Why Onyx Pharmaceuticals Shares Skyrocketed
Jun 21st 2012 12:16PM
Updated Jun 21st 2012 12:20PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of biotechnology firm Onyx Pharmaceuticals (NAS: ONXX) are ascending to the heavens today, higher by as much as 42%, after the company announced favorable news for its relapsed and refractory multiple myeloma drug candidate, Kyprolis (aka carfilzomib).
So what: Despite concerns raised by the Food and Drug Administration regarding Kyprolis' toxicity levels and its potentially negative effects on patients' heart, liver, and lungs, an FDA review panel unanimously recommended the drug today. An FDA panel approval does not guarantee that a drug will be approved, as the FDA is under no obligation to follow the panels' decision, but it does often give a good indication as to which way the FDA will side. If approved, Kyprolis will slide in as a tertiary treatment for multiple myeloma for patients who have tried, or were unable to take, Velcade from Takeda Pharmaceutical, and Revlimid from Celgene (NAS: CELG) .
Now what: I have to admit I'm a bit shocked that the vote from the panel was unanimous, but I did expect that Kyprolis' benefits would outweigh the risks. Back in October I outlined multiple reasons that I felt Onyx was a great play going forward, and pretty much all have come to fruition. Even after today's move higher, the possibility of a buyout is very much on the table if Onyx can get Kyprolis approved by the FDA.
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