Onyx Pharmaceuticals Steps Up Its Game

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The motto for Onyx Pharmaceuticals is “Changing the Way Cancer is Treated.” With a successful 2009 behind it and a busy 2010 ahead, Onyx is staying true to its word. Tony Coles, MD, MPH, took on the dual role of CEO and president of Onyx Pharmaceuticals in March 2008 and steered the company successfully through a worldwide recession. In each of the first three quarters of 2009, earnings exceeded 2008 levels; for the third quarter alone, Onyx reported a 36% growth in revenue.

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Onyx has increased its investment in research and development and has several promising drugs in the pipeline. Topping this off, Zacks Investment Research praised Onyx’s acquisition of Proteolix last year “as a significant addition to Onyx’s cancer pipeline.” Proteolix is the maker of the novel drug carfilzomib, which has shown tremendous promise in several studies. In an interview with , Coles discussed Onyx’s ongoing success and outlined the company’s ambitious agenda for 2010.

Nexavar still golden

Nexavar is the main driver of Onyx’s current success. The FDA approved Nexavar (sorafenib) in 2005 for advanced renal cell carcinoma and in 2007 for hepatocellular carcinoma. It is now used in more than 80 countries. Onyx reported that sales of Nexavar grew 27% in the third quarter of 2009 compared with the third quarter of 2008. “We attribute the strong growth in Nexavar to the significantly unmet need that exists in liver cancer,” Coles said, noting that Nexavar had made inroads in several new markets recently. “We had several very important launches since 2008, notably in some of the European markets and, importantly, in some of the Asia-Pacific markets, where the incidence of liver cancer is highest.”

At the San Antonio Breast Cancer Symposium (SABCS) in December 2009, several studies indicated that Nexavar might have a promising future in other solid tumors. Jose Baselga, MD, an oncologist at Vall d’Hebron University Hospital in Barcelona, Spain, presented data that showed first- and second-line therapy with Nexavar and capecitabine improved progression-free survival (PFS) by 74% in a trial of 229 women with locally advanced or metastatic breast cancer. PFS was 7.4 months in the combination arm versus 4.1 months in the placebo group (HR, 0.65; P = .0339). “Interestingly enough, the statistical significance of these efficacy results were comparable across the first line and the second line,” said Coles, “with dramatic improvements in PFS in both of these populations.” The most commonly observed toxicity was hand-foot skin reaction, which is a complication of both agents and was not unexpected. Investigators described this adverse effect as manageable. “Despite this particular tolerability issue, the overwhelming benefit of the combination of Nexavar and capecitabine, we believe, is really very exciting,” Coles said.

A second study, led by William Gradishar, MD, of Northwestern University, Evanston, Illinois, demonstrated a favorable trend toward improved PFS for Nexavar plus paclitaxel versus paclitaxel alone in women with HER 2-negative breast cancer. While the data did not meet statistical significance for PFS, Coles said it nevertheless demonstrated that Nexavar is active in breast cancer.

Another study presented at SABCS that Onyx was not involved in but which generated a lot of interest showed that Nexavar resensitized some breast cancer patients to aromatase inhibitors. The data were preliminary, but Coles said Onyx was “working with the investigator of that trial to better understand these findings and make a judgment as to whether we would want to initiate a company-sponsored trial in this area.”

Onyx is proceeding with a phase III trial and several phase II trials of Nexavar in the HER2- negative patient population. One phase II study is expected to release top-line results in late 2010 on the potential role of Nexavar in combination with gemcitabine (Gemzar) or capecitabine in metastatic breast cancer patients who have progressed on bevacizumab (Avastin). Another trial is accruing patients with metastatic breast cancer who will receive Nexavar combined with docetaxel or letrozole (Femara).

Nexavar has also shown activity in lung and thyroid cancer, and Coles said Onyx has also moved forward with phase II trials for these indications. Results from a pivotal non—small cell lung cancer phase III trial investigating Nexavar are due later this year. Coles said the company is anticipating strongly positive results and looks forward to sharing them with investors.

If China proceeds with a plan under discussion to reimburse Chinese citizens for cancer drugs, it would be good news for Onyx. Nearly half the world’s liver cancer cases are in China, and currently cancer drugs are paid for out of pocket. Onyx and other pharmaceutical companies are in talks with the Chinese government on how it might implement the drug reimbursement program.

New Drug Application planned for carfilzomib

When Onyx acquired Proteolix, it also acquired carfilzomib, a next-generation proteasome inhibitor that received a lot of attention at the American Society of Hematology annual meeting in December for its efficacy in multiple myeloma. A phase II study investigating carfilzomib monotherapy in patients with relapsed or refractory multiple myeloma that had never received bortezomib (Velcade) produced an overall response rate (ORR ) of 46%. “[This] 46% ORR was seen in the lower-dose carfilzomib arm, which was 20 mg/m2. When the dose was increased to 27 mg/m2, the single-agent stand-alone efficacy of carfilzomib in the Velcade-naïve population rose to 50%,” Coles said. In addition, patients in the study who had been treated previously with bortezomib and were refractory or relapsed had an 18% ORR on the lower dose of carfilzomib.

The incidence of grade 3-4 peripheral neuropathy was approximately 2.2%, and Coles said this compared favorably to current treatments in this drug class, which are typically associated with a higher incidence of peripheral neuropathy. In the phase II study, carfilzomib also produced lower rates of myelosuppression and neutropenia. He attributed the reduced toxicity to carfilzomib’s high specificity and selectivity for the proteasome.

“These phase II data are supportive of the continued work that we’re doing in multiple myeloma and will be used to support a potential New Drug Application [NDA] that we expect to file by the end of 2010, as we seek accelerated approval for this compound in 2011,” Coles said. If the FDA grants accelerated approval to carfilzomib for multiple myeloma, part of the agreement Onyx made with Proteolix requires the company to shell out $170 million as a milestone payment. An agreement for Onyx to make other developmental milestone payments (up to $535 million) are in place for carfilzomib.

How to build a pipeline

When Coles started as CEO of Onyx, the company was successful but had only one product (Nexavar) on the market and nothing in the pipeline. “Most investors will appreciate that most successful companies…really do need a pipeline to continue to deliver multiple sources of revenue and to identify new ways of growth for the future,” he said. The company set a strategic course to expand the pipeline through the acquisition of new products with cancer indications.

First, Onyx inlicensed 0801, an alpha-folate— receptor inhibitor, from a British company. By the end of 2008, they had options to license two more compounds from S*Bio, a Singapore firm. Last year, Onyx acquired Proteolix, which came with three new agents. “Compared to a year ago, where Nexavar was the only product that we had in commercialization, today we have 8 compounds in our pipeline, so we’ve expanded the portfolio for the company dramatically,” Coles said. “We’ve got a robust pipeline with lots of opportunities to bring value to patients.”

He noted that Onyx plans to file an Investigational NDA this year for ONX 0912, an oral proteasome inhibitor acquired as part of the Proteolix package. Its likely indication will be multiple myeloma, but Onyx plans to investigate whether it is also active in solid tumors. Coles believes ONX 0912 is likely to be the first oral proteasome inhibitor brought to market.

Another compound in development at Proteolix was ONX 0914, an immuno-proteasome inhibitor. Coles described how ONX 0914 works: “The proteasome is part of the intracellular machinery that concerns itself with metabolism of protein. If you can inhibit the proteasome, you can likely disrupt some of the downstream effects of the metabolism, notably to increase apoptosis or programmed cell death. Immune cells in the body have their own proteasomes—the so-called immunoproteasome. If ONX 0914 is determined to be efficacious in inhibiting this immuno-proteasome, it opens up a whole new set of therapeutic opportunities for autoimmune conditions.” While Onyx’s focus is largely on oncology drugs, Coles noted that there is overlap between certain oncologic conditions and autoimmune disorders because they appear to share some of the same pathways.

This contributed to a decision by Onyx to purchase the option to license the two JAK2 compounds from S*Bio, Coles said. JAK is another pathway involved in oncology and autoimmune conditions. Onyx plans to explore these agents in hematologic malignancies.

The alpha-folate—receptor inhibitor ONX 0801 is another early-stage product that the company is excited about. “This particular compound is interesting because it is a targeted therapy that is taken up into the cells through its interaction with the alpha-folate receptor,” Coles said. In the cells, ONX 0801 switches off TS, an enzyme important in cell growth and division. Healthy tissue only minimally expresses the alpha-folate receptor, and Onyx hopes this means that ONX 0801 will be less toxic to noncancerous cells and have fewer adverse effects. Coles said ONX 0801 has potential in ovarian, lung, and breast cancer, all tumor types known to overexpress alpha-folate receptor.

When Onyx acquired Proteolix, a few investors were skittish but others recognized what a gem of a deal Onyx was getting, with only $276 million paid up front for the company. Onyx was drawn to Proteolix, Coles said, because of the “strength of their science in the field of proteasome inhibition,” citing carfilzomib, in particular. “As you think about the next compounds from that acquisition… you can see that Proteolix was quite a success at establishing and expanding our knowledge of proteasome inhibition,” he said. “We think these three compounds [from Proteolix] may form an important and very powerful set of new alternatives for treating these deadly diseases.”

With the purchase of Proteolix, Onyx also acquired scientific and preclinical development capabilities, as well as manufacturing capabilities. This will play an important role in Onyx’s efforts to expand on its robust pipeline. Coles said that in 2010, Proteolix will cease to exist as it becomes a fully owned and operated part of Onyx.

Outlook for 2010

Coles outlined the three main priorities for Onyx in 2010. The top priority is to expand opportunities for Nexavar sales throughout the world, particularly in liver cancer. Coles said, “This includes bringing Nexavar to more patients at earlier times in the course of their disease.” He said the company is focused on educating physicians on the importance of screening for and diagnosing liver cancer much earlier in the course of the disease, as soon as a problem is suspected. “Once identified, if the patient’s a candidate for Nexavar, [he/she should] begin Nexavar therapy right away to improve their life extension.”

The second priority is to complete ongoing studies that are expected to provide new clinical information on Nexavar, including the phase III lung cancer trial. “These results will be very important because it may demonstrate that Nexavar has yet a third tumor opportunity,” Coles said. In addition, the phase III breast study will move forward.

The final priority is preparing the NDA package for carfilzomib. “[We] are looking very much forward to reviewing the top-line data from the pivotal study that’s underway now,” he said, “and then using those data to file the NDA with the expectation that we could have an accelerated approval for carfilzomib in 2011.”

Coles said the company is in a strong financial position, with half a billion dollars in cash on the balance sheet. “[This] has really given investors the confidence they need to believe that we have both near-term opportunities with continued revenue growth from Nexavar and longer-term opportunities with growth from the remainder of the pipeline,” he said. The company expects to make its investors happy and at the same time improve the lives of tens of thousands of patients. He described it as a very exciting time for the company. Time will tell if Coles’ optimism is well placed, but based on last year’s developments, things are looking pretty good for Onyx.