By Mary Welch
Onyx Pharmaceuticals Inc. filed to sell 2.5 million shares of stock, which at the assumed price of $18.375, would yield the Richmond, Calif., company about $46 million.
Onyx plans to use the proceeds for the eventual commercialization of ONYX-015, which is about to enter Phase III tests for the treatment of head and neck cancer, as well as general corporate expenses and research and development activities.
The company reported 1999 year-end revenues of $13.3 million and a net loss of $14.8 million. As of Dec. 31, Onyx had $12.6 million in cash.
The offering is being led by U.S. Bancorp Piper Jaffray, of Minneapolis, and co-managed by Chase H&Q and CIBC World Markets, both of New York. After the offering, Onyx will have 16.5 million shares outstanding.
Earlier in the year, Onyx raised $18 million in a private placement to fund a vaccine that targets the retinoblastoma (Rb) suppressant tumors. (See BioWorld Today, Jan. 20, 2000, p. 1.)
Onyx's lead product is ONYX-015, an adenovirus that has been genetically engineered so it no longer inactivates the p53 tumor gene in normal cells, but is designed to replicate in and kill tumor cells deficient in p53 activity. Loss of p53 function is the most common genetic abnormality in cancer, with more than half of all cancers having this defect.
In a deal worth at least $155 million, Warner-Lambert Co., of Morris Plains, N.J., agreed to develop and commercialize ONYX-015 and two new armed anticancer vaccines. Warner-Lambert is making up-front payments and equity investments over the next two years totaling $15 million and will pay for $40 million worth of the Phase III costs. ONYX-015 should enter Phase III trials by mid-year. (See BioWorld Today, Oct. 19, 1999, p. 1.)
A Phase II/III trial of ONYX-015 in combination with chemotherapy for refractory head and neck cancer should start by year's end. Now under way are two separate Phase I/II trials of ONYX-015 in patients with liver metastases of colorectal cancer and in patients with pancreatic cancer. It also is in a Phase I trial for patients with ovarian cancer and in patients with advanced cancers with lung involvement. Interim results from several of these trials should be presented at the May meeting of the American Society of Clinical Oncology.
In other research programs, Onyx is developing viruses with genes that result in the selective activation of chemotherapeutic drugs within targeted tumors. In addition, the company is working on viruses that selectively replicate in and kill cancer cells based on mutation in the Rb tumor suppressor gene. Mutations in that gene occur in more than 30 percent of all cancers.
In its registration statement, Onyx said it expects partner Bayer Corp., of Pittsburgh, to file an investigational new drug application by mid-2000 for an anticancer compound currently in preclinical testing.
Onyx's stock (NASDAQ:ONXX) closed Tuesday at $15.187, down $2 .