In 2012, shares of Onyx Pharmaceuticals (ONXX) shot up over 100% after several drugs became FDA approved. The company eventually settled with gains of 70% for 2012. However, shares are now trading in the mid-range of their 52-week prices and appear to be a bargain going forward.
I recommended buying shares of Onyx in my annual "Top Ten Stocks for 2013" list. Since that time, shares are down 7%. The three main reasons I gave for the recommendation were sales of Kyprolis, buyout target, and a strong pipeline.
Kyprolis, which was approved in 2012, treats multiple myeloma. Analysts at Bloomberg see the drug reaching peak sales of $683 million in 2016. Several analysts thought the drug could be even bigger than that, with targeted annual sale prices of $1 to $2 billion. In 2012, the drug had sales of $64 million in less than six months on the market.
In the third quarter of 2012, Kyprolis had sales of $18.6 million. This was significantly higher than the $10 million predicted by analysts. Kyprolis maintained close to a 10% market share with this sales figure. On Thursday, Onyx reported sales of $45 million for Kyprolis in the fourth quarter. This gave the drug a market share of 30% of its target market. The company recognized the "encouraging depth of adoption by U.S. physicians." Onyx expects sales of the new drug to continue to increase quarter-over-quarter. Sales of the drug will also soon expand to several key European markets.
Kyprolis is currently in three additional Phase III tests. The drug is being tested to treat additional types of myeloma. A fourth Phase III program is also scheduled to start soon. These additional tests will provide more revenue and a stronger relationship with doctors treating myeloma if approved.
Stivarga, another drug that was approved in 2012, has an exciting future. The drug is made in a partnership with Bayer Healthcare. The drug saw net sales of $40 million in less than three months. Onyx saw revenue of $8 million, in the form of a 20% royalty during the fourth quarter. This is another drug that could see peak sales of over $1 billion, according to the company. The drug treats a form of colorectal cancer.
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