UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
      Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE
    ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER
    31, 2009o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES  EXCHANGE ACT OF 1934  FOR THE TRANSITION PERIOD
    FROM          TO   Commission File
    No. 0-28298
      Onyx Pharmaceuticals,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

94-3154463(State or other jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification No.)   2100
    Powell Street
    Emeryville, California 94608(510) 597-6500 (Address,
    including zip code, and telephone number,
    including area code, of registrants principal executive
    offices) Securities
    Registered Pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock $0.001 par value

NASDAQ Global Market  Securities Registered Pursuant to Section 12(g) of the
    Act: None
      þ o
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ




---



##### 





DOCUMENTS
    INCORPORATED BY REFERENCE
  items 10-14 Form 10-K.
 2




---



##### 



PART I.
  This Annual Report on
    Form 10-K
    contains forward-looking statements within the meaning of
    Section 27A of the Securities Act of 1933, as amended, and
    Section 21E of the Securities Exchange Act of 1934, as
    amended. These statements involve known and unknown risks,
    uncertainties and other factors that may cause our or our
    industrys results, levels of activity, or achievements to
    differ significantly and materially from that expressed or
    implied by such forward-looking statements. These factors
    include, among others, those set forth in Item 1A
    Risk Factors and elsewhere in this Annual Report on
    Form 10-K.
    In some cases, you can identify forward-looking statements by
    terminology such as may, will,
    should, intend, expect,
    plan, anticipate, believe,
    estimate, predict,
    potential, or continue, or the negative
    of such terms or other comparable terminology.
  Although we believe that the expectations reflected in the
    forward-looking statements are reasonable, we cannot guarantee
    future results, events, levels of activity, performance or
    achievements. We do not assume responsibility for the accuracy
    and completeness of the forward-looking statements. We do not
    intend to update any of the forward-looking statements after the
    date of this Annual Report on
    Form 10-K
    to conform these statements to actual results, unless required
    by law.
  All references to the Company, Onyx,
    we, our, and us in this
    Annual Report on
    Form 10-K
    refer collectively to Onyx Pharmaceuticals, Inc. and its
    wholly-owned subsidiary, formerly known as Proteolix, Inc. and,
    currently known as Onyx Therapeutics, Inc., except where it is
    made clear that the term means only the parent company or unless
    the context requires otherwise. All references to
    Proteolix in this Annual Report on
    Form 10-K
    refer to Proteolix, Inc.
  Item 1.
    Business  Overview
  Changing the Way
    Cancer is Treated tm ®
    (510) 597-6500.
  Our
    Strategy
    
    maximizing current opportunities worldwide for Nexavarin
    approved indications;
    preparing for future commercialization opportunitiesof
    Nexavar and carfilzomib; 3




---



##### 




    investing in a broad and balanced development program for
    Nexavarby pursuing other types of cancer that Nexavar may
    help in treating, including lung, breast, thyroid, ovarian and
    colorectal cancers;
    advancing the development of our pipeline,including
    carfilzomib, the ONX 0912, ONX 0914 and ONX 0801 programs, and
    assessing in-licensing opportunities, such as our option to
    in-license ONX 0803 and ONX 0805 (both Janus Kinase, or JAK2,
    inhibitors); and
    continuing to expand our pipelineby pursuing other
    investments and opportunities with disciplined financial goals.  Marketed
    Product  Nexavar
    Commercialization
    Status
   4




---



##### 



Product
    Candidates in Clinical Trials
    CurrentProduct Candidate

Indication

StatusNexavarLiver Cancer   Adjuvant therapy

Phase 3   First line, erlotinib +/-

Phase 3   Locoregional therapies, e.g. TACE

Phase 2Kidney Cancer   Adjuvant therapy

Phase 3Non-Small Cell Lung Cancer   First line, gemcitabine/cisplatin +/-

Phase 3   Third/fourth line, monotherapy

Phase 3Thyroid Cancer   Monotherapy

Phase 3Breast Cancer   First/second line, capecitabine +/-

Phase 2; Phase 3 planned   First line, paclitaxel +/-

Phase 2   First/second line, gemcitabine or
    capecitibine +/- following treatment with bevacizumab

Phase 2   First line, docetaxel or letrozole +/-

Phase 2Ovarian Cancer   Maintenance therapy

Phase 2Colorectal Cancer   First line, combination

Phase 2CarfilzomibMultiple Myeloma   Monotherapy

Phase 2b   Revlimid, dexamethasone +/-

Phase 1b; Phase 3 plannedSolid Tumor   Monotherapy

Phase 2Cell Cycle Kinase Inhibitor*



Phase 2ONX 0801



Phase 1; Phase 2 plannedONX 0912



IND acceptedONX 0803, ONX 0805**



Phase 1/2; preclinicalONX 0914



Preclinical     *
    
    Outlicensed to Pfizer Inc.**
    
    Subject to exercise of our option to in-license. 5




---



##### 



Nexavar
    Development Strategy with Bayer
        Liver
    Cancer Program
  Phase 3 Trial.
  Phase 3 Trial.
  Phase 3 Trial.
 6




---



##### 



Phase 3 Trial. ® c
  Phase 2 Trial.
  Kidney
    Cancer Program
  Phase 3 Trial.
  Phase 3 Trial.
  Phase 2 Trial.
  Phase 2 Trial.
  Non-Small
    Cell Lung Cancer Program
  Phase 3 Trial.
 7




---



##### 



Phase 3 Trial. rd th
  Phase 3 Trial.
  Thyroid
    Cancer Program
  Phase 3 Trial.
  Breast
    Cancer Program
      and/or
 8




---



##### 



Early/Mid
    Stage Clinical Development
    Carfilzomib
    Multiple
    Myeloma Program
  and/or
  Phase 2b Trial. 003-A1
  Phase 2 Trial. and/or
  Phase 1b/2 Trial.
  Phase 3 Trial.
 9




---



##### 



ONX
    0801
    ONX
    0912
    Product
    Candidate  Earlier Stage Pipeline
  ONX
    0914
    Collaboration,
    Licensing, Option Agreements
  Collaboration
    Agreement with Bayer
     10




---



##### 



Collaboration
    Agreement with Pfizer
  4 6
  Licensing
    Agreement with BTG
    Option
    Agreement with S*BIO
  and/or
  ONX 0803
    and ONX 0805
   11




---



##### 



Acquisition
    of Proteolix
  mid-to-late
    
    $40.0 million is expected to be paid in 2010, 180 days
    after completion of enrollment in an ongoing pivotal Phase 2b
    clinical study involving relapsed and refractory multiple
    myeloma patients, known as the
    003-A1
    trial. Upon achievement of the first milestone,
    $4.0 million of the first earnout payment will also be
    contributed to the escrow account.
    $535.0 million of earnout payments will become payable in
    up to four additional installments, upon the achievement of
    regulatory approvals in the U.S. and Europe within
    pre-specified timeframes for carfilzomib, as follows:  
    $170.0 million would be triggered by the achievement of
    accelerated marketing approval in the United States for
    relapsed/refractory multiple myeloma.
    $65.0 million would be triggered by marketing approval in
    the European Union for relapsed/refractory multiple myeloma.
    $150.0 million would be triggered by marketing approval in
    the United States for relapsed multiple myeloma.
    $150.0 million would be triggered by marketing approval for
    relapsed multiple myeloma in the European Union.    Research
    and Development
     12




---



##### 



Marketing
    and Sales
  point-of-contact and/or
  Manufacturing
        Intellectual
    Property
    Intellectual
    Property Related to Nexavar
   13




---



##### 



e.g.
  and/or and/or 180-day i.e.
   14




---



##### 



i.e. i.e.
    Intellectual
    Property Related to Carfilzomib and Other Proteolix
    Assets
    Intellectual
    Property Related to ONX 0801, 0803 and 0805
    Other
    Intellectual Property
    Competition
   15




---



##### 



and/or
  Nexavar for unresectable liver
    cancer.
  Nexavar for advanced kidney cancer.
  Carfilzomib.
  Government
    Regulation
   16




---



##### 



FDA
    Regulation
      
    preclinical studies;
    the submission to the FDA of an IND that must become effective
    before human clinical trials may commence;
    adequate and well-controlled human clinical trials to establish
    the safety and efficacy of the product candidate;
    the submission of an NDA to the FDA; and
    FDA approval of the NDA, including inspection and approval of
    the product manufacturing facility.          and/or
 17




---



##### 



18




---



##### 



Other
    Regulations
    and/or
     19




---



##### 



Employees
    Available
    Information
  http://www.onyx-pharm.com Form 10-K. Form 10-K, Form 10-Q, Form 8-K Form 10-K 1-800-SEC-0330. http://www.sec.gov
  Code of
    Conduct
  http://www.onyx-pharm.com
 20




---



##### 



Item 1A.
    Risk
    Factors  You should carefully consider the risks described below,
    together with all of the other information included in this
    report, in considering our business and prospects. The risks and
    uncertainties described below contain forward-looking
    statements, and our actual results may differ materially from
    those discussed here. Additional risks and uncertainties not
    presently known to us or that we currently deem immaterial also
    may impair our business operations. Each of these risk factors
    could adversely affect our business, operating results and
    financial condition, as well as adversely affect the value of an
    investment in our common stock.
  Nexavar®

    is our only approved product. If Nexavar fails and we are unable
    to develop and commercialize alternative product candidates our
    business would fail.
    Nexavar faces significant competition. If Nexavar is
    unable to successfully compete against existing and future
    therapies, our business would be harmed.
         21




---



##### 



Adoption of Nexavar in certain territories for the
    treatment of patients with unresectable liver cancer may be slow
    or limited for a variety of reasons including the geographic
    distribution of the patient population, the current treatment
    paradigm for unresectable liver cancer patients, the underlying
    liver disease present in most liver cancer patients and limited
    reimbursement. If Nexavar is not broadly adopted for the
    treatment of unresectable liver cancer, our business would be
    harmed.
      If our ongoing and planned clinical trials fail to
    demonstrate that Nexavar is safe and effective or we are unable
    to obtain necessary regulatory approvals, we will be unable to
    expand the commercial market for Nexavar and our business may
    fail.
     22




---



##### 



If serious adverse side effects are associated with
    Nexavar, approval for Nexavar could be revoked, sales of Nexavar
    could decline, and we may be unable to develop Nexavar as a
    treatment for other types of cancer.
      Specialty pharmacies and distributors that we and Bayer
    rely upon to sell Nexavar may fail to perform.
    
    not provide us accurate or timely information regarding their
    inventories, the number of patients who are using Nexavar or
    complaints about Nexavar;
    reduce their efforts or discontinue to sell or support or
    otherwise not effectively sell or support Nexavar;
    not devote the resources necessary to sell Nexavar in the
    volumes and within the time frames that we expect;
    be unable to satisfy financial obligations to us or others;
    and/or
    cease operations.  We are dependent upon our collaborative relationship with
    Bayer to further develop, manufacture and commercialize Nexavar.
    There may be circumstances that delay or prevent Bayers
    ability to develop, manufacture and commercialize
    Nexavar.
      
    decisions by Bayer regarding the amount and timing of resource
    expenditures for the development and commercialization of
    Nexavar;
    possible disagreements as to development plans, clinical trials,
    regulatory marketing or sales; 23




---



##### 




    our inability to co-promote Nexavar in any country outside the
    United States, which makes us solely dependent on Bayer to
    promote Nexavar in foreign countries;
    Bayers right to terminate the collaboration agreement us
    on limited notice and for reasons outside our control;
    loss of significant rights if we fail to meet our obligations
    under the collaboration agreement;
    the development or acquisition by Bayer of competing products,
    including fluoro-sorafenib;
    adverse regulatory or legal action against Bayer resulting from
    failure to meet healthcare industry compliance requirements in
    the promotion and sale of Nexavar, including federal and state
    reporting requirements;
    changes in key management personnel at Bayer, including
    Bayers representatives on the collaborations
    executive team; and
    disagreements with Bayer regarding interpretation or enforcement
    of the collaboration agreement.            Nexavar may face challenges and competition from generic
    products.
   24




---



##### 



The market may not accept our products and we may be
    subject to pharmaceutical pricing and third-party reimbursement
    pressures.
  and/or not-for-profit
      
    rate of adoption by healthcare practitioners;
    treatment guidelines issued by government and non-government
    agencies;
    types of cancer for which the product is approved;
    rate of a products acceptance by the target patient
    population;
    timing of market entry relative to competitive products; 25




---



##### 




    availability of alternative therapies;
    price of our product relative to alternative therapies,
    including generic versions of our products, or generic versions
    of innovative products that compete with our products;
    extent of marketing efforts by us and third-party distributors
    or agents retained by us; and
    side effects or unfavorable publicity concerning our products or
    similar products.    We face intense competition and rapid technological
    change, and many of our competitors have substantially greater
    resources than we have.
      
    discovering and patenting products;
    undertaking preclinical testing and human clinical trials;
    obtaining FDA and other regulatory approvals;
    manufacturing products; and
    marketing and obtaining reimbursement for products.        If we are not successful at integrating the Proteolix
    organization with ours, we may not be able to realize benefits
    from our acquisition.
   26




---



##### 




    consolidating research and development operations;
    retaining key employees;
    consolidating corporate and administrative infrastructures,
    including integrating and managing information technology and
    other support systems and processes;
    preserving relationships with third parties, such as regulatory
    agencies, clinical investigators, key opinion leaders, clinical
    research organizations, contract manufacturing organizations,
    licensors and suppliers;
    appropriately identifying and managing the liabilities of the
    combined company; and
    difficulty managing new risks associated with facilities,
    including environmental risks and compliance with laws
    regulating laboratories.        Our clinical trials could take longer to complete than we
    project or may not be completed at all, and; we may never obtain
    regulatory approval for carfilzomib or any other future product
    candidate.
        
    nonclinical tests may show the product to be toxic or lack
    efficacy in animal models;
    clinical trial results may show the product to be less effective
    than desired or to have harmful or problematic side effects; 27




---



##### 




    regulatory approvals may not be received, or may be delayed due
    to factors such as slow enrollment in clinical studies, extended
    length of time to achieve study endpoints, additional time
    requirements for data analysis or preparation of an IND,
    discussions with regulatory authorities, requests from
    regulatory authorities for additional preclinical or clinical
    data, analyses or changes to study design, or unexpected safety,
    efficacy or manufacturing issues;
    difficulties formulating the product, scaling the manufacturing
    process or in getting approval for manufacturing;
    manufacturing costs, pricing or reimbursement issues, or other
    factors may make the product uneconomical;
    proprietary rights of others and their competing products and
    technologies may prevent our product from being developed or
    commercialized or may increase the cost of doing so; and
    contractual rights of our collaborators or others may prevent
    our product from being developed or commercialized or may
    increase the cost of doing so.  We do not have the manufacturing expertise or capabilities
    for any current and future products and are dependent on others
    to fulfill our manufacturing needs, which could result in lost
    sales and the delay of clinical trials or regulatory
    approval.
    scale-up,
  If we lose our key employees or are unable to attract or
    retain qualified personnel, our business could suffer.
   28




---



##### 



We may not be able to realize the potential financial or
    strategic benefits of future business acquisitions or strategic
    investments, which could hurt our ability to grow our business,
    develop new products or sell our products.
    
    difficulty in combining the products, operations or workforce,
    including key personnel, of any acquired business with our
    business;
    difficulty in operating in a new or multiple new locations;
    disruption of our ongoing businesses or the ongoing business of
    the company that we invest in or acquire;
    difficulty in realizing the potential financial or strategic
    benefits of the transaction;
    difficulty in maintaining uniform standards, controls,
    procedures and policies;
    disruption of or delays in ongoing research, clinical trials and
    development efforts;
    diversion of capital and other resources;
    assumption of liabilities;
    diversion of resources and unanticipated expenses resulting from
    litigation arising from potential or actual business
    acquisitions or investments;
    difficulties in entering into new markets in which we have
    limited or no experience and where competitors in such markets
    have stronger positions; and
    impairment of relationships with our or the acquired
    businesses employees and other third parties, such as
    clinical research organizations, contract manufacturing
    organizations, licensors, suppliers, or the loss of such
    relationships as a result of our acquisition or investment.    We face product liability risks and may not be able to
    obtain adequate insurance.
  and/or
 29




---



##### 




    decreased demand for a product;
    injury to our reputation;
    distraction of management;
    withdrawal of clinical trial volunteers; and
    loss of revenues.  We or Bayer may not be able to protect or enforce our or
    their intellectual property and we may not be able to operate
    our business without infringing the intellectual property rights
    of others.
    
    obtain patents;
    license technology rights from others;
    protect trade secrets;
    operate without infringing upon the proprietary rights of
    others; and
    prevent others from infringing on our proprietary rights,
    particularly generic drug manufacturers.       30




---



##### 



Limited foreign intellectual property protection and
    compulsory licensing could limit our revenue
    opportunities.
    We may incur significant liability if it is determined
    that we are promoting the off-label use of drugs or
    are otherwise found in violation of federal and state
    regulations in the United States or elsewhere.
     31




---



##### 



Unstable market and economic conditions may have serious
    adverse consequences on our business.
    and/or
  We are subject to extensive government regulation, which
    can be costly, time consuming and subject us to unanticipated
    delays. If we are unable to obtain or maintain regulatory
    approvals for our products, compounds or product candidates, we
    will not be able to market or further develop them.
        If we use hazardous or potentially hazardous materials in
    a manner that causes injury or violates applicable law, we may
    be liable for damages.
   32




---



##### 



Our operating results are unpredictable and may fluctuate.
    If our operating results fail to meet the expectations of
    securities analysts or investors, the trading price of our stock
    could decline.
          Our stock price is volatile and we are at risk of
    securities litigation, including class action litigation, due to
    our expected stock price volatility.
    
    fluctuations in our results of operations;
    interim or final results of, or speculation about, clinical
    trials of Nexavar;
    development progress of our early stage compounds;
    decisions by regulatory agencies, or changes in regulatory
    requirements;
    announcements by us regarding, or speculation about, our
    business development activities;
    ability to accrue patients into clinical trials;
    developments in our relationship with Bayer; 33




---



##### 




    public concern as to the safety and efficacy of our product
    candidates;
    changes in healthcare reimbursement policies;
    announcements by us or our competitors of technological
    innovations or new commercial therapeutic products;
    government regulation;
    developments in patent or other proprietary rights or litigation
    brought against us;
    sales by us of our common stock or debt securities;
    foreign currency fluctuations, which would affect our share of
    collaboration profits or losses; and
    general market conditions.        We have a history of losses, and we may be unable to
    sustain profitability.
     34




---



##### 



We incurred significant indebtedness through the sale of
    our 4.0% convertible senior notes due 2016, and we may incur
    additional indebtedness in the future. The indebtedness created
    by the sale of the notes and any future indebtedness we incur
    exposes us to risks that could adversely affect our business,
    financial condition and results of operations.
    
    increasing our vulnerability to adverse economic and industry
    conditions;
    limiting our ability to obtain additional financing;
    requiring the dedication of a substantial portion of our cash
    flow from operations to service our indebtedness, thereby
    reducing the amount of our cash flow available for other
    purposes;
    limiting our flexibility in planning for, or reacting to,
    changes in our business; and
    placing us at a possible competitive disadvantage with less
    leveraged competitors and competitors that may have better
    access to capital resources.    The conditional conversion features of the 2016 Notes, if
    triggered, may adversely affect our financial condition and
    operating results.
    We may need additional funds, and our future access to
    capital is uncertain.
    
    revenue from our product sales;
    global product development and commercialization activities;
    the cost involved in enforcing patents against third parties and
    defending claims by third parties; 35




---



##### 




    the costs associated with acquisitions or licenses of additional
    products;
    the cost of acquiring new or complementary businesses;
    competing technological and market developments; and
    future fee and milestone payments to BTG, S*BIO and former
    stockholders of Proteolix.      A portion of our investment portfolio is invested in
    auction rate securities, and if auctions continue to fail for
    amounts we have invested, our investment will not be liquid. If
    the issuer of an auction rate security that we hold is unable to
    successfully close future auctions and their credit rating
    deteriorates, we may be required to adjust the carrying value of
    our investment through an impairment charge to earnings.
    If we do not receive timely and accurate financial
    information from Bayer regarding the development and sale of
    Nexavar, we may be unable to accurately report our results of
    operations.
    Our operating results could be adversely affected by
    product sales occurring outside the United States and
    fluctuations in the value of the United States dollar against
    foreign currencies.
   36




---



##### 



Changes in accounting may affect our financial position
    and results of operations.
    470-20, 14-1, 470-20 470-20 470-20,
  Business Combinations
  Provisions in our collaboration agreement with Bayer may
    prevent or delay a change in control.
    Existing stockholders have significant influence over
    us.
   37




---



##### 



Provisions in the indenture for the 2016 Notes may deter
    or prevent a business combination.
    Provisions in Delaware law, our charter and executive
    change of control agreements we have entered into may prevent or
    delay a change of control.
    
    the board of directors approved the transaction where the
    stockholder acquired 15% or more of the corporations stock;
    after the transaction in which the stockholder acquired 15% or
    more of the corporations stock, the stockholder owned at
    least 85% of the corporations outstanding voting stock,
    excluding shares owned by directors, officers and employee stock
    plans in which employee participants do not have the right to
    determine confidentially whether shares held under the plan will
    be tendered in a tender or exchange offer; or
    on or after this date, the merger or sale is approved by the
    board of directors and the holders of at least two-thirds of the
    outstanding voting stock that is not owned by the stockholder.      
    our board is classified into three classes of directors as
    nearly equal in size as possible with staggered three-year terms;
    the authority of our board to issue up to 5,000,000 shares
    of preferred stock and to determine the price, rights,
    preferences and privileges of these shares, without stockholder
    approval;
    all stockholder actions must be effected at a duly called
    meeting of stockholders and not by written consent;
    special meetings of the stockholders may be called only by the
    chairman of the board, the chief executive officer, the board or
    10% or more of the stockholders entitled to vote at the
    meeting; and
    no cumulative voting.      Item 1B.
    Unresolved
    Staff Comments   38




---



##### 



Item 2.
    Properties      Item 3.
    Legal
    Proceedings  Onyx
    Pharmaceuticals, Inc. v. Bayer Corporation and Bayer
    AG No. CV09-2145
  Item 4.
    Submission
    of Matters to a Vote of Securities Holders   39




---



##### 



PART II.
  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities    Common Stock2009


2008High



Low



High



LowFirst Quarter

$
36.50


$
26.27


$
57.98


$
25.05Second Quarter


28.77



22.17



37.94



30.82Third Quarter


36.55



27.23



44.79



36.13Fourth Quarter


30.04



25.13



35.93



22.40     Stock
    Performance Graph
    
  *
    
    $100 invested on 12/31/04 in stock or index, including
    reinvestment of dividends.
    Fiscal year ending December 31.  Holders
   40




---



##### 



Dividends
    Recent
    Sales of Unregistered Securities
    Issuer
    Purchases of Equity Securities
    Item 6.
    Selected
    Financial Data      Year Ended December 31,2009


2008


2007


2006


2005(In thousands, except per share data)Statement of Operations Data:Revenue from collaboration agreement

$
250,390


$
194,343


$
90,429


$
29,274


$
-Contract revenue from collaboration


1,000



-



-



-



-License fee revenue


-



-



-



250



1,000Operating expenses:Research and development


128,506



123,749



83,306



84,169



63,120Selling, general and administrative


101,132



80,994



60,546



50,019



39,671Contingent consideration


1,528



-



-



-



-Total operating expenses


231,166



204,743



143,852



134,188



102,791Income (loss) from operations


20,224



(10,400
)


(53,423
)


(104,664
)


(101,791
)Investment income, net


4,028



12,695



19,256



11,983



6,617Interest expense


(6,858
)


-



-



-



-Provision for income taxes


(1,233
)


(347
)


-



-



-Net income (loss)

$
16,161


$
1,948


$
(34,167
)

$
(92,681
)

$
(95,174
)Basic net income (loss) per share

$
0.27


$
0.03


$
(0.67
)

$
(2.20
)

$
(2.64
)Diluted net loss per share

$
0.27


$
0.03


$
(0.67
)

$
(2.20
)

$
(2.64
)Shares used in computing basic net income (loss) per share(1)


59,215



55,915



51,177



42,170



36,039Shares used in computing diluted net income (loss) per share(1)


59,507



56,765



51,177



42,170



36,039   41




---



##### 



December 31,2009


2008


2007


2006


2005(In thousands)Balance Sheet Data:Cash, cash equivalents, and current and non-current marketable

$
587,282


$
458,046


$
469,650


$
271,403


$
284,680securitiesGoodwill(1)


193,675



-



-



-



-Intangible assets  in-process research and
    development(1)


438,800



-



-



-



-Total assets


1,324,680



509,767



484,083



286,246



294,665Working capital


530,945



428,755



469,215



256,699



241,678Advance from collaboration partner, non-current


-



-



39,234



40,000



30,000Liability for contingent consideration, current and
    non-current(1)


200,528



-



-



-



-Convertible senior notes due 2016(2)


143,669



-



-



-



-Accumulated deficit


(454,549
)


(470,710
)


(472,658
)


(438,491
)


(345,810
)Total stockholders equity


750,556



475,200



432,237



222,780



223,240     (1)
    
    In November 2009, we completed our acquisition of Proteolix for
    an aggregate purchase price with a fair value of
    $475.0 million. As a result of the acquisition, we acquired
    $438.8 million of in-process research and development and
    $193.7 million of goodwill, and we assumed
    $157.1 million of deferred tax liabilities primarily
    related to federal net operating loss and tax credit
    carryforwards.(2)
    
    In August 2009, we issued, through an underwritten public
    offering, $230.0 million aggregate principal amount of 4.0%
    convertible senior notes due 2016.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following Managements Discussion and Analysis of
    Financial Condition and Results of Operations contains
    forward-looking statements that involve risks and uncertainties.
    We use words such as may, will,
    expect, anticipate,
    estimate, intend, plan,
    predict, potential, believe,
    should and similar expressions to identify
    forward-looking statements. These statements appearing
    throughout our Annual Report on
    Form 10-K
    are statements regarding our intent, belief, or current
    expectations, primarily regarding our operations. You should not
    place undue reliance on these forward-looking statements, which
    apply only as of the date of this Annual Report on
    Form 10-K.
    Our actual results could differ materially from those
    anticipated in these forward-looking statements for many
    reasons, including those set forth under Business,
    Item 1A Risk Factors and elsewhere in this
    Annual Report on
    Form 10-K.
  Overview
  Changing the Way
    Cancer is
    Treated tm ®
  ®
 42




---



##### 



43




---



##### 



Form 10-K.
  FASB
    Accounting Standards Codification
  The FASB Accounting Standards
    Codification and the Hierarchy of Generally Accepted Accounting
    Principles (GAAP)  a replacement of
    SFAS No. 162
  Critical
    Accounting Policies, Estimates and Judgments
      Marketable Securities: available-for-sale Available-for-sale
 44




---



##### 



other-than-temporary. other-than-temporary. Available-for-sale available-for-sale
  Revenue from Collaboration Agreement: 808-10, 07-1, EITF 07-1, Accounting for Collaborative Arrangements non-U.S. sales
  Business Combinations: Business
    Combinations
  
    estimated cash flows projected from the success of unapproved
    product candidates;
    the probability of technical and regulatory success for
    unapproved product candidates considering their stages of
    development;
    the time and resources needed to complete the development and
    approval of product candidates; 45




---



##### 




    the life of the potential commercialized products and associated
    risks, including the inherent difficulties and uncertainties in
    developing a product candidate such as obtaining FDA and other
    regulatory approvals; and
    risk associated with uncertainty, achievement and payment of the
    milestone events.    Fair Value Measurements: 820-10, Fair Value
    Measurements
  
    Level 1, defined as observable inputs such as quoted prices
    for identical assets in active markets;
    Level 2, defined as inputs other than quoted prices in
    active markets that are either directly or indirectly
    observable; and
    Level 3, defined as unobservable inputs in which little or
    no market data exists, therefore requiring management to develop
    its own assumptions based on best estimates of what market
    participants would use in pricing an asset or liability at the
    reporting date.  Goodwill and Other Intangible Assets: Business
    Combinations Goodwill and Other Intangible
    Assets
  Convertible Senior Notes: 470-20, 14-1. 470-20
  Stock-Based Compensation:
 46




---



##### 



Research and Development Expense:
     47




---



##### 



Income Taxes: 740-10, SFAS No. 109,
    Accounting For Income Taxes
      Financial Accounting Standards Board
    Interpretation
    No. 48 (FIN 48)
  Results
    of Operations
  Years
    Ended December 31, 2009, 2008 and 2007
  Revenue.
 48




---



##### 



Contract Revenue from Collaborations.
  Revenue from Collaboration Agreement.
    out-of-pocket
      non-U.S. sales
 49




---



##### 



Year Ended December 31,2009


2008


2007(In thousands)Nexavar product revenue, net (as recorded by Bayer)

$
843,470


$
677,806


$
371,736Revenue subject to profit sharing (as recorded by Bayer)

$
753,340


$
637,459


$
371,736Combined cost of goods sold, distribution, selling, general and
    administrative


312,205



298,792



223,682Combined collaboration commercial profit

$
441,135


$
338,667


$
148,054Onyxs share of collaboration commercial profit


220,567



169,334



74,027Reimbursement of Onyxs shared marketing expenses


23,514



22,185



16,402Royalty income


6,309



2,824



-Revenue from collaboration agreement

$
250,390


$
194,343


$
90,429   Research and Development Expenses.
  Change

ChangeFor the Year Ending December 31,

2009 vs 2008

2008 vs 20072009

2008

2007

$

%

$

%(In thousands, except percentages)Research and development

$
128,506


$
123,749


$
83,306


$
4,757



4
%

$
40,443



49%        50




---



##### 



Form 10-K.
  Research andDevelopment ExpensesFor the Year EndedProducts/



Collabo-

Phase of Development 




December 31,Product Candidates

Description

rator

Estimated Completion

2009


2008


2007(In millions)Nexavar
    (sorafenib)
    Tablets(1)

Small molecule inhibitor of tumor cell proliferation and
    angiogenesis, targeting RAF, VEGFR-2, PDGFR-ß, KIT, FLT-3
    and RET.

Bayer

Phase 1  2004
    Phase 2  Unknown
    Phase 3  Unknown

$
101.4(2
)

$
89.8 (2
)

$
83.3(2
)Carfilzomib

Proteasome inhibitor

-

Phase 2  Unknown
    Phase 3  Planned


8.5(3
)


-



-ONX 0801

Compound targeting apha-folate receptor and inhibiting
    thymidylate synthase

BTG

Phase 1;
    Phase 2  Planned


16.7 (4
)


13.1 (4
)


-ONX 0912

Oral proteasome inhibitor

-

Phase 1  Unknown


-



-



-ONX 0914

Immunoproteasome inhibitor

-

Preclinical


0.1(3
)


-



-ONX 0803, ONX 0805

Janus Kinase 2 Inhibitors

S*BIO

Phase 1 & Phase 2  Unknown, Preclinical


0.7



20.8(5
)


-Other

-

-

-


1.1



-



-Total research and development expenses

$
128.5


$
123.7


$
83.3     (1)
    
    Aggregate research and development costs to date through
    December 31, 2009 incurred by us since fiscal year 2000 for
    the Nexavar project is $493.5 million.(2)
    
    Costs reflected include our share of product development costs
    incurred by Bayer for Nexavar. 51




---



##### 



(3)
    
    Costs reflected are from the date of acquisition,
    November 16, 2009, through December 31, 2009.(4)
    
    Costs include a $13.0 million upfront payment and
    $7.0 milestone payment made to BTG under our development
    and license agreement.(5)
    
    Costs refer to the nonrefundable upfront payment made to S*BIO
    under our development collaboration, option and license
    agreement.  Selling, General and Administrative Expenses.
  Change

ChangeFor the Year Ending December 31,

2009 vs 2008

2008 vs 20072009

2008

2007

$

%

$

%(In thousands, except percentages)Selling, general and administrative

$
101,132


$
80,994


$
60,546


$
20,138



25
%

$
20,448



34%         Investment Income, net.
    Interest Expense. 470-20, 14-1.
  Income Taxes.
 52




---



##### 



Acquired
    In-Process Research and Development
       53




---



##### 



EstimatedAcquisition DateFair ValueProduct Candidates

Description

(In thousands)Carfilzomib

First in a new class of selective and irreversible proteasome
    inhibitors associated with prolonged target suppression,
    improved antitumor activity and low neurotoxicity for treatment
    against multiple myeloma and solid tumors.

$
435,000ONX 0912

Oral proteasome inhibitor for treatment against hematologic and
    solid tumors.


3,500ONX 0914

Immunoproteasome inhibitor for treatment against rheumatoid
    arthritis and inflammatory bowel disease.


300$
438,800   Related
    Party Transactions
    Liquidity
    and Capital Resources
           54




---



##### 



other-than-temporarily
     55




---



##### 



Contractual
    Obligations and Commitments
    Payments Due by PeriodLess than


1-3


3-5


AfterContractual Obligations

Total


1 Year


Years


Years


5 Years(In thousands)Convertible senior notes due 2016

$
294,400


$
9,200


$
18,400


$
18,400


$
248,400Liability for contingent consideration


40,000



40,000



(1
)


(1
)


(1
)Operating leases, net of sublease income


20,098



4,328



9,239



6,531



-$
354,498


$
53,528


$
27,639


$
24,931


$
248,400     (1)
    
    The terms of the agreement and plan of merger dated
    October 12, 2009 for the acquisition of Proteolix provide
    that we may be required to pay up to an additional
    $575.0 million in earnout payments upon the receipt of
    certain regulatory approvals and the satisfaction of other
    milestones. Of this amount, we expect the first earnout payment
    of $40.0 million to be paid in 2010. The remaining amount
    of $535.0 million is not included in the above table as the
    timing and payment amounts are unknown. See Note 4
    Acquisition of Proteolix of the accompanying
    consolidated financial statements for further information
    regarding the amounts payable to former stockholders of
    Proteolix.      Recent
    Accounting Pronouncements
      605-25, No. 08-1, Revenue Arrangements with Multiple Deliverables. 605-25
 56




---



##### 



Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  Interest
    Rate and Market Risk
        2009


2008Average








AverageFair Value


Interest





Fair Value


InterestMaturity


(In millions)


Rate


Maturity


(In millions)


RateCash equivalents, fixed rate


0  3 months


$
103.2



0.11
%


0  3 months


$
233.8






0.53%Marketable securities, fixed rate


0  12 months


$
479.6



0.53
%


0  12 months


$
222.9






0.87%     Liquidity
    Risk
   57




---



##### 



Foreign
    Currency Exchange Rate Risk
      Item 8.
    Consolidated
    Financial Statements and Supplementary Data  Form 10-K.
  Item 9.
    Changes
    In and Disagreements With Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation of Disclosure Controls and
    Procedures: Rules 13a-15(e) 15d-15(e) Form 10-K
  Managements Report on Internal Control over Financial
    Reporting: Rule 13a-15(f)
   58




---



##### 



Changes in Internal Control over Financial
    Reporting:
    Inherent Limitations on Effectiveness of
    Controls:
 59




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                  Ernst &
    Young LLP
     60




---



##### 



Item 9B.
    Other
    information    PART III.
  Form 10-K Form 10-K,
  Item 10.
    Directors,
    Executive Officers and Corporate Governance    Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Securities
    Authorized for Issuance Under Equity Compensation Plans as of
    December 31, 2009
  Number of



Number of securitiessecurities to be



remaining available forissued upon exercise

Weighted-average

future issuance underof outstanding

exercise price of

equity compensation plansoptions

outstanding options

(excluding securitiesand rights

and rights

reflected in column a)Plan Category(1)

Column a

Column b

Column cEquity compensation plans approved by security holders


5,068,110


$
29.48



5,370,717
(2)     (1)
    
    We have no equity compensation plans not approved by security
    holders.(2)
    
    This amount includes 434,327 shares that remain available
    for purchase under our Employee Stock Purchase Plan. Under the
    2005 Equity Incentive Plan, as amended, shares available for
    issuance should be reduced by one and six tenths (1.6) shares
    for each share of common stock available for issuance pursuant
    to a stock purchase award, stock bonus award, stock unit award
    or other stock award granted. With this adjustment, the total
    amount available for future issuance would be reduced to
    3,519,571 shares.  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accounting Fees and Services     61




---



##### 



PART IV.
  Item 15.
    Exhibits,
    Consolidated Financial Statement Schedules  (a)
    Documents
    filed as part of this report.  (1)
    Index to
    Consolidated Financial Statements                (2)
    Consolidated
    Financial Statement Schedules    Exhibits
  ExhibitNumber

Description of Document2
.1(1)*

Agreement and Plan of Merger dated as of October 10, 2009
    among Onyx Pharmaceuticals, Inc., Proteolix, Inc., Profiterole
    Acquisition Corp., and Shareholder Representative Services LLC.3
.1(2)

Restated Certificate of Incorporation of the Company.3
.2(3)

Amended and Restated Bylaws of the Company.3
.3(4)

Certificate of Amendment to Amended and Restated Certificate of
    Incorporation.3
.4(5)

Certificate of Amendment to Amended and Restated Certificate of
    Incorporation.4
.1

Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4.4
.2(2)

Specimen Stock Certificate.4
.3(6)

Indenture dated as of August 12, 2009 between Onyx
    Pharmaceuticals, Inc. and Wells Fargo Bank, National Association.4
.4(6)

First Supplemental Indenture dated as of August 12, 2009
    between Onyx Pharmaceuticals, Inc. and Wells Fargo Bank,
    National Association.4
.5(6)

Form of 4.00% Convertible Senior Note due 2016.10
.1(i)(7)*

Collaboration Agreement between Bayer Corporation (formerly
    Miles, Inc.) and the Company dated April 22, 1994.10
.1(ii)(7)*

Amendment to Collaboration Agreement between Bayer Corporation
    and the Company dated April 24, 1996.10
.1(iii)(7)*

Amendment to Collaboration Agreement between Bayer Corporation
    and the Company dated February 1, 1999.10
.2(i)(7)*

Amended and Restated Research, Development and Marketing
    Collaboration Agreement dated May 2, 1995 between the
    Company and Warner-Lambert Company.10
.2(ii)(8)*

Research, Development and Marketing Collaboration Agreement
    dated July 31, 1997 between the Company and Warner-Lambert
    Company. 62




---



##### 



ExhibitNumber

Description of Document10
.2(iii)(8)*

Amendment to the Amended and Restated Research, Development and
    Marketing Collaboration Agreement, dated December 15, 1997,
    between the Company and Warner-Lambert Company.10
.2(iv)(8)*

Second Amendment to the Amended and Restated Research,
    Development and Marketing Agreement between Warner-Lambert and
    the Company dated May 2, 1995.10
.2(v)(8)*

Second Amendment to Research, Development and Marketing
    Collaboration Agreement between Warner-Lambert and the Company
    dated July 31, 1997.10
.2(vi)(9)*

Amendment #3 to the Research, Development and Marketing
    Collaboration Agreement between the Company and Warner-Lambert
    dated August 6, 2001.10
.2(vii)(10)*

Amendment #3 to the Amended and Restated Research, Development
    and Marketing Collaboration Agreement between the Company and
    Warner-Lambert dated August 6, 2001.10
.3(11)*

Technology Transfer Agreement dated April 24, 1992 between
    Chiron Corporation and the Company, as amended in the Chiron
    Onyx HPV Addendum dated December 2, 1992, in the Amendment
    dated February 1, 1994, in the Letter Agreement dated
    May 20, 1994 and in the Letter Agreement dated
    March 29, 1996.10
.4(2)+

Letter Agreement between Dr. Gregory Giotta and the Company
    dated May 26, 1995.10
.5(2)+

1996 Equity Incentive Plan.10
.6(2)+

1996 Non-Employee Directors Stock Option Plan.10
.7(12)+

1996 Employee Stock Purchase Plan.10
.8(2)+

Form of Indemnity Agreement to be signed by executive officers
    and directors of the Company.10
.9(13)+

Form of Executive Change in Control Severance Benefits Agreement.10
.10(i)(14)*

Collaboration Agreement between the Company and Warner-Lambert
    Company dated October 13, 1999.10
.10(ii)(9)*

Amendment #1 to the Collaboration Agreement between the Company
    and Warner-Lambert dated August 6, 2001.10
.10(ii)(15)*

Second Amendment to the Collaboration Agreement between the
    Company and Warner-Lambert Company dated September 16, 2002.10
.11(16)

Stock and Warrant Purchase Agreement between the Company and the
    investors dated May 6, 2002.10
.12(i)(17)

Sublease between the Company and Siebel Systems dated
    August 5, 2004.10
.12(ii)(18)

First Amendment to Sublease between the Company and Oracle USA
    Inc., dated November 3, 2006.10
.13(i)(19)+

2005 Equity Incentive Plan.10
.13(ii)(18)+

Form of Stock Option Agreement pursuant to the 2005 Equity
    Incentive Plan.10
.13(iii)(18)+

Form of Stock Option Agreement pursuant to the 2005 Equity
    Incentive Plan and the Non-Discretionary Grant Program for
    Directors.10
.13(iv)(20)+

Form of Stock Bonus Award Grant Notice and Agreement between the
    Company and certain award recipients.10
.14(7)*

United States Co-Promotion Agreement by and between the Company
    and Bayer Pharmaceuticals Corporation, dated March 6, 2006.10
.15(21)+

Letter Agreement between Laura A. Brege and the Company, dated
    May 19, 2006.10
.16(20)+

Letter Agreement between Gregory W. Schafer and the Company,
    dated July 7, 2006.10
.17(22)

Common Stock Purchase Agreement between the Company and Azimuth
    Opportunity Ltd., dated September 29, 2006.10
.18+

Letter Agreement between Michael Kauffman, M.D., and the
    Company, dated October 10, 2009.10
.19(23)+

Bonuses for Fiscal Year 2008 and Base Salaries for Fiscal Year
    2009 for Executive Officers.10
.20(i)(24)+

Employment Agreement between the Company and N. Anthony
    Coles, M.D., dated as of February 22, 2008. 63




---



##### 



ExhibitNumber

Description of Document10
.20(ii)(23)

Amendment to Executive Employment Agreement between the Company
    and N. Anthony Coles, M.D., effective as of March 12,
    2009.10
.21(24)+

Executive Change in Control Severance Benefits Agreement between
    the Company and N. Anthony Coles, M.D., dated as of
    February 22, 2008.10
.22**

License and Supply Agreement, dated October 12, 2005, by
    and between CyDex, Inc. and Proteolix, Inc., as amended.10
.23

Reserved.10
.24(i)(25)+

Separation and Consulting Agreement between the Company and
    Gregory W. Schafer, dated June 23, 2008.10
.24(ii)(3)+

Amendment to Separation and Consulting Agreement between the
    Company and Gregory W. Schafer, dated December 5, 2008.10
.25(3)+

Onyx Pharmaceuticals, Inc. Executive Severance Benefit Plan.10
.26(26)+

Letter Agreement between the Company and Matthew K. Fust, dated
    December 12, 2008.10
.27(27)*

Development and License Agreement between the Company and BTG
    International Limited, dated as of November 6, 2008.10
.28(i)(23)+

Letter Agreement between the Company and Juergen
    Lasowksi, Ph.D., dated April 28, 2008.10
.28(ii)(23)+

Amendment to Letter Agreement between the Company and Juergen
    Lasowski, Ph.D., effective as of March 12, 2009.10
.29(28)+

Executive Employment Agreement between the Company and Suzanne
    M. Shema, effective as of August 31, 2009.21
.1

Subsidiaries of the Registrant.23
.1

Consent of Independent Registered Public Accounting Firm.24
.1

Power of Attorney. Reference is made to the signature page.31
.1

Certification of Principal Executive Officer required by
    Rule 13a-14(a)
    or
    Rule 15d-14(a).31
.2

Certification of Principal Financial Officer required by
    Rule 13a-14(a)
    or
    Rule 15d-14(a).32
.1

Certifications required by
    Rule 13a-14(b)
    or
    Rule 15d-14(b)and
    Section 1350 of Chapter 63 of Title 18 of the
    United States Code (18 U.S.C. 1350).     *
    
    Confidential treatment has been received for portions of this
    document.**
    
    Confidential treatment has been sought for portions of this
    document.+
    
    Indicates management contract or compensatory plan or
    arrangement.(1)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on October 13, 2009.(2)
    
    Filed as an exhibit to Onyxs Registration Statement on
    Form SB-2
    (No. 333-3176-LA).(3)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on December 5, 2008.(4)
    
    Filed as an exhibit to Onyxs Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2000.(5)
    
    Filed as an exhibit to Onyxs Registration Statement on
    Form S-3
    (No. 333-134565)
    filed on May 30, 2006.(6)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on August 12, 2009.(7)
    
    Filed as an exhibit to Onyxs Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2006. The redactions to
    this agreement have been amended since its original filing in
    accordance with a request for extension of confidential
    treatment filed separately by the Company with the Securities
    and Exchange Commission.(8)
    
    Filed as an exhibit to Onyxs Annual Report on
    Form 10-K
    for the year ended December 31, 2002. The redactions to
    this agreement have been amended since its original filing in
    accordance with a request for extension of confidential
    treatment filed separately by the Company with the Securities
    and Exchange Commission.(9)
    
    Filed as an exhibit to Onyxs Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2001. 64




---



##### 



(10)
    
    Filed as an exhibit to Onyxs Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2006. The redactions to
    this agreement have been amended since its original filing in
    accordance with a request for extension of confidential
    treatment filed separately by the Company with the Securities
    and Exchange Commission.(11)
    
    Filed as an exhibit to Onyxs Annual Report on
    Form 10-K
    for the year ended December 31, 2001. The redactions to
    this agreement have been amended since its original filing in
    accordance with a request for extension of confidential
    treatment filed separately by the Company with the Securities
    and Exchange Commission.(12)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on May 25, 2007.(13)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on June 10, 2008.(14)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on March 1, 2000.(15)
    
    Filed as an exhibit to Onyxs Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2002.(16)
    
    Filed as an exhibit to Onyxs Registration Statement on
    Form S-3
    filed on June 5, 2002
    (No. 333-89850).(17)
    
    Filed as an exhibit to Onyxs Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2004.(18)
    
    Filed as an exhibit to Onyxs Annual Report on
    Form 10-K
    for the year ended December 31, 2006.(19)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on May 27, 2009(20)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on July 12, 2006.(21)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on June 12, 2006.(22)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on September 29, 2006.(23)
    
    Filed as an exhibit to Onyxs Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2009.(24)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on February 26, 2008.(25)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on June 23, 2008.(26)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on December 23, 2008.(27)
    
    Filed as an exhibit to Onyxs Annual Report on
    Form 10-K
    for the year ended December 31, 2008.(28)
    
    Filed as an exhibit to Onyxs Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2009. 65




---



##### 



SIGNATURES
  Form 10-K
  Onyx Pharmaceuticals, inc.
  By:
    /s/  N.
    Anthony Coles   President and Chief Executive Officer
  POWER OF
    ATTORNEY
  Form 10-K,
    Signature

Title

Date/s/  N.
    ANTHONY COLESN.
    Anthony Coles

President and Chief Executive Officer (Principal Executive
    Officer)

February 23, 2010/s/  MATTHEW
    K. FUSTMatthew
    K. Fust

Executive Vice President and Chief Financial Officer (Principal
    Financial and Accounting Officer)

February 23, 2010/s/  PAUL
    GODDARDPaul
    Goddard, Ph.D.

Director

February 23, 2010/s/  ANTONIO
    GRILLO-LOPEZAntonio
    Grillo-Lopez, M.D.

Director

February 23, 2010/s/  MAGNUS
    LUNDBERGMagnus
    Lundberg

Director

February 23, 2010/s/  CORINNE
    H. NEVINNYCorinne
    H. Nevinny

Director

February 23, 2010/s/  WENDELL
    WIERENGAWendell
    Wierenga, Ph.D.

Director

February 23, 2010/s/  THOMAS
    G. WIGGANSThomas
    G. Wiggans

Director

February 23, 2010  66




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            Ernst &
    Young LLP
     67




---



##### 



ONYX
    PHARMACEUTICALS, INC.
  CONSOLIDATED BALANCE SHEETS
  December 31,2009


2008(In thousands, except share and per share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
107,668


$
235,152Marketable securities , current


442,440



183,272Restricted cash


27,600



-Receivable from collaboration partner


51,418



35,836Prepaid expenses and other current assets


9,597



7,799Total current assets


638,723



462,059Marketable securities, non-current


37,174



39,622Property and equipment, net


7,473



3,363Intangible assets  in-process research and development


438,800



-Goodwill


193,675



-Other assets


8,835



4,723Total assets

$
1,324,680


$
509,767LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
1,363


$
93Advance from collaboration partner


-



16,633Accrued liabilities


11,852



4,523Accrued clinical trials and related expenses


13,815



6,041Accrued compensation


13,148



6,014Liability for contingent consideration, current


40,000



-Escrow account liability


27,600



-Total current liabilities


107,778



33,304Deferred rent and lease incentives


5,059



1,263Convertible senior notes due 2016


143,669



-Liability for contingent consideration, non-current


160,528



-Deferred tax liability


157,090



-Commitments and contingencies (Notes 4, 11 and 18)Stockholders equity:Preferred stock, $0.001 par value; 5,000,000 shares
    authorized; none issued and outstanding


-



-Common stock, $0.001 par value; 100,000,000 shares
    authorized; 62,260,183 and 56,560,244 shares issued and
    outstanding as of December 31, 2009 and 2008, respectively


62



57Additional paid-in capital


1,207,010



950,628Receivable from stock option exercises


(5
)


(455
)Accumulated other comprehensive gain (loss)


(1,962
)


(4,320
)Accumulated deficit


(454,549
)


(470,710
)Total stockholders equity


750,556



475,200Total liabilities and stockholders equity

$
1,324,680


$
509,767    68




---



##### 



ONYX
    PHARMACEUTICALS, INC.
  CONSOLIDATED STATEMENTS OF OPERATIONS
  Year Ended December 31,2009


2008


2007( In thousands, except per share amounts )Revenue:Revenue from collaboration agreement

$
250,390


$
194,343


$
90,429Contract revenue from collaborations


1,000



-



-Total revenue


251,390



194,343



90,429Operating expenses:Research and development


128,506



123,749



83,306Selling, general and administrative


101,132



80,994



60,546Contingent consideration


1,528



-



-Total operating expenses


231,166



204,743



143,852Income (loss) from operations


20,224



(10,400
)


(53,423
)Investment income, net


4,028



12,695



19,256Interest expense


(6,858
)


-



-Income (loss) before provision for income taxes


17,394



2,295



(34,167
)Provision for income taxes


1,233



347



-Net income (loss)

$
16,161


$
1,948


$
(34,167
)Basic net income (loss) per share

$
0.27


$
0.03


$
(0.67
)Diluted net income (loss) per share

$
0.27


$
0.03


$
(0.67
)Shares used in computing basic net income (loss) per share


59,215



55,915



51,177Shares used in computing diluted net income (loss) per share


59,507



56,765



51,177    69




---



##### 



ONYX
    PHARMACEUTICALS, INC.
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
  Receivable


AccumulatedFrom


OtherAdditional


Stock


Comprehensive





TotalCommon Stock


Paid-In


Option


Income


Accumulated


StockholdersShares


Amount


Capital


Exercises


(Loss)


Deficit


Equity(In thousands, except shares and per share amounts)Balances at December 31, 2006


45,913,370


$
46


$
661,402


$
-


$
(177
)

$
(438,491
)

$
222,780Exercise of stock options


1,477,661



1



21,909



(23
)


-



-



21,887Issuance of common stock in connection with Azimuth common stock
    purchase agreement


1,246,912



2



30,754



-



-



-



30,756Issuance of common stock in connection with follow-on public
    offering


6,600,000



7



174,149



-



-



-



174,156Stock-based compensation, related to stock option grants


-



-



14,073



-



-



-



14,073Issuance of common stock pursuant to employee stock purchase plan


73,611



-



954







-



-



954Vesting of restricted stock awards


13,333



-



1,265



-



-



-



1,265Comprehensive loss:Change in unrealized gain (loss) on investments


-



-



-



-



533



-



533Net loss


-



-



-



-



-



(34,167
)


(34,167
)Comprehensive loss


























(33,634
)Balances at December 31, 2007


55,324,887



56



904,506



(23
)


356



(472,658
)


432,237Exercise of stock options


1,145,281



1



25,060



(432
)


-



-



24,629Stock-based compensation, related to stock option grants


-



-



16,779



-



-



-



16,779Tax benefit associated with stock options


-



-



112



-



-



-



112Issuance of common stock pursuant to employee stock purchase plan


37,631



-



1,386



-



-



-



1,386Vesting of restricted stock awards


72,551



-



3,362



-



-



-



3,362Repurchase of restricted stock awards


(20,106
)


-



(577
)


-



-



-



(577
)Comprehensive loss:Change in unrealized gain (loss) on investments


-



-



-



-



(4,676
)


-



(4,676
)Net income


-



-



-



-



-



1,948



1,948Comprehensive loss


























(2,728
)Balances at December 31, 2008


56,560,244



57



950,628



(455
)


(4,320
)


(470,710
)


475,200Exercise of stock options


552,607



-



12,167



450



-



-



12,617Issuance of common stock in connection with follow-on public
    offering


4,600,000



5



133,914



-



-



-



133,919Warrant exercise


5,852



-



-



-



-



-



-Stock-based compensation, related to stock option grants


-



-



16,669



-



-



-



16,669Tax benefit associated with stock options


-



-



35



-



-



-



35Issuance of common stock pursuant to employee stock purchase plan


45,435



-



1,647



-



-



-



1,647Restricted stock awards issued


368,641



-



-



-



-



-



-Vesting of restricted stock awards


128,014



-



5,408



-



-



-



5,408Repurchase of restricted stock awards


(610
)


-



(18
)


-



-



-



(18
)Equity component of convertible senior notes due 2016


-



-



86,560



-



-



-



86,560Comprehensive loss:Change in unrealized gain (loss) on investments


-



-



-



-



2,358



-



2,358Net income


-



-



-



-



-



16,161



16,161Comprehensive income


























18,519Balances at December 31, 2009


62,260,183


$
62


$
1,207,010


$
(5
)

$
(1,962
)

$
(454,549
)

$
750,556    70




---



##### 



ONYX
    PHARMACEUTICALS, INC.
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  Year Ended December 31,2009


2008


2007(In thousands)Cash flows from operating activities:Net income (loss)

$
16,161


$
1,948


$
(34,167
)Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Realized losses (gains) on sales of short-term marketable
    securities


32



(483
)


-Depreciation and amortization


1,625



1,333



1,030Forgiveness of note receivable


-



-



(87
)Stock-based compensation


22,561



20,506



15,624Excess tax benefit from stock-based awards


(35
)


(112
)


-Amortization of convertible senior notes discount and debt
    issuance costs


3,371



-



-Changes in fair value of liability for contingent consideration


1,528



-



-Changes in operating assets and liabilities:Receivable from collaboration partner


(15,582
)


(31,134
)


4,579Prepaid expenses and other current assets


(1,582
)


(1,383
)


(2,710
)Other assets


17



(4,442
)


144Accounts payable


843



(178
)


(26
)Payable to collaboration partner


-



-



(8,391
)Accrued liabilities


4,579



2,458



(862
)Accrued clinical trials and related expenses


(988
)


2,718



(4,940
)Accrued compensation


2,925



232



2,461Deferred rent and lease incentives


(383
)


92



904Net cash provided by (used in) operating activities


35,072



(8,445
)


(26,441
)Cash flows from investing activities:Acquisition of Proteolix, Inc., net of cash acquired


(252,514
)


-



-Purchases of marketable securities


(742,290
)


(420,344
)


(499,470
)Sales of marketable securities


106,846



96,839



-Maturities of marketable securities


381,050



404,415



368,996Capital expenditures


(1,300
)


(1,550
)


(2,698
)Note receivable from related party


-



-



152Net cash provided by (used in) investing activities


(508,208
)


79,360



(133,020
)Cash flows from financing activities:Repayment of notes payable


(8,160
)


-



-Purchases of treasury stock


(18
)


(577
)


-Payments to collaboration partner


(16,633
)


(22,601
)


(766
)Net proceeds from issuances of common stock


147,699



25,650



227,467Proceeds from issuance of convertible senior notes


230,000



-



-Convertible senior notes debt issuance costs


(7,271
)


-



-Excess tax benefit from stock-based awards


35



112



-Net cash provided by financing activities


345,652



2,584



226,701Net increase (decrease) in cash and cash equivalents


(127,484
)


73,499



67,240Cash and cash equivalents at beginning of period


235,152



161,653



94,413Cash and cash equivalents at end of period

$
107,668


$
235,152


$
161,653Supplemental cash flow dataCash paid during the period for income taxes

$
506


$
641


$
-    71




---



##### 



ONYX
    PHARMACEUTICALS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 December
    31, 2009
  Note 1.
    Overview
    and Summary of Significant Accounting Policies  Overview
  Changing the Way Cancer is Treated tm
  ®
    FASB
    Accounting Standards Codification
  The FASB Accounting
    Standards Codification and the Hierarchy of Generally Accepted
    Accounting Principles (GAAP)  a replacement of
    SFAS No. 162
  Basis
    of Presentation
    Business
    Combinations
  Business Combinations
 72




---



##### 



Significant
    Accounting Policies, Estimates and Judgments
    Revenue
    Recognition
    Contract Revenue from Collaborations.
    Revenue
    from Collaboration Agreement
  808-10, 07-1, EITF 07-1, Accounting for Collaborative Arrangements, non-U.S. sales
 73




---



##### 



Research
    and Development
        Stock-Based
    Compensation
   74




---



##### 



Net
    Income (Loss) Per Share
      in-the-money
 75




---



##### 



Year Ended December 31,2009


2008


2007(In thousands, except per share amounts)Numerator:Net income (loss)  basic

$
16,161


$
1,948


$
(34,167
)Add: interest and issuance costs related to convertible senior
    notes


-



-



-Net income (loss)  diluted

$
16,161


$
1,948


$
(34,167
)Denominator:Weighted average common shares outstanding  basic


59,215



55,915



51,177Dilutive effect of convertible senior notes


-



-



-Dilutive effect of options


292



850



-Weighted average common shares outstanding and dilutive
    potential common shares  diluted


59,507



56,765



51,177Net income (loss) per share:Basic

$
0.27


$
0.03


$
(0.67
)Diluted

$
0.27


$
0.03


$
(0.67
)       Year Ended December 31,2009


2008(In thousands)Potential common shares  2016 Notes


5,801



-Potential common shares  equity plans


3,959



1,8122016 Notes interest and issuance expense not added back under
    the if-converted method

$
6,820


$
-   Income
    Taxes
  SFAS No. 109, Accounting For Income
    Taxes
 76




---



##### 



FASB Interpretation
    No. 48 (FIN 48)
      Cash
    and Cash Equivalents
      Marketable
    Securities
  available-for-sale Available-for-sale Available-for-sale other-than-temporary. other-than-temporary. Available-for-sale available-for-sale
 77




---



##### 



Fair
    Value Measurements
  820-10, 820-10
    Concentration
    of Credit Risk
      Property
    and Equipment
    Deferred
    Rent and Lease Incentives
    Intangible
    Assets  In-process Research and
    Development
   78




---



##### 



Liability
    for Contingent Consideration
  Business
    Combinations
  Convertible
    Senior Notes
  470-20, 14-1. 470-20
  Segment
    Reporting
    Recent
    Accounting Pronouncements
  Accounting for Transfers of Financial Assets  an
    amendment of FASB Statement No. 140
  Amendments to
    FASB Interpretation No. 46(R)
 79




---



##### 



605-25, No. 08-1, Revenue Arrangements with Multiple Deliverables. 605-25
  Subsequent
    Events
    Note 2.
    Agreements
    with Other Companies  Bayer
    Pharmaceuticals Corporation
      Pfizer
   80




---



##### 



BTG
    S*BIO
    Note 3.
    Revenue
    from Collaboration Agreement      out-of-pocket
 81




---



##### 



non-U.S. sales
    Year Ended December 31,2009


2008


2007(In thousands)Onyxs share of collaboration commercial profit

$
220,567


$
169,334


$
74,027Reimbursement of Onyxs shared marketing expenses


23,514



22,185



16,402Royalty income


6,309



2,824



-Revenue from collaboration agreement

$
250,390


$
194,343


$
90,429     Note 4.
    Acquisition
    of Proteolix    Escrow Account Liability. Liability for
    Contingent Consideration.
 82




---



##### 



Fair Value ofConsiderationTransferred(In thousands)Cash

$
276,000Contingent consideration


199,000Total

$
475,000     November 16, 2009(In thousands)Cash

$
23,486Prepaids and other current assets


181Property and equipment, net


4,435Intangible assets  IPR&D


438,800Total identifiable assets


466,902Accounts payable


(427
)Accrued clinical expenses


(8,762
)Accrued and other current liabilities


(6,456
)Accrued property lease liability


(4,682
)Current and non-current notes payable


(8,160
)Deferred tax liabilities


(157,090
)Total liabilities assumed


(185,577
)Net identifiable assets acquired


281,325Goodwill


193,675Net assets acquired

$
475,000    83




---



##### 



Intangible
    Assets  IPR&D
          EstimatedAcquisition DateProduct Candidates

Description

Fair Value(In thousands)Carfilzomib

First in a new class of selective and irreversible proteasome
    inhibitors associated with prolonged target suppression,
    improved antitumor activity and low neurotoxicity for  treatment
    against multiple myeloma and solid tumors.

$
435,000ONX 0912

Oral proteasome inhibitor for treatment against hematologic and
    solid tumors.


3,500ONX 0914

Immunoproteasome inhibitor for treatment against rheumatoid
    arthritis and inflammatory bowel disease.


300$
438,800  84




---



##### 



Goodwill
    Liability
    for Contingent Consideration
  003-A1
  
    $170.0 million would be triggered by the achievement of
    accelerated marketing approval in the United States for
    relapsed/refractory multiple myeloma;
    $65.0 million would be triggered by marketing approval in
    the European Union for relapsed/refractory multiple myeloma;
    $150.0 million would be triggered by marketing approval in
    the United States for relapsed multiple myeloma; and
    $150.0 million would be triggered by marketing approval for
    relapsed multiple myeloma in the European Union.    
    estimated cash flows projected from the success of unapproved
    product candidates;
    the probability of technical and regulatory success for
    unapproved product candidates considering their stages of
    development;
    the time and resources needed to complete the development and
    approval of product candidates;
    the life of the potential commercialized products and associated
    risks, including the inherent difficulties and uncertainties in
    developing a product candidate such as obtaining FDA and other
    regulatory approvals; and
    risk associated with uncertainty, achievement and payment of the
    milestone events.    Escrow
    Account Liability
   85




---



##### 



Deferred
    Tax Liabilities
    Acquisition-Related
    Transaction Costs
    Revenue
    and Earnings
    November 16, 2009 -December 31, 2009(In thousands)Net loss

$
8,503   Pro
    Forma Information
    Year Ended December 31,2009


2008(In thousands, except per share data)Net loss

$
(33,316
)

$
(45,519
)Basic net loss per share

$
(0.56
)

$
(0.81
)     Note 5.
    Fair
    Value Measurements  820-10, Fair Value
    Measurements
  
    Level 1, defined as observable inputs such as quoted prices
    for identical assets in active markets;
    Level 2, defined as inputs other than quoted prices in
    active markets that are either directly or indirectly
    observable; and
    Level 3, defined as unobservable inputs in which little or
    no market data exists, therefore requiring management to develop
    its own assumptions based on best estimates of what market
    participants would use in pricing an asset or liability at the
    reporting date. 86




---



##### 



As of December 31, 2009As reflectedon theunauditedbalancesheet


Level 1


Level 2


Level 3


Total(In thousands)Assets:Money market funds

$
83,115


$
83,115


$
-


$
-


$
83,115Corporate and financial institutions debt


110,644



-



110,644



-



110,644Auction rate securities


37,274



-



100



37,174



37,274U.S. government agencies


168,692



-



168,692



-



168,692U.S. treasury bills


183,090



183,090



-



-



183,090Total

$
582,815


$
266,205


$
279,436


$
37,174


$
582,815Liabilities:Liability for contingent consideration, current and non-current

$
200,528


$
-


$
-


$
200,528


$
200,528Convertible senior notes due 2016 (face value $230,000)


143,669



-



242,098



-



242,098$
344,197


$
-


$
242,098


$
200,528


$
442,626   As of December 31, 2008As reflectedon theunauditedbalance sheet


Level 1


Level 2


Level 3


Total(In thousands)Assets:Money market funds

$
113,832


$
113,832


$
-


$
-


$
113,832Corporate debt


109,866



-



109,866



-



109,866Auction rate securities


39,622



-



-



39,622



39,622U.S. government agencies


143,376



-



143,376



-



143,376U.S. treasury bills


49,993



49,993



-



-



49,993Total

$
456,689


$
163,825


$
253,242


$
39,622


$
456,689   Auction
    Rate Securities
   87




---



##### 



Auction Rate SecuritiesYear Ended December 31,2009


2008(In thousands)Fair value at beginning of period

$
39,622


$
50,000Redemptions


(5,600
)


(5,000
)Transfer to Level 2


100



-Change in valuation


(3,052
)


(5,378
)Fair value at end of period

$
37,174


$
39,622     Liability
    for Contingent Consideration
    Liability for Contingent ConsiderationYear Ended December 31, 2009(In thousands)Fair value at beginning of period

$
199,000Change in valuation


1,528Fair value at end of period

$
200,528   Convertible
    Senior Notes due 2016
  825-10, Disclosures About Fair
    Value of Financial Instruments (as amended) marked-to-market
  Note 6.
    Marketable
    Securities   88




---



##### 



Available-for-sale
  December 31, 2009Adjusted


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Agency bond investments:Current

$
349,254


$
162


$
(156
)

$
349,260Total agency bond investments


349,254



162



(156
)


349,260Corporate debt investments:Current


93,119



92



(31
)


93,180Non-current


39,200



-



(2,026
)


37,174Total corporate investments


132,319



92



(2,057
)


130,354Total
    available-for-sale
    marketable securities

$
481,573


$
254


$
(2,213
)

$
479,614   December 31, 2008Adjusted


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Agency bond investments:Current

$
132,319


$
1,054


$
(4
)

$
133,369Total agency bond investments


132,319



1,054



(4
)


133,369Corporate debt investments:Current


49,903



-



-



49,903Non-current


45,000



-



(5,378
)


39,622Total corporate investments


94,903



-



(5,378
)


89,525Total
    available-for-sale
    marketable securities

$
227,222


$
1,054


$
(5,382
)

$
222,894    89




---



##### 



Note 7.
    Property
    and Equipment    December 31,2009


2008(In thousands)Computers, machinery and equipment

$
6,323


$
4,352Furniture and fixtures


1,056



620Leasehold and tenant improvements


6,078



1,934Construction in progress


-



81613,457



7,722(5,984
)


(4,359
)Less accumulated depreciation and amortization

$
7,473


$
3,363     Note 8.
    Other
    Long-Term Assets    Note 9.
    Convertible
    Senior Notes due 2016           90




---



##### 



470-20, 14-1. 470-20
    December 31, 2009Long-Term

Principal


Discount


Net Carrying Value(In thousands)2016 Notes  4.00%

$
230,000


$
(86,331
)

$
143,669   470-20
  Note 10.
    Advance
    from Collaboration Partner    Note 11.
    Facility
    Leases     91




---



##### 



Year ending December 31:2010

$
4,3282011


4,5102012


4,7292013


3,9482014


2,583$
20,098     Note 12.
    Related
    Party Transactions    non-executive
  Note 13.
    401(k)
    Plan    Note 14.
    Stockholders
    Equity  Stock
    Options and Employee Stock Purchase Plan
    1)
    The 1996 Equity Incentive Plan, or the 1996 Plan,
    which amended and restated the 1992 Incentive Stock Plan in
    March 1996. The Companys Board of Directors reserved
    1,725,000 shares of common stock for issuance under the
    1996 Plan. At the Companys annual meetings of stockholders
    in subsequent years, stockholders approved reserving an
    additional 4,100,000 shares of common stock for issuance
    under the 1996 Plan. The 1996 Plan provides for grants to
    employees of either nonqualified or incentive options and
    provides for the grant to consultants of the Company of
    nonqualified options. Stock options may be granted with an
    exercise price not less than 100% of the fair market value of
    the common stock on the date of grant. Stock options are
    generally granted with terms of up to ten years and vest over a
    period of four years. 92




---



##### 



2)
    The 1996 Non-Employee Directors Stock Option Plan, or the
    Directors Plan, which was approved in March
    1996 and reserved 175,000 shares for issuance to provide
    for the automatic grant of nonqualified options to purchase
    shares of common stock to non-employee Directors of the Company.
    At the Companys annual meetings of stockholders in
    subsequent years, stockholders approved reserving an additional
    250,000 shares of common stock for issuance under the
    Directors Plan. Stock options may be granted with an
    exercise price not less than 100% of the fair market value of
    the common stock on the date of grant. Stock options are
    generally granted with terms of up to ten years and vest over a
    period of four years.        Common
    Stock Offering
    Preferred
    Stock
    Warrants
   93




---



##### 



Note 15.
    Stock-Based
    Compensation      Year Ended December 31,2009


2008


2007(In thousands except per share data)Research and development

$
3,574


$
3,166


$
2,897Selling, general and administrative


17,506



15,630



11,230Total share-based compensation expense

$
21,080


$
18,796


$
14,127Impact on basic net income (loss) per share

$
0.36


$
0.34


$
(0.28
)Impact on diluted net income (loss) per share

$
0.35


$
0.33


$
(0.28
)        94




---



##### 



Valuation
    Assumptions
    Year Ended December 31,2009

2008

2007Stock Option Plans:Risk-free interest rate

1.95%

2.86%

4.66%Expected life

4.3 years

4.4 years

4.3 yearsExpected volatility

64%

64%

64%Expected dividends

None

None

NoneWeighted average option fair value

$15.15

$17.32

$15.41Stock bonus awards:Expected life

3 years

3 years

3 yearsExpected dividends

None

None

NoneWeighted average fair value per share

$29.05

$30.80

$24.84ESPP:Risk-free interest rate

0.29%

2.69%

5.11%Expected life

6 months

6 months

6 monthsExpected volatility

60%

59%

57%Expected dividends

None

None

NoneWeighted average fair value per share

$9.16

$13.56

$3.78    95




---



##### 



Stock-Based
    Payment Award Activity
    Shares


Number of


WeightedAvailable for


Shares


AverageGrant


Outstanding


Exercise PriceEmployee stock options:Balance at December 31, 2006


1,734,778



5,334,477


$
22.05Shares authorized


1,600,000



-



-Granted


(1,167,701
)


1,167,701


$
28.55Exercised


-



(1,477,661
)

$
14.83Expired


156,458



(156,458
)

$
25.88Forfeited


430,153



(430,153
)

$
33.47Balance at December 31, 2007


2,753,688



4,437,906


$
25.39Shares authorized


3,100,000



-



-Granted


(1,624,036
)


1,624,036


$
32.81Exercised


-



(1,145,281
)

$
21.90Expired


13,642



(13,642
)

$
35.71Forfeited


336,345



(336,345
)

$
26.88Balance at December 31, 2008


4,579,639



4,566,674


$
28.76Shares authorized


2,000,000



-



-Granted


(1,476,972
)


1,476,972


$
29.47Exercised


-



(552,607
)

$
22.02Expired


181,043



(181,043
)

$
37.92Forfeited


241,886



(241,886
)

$
26.50Balance at December 31, 2009


5,525,596



5,068,110


$
29.48   Weighted AverageGrant Date FairShares


ValueStock bonus awards:Balance at December 31, 2006


33,333


$
21.04Granted


166,747


$
24.84Vested


(13,333
)

$
21.04Cancelled


(6,724
)

$
24.84Balance at December 31, 2007


180,023


$
24.42Granted


223,015


$
30.72Vested


(72,551
)

$
24.89Cancelled


(34,645
)

$
26.51Balance at December 31, 2008


295,842


$
28.81Granted


233,934


$
28.92Vested


(128,014
)

$
28.49Cancelled


(33,121
)

$
27.39Balance at December 31, 2009


368,641


$
29.12  96




---



##### 



Options Outstanding


Options ExercisableWeighted Average








WeightedContractual Life








AverageNumber


Remaining


Weighted Average


Number


ExerciseRange of Exercise Prices

Outstanding


(In years)


Exercise Price


Exercisable


Price$4.20 - $25.23


1,050,712



6.7


$
20.30



707,441


$
19.76$25.25 - $28.61


1,153,798



8.5


$
27.92



323,800


$
27.21$28.62 - $29.03


1,296,145



7.6


$
28.88



732,543


$
28.81$29.04 - $38.08


1,063,743



7.5


$
33.51



456,277


$
33.92$38.36 - $56.21


503,712



7.4


$
45.25



305,256


$
44.84Total


5,068,110



7.6


$
29.48



2,525,317


$
28.93   in-the-money in-the-money in-the-money
    Note 16.
    Comprehensive
    Income (Loss)  available-for-sale
  Year Ended December 31,2009


2008


2007(In thousands)Net income (loss)

$
16,161


$
1,948


$
(34,167
)Other comprehensive income (loss):Change in unrealized gain (loss) on
    available-for-sale
    securities


2,358



(4,676
)


533Comprehensive income (loss)

$
18,519


$
(2,728
)

$
(33,634
)     Year Ended December 31,2009


2008


2007(In thousands)Increase (decrease) in unrealized gain (loss) on
    available-for-sale
    securities

$
2,390


$
(5,159
)

$
533Reclassification adjustment for net gains (losses) on
    available-for-sale
    securities included in net income


(32
)


483



-Change in unrealized gain (loss) on
    available-for-sale
    securities

$
2,358


$
(4,676
)

$
533  97




---



##### 



Note 17.
    Income
    Taxes    Year Ended December 31,2009


2008


2007(In thousands)Current:Federal

$
624


$
226


$
-State


609



121



-Total current


1,233



347



-Deferred:Federal


-



-



-State


-



-



-Total deferred


-



-



-Total provision for income taxes

$
1,233


$
347


$
-       Year Ended December 31,2009


2008


2007Federal income tax at statutory rate


35
%


34
%


(34
)%State income tax, net of federal benefit


2
%


3
%


0
%Federal minimum tax


4
%


10
%


0
%Stock compensation expense


11
%


55
%


3
%Research credits expense add-back


5
%


51
%


12
%Non-deductible meals and entertainment expense


2
%


17
%


1
%Other non-deductible expenses


1
%


6
%


0
%Capitalized acquisition costs


11
%


0
%


0
%Contingent consideration


3
%


0
%


0
%Change in valuation allowance


(67
)%


(161
)%


18
%Income tax expense


7
%


15
%


0
%  98




---



##### 



December 31,2009


2008(In thousands)Deferred tax assets:Net operating loss carryforwards

$
182,228


$
144,267Tax credit carryforwards


52,431



42,388Capitalized research and development


160



767Deferred revenue


-



3,841Accrued expenses


5,238



825Stock options


9,753



7,763Property and equipment


1,192



406Intangible assets


11,964



10,060Other long-term assets


2,991



2,826Contingent consideration


11,518



-Capitalized costs


11,870



-Total deferred tax assets


289,345



213,143Valuation allowance


(258,439
)


(213,143
)Total deferred tax assets after valuation allowance


30,906



-Deferred tax liabilities:Discount on debt offering


(30,906
)


-Intangible assets  in-process research and
    development


(157,090
)


-Total deferred tax liabilities


(187,996
)


-Net deferred tax assets (liabilities)

$
(157,090
)

$
-      99




---



##### 



Year Ended December 31,2009


2008


2007(In thousands)Balance at January 1

$
-


$
-


$
-Additions based on tax positions related to the current year


-



-



-Additions/Reductions for tax positions of prior years


-



-



-Reductions for tax positions of prior years


-



-



-Settlement


-



-



-Balance at December 31

$
-


$
-


$
-        100




---



##### 



Note 18.
    Guarantees,
    Indemnifications and Contingencies  Guarantees
    and Indemnifications
    Contingencies
    Note 19.
    Quarterly
    Financial Data (Unaudited)    2009 Quarter EndedDecember 31


September 30


June 30


March 31(In thousands, except per share data)Revenue:Revenue from collaboration agreement

$
67,317


$
69,137


$
60,219


$
53,717Contract revenue


1,000



-



-



-Total revenue


68,317



69,137



60,219



53,717Operating expenses:Research and development expenses


36,028



35,635



28,022



28,820Selling, general and administrative expenses


32,232



23,440



23,507



21,953Contingent consideration


1,528



-



-



-Income (loss) from operations


(1,471
)


10,062



8,690



2,944Investment income, net


920



1,015



972



1,121Interest expense


(4,603
)


(2,255
)


-



-Provision for income taxes


(355
)


(589
)


(288
)


-Net income (loss)

$
(5,509
)

$
8,233


$
9,374


$
4,065Basic net income (loss) per share

$
(0.09
)

$
0.14


$
0.16


$
0.07Diluted net income (loss) per share

$
(0.09
)

$
0.14


$
0.16


$
0.07   101




---



##### 



2008 Quarter EndedDecember 31


September 30


June 30


March 31(In thousands, except per share data)Revenue:Revenue from collaboration agreement

$
49,650


$
50,766


$
45,072


$
48,855Operating expenses:Research and development expenses


59,905



21,792



23,498



18,555Selling, general and administrative expenses


22,008



19,319



19,822



19,844Income (loss) from operations


(32,263
)


9,655



1,752



10,456Investment income, net


1,999



2,763



2,662



5,271Provision (benefit) for income taxes


(77
)


175



(60
)


309Net income (loss)

$
(30,187
)

$
12,243


$
4,474


$
15,418Basic net income (loss) per share

$
(0.53
)

$
0.22


$
0.08


$
0.28Diluted net income (loss) per share

$
(0.53
)

$
0.21


$
0.08


$
0.27  102




---



##### 



Exhibits
  ExhibitNumber

Description of Document2
.1(1)*

Agreement and Plan of Merger dated as of October 10, 2009
    among Onyx Pharmaceuticals, Inc., Proteolix, Inc., Profiterole
    Acquisition Corp., and Shareholder Representative Services LLC.3
.1(2)

Restated Certificate of Incorporation of the Company.3
.2(3)

Amended and Restated Bylaws of the Company.3
.3(4)

Certificate of Amendment to Amended and Restated Certificate of
    Incorporation.3
.4(5)

Certificate of Amendment to Amended and Restated Certificate of
    Incorporation.4
.1

Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4.4
.2(2)

Specimen Stock Certificate.4
.3(6)

Indenture dated as of August 12, 2009 between Onyx
    Pharmaceuticals, Inc. and Wells Fargo Bank, National Association.4
.4(6)

First Supplemental Indenture dated as of August 12, 2009
    between Onyx Pharmaceuticals, Inc. and Wells Fargo Bank,
    National Association.4
.5(6)

Form of 4.00% Convertible Senior Note due 2016.10
.1(i)(7)*

Collaboration Agreement between Bayer Corporation (formerly
    Miles, Inc.) and the Company dated April 22, 1994.10
.1(ii)(7)*

Amendment to Collaboration Agreement between Bayer Corporation
    and the Company dated April 24, 1996.10
.1(iii)(7)*

Amendment to Collaboration Agreement between Bayer Corporation
    and the Company dated February 1, 1999.10
.2(i)(7)*

Amended and Restated Research, Development and Marketing
    Collaboration Agreement dated May 2, 1995 between the
    Company and Warner-Lambert Company.10
.2(ii)(8)*

Research, Development and Marketing Collaboration Agreement
    dated July 31, 1997 between the Company and Warner-Lambert
    Company.10
.2(iii)(8)*

Amendment to the Amended and Restated Research, Development and
    Marketing Collaboration Agreement, dated December 15, 1997,
    between the Company and Warner-Lambert Company.10
.2(iv)(8)*

Second Amendment to the Amended and Restated Research,
    Development and Marketing Agreement between Warner-Lambert and
    the Company dated May 2, 1995.10
.2(v)(8)*

Second Amendment to Research, Development and Marketing
    Collaboration Agreement between Warner-Lambert and the Company
    dated July 31, 1997.10
.2(vi)(9)*

Amendment #3 to the Research, Development and Marketing
    Collaboration Agreement between the Company and Warner-Lambert
    dated August 6, 2001.10
.2(vii)(10)*

Amendment #3 to the Amended and Restated Research, Development
    and Marketing Collaboration Agreement between the Company and
    Warner-Lambert dated August 6, 2001.10
.3(11)*

Technology Transfer Agreement dated April 24, 1992 between
    Chiron Corporation and the Company, as amended in the Chiron
    Onyx HPV Addendum dated December 2, 1992, in the Amendment
    dated February 1, 1994, in the Letter Agreement dated
    May 20, 1994 and in the Letter Agreement dated
    March 29, 1996.10
.4(2)+

Letter Agreement between Dr. Gregory Giotta and the Company
    dated May 26, 1995.10
.5(2)+

1996 Equity Incentive Plan.10
.6(2)+

1996 Non-Employee Directors Stock Option Plan.10
.7(12)+

1996 Employee Stock Purchase Plan.10
.8(2)+

Form of Indemnity Agreement to be signed by executive officers
    and directors of the Company.10
.9(13)+

Form of Executive Change in Control Severance Benefits Agreement.10
.10(i)(14)*

Collaboration Agreement between the Company and Warner-Lambert
    Company dated October 13, 1999.10
.10(ii)(9)*

Amendment #1 to the Collaboration Agreement between the Company
    and Warner-Lambert dated August 6, 2001.10
.10(ii)(15)*

Second Amendment to the Collaboration Agreement between the
    Company and Warner-Lambert Company dated September 16,
    2002. 103




---



##### 



ExhibitNumber

Description of Document10
.11(16)

Stock and Warrant Purchase Agreement between the Company and the
    investors dated May 6, 2002.10
.12(i)(17)

Sublease between the Company and Siebel Systems dated
    August 5, 2004.10
.12(ii)(18)

First Amendment to Sublease between the Company and Oracle USA
    Inc., dated November 3, 2006.10
.13(i)(19)+

2005 Equity Incentive Plan.10
.13(ii)(18)+

Form of Stock Option Agreement pursuant to the 2005 Equity
    Incentive Plan.10
.13(iii)(18)+

Form of Stock Option Agreement pursuant to the 2005 Equity
    Incentive Plan and the Non-Discretionary Grant Program for
    Directors.10
.13(iv)(20)+

Form of Stock Bonus Award Grant Notice and Agreement between the
    Company and certain award recipients.10
.14(7)*

United States Co-Promotion Agreement by and between the Company
    and Bayer Pharmaceuticals Corporation, dated March 6, 2006.10
.15(21)+

Letter Agreement between Laura A. Brege and the Company, dated
    May 19, 2006.10
.16(20)+

Letter Agreement between Gregory W. Schafer and the Company,
    dated July 7, 2006.10
.17(22)

Common Stock Purchase Agreement between the Company and Azimuth
    Opportunity Ltd., dated September 29, 2006.10
.18+

Letter Agreement between Michael Kauffman, M.D., and the
    Company, dated October 10, 2009.10
.19(23)+

Bonuses for Fiscal Year 2008 and Base Salaries for Fiscal Year
    2009 for Executive Officers.10
.20(i)(24)+

Employment Agreement between the Company and N. Anthony
    Coles, M.D., dated as of February 22, 2008.10
.20(ii)(23)

Amendment to Executive Employment Agreement between the Company
    and N. Anthony Coles, M.D., effective as of March 12,
    2009.10
.21(24)+

Executive Change in Control Severance Benefits Agreement between
    the Company and N. Anthony Coles, M.D., dated as of
    February 22, 2008.10
.22**

License and Supply Agreement, dated October 12, 2005, by
    and between CyDex, Inc. and Proteolix, Inc., as amended.10
.23

Reserved.10
.24(i)(25)+

Separation and Consulting Agreement between the Company and
    Gregory W. Schafer, dated June 23, 2008.10
.24(ii)(3)+

Amendment to Separation and Consulting Agreement between the
    Company and Gregory W. Schafer, dated December 5, 2008.10
.25(3)+

Onyx Pharmaceuticals, Inc. Executive Severance Benefit Plan.10
.26(26)+

Letter Agreement between the Company and Matthew K. Fust, dated
    December 12, 2008.10
.27(27)*

Development and License Agreement between the Company and BTG
    International Limited, dated as of November 6, 2008.10
.28(i)(23)+

Letter Agreement between the Company and Juergen
    Lasowksi, Ph.D., dated April 28, 2008.10
.28(ii)(23)+

Amendment to Letter Agreement between the Company and Juergen
    Lasowski, Ph.D., effective as of March 12, 2009.10
.29(28)+

Executive Employment Agreement between the Company and Suzanne
    M. Shema, effective as of August 31, 2009.21
.1

Subsidiaries of the Registrant.23
.1

Consent of Independent Registered Public Accounting Firm.24
.1

Power of Attorney. Reference is made to the signature page.31
.1

Certification of Principal Executive Officer required by
    Rule 13a-14(a)
    or
    Rule 15d-14(a).31
.2

Certification of Principal Financial Officer required by
    Rule 13a-14(a)
    or
    Rule 15d-14(a).32
.1

Certifications required by
    Rule 13a-14(b)
    or
    Rule 15d-14(b)and
    Section 1350 of Chapter 63 of Title 18 of the
    United States Code (18 U.S.C. 1350).     *
    
    Confidential treatment has been received for portions of this
    document.**
    
    Confidential treatment has been sought for portions of this
    document. 104




---



##### 



+
    
    Indicates management contract or compensatory plan or
    arrangement.(1)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on October 13, 2009.(2)
    
    Filed as an exhibit to Onyxs Registration Statement on
    Form SB-2
    (No. 333-3176-LA).(3)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on December 5, 2008.(4)
    
    Filed as an exhibit to Onyxs Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2000.(5)
    
    Filed as an exhibit to Onyxs Registration Statement on
    Form S-3
    (No.
    333-134565)
    filed on May 30, 2006.(6)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on August 12, 2009.(7)
    
    Filed as an exhibit to Onyxs Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2006. The redactions to
    this agreement have been amended since its original filing in
    accordance with a request for extension of confidential
    treatment filed separately by the Company with the Securities
    and Exchange Commission.(8)
    
    Filed as an exhibit to Onyxs Annual Report on
    Form 10-K
    for the year ended December 31, 2002. The redactions to
    this agreement have been amended since its original filing in
    accordance with a request for extension of confidential
    treatment filed separately by the Company with the Securities
    and Exchange Commission.(9)
    
    Filed as an exhibit to Onyxs Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2001.(10)
    
    Filed as an exhibit to Onyxs Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2006. The redactions to
    this agreement have been amended since its original filing in
    accordance with a request for extension of confidential
    treatment filed separately by the Company with the Securities
    and Exchange Commission.(11)
    
    Filed as an exhibit to Onyxs Annual Report on
    Form 10-K
    for the year ended December 31, 2001. The redactions to
    this agreement have been amended since its original filing in
    accordance with a request for extension of confidential
    treatment filed separately by the Company with the Securities
    and Exchange Commission.(12)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on May 25, 2007.(13)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on June 10, 2008.(14)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on March 1, 2000.(15)
    
    Filed as an exhibit to Onyxs Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2002.(16)
    
    Filed as an exhibit to Onyxs Registration Statement on
    Form S-3
    filed on June 5, 2002
    (No. 333-89850).(17)
    
    Filed as an exhibit to Onyxs Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2004.(18)
    
    Filed as an exhibit to Onyxs Annual Report on
    Form 10-K
    for the year ended December 31, 2006.(19)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on May 27, 2009(20)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on July 12, 2006.(21)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on June 12, 2006.(22)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on September 29, 2006.(23)
    
    Filed as an exhibit to Onyxs Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2009.(24)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on February 26, 2008.(25)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on June 23, 2008.(26)
    
    Filed as an exhibit to Onyxs Current Report on
    Form 8-K
    filed on December 23, 2008.(27)
    
    Filed as an exhibit to Onyxs Annual Report on
    Form 10-K
    for the year ended December 31, 2008.(28)
    
    Filed as an exhibit to Onyxs Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2009. 105