INTERVIEW-Onyx CEO banking on 2011 US carfilzomib approval

* Onyx CEO sees carfilzomib approval based on recent data

* Onyx CEO sees carfilzomib on U.S. market in mid-2011

* Onyx in talks with potential Asia carfilzomib partners

* CEO says prefers no carfilzomib partner for U.S., Europe

* Says Nexavar breast cancer data very, very good

By Bill Berkrot

NEW YORK (Reuters) - Onyx Pharmaceuticals Inc's chief executive is doing a bit of juggling these days as he attempts to keep his small biotechnology company in the black while spending on a promising portfolio of drugs that includes a potential blockbuster cancer medicine.

"The trick here is to maintain profitability and our expectation is to continue to be profitable for 2010, so there's a very artful threading of the needle in terms of investing in the pipeline and remaining profitable. But so far so good," Onyx CEO Tony Coles said in an interview.

With the acquisition of Proteolix and its multiple myeloma drug, carfilzomib, as well as other experimental medicines, Coles changed Onyx last year from a company that depends solely on revenue from cancer drug Nexavar that it shares with Germany's Bayer AG.

Two weeks ago the company unveiled carfilzomib data in which nearly a quarter of extremely ill multiple myeloma patients who were no longer being helped by current medicines responded to the Onyx drug -- a far higher rate than would have been expected.

"We're sitting in the middle of success in the clinic and this astounding overall response rate that I think a lot of people were unsure would ever be possible," Coles said.

"Now our next opportunity is to take advantage of this overall response rate of 24 percent, duration of response of almost 7-1/2 months and turn that into an NDA (new drug application) and then into a real product hopefully next year," Coles said.

Analysts and Onyx expect carfilzomib to become a $1 billion a year drug once it gains U.S. approval.

Coles in December called 2009 a transformative year for Onyx. And 2010?

"This is the year of execution," he said, "getting the NDA filed, getting clinical trials up and running and really positioning us for more success in 2011 and 2012."

The company plans to submit its application for U.S. approval by the end of this year and expects the drug to be on the market by mid-2011, Coles said.

Onyx, which holds all global rights to carfilzomib, is actively talking to potential marketing partners for Japan and other parts of the Asia/Pacific region, Coles said.

"We're not ready yet to announce anything, but we've had lots of interest from a variety of parties and I can tell you that the data that we published a couple of weeks ago has only strengthened that interest," Coles said.

"There's no reason to wait. We should just get moving and really work in markets like Japan to get the process started because that is a process that takes a while."

The company is currently planning to go it alone with carfilzomib sales in Europe and the United States. With only about 300 employees, it expects to do some hiring once the new drug is approved.

"Having a European presence and ex-U.S. presence is key to building the kind of company we want to build," Coles said.

"It give us a means for which we would enter Europe as a stand-alone company and it actually sets us up for continued cash flow that will be reinvested in the rest of the pipeline and be delivered to shareholders," he said.

Despite solid cash flow and profitability that is not typical for such a small biotech company, shareholders have been less than enthused with Onyx and its shares are off about 4 percent for the year, underperforming the sector and broader market.

Asked what it will take to get shares jump-started beyond a better overall economic environment Coles said: "A few sustained quarters of Nexavar growth will be important in terms of shareholders believing that Nexavar has room to grow."

Sales of the liver and kidney cancer drug rose 17 percent in the second quarter to $236.1 million and Onyx and Bayer expect full-year sales of $925 million to $975 million.

Nexavar is also being tested for several other cancers, including lung and breast, with early breast cancer data looking "very, very good," Coles said.

"The trajectory for Nexavar is very good and I'm encouraged by the second quarter sales."

Coles is also encouraged by early results from other medicines in the Onyx pipeline, but the one thing that would likely push the share price dramatically higher is a speedy U.S. carfilzomib approval.

Coles believes it can gain FDA approval based on the Phase II data it reported last month. He said the company has demonstrated impressive efficacy, good safety and tolerability and noted the drug represents a clear unmet need as virtually all multiple myeloma patients eventually stop being helped by current medicines, at which point they have an all too short survival prognosis.

Should the FDA not be satisfied by the trial that did not compare carfilzomib to another treatment regimen, however, the company is conducting a large, more traditional placebo-controlled Phase III study.

"Patients will all relapse at some point and we hope to be there for them when they do," he added. (Reporting by Bill Berkrot; editing by Andre Grenon)