Onyx Halts Lung Cancer Study, Shares Plunge

Investors will be listening attentively to Onyx's conference call Tuesday morning for signs that the Nexavar liver cancer launch is proceeding well. The drug is approved in the United States and Europe, although in the latter, several countries have yet to formalize pricing.

One criticism of the Bayer-Onyx joint venture has been a high level of spending on clinical trials which has tamped down profitability. The failure of the lung cancer trial, however, may prompt a cut in spending, which in turn, could boost the profit margins of Nexavar and Onyx, respectively.

Another wild card for Onyx's valuation is the performance of Nexavar in Asia, especially China, where liver cancer prevalence is extremely high. Asia can be a blockbuster market for Nexavar but a relatively immature or nonexistent infrastructure for medical care reimbursement makes patients difficult to reach.

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