Onyx's Strong Quarter Bolsters New CEO

Tony Coles, the new CEO at Onyx PharmaceuticalsONXX, said the right things during his first quarterly conference call Tuesday. It helped that Onyx blew away consensus earnings estimates, with the company posting a profit of 27 cents a share, well above expectations for a loss of 6 cents a share.

Sales of Onyx's cancer drug Nexavar totaled $151.9 million in the quarter, which was previously announced by the company's partner, the German drug firm Bayer. It was higher-than-expected revenue from the Nexavar joint venture and sharply lower expenses during the quarter that helped Onyx post its impressive first-quarter profit.

And that's a very good way for Coles to start his run as CEO of Onyx because after the fourth-quarter of last year, investors (and, ahem, a certain Internet biotech columnist) were grumbling that Nexavar's success, especially in the liver cancer market, was not being reflected in the company's bottom line.

For the first time since Nexavar was launched two years ago, Onyx gave meaningful financial guidance, calling for Nexavar sales in the range of $600 million to $650 million for 2008.

Nexavar sales totaled $372 million in 2007. The drug has several strong competitors in the kidney cancer market, including Pfizer'sPFE Sutent and Genentech'sDNA Avastin, but pretty much as the liver cancer market to itself.

Several analysts on Tuesday's conference call sounded downright angry with this guidance, describing it as weak or even meaningless since Nexavar's first-quarter run rate gets the drug to $608 million already.