EMERYVILLE, Calif. ( TheStreet) -- Onyx Pharmaceuticals ( ONXX) is moving ahead with plans to seek regulatory approval for a new multiple myeloma drug based on strong results from a pivotal study that benefited patients who had exhausted most, if not all, of their treatment options, the company announced Monday.

The Onyx drug, carfilzomib, was able to induce a clinically meaningful tumor response in 24% of multiple myeloma patients with a median duration of response of 7.4 months, according to study results that were independently verified and released by Onyx.

Onyx shares were up 19% to $25.59 in recent Monday trading.

These multiple myeloma patients responded to carfilzomib despite being very sick, having already been treated with a median of five prior lines of therapy. Almost all the patients in the study were previously treated with Takeda's Velcade and more than half also received Celgene's ( CELG) Revlimid -- both drugs considered state-of-the-art care in multiple myeloma. Yet the patients entered the carfilzomib study with cancer that was either minimally responsive to these other drugs or growing again.

"These are multiple myeloma patients who have very few treatment options," said Onyx CEO Tony Coles, speaking by phone Sunday night. "If you look at the natural history of relapsed and refractory disease, only about 11% of patients would be expected to respond. Well, we more than doubled that."

Dr. Ken Anderson, chief of the hematologic cancer division at Boston's Dana Farber Cancer Center, called the new carfilzomib data "very promising."

"I'm encouraged by the extent of the response, the durability of the response and the lack of side effects," said Anderson, also reached by phone Sunday night. Anderson was not involved in the carfilzomib study.

Onyx will file for carfilzomib's approval with the U.S. Food and Drug Administration before the end of the year, Coles said.

Based on that filing timetable, carfilzomib could be approved in the first half or middle of 2011. If that happens, carfilzomib will become the second cancer drug approved and marketed by Onyx, joining Nexavar, which is used to treat kidney and liver cancer.

Carfilzomib's chances for FDA approval depend on how regulators view results from a study that lacks a control arm. All patients in the study were treated with carfilizomib, which means there wasn't a group of patients treated with another drug, or even a placebo, by which to compare carfilzomib's efficacy and safety.

Onyx will seek so-called FDA accelerated approval for carfilzomib, typically reserved for cancer drugs that can show a meaningful benefit for patients who have no other treatment options. But the definition of "meaningful benefit" is often a shifting target, and lately, the FDA has become more conservative, demanding higher response rates and longer durations of response from drugs in single-arm studies.

The 24% response rate and almost 7.5 months duration from carfilzomib should give Onyx the ammunition it needs to make a persuasive approval argument. Carfilzomib's efficacy compares favorably to Takeda's Velcade, which was approved in 2003 based on a 28% response rate from a single-arm study in relapsed/refractory multiple myeloma patients.

Going into Monday's results, Onyx had told investors that a carfilzomib response rate of 15-18% with 4-6 months of duration would give the drug a good shot at FDA approval.

That guidance was generally met with skepticism by Wall Street, where analysts and many buy-side investors, consulting with multiple myeloma experts, felt carfilzomib needed to demonstrate a response rate north of 20% with a duration of six months or greater to better the odds for approval.

"Carfilzomib phase II data likely to disappoint," was how BMO Capital Markets biotech analyst Jason Zhang summed up expectations for the results in a July 8 research note. Zhang was pessimistic about carfilzomib's chances of bettering the 21% response rate from a subgroup of multiple myeloma patients in a previous, pilot study which enrolled fewer patients. Zhang did upgrade Onyx to outperform in the same research note.

The lack of investor confidence in carfilzomib was also manifest in the recent decline in Onyx's stock price. At Friday's close of $21.50, Onyx was trading at a three-year low and is valued at approximately two times Nexavar sales. Onyx shares Nexavar profits with the German drug firm Bayer.

Carfilzomib is a proteasome inhibitor, which works by interrupting a key enzyme that cancer cells require to survive and multiply. Velcade was the first proteasome inhibitor approved in multiple myeloma. Carfilzomib was developed to be more potent than Velcade and cause fewer side effects, particularly numbness and nerve pain that are well-known issues with Velcade.

Onyx's Coles said carfilzomib was well tolerated in the phase II study announced Monday, with rates of serious peripheral neuropathy reported to be in the low single digits and no concerning rates of infection or suppressed bone marrow activity.

Onyx gained control of carfilzomib when it acquired privately held Proteolix in October 2009. Onyx paid $276 million up front for Proteolix, with another $535 million in future payments largely contingent on carfilzomib's approval.

"Monday's results are really good news," said Coles. "It validates our growth strategy and why we acquired Proteolix in the first place."

-- Reported by Adam Feuerstein in Boston.
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