EMERYVILLE, Calif. ( TheStreet) -- Onyx Pharmaceuticals ( ONXX) has sold Japanese rights to its multiple myeloma drug candidate carfilzomib to the Japanese drug maker Ono Pharmaceuticals, the company announced Wednesday.

Ono will pay Onyx $59 million upfront in exchange for Japanese development and marketing rights to carfilzomib plus a follow-on compound known as ONX 0912. Onyx is also eligible to receive future milestone payments that could bring in another $280 million. If carfilzomib or ONX 0912 is approved for sale in Japan, Ono will pay Onyx double-digit royalties on drug sales, according to terms of the agreement released by Onyx.

The Ono deal helps Onyx recoup some of the $275 million it paid for carfilzomib through the acquisition of privately held Proteolix in October 2009.

Onyx CEO Tony Coles says Onyx intends to retain U.S. and western Europe rights to carfilzomib but will look for other partnerships to cover the rest of Asia.

Coles says the multiple myeloma market in Japan is estimated to be worth an estimated $80 million to $100 million today but is growing. Celgene ( CELG) recently received approval from Japanese drug regulators to sell its multiple myeloma drug Revlimid there.

Carfilzomib is a next generation proteasome inhibitor designed to be as potent and cause less side effects than a similar drug, Velcade, sold by Takeda Pharmaceuticals.

Onyx intends to seek U.S. regulatory approval for carfilzomib by the end of the year. The initial filing will be for an accelerated approval based on a phase II study of carfilzomib which demonstrated a 24% response rate and more than 7 months duration of response in patients whose multiple myeloma continued to progress despite previous treatments with Celgene's Revlimid and Takeda's Velcade.

FDA's recent refusal to consider a Roche breast cancer drug for accelerated approval has investors concerned about the agency's possibly raising the bar for the accelerated approval of cancer drugs.

Onyx's Coles says he's fielded investor questions about carfilzomib and FDA accelerated approval about 14 dozen times in the past two weeks since FDA dinged Roche.

"I can't guarantee FDA approval, the FDA will do what it wants to do, but I do believe that the carfilzomib data demonstrate the drug is providing a significant response to patients in which all other currently approved drugs have failed," he says.

Onyx is expected to present a full dataset from the carfilozmib phase II study at the American Society of Hematology annual meeting in December.

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