Onyx Pharma Poised to Crack Asian Market

Onyx Pharmaceuticals(ONXX Quote - Cramer on ONXX - Stock Picks) might be the new Chinese stock play.

Liver cancer patients in China are apparently digging into their own pockets to pay for treatment with Onyx's Nexavar, according to executives from the German drug firm Bayer, speaking this week at a New York investment conference.

The upbeat comments about Nexavar's commercial prospects in China, and Asia in general, surprised investors and sent Onyx shares higher, adding to the stock's already impressive gains this year. The stock was recently up 1.1% to $45.22.

Nexavar is approved for treating kidney cancer, and approval for liver cancer is expected in Europe and the U.S. by the end of the year. The drug is co-marketed by Onyx and Bayer, which takes a lead role in selling overseas.

Onyx is up 267% since its positive liver cancer data was first announced back in February. At its current valuation, the stock is baking in a significant amount of future revenue from liver cancer patients in the U.S. and Europe.

Asia, however, is a different story. The number of people who die of liver cancer in China, Korea and Japan each year is five times higher than the amount reported in the U.S. and Europe combined.

Asia is a huge commercial opportunity, but investors and analysts have been reluctant to model meaningful Asian revenue for Nexavar because other than Japan, there isn't much of an insurance or reimbursement infrastructure for cancer drugs in the rest of Asia.

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