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Onyx Shares Up On New Agreement With Bayer On Cancer Drug - Update

Onyx Pharmaceuticals Inc. (ONXX: Quote), said Wednesday it has entered into a new agreement with Bayer Healthcare linked to the development of regorafenib, a late-stage oncology compound from the Bayer stable. Additionally, the two companies have restructured their partnership for the global development and marketing of liver cancer drug, Nexavar.

Onyx said the agreements settles a US lawsuit filed by it against Bayer regarding the promotion of regorafenib and Nexavar. Following the news, shares of Onyx surged nearly 10 percent on the Nasdaq, while Bayer gained over 6 percent.

The agreement provides Bayer Healthcare with the final decision-making authority for global development and marketing of regorafenib, while Onyx will get a 20 percent royalty on any future global sales of regorafenib in oncology.

Regorafenib is an investigational agent being developed as a treatment for gastrointestinal stromal tumors. The drug is not approved by the US Food and Drug Administration, but has been designated as an orphan drug.

Onyx indicated the status of liver cancer drug Nexavar under the revised collaboration agreement remains mostly unchanged. Bayer will pay Onyx $160 million as one-time payment for royalty rights in Japan. However, Bayer will have no obligation to pay Nexavar royalties to Onyx on Japanese sales after 2011.

Onyx and Bayer are marketing and developing Nexavar, an anticancer therapy currently approved in the US for the treatment of unresectable liver cancer and advanced kidney cancer. The drug is currently approved in 100 countries. Global Nexavar sales, which recorded by Bayer were $245.7 million for the second quarter, up 4 percent from last year.

Bayer Healthcare is a unit of Germany's Bayer AG (BAYZF.PK, BYR.L).

ONXX is trading at $35.06, up $3.15 or 9.87%, on a volume 3.2 million shares on the Nasdaq.

BAYZF.PK, shares of which are sold over the counter, is trading at $61.79, up $3.63 or 6.24%. BYR.L closed Wednesday's trade at 44.83 pence, up 1.23 pence or 2.82%, on the London Stock Exchange.

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by RTT Staff Writer

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