Onyx to Acquire Cancer Drugmaker

Recently, Onyx Pharmaceuticals (ONXX - Analyst Report) announced that it will purchase privately held cancer drugmaker Proteolix for an upfront cash payment of $276 million. This transaction gives Onyx access to Proteolix's lead compound, carfilzomib, a mid-stage multiple myeloma drug.

Apart from the upfront cash payment, Onyx, which currently sells the liver and kidney cancer drug Nexavar along with Bayer AG, is also liable to pay $40 million in 2010 if carfilzomib achieves a development milestone and up to $535 million depending on the achievement of certain regulatory approvals for carfilzomib in the U.S. and Europe.  That is inclusive of a payment of $170 million if the Food and Drug Administration (FDA) decides to conduct a fast review of the drug. The all-cash transaction is expected to close in the fourth quarter of this year.

As a reminder, carfilzomib is currently undergoing a phase II b trial (n=250) in patients with relapsed and refractory multiple myeloma. Enrollment for the study is expected to be completed this year and data should be available in the second half of 2010.

A late-stage, multiple myeloma study to evaluate carfilzomib in combination with Celgene Inc's (CELG - Analyst Report) Revlimid and the anti-inflammatory steroid dexamethasone is expected to start in 2010. FDA approval of carfilzomib, potentially in 2011, would provide further options to patients who have not responded to other multiple myeloma drugs.

Carfilzomib is also being evaluated in early stage studies for solid tumor cancers.

On approval, carfilzomib will compete with Celgene’s Revlimid and Takeda's Velcade. Multiple myeloma, the second most common hematologic cancer, results from an abnormality of plasma cells usually in the bone marrow.

More than 50,000 people are living with the disease in the US and approximately 20,000 new cases are diagnosed annually. More than 180,000 people suffer from multiple myeloma globally with approximately 86,000 new cases being diagnosed annually.

We believe that the acquisition of Proteolix results in a significant addition to Onyx’s cancer pipeline. The successful development and approval of carfilzomib would give additional options to patients suffering from multiple myeloma since current treatments are characterized by serious side effects, particularly neurotoxicity.