These non-GAAP financial measures exclude the following items:
(a) Contingent consideration expense (benefit): The effects of contingent consideration expense (benefit) are excluded due to the nature of this charge, which is related to the change in fair value of the liability for contingent consideration in connection with the acquisition of Proteolix; such exclusion facilitates comparisons of Onyx's operating results to peer companies.
(b) Employee stock-based compensation: The effects of employee stock-based compensation are excluded because of varying available valuation methodologies, subjective assumptions and the variety of award types; such exclusion facilitates comparisons of Onyx's operating results to peer companies.
(c) Imputed interest related to the convertible senior notes due 2016: The effects of imputed interest related to the convertible senior notes due 2016 are excluded because this expense is non-cash; such exclusion facilitates comparisons of Onyx's cash operating results to peer companies.
(d) Advance funding to S*BIO and impairment of equity investment in S*BIO: The effects of the termination of the S*BIO collaboration agreement are excluded because they do not relate to the normal and recurring transactions of Onyx's business; such exclusion allows for a better representation of the ongoing economics of the business, facilitates comparison to peer companies and is reflective of how Onyx manages the business.
(e) Proceeds received pursuant to the sale of Jak2 inhibitors by S*BIO: The effects of the proceeds received pursuant to the sale of Jak2 inhibitors by S*BIO are excluded because they do not relate to the normal and recurring transactions of Onyx's business; such exclusion allows for a better representation of the ongoing economics of the business, facilitates comparison to peer companies and is reflective of how Onyx manages the business.
(f) Lease termination exit costs: The effects of lease termination exit costs and reoccupation of facilities are excluded because they represent non-cash items that relate to Onyx's exit from facilities it previously occupied in Emeryville and in South San Francisco, California.
(g) Amortization of certain acquired intangible assets: The effects of amortization of certain acquired intangible assets are excluded because this expense is non-cash; such exclusion facilitates comparisons of Onyx's operating results to peer companies.
(h) Non-cash tax related effect on certain acquired intangible assets: The tax related effect on certain acquired intangible assets is excluded because this expense is non-cash; such exclusion facilitates comparisons of Onyx's operating results to peer companies.
(i) Under the "if-converted" method, interest and issuance costs and potential common shares related to the Company's convertible senior notes were excluded in the computation of diluted per share amounts for the three months ended December 31, 2012 and the years ended December 31, 2012 and 2011 because their effect would be anti-dilutive.
ONYX PHARMACEUTICALS, INC. CALCULATION OF REVENUE FROM COLLABORATION AGREEMENT (In thousands, unaudited) Three Months Ended Year Ended December 31, December 31, ------------------- ------------------- 2012 2011 2012 2011 --------- --------- --------- ---------Nexavar revenue subject to profit sharing (as recorded by Bayer) $ 229,060 $ 231,490 $ 861,443 $ 839,944Combined cost of goods sold, distribution, selling, general and administrative expenses 91,869 94,697 326,223 335,471 --------- --------- --------- ---------Combined collaboration commercial profit $ 137,191 $ 136,793 $ 535,220 $ 504,473 ========= ========= ========= =========Onyx's share of collaboration commercial profit $ 68,596 $ 68,396 $ 267,610 $ 252,236Reimbursement of Onyx's shared marketing expenses 4,340 5,255 20,806 22,946Royalty revenue (1) - 3,170 - 11,781 --------- --------- --------- ---------Revenue from collaboration agreement $ 72,936 $ 76,821 $ 288,416 $ 286,963 ========= ========= ========= =========
(1) Effective January 1, 2012, royalty revenue ceased due to the sale of the Japan royalty to Bayer.
ONYX PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) December 31, 2012 December 31, (unaudited) 2011(1) ------------- -------------AssetsCash, cash equivalents and current marketable securities $ 484,436 $ 646,343Accounts receivable, net 79,117 -Other current assets 121,320 85,506 ------------- -------------Total current assets 684,873 731,849Marketable securities, non-current 8,323 22,102Property and equiment, net 29,016 19,734Finite-lived intangible assets, net 257,969 -Intangible assets - in-process research and development 171,500 438,800Goodwill 193,675 193,675Other assets 6,215 5,564 ------------- -------------Total assets $ 1,351,571 $ 1,411,724 ============= =============Liabilities and stockholders' equityCurrent liabilities $ 131,369 $ 111,792Convertible senior notes due 2016 174,404 162,893Liability for contingent consideration, non- current 149,162 137,816Deferred tax liability 51,940 149,413Other long-term liabilities 24,577 26,397Stockholders' equity 820,119 823,413 ------------- -------------Total liabilities and stockholders' equity $ 1,351,571 $ 1,411,724 ============= =============
(1) Derived from the audited financial statements, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011. Certain amounts have been reclassified to conform to the current year presentation.
