Onyx floats $359m stock offer to finance Kyprolis, oprozomib and R&D
This article was originally published in Scrip
Onyx Pharmaceuticals is selling 4.4 million shares of common stock to raise gross proceeds of $358.6 million for the commercialization of the third-line multiple myeloma drug Kyprolis (carfilzomib) and for the South San Francisco-based company's ongoing clinical trials to support registration and expansion of new and approved cancer therapies.
At $81.50 per share, the underwritten public offering of common stock set to close on 22 January was priced below the 15 January closing price of $83.43. Investors sent Onyx's stock down $4.15, or 5%, to close at $79.28 after the offering price was set on 16 January. It fell below $79 in after-hours trading.
Onyx said in a prospectus filed with the US Securities and Exchange Commission (SEC) that net proceeds from the company's stock offering will fund clinical development of its proteasome inhibitors - Kyprolis for injection and oral oprozomib - and pay other research, commercial and business development expenses.
Onyx shares commercialization costs for the kinase inhibitors Nexavar (sorafenib) and Stivarga (regorafenib) with Bayer, which pays all research and development expenses for the newly approved Stivarga. That's why most of Onyx's resources are focused on Kyprolis and oprozomib, which are not being developed in partnership with another company.
Data from Phase I oprozomib clinical trials in hematological malignancies and advanced solid tumors are expected during the first half of 2013.
Onyx intends to report interim Phase III analyses for Kyprolis from the FOCUS clinical trial in relapsed and refractory multiple myeloma in the second half of 2013 and from the ASPIRE trial in relapsed multiple myeloma in the fourth quarter of 2013.
The company has an ongoing head-to-head Phase III study called ENDEAVOR that pits Kyprolis against Millennium's Velcade (bortezomib) in relapsed multiple myeloma, and a Phase III head-to-head study in the front-line setting is expected to begin enrolling patients in 2013.
In its initial third-line indication, Kyprolis generated $62 million in sales between its launch in late July and the end of December, but Onyx expects sales to peak at $2 billion as the company expands the approved indications and markets for the multiple myeloma drug (scripintelligence.com, 14 January 2013).
In terms of business development opportunities, Onyx does not have in-house drug discovery capabilities, so chairman, president and CEO Anthony Coles told Scrip in an 8 January interview that the company will consider product acquisitions, licensing arrangements and option agreements for both early- and late-stage assets.
"We focus on oncology, but we have a degree of openness to mechanisms of action," Dr Coles said while attending the 31st Annual JP Morgan Healthcare Conference in San Francisco. He noted: "There are still a lot of early-stage or private companies looking at interesting technology."
Onyx had $530 million in cash as of 30 September to finance its business development, commercialization and research expenses, so proceeds from its January 2013 stock offering also may be used to pay some or all of the company's $230 million in convertible debt that is due in August 2016.