Onyx Pharmaceuticals Inc (ONXX)

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Onyx Pharmaceuticals to Acquire Proteolix, Inc.
Acquisition Provides Next-Generation Product Candidate for Multiple Myeloma with Potential Accelerated Approval Pathway

Press Release
Source: Onyx Pharmaceuticals, Inc.
On 6:58 am EDT, Monday October 12, 2009
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EMERYVILLE, Calif., Oct. 12 /PRNewswire-FirstCall/ -- Onyx Pharmaceuticals, Inc. (Nasdaq: ONXX - News) today announced that it has signed a definitive agreement to acquire Proteolix, Inc., a privately held biopharmaceutical company focused on discovering and developing novel therapies that target the proteasome for the treatment of hematological malignancies and solid tumors. Proteolix's lead compound, carfilzomib, is a proteasome inhibitor currently in multiple clinical trials, including an advanced Phase 2b clinical trial for patients with relapsed and refractory multiple myeloma.

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{"s" : "onxx","k" : "c10,l10,p20,t10","o" : "","j" : ""} "Carfilzomib is a next generation product candidate with a proven and well-validated mechanism of action, strong efficacy signals, demonstrated tolerability and a potential accelerated approval pathway," said N. Anthony Coles, M.D., president and chief executive officer of Onyx. "This acquisition leverages Onyx's proven expertise in developing and commercializing Nexavar® and provides strategic expansion into the $16 billion hematological malignancies market. The transaction structure reflects our approach to growing our business in a disciplined fashion, including earnout payments contingent on specific approval-based events. In addition, our development plan is designed to maintain our ability to continue to grow operating cash flow in 2010 and beyond."

Under the terms of the transaction, Onyx will make a $276 million cash payment upon closing of the transaction. Additional payments include $40 million payable in 2010 based on the achievement of a development milestone and up to $535 million contingent upon the achievement of certain regulatory approvals for carfilzomib in the U.S. and Europe. Of the potential $535 million, a payment of $170 million is based upon the achievement of accelerated U.S. Food and Drug Administration approval. The transaction is expected to close in the fourth quarter of 2009, subject to the receipt of clearance under the Hart-Scott-Rodino Act and customary closing conditions.

"There is a tremendous need for new agents in multiple myeloma that can extend and improve the lives of patients and be used in combination with existing therapies. Current therapies are limited by serious side effects, particularly neurotoxicity, as well as limited duration of response and resistance," said Todd Yancey, vice president clinical development at Onyx. "We look forward to the presentation of important new data on carfilzomib at the American Society of Hematology meeting in December and the release of topline data from the Phase 2b trial in the second half of 2010."

Proteolix is developing several therapeutics that inhibit the cellular proteasome, a validated and well-characterized approach to treating certain hematological malignancies. Carfilzomib is a next generation proteasome inhibitor, selectively targeting the threonine protease with prolonged target suppression and improved anti-tumor activity in proof of concept trials. To date, carfilzomib has demonstrated strong response rates in multiple studies with an encouraging safety profile, including low rates of observed neurotoxicity, a known side effect of currently approved proteasome inhibitors. An ongoing 250-patient Phase 2b trial in patients with relapsed and refractory multiple myeloma is expected to complete enrollment in 2009 with data anticipated in the second half of 2010 to support a potential new drug application (NDA) filing by year-end 2010. A Phase 3 trial evaluating the combination of carfilzomib in combination with Revlimid and dexamethasone as a potential treatment option for patients with relapsed and refractory multiple myeloma is expected to begin in 2010. In addition, carfilzomib is being evaluated in a Phase 2 trial in relapsed patients with multiple myeloma. Carfilzomib is also being evaluated in a Phase 1b/2 study for solid tumor cancers. Proteolix is developing two molecules in addition to carfilzomib: an oral proteasome inhibitor and a selective inhibitor of the immunoproteasome.

Management Conference Call Today

Onyx will host a teleconference and webcast today to provide a general business overview and discuss the acquisition. The event will begin at 8:00am ET. The live webcast will be available at:

http://www.onyx-pharm.com/view.cfm/32/Event-Calendar

or by dialing 847-413-3362 847-413-3362 and using the passcode 25577870. A replay of the presentation will be available on the Onyx website or by dialing 630-652-3044 630-652-3044 and using the passcode 25577870 later in the day. The replay will be available through November 12, 2009.

Briefing with External Clinical Experts

Following the teleconference, Onyx will host a webcast presentation at 11:00am ET with clinical experts in multiple myeloma who will review and discuss the disease landscape and the clinical development of carfilzomib.

The live webcast will be available at: http://www.onyx-pharm.com/view.cfm/32/Event-Calendar

A replay of the webcast will be available on the Onyx website through November 12, 2009.

About Multiple Myeloma

Multiple myeloma (MM) is the second most common hematologic cancer and results from an abnormality of plasma cells, usually in the bone marrow. In the United States, more than 50,000 people are living with MM and approximately 20,000 new cases are diagnosed annually (i). Worldwide, more than 180,000 people are living with MM and approximately 86,000 new cases are diagnosed annually (ii).

About Onyx Pharmaceuticals, Inc.

Onyx Pharmaceuticals, Inc. is a biopharmaceutical company committed to improving the lives of people with cancer. The company, in collaboration with Bayer HealthCare Pharmaceuticals, Inc., is developing and marketing Nexavar®, a small molecule drug. Nexavar is currently approved for the treatment of liver cancer and advanced kidney cancer. Additionally, Nexavar is being investigated in several ongoing trials in a variety of tumor types. For more information about Onyx, visit the company's website at www.onyx-pharm.com.

Nexavar® (sorafenib) tablets is a registered trademark of Bayer HealthCare Pharmaceuticals.

About Proteolix

Founded in December 2003, Proteolix, Inc. is a privately-held biopharmaceutical company, headquartered in South San Francisco, dedicated to discovering, developing and commercializing novel therapeutics that target protein degradation pathways for cancer and autoimmune diseases. Proteolix's lead product, carfilzomib, is the first in a new class of highly specific proteasome inhibitors, and is currently in multiple Phase 2 clinical studies to evaluate its safety and efficacy in multiple myeloma and other malignancies. Proteolix is also developing a pipeline of novel proteasome inhibitors, including an oral proteasome inhibitor and a selective immunoproteasome inhibitor.

Forward Looking Statements

This news release contains "forward-looking statements" of Onyx within the meaning of the federal securities laws. These forward-looking statements include without limitation, statements regarding the consummation and anticipated benefits of the proposed acquisition of Proteolix and the timing, progress and results of the clinical development, safety, regulatory processes, commercialization efforts or commercial potential of carfilzomib. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those anticipated, including risks related to the ability of each company to meet the conditions necessary to close this transaction, the risk that Proteolix's operations will not be integrated successfully into Onyx's, the risk that Onyx may not realize the anticipated benefits of the acquisition and risks related to the development and commercialization of pharmaceutical products. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Reference should be made to Onyx's Annual Report on Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange Commission under the heading "Risk Factors" and Onyx's Quarterly Reports on Form 10-Q for a more detailed description of such factors. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this release. Onyx undertakes no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances after the date of this release except as required by law.

(i)National Cancer Institute, Surveillance Epidemiology and End Results, 2007 Facts and Figures

(ii)International Agency for Research on Cancer , GLOBOCAN 2002 database