talk about the progress of the STORM trial and the timing of the data.

Okay.

Sure.

Helen why don't you take the EU infrastructure question and Pablo will address STORM.

Yes.

In terms of our European infrastructure we have continued to gradually build a small core team in Europe who are focused on the long lead time activities that would include things like regulatory filings and building our reimbursement and access dossier.

We have, just like we did in the US where we were awaiting ODAC before triggering resources put a very similar plan in place for Europe where we will ungate resources based on regulatory progress.

So we're continuing with that plan.

We have continued to add people in Europe as needed to make sure that we are ready for the earliest possible launch.

Thank you Helen.

Pablo on STORM.

Yes.

Regarding STORM, as you know like all this analysis is event driven.

However we expect final results in the STORM trial in the second half of next year.

Why don't you, while we're on Nexavar Phase III programs, why don't you just update quickly on RESILIENCE, the breast cancer study as well.

Certainly Tony.

The results of RESILIENCE should be available mid year 2014.

Okay.

Good.

Two shots on goal for Nexavar next year.

Next question operator.

Chris Raymond with Robert Baird.

Thanks.

More back to the commercial side if you don't mind.

I know you guys are doing exactly what you guided to in terms of Kyprolis having the quarter on quarter growth and it seems like it's just right on track.

Every launch has barriers.

I was wondering if you could talk a little bit about the competitive dynamic.

What would you describe as the biggest barrier?

Is it sub-q Velcade, is it the Pomalyst launch, or is it something else?

Thanks.

Why don't we have Helen kick that one off.

Chris as we look at where we are indicated, patients who previously received Revlimid and Velcade and progressed on or within 30 days, prior to the launch of Kyprolis, what patients were being treated with was retreatment with Velcade or Revlimid or older cytotoxics.

What we have seen with Kyprolis, and now also with Pomalyst is that we are displacing the use of retreatment and the older agent.

So we have seen continued growth in the use of novel agents in that setting but there remains significant opportunity still to displace retreatment and cytotoxics.

Okay.

Thank you for the question.

Thank you Helen.

Operator we'll take the next question.

Robyn Karnauskas with Deutsche Bank.

Hi guys.

Thanks for taking my question.

Maybe you can give us a sense of next potential data update that we'll see from oprozomib, what kind of data could we see from Onyx at ASH, and when do you think we could see some of the data from the Phase 1b studies with oprozomib and the combinations?

Thanks.

Okay.

Sure those Phase 2 studies are just getting up and running Robyn, but Pablo can you give just a little more color on them?

So yes, Robyn, so the oprozomib program will be updated at ASH and we will provide more data for the ongoing Phase 1 study that we provided an update at EHA this year and we'll have data on more patients with longer duration of therapy.

As I mentioned we are seeing that our discussions with investigators indicate that patients are able to stay on drugs longer and we take that to be a positive sign regarding the tolerability of oprozomib in the patient population.

There is also emerging and encouraging efficacy data.

That study will be updated at ASH.

The combination studies are getting started.

One is a combination with dexamethasone, the other one is a triplet with Revlimid and dexamethasone and it's unlikely that we'll have substantial data for ASH.

It's probably going to have to wait until next year.

Okay.

Operator, next question.

Mike King with JMP securities.

Thanks for taking my question.

I apologize if this has been asked already.

I got on the call late.

I am just trying to figure out with, with FOCUS and ASPIRE, what's the strategy there again?

And I guess it sounds to me like FOCUS is a push out but you are going to try and merge it with the ASPIRE data and do a simultaneous filing?

Is that what you are saying?

Yes, let me have Pablo address that.

So what we mentioned is that the DMC recommended that FOCUS continue without modification.

That would mean that the final analysis for FOCUS will be available in the first or second quarter of next year.

We expect regarding ASPIRE that the interim analysis for ASPIRE will be available in the first or second quarter of next year.

What that will allow us to do is potentially submit both combined for European regulatory filing as opposed to if we had FOCUS under review we would have had to wait until FOCUS review was completed to submit the ASPIRE data.

This in a way accelerates the submission of ASPIRE if both trials are positive.

And just to underscore Pablo's comment, the wonderful part about that is that ASPIRE obviously provides an opportunity to the much larger relapse population.

So we think net-net the simultaneous filing is a great advantage potentially for us should those studies be positive.

We'll take the next question operator.

Biren Amin with Jefferies.

Thanks for taking my questions.

I wanted to ask you a question on the FOCUS trial.

Can you maybe tell us the patient base lines in the trial, were they similar to the OO3-A1 salvage population?

Thanks.

Yes, they were, Biren.

We've looked at those side by side and obviously we tried to structure the FOCUS trial to mirror the refractory population and the advanced myeloma population in the US and they are quite similar in their demographic characteristics and number of lines of previous therapies.

Next question operator.

Rachel McMinn with Bank of America.

Just a couple quick questions.

I just want to clarify as well on FOCUS.

Is it fair to say that the study is, the data is just not as strong because it is continuing to the final analysis?

And then Tony, I also wanted to get your thoughts on additional front line strategies, or maybe that's better for Pablo.

I think you guys at ASCO talked about the idea of doing another Kyprolis study perhaps, ASPIRE like, but in the front line setting.

I just wanted to get your updated thoughts on that.

And then just in terms of the timing of ASPIRE, you've pushed it out to like the first half of 2014 but that's still pretty far away, so it sounds like the event rate is much, much slower.

I guess how confident are you that that's really when we're going to get the interim analysis?

Thanks.

I think I'll let Pablo start off.

I've got a couple specific comments and if he doesn't hit them in his comments, I will add them.

Okay.

So there is two or three points there, Rachel.

The first point regarding FOCUS, as you know studies are powered for the final analysis and an interim analysis is put in place if a study can be stopped earlier that indeed happens.

We have to wait until all the events for FOCUS are in and conduct a final analysis which we expect in the first or second quarter next year.

Regarding ASPIRE, as you know and we've guided earlier, there has been slower event accrual than expected initially.

I think our initial assumptions for ASPIRE were conservative and we didn't have the mature 006 data.

Now that we have seen and we've shared with you the 006 mature data from ASCO, with the PFS and Revlimid naive patients close to 29 months, I think it's easier to understand why some of the events are taking longer to come in.

As we get later in the conduct of the study we can more precisely project when the desired number of events for the interim analysis will occur.

We are fairly confident that will be in the first or second quarter of next year.

Regarding first line, we continue to have -- to think what's the best way to expand the use of Kyprolis.

We have the CLARION study in place which we think will support global regulatory submissions and we have discussions internally whether a CRD based regimen, in first line it's also important part of our plan.

We are not ready to unveil what that plan would look like but stay tuned.

Good.

I think that's a complete answer.

Thank you.

All right operator next question.

Matt Roden with UBS.

Great.

Thanks for taking my questions as well.

Also on FOCUS and ASPIRE I know these are blinded studies, you can't really see exactly what's going on.

As this event rate slows down and time lines get pushed back, I was wondering if there is anything you can conclude from the amount of drug that you are actually supplying to the study sites, and whether or not that gives you any sort of hint as to whether or not the delay is because of outperformance of the comparator arms or whether or not it's actually the drug arm.

Secondly I was just wondering if you can update us on the latest information you have on the post-marketing pharmacovigilance program for Kyprolis, just wondering if you are seeing anything noteworthy either good or bad on that topic?

Thanks.

Yes.

The first one's easy Matt.

There is no real read through in terms of the clinical supply that we are providing.

The only thing I would underscore from Pablo's comments is I think it garnered everyone's attention at ASCO that the 006 study in the Revlimid naive population performed above expectations.

So you can't draw any conclusion from that but we're certainly encouraged that the add on of Kyprolis to what we know is an effective backbone of Revlimid and dexamethasone seems potentially promising, so we just have to wait until all the events accrue.

And then with regard to any post-market pharmacovigilance, we are not finding any unusual signals, no safety questions that are being raised that are unusual that aren't already identified in our label, and importantly the data monitoring committees for all of the ongoing trials have not commented or expressed any concern.

That's probably the strongest statement of neutrality that we can offer.

Next question operator.

Terence Flynn with Goldman Sachs.

Thanks for taking the question.

Was just wondering, two for me.

One for Pablo on FOCUS can you just remind us about any crossover on the control arm, if that's allowed or not.

And then one for Helen, in terms of the 6% quarter over quarter growth rate you saw with Kyprolis, is that a good number to think about in the second half of the year?

Are there any other factors that maybe would lead to maybe an acceleration of that number?

Thanks.

Okay.

Pablo take the crossover question which will be easy and then Helen.

So the FOCUS study does not allow crossover.

After progression patients can receive additional experimental or approved therapies but there is no crossover to Kyprolis.

I think it is also important to point out that the FOCUS study is conducted outside the US, the majority of the patients are from Europe, the rest from outside of Europe.

So there is no access to commercial Kyprolis in the territories where FOCUS is being conducted.

Terence, on the quarter on quarter demand growth we're not providing specific sales guidance on this call but what I can say is that we do project that continued demand growth driven by this pattern we're seeing of new patient starts from the broad and growing base of prescribers as we do continue to displace retreatment and the older agents.

Okay.

Very good.

Next question operator.

Mark Schoenebaum with ISI Group.

Hey Tony.

I really appreciate you taking my question.

Sure.

Could you please comment on in the unlikely scenario where FOCUS were to fail, do you believe ASPIRE would alone be enough to support registration in Europe?

A second was also on FOCUS, what assumptions have you guys made for the supportive care only control arm?

And a last question for Helen, excuse me, what -- could you help us out with, now that you have been on the market for a while what you are seeing in terms of the average duration of therapy of Kyprolis?

Thank you very much.

Okay.

Why don't we have Helen just do duration of treatment quickly and then Pablo will cover the two questions on the clinical program.

Thanks.

We do have some initial insight from the duration of therapy we are seeing in market that is really based on the first cohorts of patients who started them after the launch.

These were patients who were very similar to our 003A1 study in that they had received multiple prior lines of therapy and not surprisingly we're seeing the in market treatment duration to be very similar to 003A1, so in the four to five months time frame.

Subsequent cohorts have been exposed to less lines of therapy and we're continuing to follow them as that data matures so we can calculate a mean duration for them.

So we do expect to provide additional updates as we get the data on the less advanced patients.

Okay.

Very good.

Pablo, as far as the ASPIRE question and it's registerability and then the FOCUS question.

Regarding ASPIRE, we are very confident in the design of the study.

As you know progression free survival is a primary end point.

This has been established as an approval end point in patients with myeloma.

Based on the 006 data that we updated at ASCO, and you take into account the original R&D trials with a progression free survival of about 11 months we are very confident that ASPIRE will show a difference in progression free survival that will be more than sufficient to support registration in Europe and certainly in the US.

Regarding the FOCUS we have not commented publicly on the assumptions behind the control arm.

I will just say that the study was designed after scientific consultation with EMA.

Good.

The only point that I would add is remember ASPIRE is operating under both a SPA and scientific advice from the European.

And we have I think a good understanding about PFS as the best end point for that particular trial so that should address your question mark.

Operator let's take the next question.

Ying Huang with Barclays.

Thanks for taking my questions as well.

Obviously, I realize this could be our last earnings call for Onyx.

Kudos to you guys.

You guys created a lot of share value for Onyx apparently.

One on FOCUS, is it because the best supported care does better than you assumed or it because those patients may subsequently get, let's say pomalidomide as an experimental therapy which caused this interim analysis result.

And then secondly, Matt, can you tell us what is the direct cost you incur for sales and marketing for Kyprolis for second quarter?

Thanks.

Okay.

Pablo, just if you could, take the first one.

I don't know if we have any visibility on that.

Any color?

We certainly don't have any visibility on that.

I would repeat the comment that I made earlier which is studies are originally designed and power based on the assumptions around the final analysis and interims are put in place to stop the studies earlier than is necessary.

So I will not comment further and we don't have any available data regarding the subsequent therapy in these patients.

Matt, on the sales and marketing.

Sure.

We actually have not broken out specific details as relates to the Kyprolis US commercial infrastructure.

I'd remind you that our selling, general and administrative expense line includes not only the cost of the US Kyprolis infrastructure, but also the cost of the sales force which details Nexavar and Stivarga, as well as our commercial infrastructure here in South San Francisco and the usual corporate G&A activities.

The Kyprolis commercial infrastructure is the key driver of the increase in the SG&A line over the course of the last several quarters since launch in the third quarter of last year, and that may give you a way to calibrate on the incremental costs associated with Kyprolis.

Thanks Matt.

Operator we've got time for just one more question.

Jim Birchenough with BMO Capital.

Hi guys.

Thanks for fitting me in at the end.

This could take a while.

Just kidding.

A few questions.

I am trying to understand the dynamic between new patients coming on therapy, which it sounds like is growing, but patients that might have built up advanced patients from the fourth quarter and first quarter that could be coming off at that four to five month time point.

I am just trying to wonder Helen if you could comment whether how we should think about that going forward.

As you think about the patients that came on in the first quarter and second quarter do you expect fewer discontinuations and when you think about the new patient adds you had this quarter, how does that net out?

That's the first question.

Secondly, just on ENDEAVOR, you are going to a dose that you haven't had that much experience with.

So just wondering if you can comment on anything that gives you incremental comfort at 56 milligrams per meters squared and if there were a problem with that dose would we have seen it at this point in ENDEAVOR?

Thanks.

Okay.

Helen if you could take the Kyprolis performance question and then we'll address the ENDEAVOR question.

In terms of how I would think about this is certainly the first patients that started on Kyprolis after we launched, with the mean duration being in the four to five months, obviously, we were losing a good number of those patients as we were coming into the fourth and first quarter.

You are absolutely right though.

As we get patients who are less advanced we're going to see more of a balance of more patients continuing on therapy with the proportional contribution of new patient adds perhaps becoming less as we are building more and more of a base of continuing patients.

Okay.

Good, and then Pablo, finally on the ENDEAVOR question.

Certainly.

So regarding ENDEAVOR I think there are a couple of important points.

Number one is the data from study 007 which gives us confidence on the design of ENDEAVOR to demonstrate superiority over Velcade.

I think it's important to address the point you made about the higher dose of Kyprolis.

We have data monitoring committee in place.

The data monitoring committee for ENDEAVOR met recently and recommend that the study continue without modifications.

Okay.

Thank you all very much.

Look, our momentum continues to accelerate as we reach more patients globally with important therapies.

I have said that our team is well focused on what it is that we have to do, and that's importantly, serving patients and creating shareholder value.

We are well on our way to establishing a global oncology business that will be a leader in the field.

We look forward to keeping you updated.

Thank you for joining our call today.

We'll speak to you soon.

Thank you operator.

Thank you.

Ladies and gentlemen, thank you for participating in the Onyx Pharmaceuticals second quarter 2013 financial results conference call.

You may disconnect at this time.