##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




FORM 10-Q

|    |  |                                                                   
|--- |  | ------------------------------------------------------------------
|(X) |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
|    |  | EXCHANGE ACT OF 1934                                              

For the quarterly period ended September 30, 2003

or

|      |  |                                                                    
|----- |  | -------------------------------------------------------------------
|(   ) |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
|      |  | EXCHANGE ACT OF 1934                                               

For the transition period from _________________to______________

Commission File Number: 0-28298

ONYX PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)


|                                |  |                         
|------------------------------- |  | ------------------------
|Delaware                        |  | 94-3154463              
|                                |  |                         
|(State or other jurisdiction of |  | (IRS Employer ID Number)
|incorporation or organization)  |  |                         

3031 Research Drive
Richmond, California 94806
(Address of principal executive offices)

(510) 222-9700
(Registrants telephone number including area code)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the proceeding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

(X) Yes (  ) No


Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

(X) Yes (  ) No


Indicate the number of shares outstanding of each of the issuers classes
of Common Stock, as of the latest practicable date. The number of outstanding
shares of the registrants Common Stock, $0.001 par value, was 29,390,343 as
of November 6, 2003.

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TABLE OF CONTENTS



|                              |                                                                                               |                                         |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | --------------------------------------- |  |  |  |  |  | 
|PART I: FINANCIAL INFORMATION
|                              | Item 1. Financial Statements (Unaudited)                                                     
|                              |                                                                                               | CONDENSED BALANCE SHEETS               
|                              |                                                                                               | CONDENSED STATEMENTS OF OPERATIONS     
|                              |                                                                                               | CONDENSED STATEMENTS OF CASH FLOWS     
|                              |                                                                                               | NOTES TO CONDENSED FINANCIAL STATEMENTS
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                              | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                              | Item 4. Controls and Procedures                                                              
|PART II: OTHER INFORMATION   
|                              | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                   
|EXHIBIT INDEX                
|Exhibit 31.1                 
|Exhibit 32.1                 



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ONYX PHARMACEUTICALS, INC.

INDEX

|                                                                                             |                                                                                              |  |      |   | 
|-------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------- |  | ---- | - | 
|                                                                                             |                                                                                              |  | PAGE
|                                                                                             |                                                                                              |  |     
|PART I: FINANCIAL INFORMATION                                                                |                                                                                              |  |      |  
|Item 1.Financial Statements (Unaudited)                                                      |                                                                                              |  |      |  
|                                                                                             | Condensed Balance Sheets - September 30, 2003 and
December 31, 2002                          |  |      | 3 | 
|                                                                                             | Condensed Statements of Operations - Three and nine months ended
September 30, 2003 and 2002 |  |      | 4 | 
|                                                                                             | Condensed Statements of Cash Flows - Nine months ended
September 30, 2003 and 2002           |  |      | 5 | 
|                                                                                             | Notes to Condensed Financial Statements                                                      |  |      | 6 | 
|Item 2.Managements Discussion and Analysis of Financial Condition
and Results of Operations |                                                                                              |  | 10   |  
|Item 3.Quantitative and Qualitative Disclosures About Market Risk                            |                                                                                              |  | 26   |  
|Item 4.Controls and Procedures                                                               |                                                                                              |  | 26   |  
|PART II: OTHER INFORMATION                                                                   |                                                                                              |  |      |  
|Item 6.Exhibits and Reports on Form 8-K                                                      |                                                                                              |  | 27   |  
|SIGNATURES                                                                                   |                                                                                              |  | 28   |  

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ONYX PHARMACEUTICALS, INC.




PART I: FINANCIAL INFORMATION




Item 1. Financial Statements (Unaudited)




CONDENSED BALANCE SHEETS
(In thousands)

|                                   |                                      |        |                                              |                            |   |               |        |              |   |          |        | 
|---------------------------------- | ------------------------------------ | ------ | -------------------------------------------- | -------------------------- | - | ------------- | ------ | ------------ | - | -------- | ------ | 
|                                   |                                      |        |                                              |                            |   | September 30, |        | December 31,
|                                   |                                      |        |                                              |                            |   | 2003          |        | 2002        
|                                   |                                      |        |                                              |                            |   |               |        |             
|                                   |                                      |        |                                              |                            |   | (Unaudited)   |        | (Note 1)    
|                                   |                                      | ASSETS |                                              |                            |   |               |        |              |   |         
|Current assets:                    |                                      |        |                                              |                            |   |               |        |             
|                                   |                                      |        | Cash and cash equivalents                    |                            | $ | 42,442        |        |              | $ | 11,014   |       
|                                   |                                      |        | Marketable securities                        |                            |   | 52,468        |        |              |   | 28,819   |       
|                                   |                                      |        | Receivable from collaboration partner        |                            |   | 788           |        |              |   |         |       
|                                   |                                      |        | Other current assets                         |                            |   | 1,901         |        |              |   | 1,351    |       
|                                   |                                      |        |                                              |                            |   |               |        |             
|                                   |                                      |        |                                              | Total current assets       |   |               | 97,599 |              |   |          | 41,184 | 
|Property and equipment, net        |                                      |        | 2,092                                        |                            |   |               | 2,834  |             
|Notes receivable                   |                                      |        |                                             |                            |   |               | 275    |             
|Other assets                       |                                      |        | 408                                          |                            |   |               | 1,948  |             
|                                   |                                      |        |                                              |                            |   |               |        |             
|                                   |                                      | $      | 100,099                                      |                            |   | $             | 46,241 |             
|                                   |                                      |        |                                              |                            |   |               |        |             
|                                   | LIABILITIES AND STOCKHOLDERS EQUITY |        |                                              |                            |   |               |        |              |  
|Current liabilities:               |                                      |        |                                              |                            |   |               |        |             
|                                   |                                      |        | Accounts payable                             |                            | $ | 354           |        |              | $ | 736      |       
|                                   |                                      |        | Accrued restructuring                        |                            |   | 1,361         |        |              |   | 31       |       
|                                   |                                      |        | Accrued liabilities                          |                            |   | 851           |        |              |   | 768      |       
|                                   |                                      |        | Accrued clinical trials and related expenses |                            |   | 10,178        |        |              |   | 9,762    |       
|                                   |                                      |        | Accrued compensation                         |                            |   | 328           |        |              |   | 1,160    |       
|                                   |                                      |        |                                              |                            |   |               |        |             
|Total current liabilities          |                                      |        | 13,072                                       |                            |   |               | 12,457 |             
|Advance from collaboration partner |                                      |        | 5,000                                        |                            |   |               | 5,000  |             
|Commitments                        |                                      |        |                                              |                            |   |               |        |             
|Stockholders equity:              |                                      |        |                                              |                            |   |               |        |             
|                                   |                                      |        | Common stock                                 |                            |   | 29            |        |              |   | 22       |       
|                                   |                                      |        | Additional paid-in capital                   |                            |   | 274,011       |        |              |   | 187,633  |       
|                                   |                                      |        | Accumulated other comprehensive income       |                            |   | 71            |        |              |   | 40       |       
|                                   |                                      |        | Accumulated deficit                          |                            |   | (192,084      | )      |              |   | (158,911 | )     
|                                   |                                      |        |                                              |                            |   |               |        |             
|                                   |                                      |        |                                              | Total stockholders equity |   |               | 82,027 |              |   |          | 28,784 | 
|                                   |                                      |        |                                              |                            |   |               |        |             
|                                   |                                      | $      | 100,099                                      |                            |   | $             | 46,241 |             
|                                   |                                      |        |                                              |                            |   |               |        |             

See accompanying notes.

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ONYX PHARMACEUTICALS, INC.




CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)
(Unaudited)


|                                                              |                                     |                          |         |                    |        |                   |         |        |        |      |         |        |        |   |         |        |        | 
|------------------------------------------------------------- | ----------------------------------- | ------------------------ | ------- | ------------------ | ------ | ----------------- | ------- | ------ | ------ | ---- | ------- | ------ | ------ | - | ------- | ------ | ------ | 
|                                                              |                                     |                          |         | Three Months Ended |        | Nine Months Ended
|                                                              |                                     |                          |         | September 30,      |        | September 30,    
|                                                              |                                     |                          |         |                    |        |                  
|                                                              |                                     |                          |         | 2003               |        | 2002              |         | 2003   |        | 2002
|                                                              |                                     |                          |         |                    |        |                   |         |        |        |     
|Revenue:                                                      |                                     |                          |         |                    |        |                   |         |        |        |      |         |        |        |   |         |       
|                                                              | Contract revenue from related party |                          | $       |                   |        |                   | $       | 1,178  |        |      | $       |       |        |   | $       | 2,715  |       
|Operating expenses:                                           |                                     |                          |         |                    |        |                   |         |        |        |      |         |        |        |   |         |       
|                                                              | Research and development            |                          |         | 9,036              |        |                   |         | 10,921 |        |      |         | 25,097 |        |   |         | 32,027 |       
|                                                              | General and administrative          |                          |         | 1,353              |        |                   |         | 1,407  |        |      |         | 4,218  |        |   |         | 4,349  |       
|                                                              | Restructuring                       |                          |         | 944                |        |                   |         |       |        |      |         | 4,145  |        |   |         |       |       
|                                                              |                                     |                          |         |                    |        |                   |         |        |        |      |         |        |        |   |         |       
|                                                              |                                     | Total operating expenses |         |                    | 11,333 |                   |         |        | 12,328 |      |         |        | 33,460 |   |         |        | 36,376 | 
|                                                              |                                     |                          |         |                    |        |                   |         |        |        |      |         |        |        |   |         |       
|Loss from operations                                          |                                     |                          | (11,333 | )                  |        |                   | (11,150 | )      |        |      | (33,460 | )      |        |   | (33,661 | )     
|Interest income                                               |                                     |                          | 254     |                    |        |                   | 272     |        |        |      | 562     |        |        |   | 936     |       
|Other income                                                  |                                     |                          |        |                    |        |                   | 60      |        |        |      |        |        |        |   | 235     |       
|Other expense  related party                                 |                                     |                          |        |                    |        |                   |        |        |        |      | 275     |        |        |   |        |       
|                                                              |                                     |                          |         |                    |        |                   |         |        |        |      |         |        |        |   |         |       
|Net loss                                                      |                                     | $                        | (11,079 | )                  |        | $                 | (10,818 | )      |        | $    | (33,173 | )      |        | $ | (32,490 | )     
|                                                              |                                     |                          |         |                    |        |                   |         |        |        |      |         |        |        |   |         |       
|Basic and diluted net loss per share                          |                                     | $                        | (0.40   | )                  |        | $                 | (0.50   | )      |        | $    | (1.34   | )      |        | $ | (1.61   | )     
|                                                              |                                     |                          |         |                    |        |                   |         |        |        |      |         |        |        |   |         |       
|Shares used in computing basic and
diluted net loss per share |                                     |                          | 27,777  |                    |        |                   | 21,593  |        |        |      | 24,791  |        |        |   | 20,178  |       
|                                                              |                                     |                          |         |                    |        |                   |         |        |        |      |         |        |        |   |         |       

See accompanying notes.

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ONYX PHARMACEUTICALS, INC.




CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

|                                      |                                                  |                                                                             |                                              |                                           |         |                   |         |         |         |        |         |  
|------------------------------------- | ------------------------------------------------ | --------------------------------------------------------------------------- | -------------------------------------------- | ----------------------------------------- | ------- | ----------------- | ------- | ------- | ------- | ------ | ------- | -
|                                      |                                                  |                                                                             |                                              |                                           |         | Nine Months Ended
|                                      |                                                  |                                                                             |                                              |                                           |         | September 30,    
|                                      |                                                  |                                                                             |                                              |                                           |         |                  
|                                      |                                                  |                                                                             |                                              |                                           |         | 2003              |         | 2002   
|                                      |                                                  |                                                                             |                                              |                                           |         |                   |         |        
|Cash flows from operating activities: |                                                  |                                                                             |                                              |                                           |         |                   |         |        
|                                      |                                                  | Net loss                                                                    |                                              | $                                         | (33,173 | )                 |         | $       | (32,490 | )     
|                                      |                                                  | Adjustments to reconcile net loss to net cash used in
operating activities: |                                              |                                           |         |                   |         |         |         |       
|                                      |                                                  | Depreciation and amortization                                               |                                              |                                           | 1,083   |                   |         |         | 1,330   |       
|                                      |                                                  | Noncash restructuring charges                                               |                                              |                                           | 2,394   |                   |         |         |        |       
|                                      |                                                  | Loss on impairment of investment                                            |                                              |                                           | 275     |                   |         |         |        |       
|                                      |                                                  | Stock-based compensation to consultants                                     |                                              |                                           | 716     |                   |         |         | 241     |       
|                                      |                                                  | Other                                                                       |                                              |                                           | 3       |                   |         |         | (36     | )     
|                                      |                                                  | Changes in assets and liabilities:                                          |                                              |                                           |         |                   |         |         |         |       
|                                      |                                                  |                                                                             | Receivable from collaboration partner        |                                           |         | (788              | )       |         |         |       |        
|                                      |                                                  |                                                                             | Other current assets                         |                                           |         | (287              | )       |         |         | (684   | )      
|                                      |                                                  |                                                                             | Other assets                                 |                                           |         | 32                |         |         |         | 32     |        
|                                      |                                                  |                                                                             | Accounts payable                             |                                           |         | (382              | )       |         |         | (86    | )      
|                                      |                                                  |                                                                             | Accrued liabilities                          |                                           |         | 52                |         |         |         | (68    | )      
|                                      |                                                  |                                                                             | Accrued clinical trials and related expenses |                                           |         | 416               |         |         |         | 1,597  |        
|                                      |                                                  |                                                                             | Accrued compensation                         |                                           |         | (832              | )       |         |         | 51     |        
|                                      |                                                  |                                                                             | Deferred revenue                             |                                           |         |                  |         |         |         | (1,465 | )      
|                                      |                                                  |                                                                             |                                              |                                           |         |                   |         |        
|                                      |                                                  |                                                                             |                                              | Net cash used in operating activities     |         |                   | (30,491 | )       |         |        | (31,578 | )
|                                      |                                                  |                                                                             |                                              |                                           |         |                   |         |        
|Cash flows from investing activities: |                                                  |                                                                             |                                              |                                           |         |                   |         |        
|                                      |                                                  | Purchases of marketable securities                                          |                                              |                                           | (50,491 | )                 |         |         | (26,975 | )     
|                                      |                                                  | Maturities of marketable securities                                         |                                              |                                           | 26,873  |                   |         |         | 24,215  |       
|                                      |                                                  | Capital expenditures                                                        |                                              |                                           | (132    | )                 |         |         | (584    | )     
|                                      |                                                  | Notes receivable from related parties                                       |                                              |                                           |        |                   |         |         | 44      |       
|                                      |                                                  |                                                                             |                                              |                                           |         |                   |         |        
|                                      |                                                  |                                                                             |                                              | Net cash used in investing activities     |         |                   | (23,750 | )       |         |        | (3,300  | )
|                                      |                                                  |                                                                             |                                              |                                           |         |                   |         |        
|Cash flows from financing activities: |                                                  |                                                                             |                                              |                                           |         |                   |         |        
|                                      |                                                  | Advance from collaboration partner                                          |                                              |                                           |        |                   |         |         | 5,000   |       
|                                      |                                                  | Net proceeds from issuances of common stock                                 |                                              |                                           | 85,669  |                   |         |         | 19,127  |       
|                                      |                                                  |                                                                             |                                              |                                           |         |                   |         |        
|                                      |                                                  |                                                                             |                                              | Net cash provided by financing activities |         |                   | 85,669  |         |         |        | 24,127  |  
|                                      |                                                  |                                                                             |                                              |                                           |         |                   |         |        
|                                      | Net decrease in cash and cash equivalents        |                                                                             |                                              | 31,428                                    |         |                   |         | (10,751 | )      
|                                      | Cash and cash equivalents at beginning of period |                                                                             |                                              | 11,014                                    |         |                   |         | 39,568  |        
|                                      |                                                  |                                                                             |                                              |                                           |         |                   |         |        
|                                      | Cash and cash equivalents at end of period       |                                                                             | $                                            | 42,442                                    |         |                   | $       | 28,817  |        
|                                      |                                                  |                                                                             |                                              |                                           |         |                   |         |        

See accompanying notes.

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ONYX PHARMACEUTICALS, INC.




NOTES TO CONDENSED FINANCIAL STATEMENTS
September 30, 2003
(Unaudited)

Note 1. Basis of Presentation

The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the three and
nine months ended September 30, 2003 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2003, or for any
other future operating periods.

The condensed balance sheet at December 31, 2002 has been derived from
the audited financial statements at that date, but does not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.

For further information, refer to the financial statements and footnotes
thereto included in the Onyx Pharmaceuticals, Inc. (the Company or Onyx)
Annual Report on Form 10-K for the year ended December 31, 2002.

Note 2. Stock-Based Compensation

The Company has elected to continue to follow Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees (APB 25), to
account for employee stock options because the alternative fair value method of
accounting prescribed by Statement of Financial Accounting Standards (SFAS)
123, Accounting for Stock-Based Compensation, requires the use of option
valuation models that were not developed for use in valuing employee stock
options. Under APB 25, no compensation expense is recognized when the exercise
price of employee stock options equals the market price of the underlying stock
on the date of grant.

The pro forma information regarding net loss and loss per share prepared
in accordance with SFAS 123, as amended by SFAS 148, has been determined as if
the Company had accounted for its employee stock options under the fair value
method prescribed by SFAS 123. The fair value of options was estimated at the
date of grant using the Black-Scholes option valuation model with the following
weighted-average assumptions:

|                                   |  |                    |      |                   |  |           |      |           |  |   |      |   |  |   |      |  
|---------------------------------- |  | ------------------ | ---- | ----------------- |  | --------- | ---- | --------- |  | - | ---- | - |  | - | ---- | -
|                                   |  | Three Months Ended |      | Nine Months Ended
|                                   |  | September 30,      |      | September 30,    
|                                   |  |                    |      |                  
|                                   |  | 2003               |      | 2002              |  | 2003      |      | 2002     
|                                   |  |                    |      |                   |  |           |      |          
|Risk-free interest rate            |  |                    | 1.77 | %                 |  |           | 2.77 | %         |  |   | 2.34 | % |  |   | 3.04 | %
|Expected life                      |  | 2.5 years          |      | 3.0 years         |  | 3.0 years |      | 2.9 years
|Expected volatility                |  |                    | 0.78 |                   |  |           | 0.84 |           |  |   | 0.89 |   |  |   | 0.84 |  
|Expected dividends                 |  | None               |      | None              |  | None      |      | None     
|Weighted average option fair value |  | $                  | 7.62 |                   |  | $         | 2.23 |           |  | $ | 3.39 |   |  | $ | 2.48 |  

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ONYX PHARMACEUTICALS, INC.

The following table summarizes the pro forma effects assuming compensation
cost for such awards had been recorded based upon the estimated fair value:

|                                                                                                                                        |                                                    |   |                                          |       |                   |   |         |       |      |   |         |       |   |   |         |       |  
|--------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------- | - | ---------------------------------------- | ----- | ----------------- | - | ------- | ----- | ---- | - | ------- | ----- | - | - | ------- | ----- | -
|                                                                                                                                        |                                                    |   | Three Months Ended                       |       | Nine Months Ended
|                                                                                                                                        |                                                    |   | September 30,                            |       | September 30,    
|                                                                                                                                        |                                                    |   |                                          |       |                  
|                                                                                                                                        |                                                    |   | 2003                                     |       | 2002              |   | 2003    |       | 2002
|                                                                                                                                        |                                                    |   |                                          |       |                   |   |         |       |     
|                                                                                                                                        |                                                    |   | (In thousands, except per share amounts)
|Net loss  as reported                                                                                                                  |                                                    | $ | (11,079                                  | )     |                   | $ | (10,818 | )     |      | $ | (33,173 | )     |   | $ | (32,490 | )    
|Deduct: Total stock-based employee compensation
determined under the fair value based method for
all awards, net of related tax effects |                                                    |   | (312                                     | )     |                   |   | (521    | )     |      |   | (1,241  | )     |   |   | (1,208  | )    
|                                                                                                                                        |                                                    |   |                                          |       |                   |   |         |       |      |   |         |       |   |   |         |      
|Pro forma net loss                                                                                                                      |                                                    | $ | (11,391                                  | )     |                   | $ | (11,339 | )     |      | $ | (34,414 | )     |   | $ | (33,698 | )    
|                                                                                                                                        |                                                    |   |                                          |       |                   |   |         |       |      |   |         |       |   |   |         |      
|Loss per share:                                                                                                                         |                                                    |   |                                          |       |                   |   |         |       |      |   |         |       |   |   |         |      
|                                                                                                                                        | Basic and diluted net loss per share  as reported |   | $                                        | (0.40 | )                 |   | $       | (0.50 | )    |   | $       | (1.34 | ) |   | $       | (1.61 | )
|                                                                                                                                        |                                                    |   |                                          |       |                   |   |         |       |      |   |         |       |   |   |         |      
|                                                                                                                                        | Basic and diluted net loss per share  pro forma   |   | $                                        | (0.41 | )                 |   | $       | (0.53 | )    |   | $       | (1.39 | ) |   | $       | (1.67 | )
|                                                                                                                                        |                                                    |   |                                          |       |                   |   |         |       |      |   |         |       |   |   |         |      

Note 3. Net Loss Per Share

Basic and diluted net loss per share are presented in conformity with
SFAS 128, Earnings Per Share, for all periods presented. Basic net loss per
share and diluted net loss per share have been computed using the
weighted-average number of shares of common stock outstanding during the
period. Potentially dilutive outstanding securities of 3,384,417 stock options
and warrants for the three and nine months ended September 30, 2003 and
3,387,166 stock options and warrants for the three and nine months ended
September 30, 2002 were not considered in the computation of diluted net loss
per share because they would be antidilutive.

Note 4. Comprehensive Loss

Comprehensive loss is comprised of net loss and other comprehensive
income (loss). Other comprehensive income (loss) is comprised of unrealized
holding gains (losses) on the Companys available-for-sale securities that are
excluded from net loss and reported separately in stockholders equity.
Comprehensive loss and its components are as follows:

|                                   |                                                             |   |                    |    |                   |   |                |     |      |   |         |    |  |   |         |     |  
|---------------------------------- | ----------------------------------------------------------- | - | ------------------ | -- | ----------------- | - | -------------- | --- | ---- | - | ------- | -- |  | - | ------- | --- | -
|                                   |                                                             |   | Three Months Ended |    | Nine Months Ended
|                                   |                                                             |   | September 30,      |    | September 30,    
|                                   |                                                             |   |                    |    |                  
|                                   |                                                             |   | 2003               |    | 2002              |   | 2003           |     | 2002
|                                   |                                                             |   |                    |    |                   |   |                |     |     
|                                   |                                                             |   |                    |    |                   |   | (In thousands) |     |      |   |        
|Net loss                           |                                                             | $ | (11,079            | )  |                   | $ | (10,818        | )   |      | $ | (33,173 | )  |  | $ | (32,490 | )  
|Other comprehensive income (loss): |                                                             |   |                    |    |                   |   |                |     |      |   |         |    |  |   |         |    
|                                   | Net unrealized gain (loss) on
available-for-sale securities |   |                    | 45 |                   |   |                | (10 | )    |   |         | 31 |  |   |         | (94 | )
|                                   |                                                             |   |                    |    |                   |   |                |     |      |   |         |    |  |   |         |    
|Comprehensive loss                 |                                                             | $ | (11,034            | )  |                   | $ | (10,828        | )   |      | $ | (33,142 | )  |  | $ | (32,584 | )  
|                                   |                                                             |   |                    |    |                   |   |                |     |      |   |         |    |  |   |         |    

Note 5. Recently Issued Accounting Standards

In July 2002, the Financial Accounting Standards Board (FASB) issued
SFAS 146, Accounting for Costs Associated with Exit or Disposal Activities,
which addresses accounting for restructuring, discontinued operations, plant
closing, or other exit or disposal activities. SFAS 146 requires companies to
recognize costs associated with exit or disposal activities when they are
incurred. Previous guidance in Emerging Issues Task Force, (EITF) No. 94-3,
Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring) required that a liability for an exit cost be recognized at the
date of a companys commitment to an exit or disposal plan. SFAS 146 is to be
applied prospectively to exit or disposal activities initiated after December
31, 2002. The Company adopted SFAS 146 on January 1, 2003 and recorded its
January and June 2003 restructurings in accordance with the provisions of SFAS
146.

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ONYX PHARMACEUTICALS, INC.

In November 2002, the FASB issued Interpretation No. 45 (FIN 45),
Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. FIN 45 elaborates on the
existing disclosure requirements for most guarantees, including residual value
guarantees issued in conjunction with operating lease agreements. It also
clarifies that at the time a company issues a guarantee, the company must
recognize an initial liability for the fair value of the obligation it assumes
under that guarantee and must disclose that information in its interim and
annual financial statements. The initial recognition and measurement
provisions apply on a prospective basis to guarantees issued or modified after
December 31, 2002. The disclosure requirements are effective for financial
statements of interim or annual periods ending after December 15, 2002. The
adoption of FIN 45 did not have a material impact on the
Companys financial position or results of operations.

In November 2002, the FASB issued EITF Issue No. 00-21, Revenue
Arrangements with Multiple Deliverables. EITF 00-21 addresses certain aspects
of the accounting by a company for arrangements under which it will perform
multiple revenue-generating activities. EITF 00-21 addresses when and how an
arrangement involving multiple deliverables should be divided into separate
units of accounting. EITF 00-21 provides guidance with respect to the effect
of certain customer rights due to company nonperformance on the recognition of
revenue allocated to delivered units of accounting. EITF 00-21 also addresses
the impact on the measurement and/or allocation of arrangement consideration of
customer cancellation provisions and consideration that varies as a result of
future actions of the customer or the company. Finally, EITF 00-21 provides
guidance with respect to the recognition of the cost of certain deliverables
that are excluded from the revenue accounting arrangement. The provisions of
EITF 00-21 applies to revenue arrangements entered into in fiscal periods
beginning after June 15, 2003. The adoption of EITF 00-21 did not have a
material effect on the Companys financial position or results of operations.

In January 2003, the FASB issued Interpretation No. 46 (FIN 46),
Consolidation of Variable Interest Entities. FIN 46, as amended, requires a
variable interest entity to be consolidated by a company if that company is
subject to a majority of the risk of loss from the variable interest entitys
activities or entitled to receive a majority of the entitys residual returns
or both. A variable interest entity is a corporation, partnership, trust, or
any other legal structure used for business purposes that either (a) does not
have equity investors with voting rights or (b) has equity investors that do
not provide sufficient financial resources for the entity to support its
activities. A variable interest entity often holds financial assets, including
loans or receivables, real estate or other property. A variable interest
entity may be essentially passive or it may engage in research and development
or other activities on behalf of another company. The consolidation
requirements of FIN 46 apply immediately to variable interest entities created
after January 31, 2003. The consolidation requirements apply to older entities
at the end of the first interim or annual period ending after December 15,
2003. Certain of the disclosure requirements apply to all financial statements
issued after January 31, 2003, regardless of when the variable interest entity
was established. The Companys adoption of the disclosure requirements in
January 2003 did not have an impact on the Companys financial position or
results of operations. The adoption of the recognition requirements of FIN 46
on December 31, 2003 is not expected to have a material impact on the Companys
financial position or results of operations.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity, as
amended, effective for financial instruments entered into or modified after May
31, 2003, and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003. The adoption of SFAS No. 150 is not
expected to have a material impact on the Companys financial
position or results of operations.

Note 6. Restructuring

In June 2003, the Company announced the discontinuation of its therapeutic
virus program and the termination of all internal research activities. The
decision was part of a business realignment that placed an increased priority
on the development of BAY 43-9006, Onyxs lead product candidate that is being
developed jointly with Bayer Pharmaceuticals Corporation. As a first step in
the realignment, in January 2003, the Company suspended Phase II and Phase III
clinical trials of ONYX-015 for head and neck cancer, canceled plans to
initiate a Phase II trial in metastatic colorectal cancer and suspended all
manufacturing activities. In the quarter ended March 31, 2003, the Company
reduced staff levels by approximately 25 positions and recognized $0.4 million
of employee termination costs. In the quarter ended June 30, 2003, the Company
announced it would further reduce staff levels by approximately 50 positions,
the majority of which were associated with research and development for the
therapeutic virus program and the remainder of which were general and
administrative staff. Certain of the approximately 50 terminated employees
provided services to the Company beyond the

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ONYX PHARMACEUTICALS, INC.

minimum retention period of 60 days in order to receive severance-related
benefits. For those employees, the Company measured the fair value of the
severance-related benefits at the communication date and amortized the amount
over the expected service period, ranging from 80 days to six months. The fair
value of the severance-related benefits associated with the 50 employees
terminated in June 2003 was $1.3 million, of which $0.3 million was amortized
to restructuring expenses during the three months ended June 30, 2003 and $0.9
million was amortized to restructuring expenses during the three months ended
September 30, 2003. The Company expects to record the remaining severance
charges of $0.1 million in the quarter ending December 31, 2003. In addition
to the $1.6 million of severance-related benefits recorded by the Company for
the nine-month period ended September 30, 2003, restructuring charges of $2.5
million were also recognized as a result of the termination of the process
development and manufacturing agreement with XOMA (US) LLC, including a
termination fee of $1.0 million, a $1.0 million write-off of the unamortized
up-front payment originally made in 2001, and $0.5 million of other obligations
under the contract.

Of the $4.1 million restructuring expenses recognized during the
nine-month period ended September 30, 2003, $1.4 million was accrued at
September 30, 2003, which amounts to $1.1 million for the termination of the
XOMA agreement and $0.3 million for severance-related benefits.

The Company may also incur charges of up to $3.3 million related to the
expected early termination of its facility lease and the abandonment of
certain property and equipment. These estimated charges will be recorded when
a loss has been incurred or at the cease use date. At this time, the Company
is not certain when this loss or the cease use date will occur or the amount
of the loss, if any. The Company anticipates that the restructuring
activities in January and June 2003 will reduce its quarterly operating
expenses; however, these savings are expected to be fully offset by the
Companys share of the increased codevelopment costs for BAY 43-9006 as the
compound advances through clinical trials.

Note 7. Sale of Equity Securities

In February 2003, the Company received net cash proceeds of $9.9 million
in connection with the completion of a private placement of 2,105,263 shares of
its common stock at $4.75 per share, primarily to entities affiliated with
Deerfield Management Company. These shares were registered for resale in June
2003.

In July
2003, the Company sold 5.0 million shares of its common stock at a
price of $15.25 per share in an underwritten public offering pursuant to an
effective registration statement previously filed with the Securities and
Exchange Commission. In August 2003, the underwriters for the offering
exercised their over-allotment option and thereby purchased an additional
179,000 shares of the Companys common stock to cover over-allotments at a
price of $15.25 per share. The Company received aggregate net cash proceeds
of approximately $73.8 million from this public offering.

Note 8. Related Party Transaction

In November 2001, the Company sold and licensed to Syrrx, Inc. assets
from the Companys small molecules discovery program in exchange for Syrrx
preferred stock valued at $750,000. The entire amount was recorded as Other
income on the date of sale. The value of the preferred stock was initially
determined based on similar sales of Syrrx preferred stock for cash. In
December 2002, the Company recorded a $100,000 charge to reduce the carrying
value of its Syrrx investment to reflect an impairment in the value of the
stock. In the quarter ended June 30, 2003, based on a further round of
financing completed by Syrrx in April 2003, the Company recorded an additional
write-down of $275,000 as Other expense-related party to further reduce the
carrying value of the investment. Management considers the reduction in
carrying value of the investment to be other-than-temporary. At the time of
the transactions mentioned above, a member of the board of directors of Onyx
was a director and officer of Syrrx. This board member is no longer an
officer of Syrrx.

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ONYX PHARMACEUTICALS, INC.




Item 2. 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 Form 10-Q 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 Form 10-Q. Our actual results could differ materially from
those anticipated in these forward-looking statements for many reasons,
including those set forth under Business Risks.

Overview

We are a biopharmaceutical company dedicated to developing innovative
therapies targeting the molecular mechanisms that cause cancer. A common
feature of cancer cells is the abnormal activation of signaling pathways, in
particular, those that cause tumor growth. Applying our scientific expertise in
the fields of oncology and small molecule drug discovery, our product
candidates are designed to inhibit proteins that signal excess cancer cell
growth. By exploiting the genetic differences between cancer cells and normal
cells, we focus on creating anticancer therapies that inhibit the growth of
malignant cells but minimize damage to healthy tissue. Our lead product
candidate, BAY 43-9006, which has emerged from our long-standing collaboration
with Bayer Pharmaceuticals Corporation, or Bayer, is one of a new class of
anticancer treatments. Several U.S. Food and Drug Administration, or FDA,
approved drugs developed and owned by others validate the targeting of growth
signaling pathways to treat cancer, but ours is the first small molecule to
enter clinical trials that targets the enzyme, RAF kinase.

BAY 43-9006 is an orally available agent designed to inhibit the enzyme
RAF kinase and thereby selectively block a cascade of biochemical signals known
as the RAS pathway. The RAS pathway plays an important role in tumor growth and
is abnormally activated in many human cancers by various mechanisms. In
approximately 20 percent of human cancers, a RAS gene is activated by mutation.
In addition, researchers recently found that a specific RAF kinase, BRAF, is
activated by mutation in two-thirds of melanomas and is also involved in
several other cancers.

Together with Bayer, we are conducting multiple clinical trials of BAY
43-9006. Under our collaboration with Bayer, we are jointly developing and
intend to commercialize BAY 43-9006, except in Japan where Bayer funds all
development costs, and we will receive a royalty on any marketed product. To
date, over 800 patients have been enrolled in our various clinical trials. On
October 25, 2003, Onyx and Bayer announced that we have begun a Phase III
clinical trial to evaluate BAY 43-9006 in the treatment of kidney cancer. This
decision was based on promising interim Phase II data, which showed encouraging
signs of tumor shrinkage and disease stabilization. Phase II clinical trials
of BAY 43-9006 are underway for the treatment of liver, melanoma, kidney and
other cancers. These trials were initiated in August 2002 based on preliminary
Phase I data which showed that the compound was well tolerated and provided
early evidence of antitumor activity. In addition, a Phase I clinical trial in
Canada is being conducted in patients with acute myelogenous leukemia, or AML,
and myelodysplastic syndrome, or MDS.

In collaboration with Warner-Lambert Company, now a subsidiary of Pfizer
Inc, we have identified a number of other lead compounds that modulate the
activity of key enzymes that regulate the process whereby a single cell
replicates itself and divides into two identical new cells, a process known as
the cell cycle. Mutations in genes that regulate the cell cycle are present
in a majority of human cancers. Pfizer is currently advancing a lead candidate
from that collaboration, a small molecule cell cycle inhibitor targeting a
cyclin-dependent kinase. We believe Pfizer expects to enter Phase I clinical
trials with its candidate in early 2004.

Prior to June 2003, in addition to our small molecule program, we were
developing therapeutic viruses that selectively replicate in cells with
cancer-causing genetic mutations. In June 2003, we announced the
discontinuation of our therapeutic virus program and the termination of all
internal research activities. The decision was part of a business realignment
that placed an increased priority on the development of BAY 43-9006. As a
first step in the realignment, in January 2003, we

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ONYX PHARMACEUTICALS, INC.

suspended Phase II and Phase III clinical trials of ONYX-015 for head and neck
cancer, canceled plans to initiate a Phase II trial in metastatic colorectal
cancer and suspended all manufacturing activities. In the quarter ended March
31, 2003, we reduced staff levels by approximately 25 positions and recognized
$0.4 million of employee termination costs. In the quarter ended June 30,
2003, we announced we would further reduce staff levels by approximately 50
positions, the majority of which were associated with research and development
for the therapeutic virus program and the remainder of which were general and
administrative staff. Certain of the approximately 50 terminated employees
provided services to Onyx beyond the minimum retention period of 60 days to
receive severance-related benefits. For those employees, we measured the fair
value of the severance-related benefits at the communication date and amortized
the amount over the expected service period, ranging from 80 days to six
months. The fair value of the severance-related benefits associated with the
50 employees terminated in June 2003 was $1.3 million, of which $0.3 million
was amortized to restructuring expenses during the three months ended June 30,
2003 and $0.9 million was amortized to restructuring expenses during the three
months ended September 30, 2003. We expect to record the remaining severance
charges of $0.1 million in the quarter ending December 31, 2003. In addition
to the $1.6 million of severance-related benefits we recorded for the
nine-month period ended September 30, 2003, restructuring charges of $2.5
million were also recognized as a result of the termination of our process
development and manufacturing agreement with XOMA (US) LLC, or XOMA, including
a termination fee of $1.0 million, a $1.0 million write-off of the unamortized
up-front payment originally made in 2001, and $0.5 million of other obligations
under the contract.

Of the $4.1 million restructuring expenses recognized during the
nine-month period ended September 30, 2003, $1.4 million was accrued at
September 30, 2003, including $1.1 million for the termination of the XOMA
agreement and $0.3 million for severance-related benefits.

We may also incur charges of up to $3.3 million related to the expected
early termination of our facility lease and the abandonment of certain
property and equipment. These estimated charges will be recorded when a loss
has been incurred or at the cease use date. At this time, we are not certain
when this loss or the cease use date will occur or the amount of the loss, if
any. We anticipate that the restructuring activities in January and June 2003
will reduce our quarterly operating expenses; however, these savings are
expected to be fully offset by our share of the increased codevelopment costs
for BAY 43-9006 as the compound advances through clinical trials.

In February 2003, we received net cash proceeds of $9.9 million in
connection with the completion of a private placement of 2,105,263 shares of
common stock at $4.75 per share, primarily to entities affiliated with
Deerfield Management Company. These shares were registered for resale in June
2003.

In July 2003, we sold 5.0 million shares of our common stock at $15.25 per
share in an underwritten public offering pursuant to an effective registration
statement previously filed with the Securities and Exchange Commission. In
August 2003, the underwriters for the offering exercised their over-allotment
option and thereby purchased an additional 179,000 shares of our common stock
to cover over-allotments at a price of $15.25 per share. We received aggregate
net cash proceeds of approximately $73.8 million from this public offering.

We have not been profitable since inception and expect to incur
substantial and increasing losses for the foreseeable future, primarily due to
expenses associated with the development and commercialization of BAY 43-9006.
We expect that losses will fluctuate from quarter to quarter and that such
fluctuations may be substantial. As of September 30, 2003, our accumulated
deficit was approximately $192.1 million.

Our business is subject to significant risks, including the risks inherent
in our development efforts, the results of the BAY 43-9006 clinical trials, our
dependence on collaborative parties, uncertainties associated with obtaining
and enforcing patents, the lengthy and expensive regulatory approval process
and competition from other products. We currently have no products that have
received marketing approval, and we have generated no revenues from the sale of
products. We do not expect to generate revenues from the sale of proposed
products in the foreseeable future. We expect that all of our revenues in the
foreseeable future will be generated from collaboration agreements.

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ONYX PHARMACEUTICALS, INC.

Results of Operations

Three and nine months ended September 30, 2003 and 2002

Revenues

We did not recognize any revenue for the three and nine months ended
September 30, 2003 as compared to $1.2 million for the three months ended
September 30, 2002, and $2.7 million for the nine months ended September 30,
2002. Revenues for the three and nine months ended September 30, 2002
reflected research funding received from Warner-Lambert, a subsidiary of
Pfizer Inc, for the therapeutic virus collaboration that concluded in
September 2002. We currently do not expect to recognize any revenue in 2003.

Research and Development Expenses

Research and development expenses decreased 17 percent to $9.0 million
for the three months ended September 30, 2003 and decreased 22 percent to
$25.1 million for the nine months ended September 30, 2003, as compared with
$10.9 million and $32.0 million for the same periods in 2002. These results
reflect a decrease of $4.8 million in the current quarter and $12.4 million
for the nine months ended September 30, 2003 as compared to the same periods
in 2002 for research and development expenses associated with our therapeutic
virus program. In January 2003, we restructured our operations to reflect an
increased priority on the development of BAY 43-9006 and suspended the
development of ONYX-015, including clinical trials and manufacturing
activities. This initial action was followed in June 2003 by an announcement
that we discontinued the entire therapeutic virus program and terminated all
other internal research activities. These two actions resulted in a reduction
in force of approximately 75 positions, most of which were associated with the
therapeutic virus program. The decrease in the therapeutic virus expenses was
partially offset by increased expenses related to Onyxs share of the
codevelopment costs with Bayer for BAY 43-9006. The increases amounted to
$2.9 million in the current quarter and $5.5 million for the nine months ended
September 30, 2003 as compared to the same periods in 2002. BAY 43-9006
development costs reflect multiple ongoing Phase I clinical trials and Phase
II clinical trials initiated in the second half of 2002. Future cost savings
from the discontinuation of our therapeutic virus program are expected to be
offset by increased costs associated with advancing the clinical development
of BAY 43-9006. At September 30, 2003, we recorded a $0.8 million receivable
from our collaboration partner, Bayer, related to reimbursement for our 50
percent share of codevelopment costs for BAY 43-9006 incurred by us during the
nine months ended September 30, 2003.

The major components of research and development costs include salaries
and employee benefits, process and analytical development, clinical
manufacturing, preclinical testing, clinical trial expenses, consulting and
other third-party costs, supplies and materials, equipment depreciation and
allocations of various overhead and occupancy costs. The scope and magnitude of
future research and development expenses are difficult to predict at this time
given the number of studies that will need to be conducted for any of our
potential product candidates. In general, biopharmaceutical development
involves a series of steps beginning with identification of a potential target
and includes proof of concept in animals and Phase I, II and III clinical
studies in humans, each of which is typically more expensive than the previous
step. Success in development results in increasing expenditures, and the
timing for completion of these steps is uncertain.

The following table summarizes our principal product development
initiatives, including the related stages of development for each product in
development and the research and development expenses recognized in connection
with each product. The information in the column labeled Phase of Development
- Estimated Completion is only our estimate of the timing of completion of the
current in-process development phases. The actual timing of completion of
those phases could differ materially from the estimates provided in the table.
For a discussion of the risks and uncertainties associated with the timing and
cost of completing a product development phase, see our Business Risks
section below.

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|                          |  |                                                                                                                           |  |          |       |                                                        |  |                                   |        |                     |  |                |        |      |  |   |        |  |  |   |        | 
|------------------------- |  | ------------------------------------------------------------------------------------------------------------------------- |  | -------- | ----- | ------------------------------------------------------ |  | --------------------------------- | ------ | ------------------- |  | -------------- | ------ | ---- |  | - | ------ |  |  | - | ------ | 
|                          |  |                                                                                                                           |  |          |       |                                                        |  | Research and Development Expenses
|                          |  |                                                                                                                           |  |          |       |                                                        |  |                                  
|                          |  |                                                                                                                           |  |          |       | Phase of                                               |  | For the Three Months              |        | For the Nine Months
|                          |  |                                                                                                                           |  |          |       | Development -                                          |  | Ended Sept. 30,                   |        | Ended Sept. 30,    
|                          |  |                                                                                                                           |  | Collabo- |       | Estimated                                              |  |                                   |        |                    
|Product                   |  | Description                                                                                                               |  | rator    |       | Completion                                             |  | 2003                              |        | 2002                |  | 2003           |        | 2002
|                          |  |                                                                                                                           |  |          |       |                                                        |  |                                   |        |                     |  |                |        |     
|                          |  |                                                                                                                           |  |          |       |                                                        |  |                                   |        |                     |  | (In thousands) |        |      |  |  
|BAY 43-9006               |  | Small Molecule
Inhibitor of RAF
Kinase                                                                                    |  | Bayer    |       | Phase I - 2003
Phase IIUnknown
Phase III-Unknown      |  | $                                 | 6,013  |                     |  | $              | 3,123  |      |  | $ | 13,249 |  |  | $ | 7,738  | 
|Therapeutic Virus
Program |  | p53-Selective
Replicating Virus
RB-Selective
Replicating Virus
RB-Selective
Replicating Virus
Armed with
Anticancer Genes |  |         |       | Phase II/III  (1)
Preclinical  (1)
Preclinical  (1) |  |                                   | 3,023  |                     |  |                | 7,798  |      |  |   | 11,848 |  |  |   | 24,289 | 
|Cell Cycle Kinases
(2)    |  | Small Molecule
Inhibitor/Cyclin-Dependent
Kinase                                                                          |  | Pfizer   |       | Preclinical  Early
2004                               |  |                                   |       |                     |  |                |       |      |  |   |       |  |  |   |       | 
|                          |  |                                                                                                                           |  |          |       |                                                        |  |                                   |        |                     |  |                |        |      |  |   |        |  |  |   |        | 
|                          |  | Total Research and Development Expenses                                                                                   |  | $        | 9,036 |                                                        |  | $                                 | 10,921 |                     |  | $              | 25,097 |      |  | $ | 32,027 | 
|                          |  |                                                                                                                           |  |          |       |                                                        |  |                                   |        |                     |  |                |        |      |  |   |        |  |  |   |        | 



---

|(1) |  | Program discontinued during the second quarter of 2003. See Note 6 to
our Condensed Financial Statements.
|--- |  | ---------------------------------------------------------------------------------------------------------
|   
|(2) |  | Pfizer is responsible for research and development costs.                                                

The overall completion dates of our major research and development
programs are estimates based on current information. The clinical development
portion of these programs may span as many as seven to ten years, and
estimation of completion dates or costs to complete would be highly
speculative and subjective due to the numerous risks and uncertainties
associated with developing biopharmaceutical products, including significant
and changing government regulation, the uncertainty of future preclinical and
clinical study results and uncertainties associated with process development
and manufacturing as well as marketing. These risks and uncertainties make
the reliable estimate of overall completion dates and total costs to complete
development highly speculative. For additional discussion of factors
affecting overall completion dates and total costs, see the Business Risks
section below.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and
employee benefits and corporate functional expenses. General and
administrative expenses remained stable at approximately $1.4 million for the
three months ended September 30, 2003 and $4.2 million for the nine months
ended September 30, 2003, as compared with $1.4 million and $4.3 million for
the corresponding periods in 2002. It is anticipated that general and
administrative expenses will decrease in future periods due to the reduction
in force announced in June 2003.

Restructuring

In June 2003, we announced the discontinuation of our therapeutic virus
program and the termination of all internal research activities. The decision
was part of a business realignment that placed an increased priority on the
development of BAY 43-9006. As a first step in the realignment, in January
2003, we suspended Phase II and Phase III clinical trials of

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ONYX-015 for head and neck cancer, canceled plans to initiate a Phase II trial
in metastatic colorectal cancer and suspended all manufacturing activities. In
the quarter ended March 31, 2003, we reduced staff levels by approximately 25
positions and recognized $0.4 million of employee termination costs. In the
quarter ended June 30, 2003, we announced we were further reducing staff levels
by approximately 50 positions, the majority of which were associated with
research and development for the therapeutic virus program and the remainder of
which were general and administrative staff. Certain of the terminated
employees provided services to Onyx beyond the minimum retention period of 60
days to receive severance-related benefits. For those employees, we measured
the fair value of the severance-related benefits at the communication date and
amortized the amount over the expected service period, ranging from 80 days to
six months. The fair value of the severance-related benefits associated with
the 50 employees terminated in June 2003 was $1.3 million, of which $0.3
million was amortized to restructuring expenses during the three months ended
June 30, 2003 and $0.9 million was amortized to restructuring expenses during
the three months ended September 30, 2003. We expect to record the remaining
severance charges of $0.1 million in the quarter ending December 31, 2003. In
addition to the $1.6 million of severance-related benefits we recorded for the
nine month period ended September 30, 2003, restructuring charges of $2.5
million were recognized as a result of the termination of our process
development and manufacturing agreement with XOMA (US) LLC, or XOMA, including
a termination fee of $1.0 million, a $1.0 million write-off of the unamortized
up-front payment originally made in 2001, and $0.5 million of other obligations
under the contract.

Of the $4.1 million restructuring expenses recognized during the
nine-month period ended September 30, 2003, $1.4 million was accrued at
September 30, 2003, including $1.1 million for the termination of the XOMA
agreement and $0.3 million for severance-related benefits.

We may also incur charges of up to $3.3 million related to the expected
early termination of our facility lease and the abandonment of certain
property and equipment. These estimated charges will be recorded when a loss
has been incurred or at the cease use date. At this time, we are not certain
when this loss or the cease use date will occur or the amount of the loss, if
any. We anticipate that the restructuring activities in January and June 2003
will reduce our quarterly operating expenses; however, these savings are
expected to be fully offset by our share of the increased codevelopment costs
for BAY 43-9006 as the compound advances through clinical trials.

Interest Income, Other Income and Other Expense

We had interest income of $254,000 for the three months ended September
30, 2003, and $562,000 for the nine months ended September 30, 2003, as
compared with $272,000 and $936,000 for the same periods in 2002. The
decrease in interest income in 2003 as compared with 2002 primarily was due to
lower average interest rates.

In November 2001, we sold and licensed to Syrrx, Inc. assets from our
small molecules discovery program in exchange for Syrrx preferred stock valued
at $750,000. The entire amount was recorded as Other income on the date of
sale. The value of the preferred stock was initially determined based on
similar sales of Syrrx preferred stock for cash. In December 2002, we
recorded a $100,000 charge to reduce the carrying value of our Syrrx
investment to reflect an impairment in the value of the stock. In the three
months ended June 30, 2003, based on a further round of financing completed by
Syrrx in April 2003, we recorded an additional write-down of $275,000 as
Other expense-related party to further reduce the carrying value of the
investment. We consider the reduction in carrying value of the investment to
be other-than-temporary. We did not incur similar write-downs in the three
months ended September 30, 2003 or in the three and nine months ended
September 30, 2002.

We licensed to Rigel Pharmaceuticals, Inc. assets from
our small molecules discovery program for $175,000 in January 2002
and $60,000 in August 2002, both of which we recorded as
Other income. No similar items were recorded in the three months or nine
months ended September 30, 2003.

Liquidity and Capital Resources

Since our inception, our cash expenditures have substantially exceeded our
revenues, and we have relied primarily on the proceeds from the sale of equity
securities and revenue from collaborative research and development agreements
to fund our operations.

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ONYX PHARMACEUTICALS, INC.

At September 30, 2003, we had cash, cash equivalents and marketable
securities of $94.9 million, compared to $39.8 million at December 31, 2002.
The increase of $55.1 million was attributable to our public offering
completed in July and August 2003, which raised aggregate net cash proceeds of
$73.8 million; the private placement financing that we completed in February
2003, which raised net cash proceeds of $9.9 million, as well as $1.9 million
received from the exercise of stock options. These sources of cash were
partially offset by cash used in operating activities of $30.5 million. The
cash was used primarily for cofunding the clinical development program with
Bayer for BAY 43-9006 and to fund our therapeutic virus program.

Total capital expenditures for equipment and leasehold improvements for
the nine-month period ended September 30, 2003, were $0.1 million. We
currently expect to make expenditures for capital equipment and leasehold
improvements of up to $0.2 million for the remainder of 2003.

We believe that our existing capital resources and interest thereon will
be sufficient to fund our current and planned operations through the end of
2005. In addition, we announced in October 2003 with our collaborator, Bayer,
the initiation of a Phase III clinical trial for BAY 43-9006. The start of the
Phase III clinical trial will result in a $15.0 million creditable
milestone-based payment to us from Bayer under our collaboration agreement that
we anticipate receiving in the fourth quarter of 2003. Pursuant to our
collaboration agreement, this amount is repayable to Bayer from a portion of
any of our future profits and royalties, if any, from any products. We
anticipate that our codevelopment costs for the BAY 43-9006 program will
increase over the next several years as the Phase III clinical trial program
advances. While these costs are unknown at the current time, we expect that we
will need to raise additional capital to continue the cofunding of the program
in future periods beyond 2005.

Changes in our research and development plans or other changes affecting
our operating expenses may result in the expenditure of our resources before
the end of 2005, and in any event, we will need to raise additional capital to
fund our operations beyond 2005. We intend to seek this additional funding
through collaborations, public and private equity or debt financings, capital
lease transactions or other available financing sources. Additional financing
may not be available on acceptable terms, if at all. If additional funds are
raised by issuing equity securities, substantial dilution to existing
stockholders may result. If adequate funds are not available, we may be
required to delay, reduce the scope of or eliminate one or more of our research
or development programs or to obtain funds through collaborations with others
that are on unfavorable terms or that may require us to relinquish rights to
certain of our technologies, product candidates or products that we would
otherwise seek to develop on our own.

Business Risks

BAY 43-9006 is our only product candidate currently in clinical
development, and our ability to discover and promote additional candidates to
clinical development is constrained. If BAY 43-9006 is not successfully
commercialized, we may be unable to identify and promote alternative product
candidates and our business would fail.

BAY 43-9006 is our only product candidate in clinical development. In June
2003, following an unsuccessful search for new collaboration partners for our
therapeutic virus product candidates, including ONYX-015 and ONYX-411, we
announced that we were discontinuing the development of all therapeutic virus
product candidates, eliminating all employee positions related to these
candidates, and terminating all related manufacturing capabilities. As a
result, we do not have internal research and development capabilities. Our
remaining scientific and administrative employees are dedicated to managing our
relationship with Bayer Pharmaceuticals Corporation, and the development of BAY
43-9006, but are not actively discovering or developing new product candidates.
As a result of the termination of our therapeutic virus program and drug
discovery programs, we do not have a functional product development pipeline.
If BAY 43-9006 is not successful in clinical trials, does not receive marketing
approval, or is not successfully commercialized, we may be unable to identify
and promote alternative product candidates to clinical development, which would
cause our business to fail.

We have begun an initial Phase III clinical trial with BAY 43-9006. If our
clinical trial fails to demonstrate the safety and effectiveness of this
product candidate, we will be unable to commercialize BAY 43-9006, and our
business may fail.

In collaboration with Bayer, we are conducting multiple clinical trials of
BAY 43-9006. We have completed Phase I single-agent clinical trials of BAY
43-9006. We are currently conducting a number of Phase I clinical trials of BAY
43-

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ONYX PHARMACEUTICALS, INC.

9006 in combination with standard chemotherapeutic agents. Phase I trials are
not designed to test the efficacy of a drug candidate but rather to test
safety, to study pharmacokinetics, or how the body processes the drug
candidate, to study pharmacodynamics, or how the drug candidate acts on the
body over a period of time, and to understand the drug candidates side effects
at various doses and schedules.

With Bayer, we are currently conducting single-agent, open label Phase II
clinical trials of BAY 43-9006 in liver, melanoma, kidney and other cancers.
Phase II trials are designed to explore the efficacy of a product candidate in
several different types of cancers and are normally randomized and
double-blinded to ensure that the results are due to the effects of the drug.
We and Bayer have initiated a Phase III clinical trial without randomized
Phase II clinical trial data. We believe that any clinical trial designed to
test the efficacy of BAY 43-9006, whether Phase II or Phase III, will likely
involve a large number of patients to achieve statistical significance and
will be expensive. We may conduct a lengthy and expensive clinical trial of
BAY 43-9006 only to learn that this drug candidate is not an effective
treatment. Historically, many companies have failed to demonstrate the
effectiveness of pharmaceutical product candidates in Phase III clinical
trials notwithstanding favorable results in Phase I or Phase II clinical
trials. In addition, we may observe previously unforeseen adverse side
effects.

If efficacy of BAY 43-9006 is not demonstrated, or if previously
unforeseen and unacceptable side effects are observed, we may not proceed with
further clinical trials of BAY 43-9006. If we do not proceed with additional
clinical trials of BAY 43-9006, we cannot seek regulatory approval of BAY
43-9006 with the U.S. Food and Drug Administration, or FDA, which may cause our
business to fail.

In our clinical trials, we treat patients who have failed conventional
treatments and who are in advanced stages of cancer. During the course of
treatment, these patients may die or suffer adverse medical effects for reasons
unrelated to BAY 43-9006. These adverse effects may impact the interpretation
of clinical trial results, which could lead to an erroneous conclusion
regarding the toxicity or efficacy of BAY 43-9006.

We are dependent upon our collaborative relationship with Bayer to
develop, manufacture and commercialize BAY 43-9006 and to obtain regulatory
approval, which could delay or prevent the development and commercialization of
BAY 43-9006.

Our strategy for developing, manufacturing and commercializing BAY 43-9006
and obtaining regulatory approval depends in large part upon our relationship
with Bayer. If we are unable to maintain our collaborative relationship with
Bayer, we would need to undertake these development, manufacturing and
marketing activities at our own expense, which would significantly increase our
capital requirements and limit the indications we are able to pursue and could
prevent us from commercializing BAY 43-9006.

Under the terms of the collaboration agreement, we and Bayer are
conducting multiple clinical trials of BAY 43-9006. We and Bayer must agree on
the development plan for BAY 43-9006. If we and Bayer cannot agree, clinical
trial progress could be significantly delayed or halted.

Under our agreement with Bayer, we have the opportunity to fund 50 percent
of clinical development costs worldwide except in Japan, where Bayer will fund
100 percent of development costs and pay us a royalty on sales. We are
currently funding 50 percent of development costs for BAY 43-9006, and depend
on Bayer to fund the balance of these costs. Our collaboration agreement with
Bayer does not, however, create an obligation for either us or Bayer to fund
the development of BAY 43-9006, or any other product candidate. If a party
declines to fund development or ceases to fund development of a product
candidate under the collaboration agreement, then that party will be entitled
to receive a royalty on any product which is ultimately commercialized, but not
to share in profits. Bayer could, upon 60 days notice, elect at any time to
terminate its cofunding of the development of BAY 43-9006. If Bayer terminates
its cofunding of BAY 43-9006 development, Onyx may be unable to fund the
development costs on its own and may be unable to find a new collaborator,
since Bayer would receive a royalty on any product that is ultimately
commercialized.

Bayer manages the development of BAY 43-9006, including the FDA regulatory
process and scope, size and schedule of clinical development. We are dependent
on Bayers experience in filing and pursuing applications necessary to gain
regulatory approvals. Bayer has limited experience in developing drugs for the
treatment of cancer.

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ONYX PHARMACEUTICALS, INC.

Our collaboration agreement with Bayer calls for Bayer to advance us
creditable milestone-based payments. Based on our continued cofunding of
development costs, Bayer will advance us $15 million upon
initiation of Phase III clinical trials. We expect to receive
this payment in the fourth quarter of 2003. In
addition, any funds advanced under the agreement are repayable out of our
future profits and royalties, if any, from any products.

Our collaboration agreement with Bayer terminates when patents expire that
were issued in connection with product candidates discovered under that
agreement, or upon the time when neither we nor Bayer are entitled to profit
sharing under that agreement, whichever is later. The patent application
related to BAY 43-9006 is held by Bayer and, if issued, will expire in 2019,
subject to possible patent-term extension, the entitlement for which and the
term of which we cannot predict.

We are subject to a number of additional risks associated with our
dependence on our collaborative relationship with Bayer, including:



| |  |  | the amount and timing of expenditure of resources can vary because of decisions by Bayer;                                 
| | - |  | --------------------------------------------------------------------------------------------------------------------------
|
| |  |  | disagreements as to development plans, including clinical trials or regulatory approval strategy;                         
|
| |  |  | the right of Bayer to terminate its collaboration agreement with 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;                          
|
| |  |  | withdrawal of support by Bayer following the development or acquisition by it of competing products; and                  
|
| |  |  | disagreements with Bayer regarding the collaboration agreement or ownership of proprietary rights.                        

Due to these factors and other possible disagreements with Bayer, we may
be delayed or prevented from developing or commercializing BAY 43-9006, or we
may become involved in litigation or arbitration, which would be time consuming
and expensive.

If Bayer is involved in a business combination, or Bayers business
strategy changes, it may adversely affect our collaborative relationship.

If Bayer is involved in a business combination, such as a merger, or is
otherwise acquired, the newly combined entity may have different priorities for
drug development and discovery than did the original collaborator. Bayer recently announced its intentions to retain its
pharmaceutical business.  However, a combination or sale of assets is still possible.

Similarly, Bayer may change its business strategy even in the absence of a
business combination. Any change in Bayers business strategy may adversely
affect its willingness or ability to complete its obligations under its
collaboration agreement with us, which could cause us to suffer significant
delays and funding shortfalls, seriously harming our business.

Provisions in our collaboration agreement with Bayer may prevent or delay
a change in control.

Our collaboration agreement with Bayer provides that if Onyx is acquired
by another entity by reason of merger, consolidation or sale of all or
substantially all of our assets, and Bayer does not consent to the transaction,
then for 60 days following the transaction Bayer may elect to terminate Onyxs
codevelopment, copromotion and comarketing rights under the collaboration
agreement. If Bayer were to exercise this right, Bayer would gain exclusive
development and marketing rights to the product candidates being developed
under the collaboration agreement, including BAY 43-9006. If this happened,
Onyx, or the successor to Onyx, would receive a royalty based on any sales of
BAY 43-9006 and other collaboration products, rather than a share of any
profits. In this case, Onyx or its successor would be permitted to continue
cofunding development, and the royalty rate would be adjusted to reflect this
continued risk-sharing by Onyx or its successor. These provisions of our
collaboration agreement with Bayer may have the effect of delaying or
preventing a change in control, or a sale of all or substantially all of our
assets, or may reduce the number of companies interested in acquiring Onyx.

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ONYX PHARMACEUTICALS, INC.

Our clinical trials could take longer to complete than we project or may
not be completed at all.

Although for planning purposes we project the commencement, continuation
and completion of clinical trials for BAY 43-9006, the actual timing of these
events may be subject to significant delays relating to various causes,
including actions by Bayer, scheduling conflicts with participating clinicians
and clinical institutions, difficulties in identifying and enrolling patients
who meet trial eligibility criteria, and shortages of available drug supply. We
may not complete clinical trials involving BAY 43-9006 as projected.

We rely on Bayer, academic institutions or clinical research organizations
to conduct, supervise or monitor some or all aspects of clinical trials
involving BAY 43-9006. We will have less control over the timing and other
aspects of these clinical trials than if we conducted them entirely on our own.
In addition, we may suffer a delay in the completion of any one of our clinical
trials because of requests from the FDA to revise the size or scope of the
clinical trial. Failure to commence or complete, or delays in, any of our
planned clinical trials would prevent us from commercializing BAY 43-9006, and
thus seriously harm our business.

We will need substantial additional funds, and our future access to
capital is uncertain.

We will require substantial additional funds to conduct the costly and
time-consuming clinical trials necessary to develop BAY 43-9006, pursue
regulatory approval and commercialize this product candidate. Our future
capital requirements will depend upon a number of factors, including:



| |  |  | the size and complexity of our BAY 43-9006 program;                                          
| | - |  | ---------------------------------------------------------------------------------------------
|
| |  |  | decisions made by Bayer to alter the size, scope and schedule of clinical development;       
|
| |  |  | our receipt of milestone-based payments;                                                     
|
| |  |  | the ability to manufacture sufficient drug supply to complete clinical trials;               
|
| |  |  | progress with preclinical testing and clinical trials;                                       
|
| |  |  | the time and costs involved in obtaining regulatory approvals;                               
|
| |  |  | the cost involved in preparing, filing, prosecuting, maintaining and enforcing patent claims;
|
| |  |  | competing technological and market developments; and                                         
|
| |  |  | product commercialization activities.                                                        

We may not be able to raise additional financing on favorable terms, or at
all. If we are unable to obtain additional funds, we may not be able to fund
our share of clinical trials. We may also have to curtail operations or obtain
funds through collaborative and licensing arrangements that may require us to
relinquish commercial rights or potential markets or grant licenses that are
unfavorable to us.

We believe that our existing capital resources and interest thereon,
including the net cash proceeds of approximately $73.8 million raised in the
underwritten public offering in July 2003 and the expected $15 million payment
from Bayer, will be sufficient to fund our current and planned operations
through the end of 2005. We anticipate that Bayer will advance us $15 million
under our collaboration agreement during the fourth quarter of 2003 for the
initiation of Phase III clinical trials for BAY 43-9006 based on our continued
cofunding of development costs. We also anticipate that our codevelopment
costs for the BAY 43-9006 program will increase over the next several years as
the Phase III clinical trial program advances. While these costs are unknown at
the current time, we expect that we will need to raise substantial additional
capital to continue the cofunding of the BAY 43-9006 program in future periods.
We may have to curtail our funding of BAY 43-9006 if we cannot raise sufficient
capital. If we do not cofund development of BAY 43-9006, we will receive a
royalty on future sales of any product that is ultimately commercialized,
instead of a share of profits.

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ONYX PHARMACEUTICALS, INC.

The efficacy of RAF inhibition in the treatment of human cancer has not
been established.

BAY 43-9006 is designed to act as a RAF inhibitor, blocking inappropriate
growth signals in tumor cells by inhibiting RAF kinase, an enzyme that induces
cancer cell growth. BAY 43-9006 is the first small molecule RAF inhibitor to
reach the stage of clinical testing, and there is currently no direct evidence
that the inhibition of RAF is an effective treatment for cancer in humans. The
anticancer activity of BAY 43-9006 was studied using preclinical models.
However, preclinical models to study anticancer activity of compounds are not
necessarily predictive of sufficient clinical efficacy of these compounds in
the treatment of human cancer to warrant a full commercial development program.
BAY 43-9006 has also been tested in Phase I and Phase II human clinical trials,
but the number of patients in these trials was insufficient to draw
statistically significant conclusions as to clinical efficacy of the compound.
RAF inhibition, the method of action of BAY 43-9006, may ultimately fail as an
effective treatment of cancer in humans, or BAY 43-9006 may not inhibit RAF
sufficiently to be effective. If RAF inhibition is not an effective treatment
of cancer in humans, BAY 43-9006 may have no commercial value as a drug
candidate, which could seriously harm our business.

We have a history of losses, and we expect to continue to incur losses.

Our net loss for the year ended December 31, 2000 was $7.5 million, for
the year ended December 31, 2001 was $27.6 million, and for the year ended
December 31, 2002 was $45.8 million. Our net loss for the nine months ended
September 30, 2003 was $33.2 million. As of September 30, 2003, we had an
accumulated deficit of approximately $192.1 million. We have incurred these
losses principally from costs incurred in our research and development programs
and from our general and administrative costs. We derived no revenues from
product sales or royalties. We expect to incur significant and increasing
operating losses over the next several years as we expand our clinical trial
activities. We expect our operating losses to increase with our cofunding of
ongoing BAY 43-9006 clinical trial costs under our collaboration agreement with
Bayer.

We do not expect to generate revenues from the sale of products for the
foreseeable future, and we must repay the milestone-based advances we receive
from Bayer from our future profits and royalties, if any. We expect that
substantially all of our revenues for the foreseeable future will result from
payments under our agreement with Bayer. Our ability to achieve profitability
depends upon success by us and Bayer in completing development of BAY 43-9006,
obtaining required regulatory approvals and manufacturing and marketing the
approved product.

We do not have manufacturing expertise or capabilities and are dependent
on third parties to fulfill our manufacturing needs, which could result in the
delay of clinical trials or regulatory approval.

We lack the resources, experience and capabilities to manufacture BAY
43-9006 or any future product candidates on our own. We would require
substantial funds to establish these capabilities. Consequently, we are
dependent on third parties, including collaborative parties and contract
manufacturers, to manufacture our product candidates and products, if any.
These parties may encounter difficulties in production scale-up, including
problems involving production yields, quality control and quality assurance and
shortage of qualified personnel. These third parties may not perform as agreed
or may not continue to manufacture our products for the time required by us to
successfully market our products. These third parties may fail to deliver the
required quantities of our products, if any, or product candidates on a timely
basis and at commercially reasonable prices. Failure by these third parties
could delay our clinical trials and our applications for regulatory approval.
If these third parties do not adequately perform, we may be forced to incur
additional expenses to pay for the manufacture of products or to develop our
own manufacturing capabilities.

We have the right to copromote BAY 43-9006, but we do not have marketing
or sales experience or capabilities.

We have the right under our collaboration agreement with Bayer to
copromote BAY 43-9006 in the United States in conjunction with Bayer. If we
exercise our rights to copromote BAY 43-9006, we will need to develop marketing
and sales capabilities. We may not successfully establish marketing and sales
capabilities or have sufficient resources to do so. If we do not develop
marketing and sales capabilities, we may not meet our copromotion obligations
under our collaboration agreement, which could result in our losing these
copromotion rights. If we do develop such capabilities, we will compete with
other companies that have experienced and well-funded marketing and sales
operations, and we will incur additional expenses.

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ONYX PHARMACEUTICALS, INC.

If we lose our key employees and consultants or are unable to attract or
retain qualified personnel, our business could suffer.

Our future success will depend in large part on the continued services of
our management personnel, including Hollings C. Renton, our Chairman, President
and Chief Executive Officer, and each of our other executive officers. The loss
of the services of one or more of our key employees could have an adverse
impact on our business. We do not maintain key person life insurance on any of
our officers, employees or consultants, other than for our chief executive
officer. Any of our key personnel could terminate their employment with us at
any time and without notice. We depend on our continued ability to attract,
retain and motivate highly qualified personnel. We face competition for
qualified individuals from numerous pharmaceutical and biotechnology companies,
universities, and other research institutions.

In January 2003, we restructured our operations to reflect an increased
priority on the development of BAY 43-9006 and, in June 2003, announced that we
discontinued our therapeutic virus program. As a result of these
restructurings, we eliminated approximately 75 positions, including our
entire scientific team associated with the therapeutic virus program. Our
remaining scientific and administrative employees are engaged in managing our
collaboration with Bayer to develop BAY 43-9006, but are not actively involved
in new product candidate discovery. If we resume our research and development
of other product candidates, we will either need to re-hire these individuals
or hire individuals with similar skill sets. If we cannot re-hire these
individuals or others with similar skill sets in a timely fashion, we will be
unable to resume these activities.

Even if our product candidates are approved, the market may not accept
these products.

Even if our product development efforts are successful and even if the
requisite regulatory approvals are obtained, BAY 43-9006 or any future product
candidates that we may develop may not gain market acceptance among physicians,
patients, healthcare payers and the medical community. A number of additional
factors may limit the market acceptance of products including the following:



| |  |  | rate of adoption by healthcare practitioners;                                               
| | - |  | --------------------------------------------------------------------------------------------
|
| |  |  | types of cancer for which the product is approved;                                          
|
| |  |  | rate of a products acceptance by the target population;                                    
|
| |  |  | timing of market entry relative to competitive products;                                    
|
| |  |  | availability of alternative therapies;                                                      
|
| |  |  | price of our product relative to alternative therapies;                                     
|
| |  |  | availability of third-party reimbursement;                                                  
|
| |  |  | 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.          

If BAY 43-9006 or any future product candidates that we may develop do not
achieve market acceptance, we may lose our investment in that product
candidate, which may cause our stock price to decline.

We face intense competition and rapid technological change, and many of
our competitors have substantially greater managerial resources than we have.

We are engaged in a rapidly changing and highly competitive field. We are
seeking to develop and market product candidates that will compete with other
products and therapies that currently exist or are being developed. Many other
companies are actively seeking to develop products that have disease targets
similar to those we are pursuing. Some of these

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ONYX PHARMACEUTICALS, INC.

competitive product candidates are in clinical trials. Competitors that target
the same tumor types as our BAY 43-9006 program and that have product
candidates in clinical development include Pfizer, AstraZeneca PLC, OSI
Pharmaceuticals, Inc., Genentech, Inc. and Abgenix, Inc., among others. We
believe Pfizer has a small molecule compound in preclinical development that
targets MEK, an enzyme that is also involved in the RAS signaling pathway. In
addition, potential competition may come from agents that target Epidermal
Growth Factor, or EGF, receptors and Vascular Endothelial Growth Factor, or
VEGF, receptors. These agents include antibodies and small molecules. In
particular, OSI Pharmaceuticals with Tarceva and
AstraZeneca with IRESSA are developing small molecule
inhibitors of EGF receptor tyrosine kinase. Companies working on developing antibody
approaches include ImClone Systems, Inc. with Erbitux and Abgenix with antibodies targeting
EGF receptors. Genentech has an antibody targeting VEGF (Avastin),
and Novartis is developing a small molecule targeting VEGF. In addition, many
other pharmaceutical companies are developing novel cancer therapies that, if
successful, would also provide competition for or be used in combination with
BAY 43-9006. We believe that other companies have RAF kinase inhibitors in
preclinical development.

If approved, the product candidates of these and other competitors now in
clinical trials will compete directly with BAY 43-9006. Many of our
competitors, either alone or together with collaborators, have substantially
greater financial resources and research and development staffs. In addition,
many of these competitors, either alone or together with their collaborators,
have significantly greater experience than we do in:



| |  |  | developing products;                                         
| | - |  | -------------------------------------------------------------
|
| |  |  | undertaking preclinical testing and human clinical trials;   
|
| |  |  | obtaining FDA and other regulatory approvals of products; and
|
| |  |  | manufacturing and marketing products.                        

Accordingly, our competitors may succeed in obtaining patent protection,
receiving FDA approval or commercializing product candidates before we do. If
we commence commercial product sales, we will compete against companies with
greater marketing and manufacturing capabilities, areas in which we have
limited or no experience.

We also face, and will continue to face, competition from academic
institutions, government agencies and research institutions. Further, we face
numerous competitors working on product candidates to treat each of the
diseases for which we are seeking to develop therapeutic products. In addition,
our product candidates, if approved, will compete with existing therapies that
have long histories of safe and effective use. We may also face competition
from other drug development technologies and methods of preventing or reducing
the incidence of disease and other classes of therapeutic agents.

Developments by competitors may render our product candidates obsolete or
noncompetitive. We face and will continue to face intense competition from
other companies for collaborations with pharmaceutical and biotechnology
companies for establishing relationships with academic and research
institutions, and for licenses to proprietary technology. These competitors,
either alone or with collaborative parties, may succeed with technologies or
products that are more effective than ours.

We anticipate that we will face increased competition in the future as new
companies enter our markets and as scientific developments surrounding other
cancer therapies continue to accelerate. If BAY 43-9006 receives regulatory
approval but cannot compete effectively in the marketplace, our business will
suffer.

We are subject to extensive government regulation, which can be costly,
time consuming and subject us to unanticipated delays.

Drug candidates under development are subject to extensive and rigorous
domestic and foreign regulation. We have not received regulatory approval in
the United States or any foreign market for BAY 43-9006 or any other product
candidate.

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We expect to rely on Bayer to file investigational new drug applications
and generally direct the regulatory approval process for BAY 43-9006, which may
not obtain necessary approvals from the FDA or other regulatory authorities. If
we fail to obtain required governmental approvals, we will experience delays in
or be precluded from marketing BAY 43-9006. If we have disagreements as to
ownership of clinical trial results or regulatory approvals, and the FDA
refuses to recognize us as holding, or having access to, the regulatory
approvals necessary to commercialize our product candidates, we may experience
delays in or be precluded from marketing products.

The regulatory review and approval process takes many years, requires the
expenditure of substantial resources, involves post-marketing surveillance, and
may involve ongoing requirements for post-marketing studies. Additional or more
rigorous governmental regulations may be promulgated that could delay
regulatory approval of BAY 43-9006. Delays in obtaining regulatory approvals
may:



| |  |  | adversely affect the successful commercialization of BAY 43-9006;
| | - |  | -----------------------------------------------------------------
|
| |  |  | impose costly procedures on us;                                  
|
| |  |  | diminish any competitive advantages that we may attain; and      
|
| |  |  | adversely affect our receipt of revenues or royalties.           

In addition, problems or failures with the products of others, including
our competitors, could have an adverse effect on our ability to obtain or
maintain regulatory approval for BAY 43-9006.

We may not be able to protect our intellectual property or operate our
business without infringing upon the intellectual property rights of others.

We can protect our technology from unauthorized use by others only to the
extent that our technology is covered by valid and enforceable patents or
effectively maintained as trade secrets. As a result, we depend in part on our
ability to:



| |  |  | 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.            

In the case of BAY 43-9006, the patent application covering this product
candidate is held by Bayer, but licensed to us in conjunction with our
collaboration agreement with Bayer. If the BAY 43-9006 patent is issued, it
will expire in 2019, subject to possible patent-term extension, the entitlement
for which and the term of which we cannot predict. Patent applications for BAY
43-9006 are also pending throughout the world. As of September 30, 2003, we
held 38 United States patents and had more than 26 patent applications pending
before the United States Patent and Trademark Office. Most of these patents or
patent applications cover protein targets used to identify product candidates
during the research phase of our collaborative agreements with Warner-Lambert
or Bayer, or aspects of our now discontinued virus program. Additionally, we
have corresponding patents or patent applications pending or granted in certain
foreign jurisdictions.

We are a party to various license agreements that give us rights to use
specified technologies in our development processes. If we are not able to
continue to license this technology on commercially reasonable terms, our
product development may be delayed. In addition, we generally do not control
the patent prosecution of in-licensed technology and, accordingly, are unable
to exercise the same degree of control over this intellectual property as we
exercise over our internally developed technology.

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ONYX PHARMACEUTICALS, INC.

Our existing patent rights may not have a deterrent effect on competitors
who are conducting or desire to commence competitive research programs with
respect to the biological targets or fields of inquiry that we are pursuing.
Although third parties may challenge our rights to, or the scope or validity of
our patents, to date, we have not received any communications from third
parties challenging our patents or patent applications covering our product
candidates.

The patent positions of biotechnology and pharmaceutical companies are
highly uncertain and involve complex legal and factual questions. Our patents,
or patents that we license from others, may not provide us with proprietary
protection or competitive advantages against competitors with similar
technologies. Competitors may challenge or circumvent our patents or patent
applications. Courts may find our patents invalid. Due to the extensive time
required for development, testing and regulatory review of our potential
products, our patents may expire or remain in existence for only a short period
following commercialization, which would reduce or eliminate any advantage the
patents may give us.

We may not have been the first to make the inventions covered by each of
our issued or pending patent applications, or we may not have been the first to
file patent applications for these inventions. Competitors may have
independently developed technologies similar to ours. We may need to license
the right to use third-party patents and intellectual property to develop and
market our product candidates. We may not acquire required licenses on
acceptable terms, if at all. If we do not obtain these required licenses, we
may need to design around other parties patents, or we may not be able to
proceed with the development, manufacture or, if approved, sale of our product
candidates. We may face litigation to defend against claims of infringement,
assert claims of infringement, enforce our patents, protect our trade secrets
or know-how, or determine the scope and validity of others proprietary rights.
In addition, we may require interference proceedings declared by the United
States Patent and Trademark Office to determine the priority of inventions
relating to our patent applications. These activities, and especially patent
litigation, are costly.

Bayer may have rights to publish data and information in which we have
rights. In addition, we sometimes engage individuals, entities or consultants
to conduct research that may be relevant to our business. The ability of these
individuals, entities or consultants to publish or otherwise publicly disclose
data and other information generated during the course of their research is
subject to certain contractual limitations. The nature of the limitations
depends on various factors, including the type of research being conducted, the
ownership of the data and information and the nature of the individual, entity
or consultant. In most cases, these individuals, entities or consultants are,
at the least, precluded from publicly disclosing our confidential information
and are only allowed to disclose other data or information generated during the
course of the research after we have been afforded an opportunity to consider
whether patent and/or other proprietary protection should be sought. If we do
not apply for patent protection prior to publication or if we cannot otherwise
maintain the confidentiality of our technology and other confidential
information, then our ability to receive patent protection or protect our
proprietary information will be harmed.

We face product liability risks and may not be able to obtain adequate
insurance.

The use of BAY 43-9006 in clinical trials, and the sale of any approved
products, exposes us to liability claims. Although we are not aware of any
historical or anticipated product liability claims against us, if we cannot
successfully defend ourselves against product liability claims, we may incur
substantial liabilities or be required to limit commercialization of BAY
43-9006.

We believe that we have obtained reasonably adequate product liability
insurance coverage for our clinical trials. We intend to expand our insurance
coverage to include the commercial sale of BAY 43-9006 if marketing approval is
obtained. However, insurance coverage is becoming increasingly expensive. We
may not be able to maintain insurance coverage at a reasonable cost. We may not
be able to obtain additional insurance coverage that will be adequate to cover
product liability risks that may arise should one of our product candidates
receive marketing approval. Regardless of merit or eventual outcome, product
liability claims may result in:



| |  |  | decreased demand for a product;             
| | - |  | --------------------------------------------
|
| |  |  | injury to our reputation;                   
|
| |  |  | withdrawal of clinical trial volunteers; and

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ONYX PHARMACEUTICALS, INC.



| |  |  | loss of revenues.
| | - |  | -----------------

Thus, whether or not we are insured, a product liability claim or product
recall may result in losses that could be material.

We deal with hazardous materials and must comply with environmental laws
and regulations, which can be expensive and restrict how we do business.

Our activities involve the controlled storage, use, and disposal of
hazardous materials, including infectious agents, corrosive, explosive and
flammable chemicals and various radioactive compounds. We are subject to
federal, state, and local laws and regulations governing the use, manufacture,
storage, handling, and disposal of these hazardous materials. Although we
believe that our safety procedures for handling and disposing of these
materials comply with the standards prescribed by these laws and regulations,
we cannot eliminate the risk of accidental contamination or injury from these
materials.

In the event of an accident, state or federal authorities may curtail our
use of these materials and we could be liable for any civil damages that
result, which may exceed our financial resources and may seriously harm our
business. While we believe that the amount of insurance we carry is sufficient
for typical risks regarding our handling of these materials, it may not be
sufficient to cover pollution conditions or other extraordinary or
unanticipated events. Additionally, an accident could damage, or force us to
shut down, our research facilities and operations. In addition, if we develop a
manufacturing capacity, we may incur substantial costs to comply with
environmental regulations and would be subject to the risk of accidental
contamination or injury from the use of hazardous materials in our
manufacturing process.

Our stock price is highly volatile.

The market price of our common stock has been highly volatile and is
likely to continue to be volatile. For example, during the period beginning
January 1, 2001 and ending September 30, 2003, the closing sales price for one
share of our common stock reached a high of $23.92 and a low of $3.50. Factors
affecting our stock price include:



| |  |  | results of clinical trials from BAY 43-9006;                                                               
| | - |  | -----------------------------------------------------------------------------------------------------------
|
| |  |  | ability to accrue patients into clinical trials;                                                           
|
| |  |  | success or failure in obtaining regulatory approval by us or our competitors;                              
|
| |  |  | public concern as to the safety and efficacy of our product candidates;                                    
|
| |  |  | developments in our relationship with Bayer;                                                               
|
| |  |  | developments in patent or other proprietary rights;                                                        
|
| |  |  | additions or departures of key personnel;                                                                  
|
| |  |  | announcements by us or our competitors of technological innovations or new commercial therapeutic products;
|
| |  |  | published reports by securities analysts;                                                                  
|
| |  |  | statements of governmental officials; and                                                                  
|
| |  |  | changes in healthcare reimbursement policies.                                                              

Existing stockholders have significant influence over us.

Our executive officers, directors and five percent stockholders own, in
the aggregate, approximately 29 percent of our outstanding common stock. As a
result, these stockholders will be able to exercise substantial influence over
all matters

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ONYX PHARMACEUTICALS, INC.

requiring stockholder approval, including the election of directors and
approval of significant corporate transactions. This could have the effect of
delaying or preventing a change in control of our company and will make some
transactions difficult or impossible to accomplish without the support of these
stockholders.

Bayer, a collaborative party, has the right to have its nominee elected to
our board of directors as long as we continue to collaborate on the development
of a compound. Because of these rights and ownership and voting arrangements,
our officers, directors and principal stockholders may be able to effectively
control the election of all members of the board of directors and to determine
all corporate actions.

We are at risk of securities class action litigation due to our expected
stock price volatility.

In the past, stockholders have often brought securities class action
litigation against a company following a decline in the market price of its
securities. This risk is especially acute for us, because biotechnology
companies have experienced greater than average stock price volatility in
recent years and, as a result, have been subject to, on average, a greater
number of securities class action claims than companies in other industries. We
may in the future be the target of similar litigation. Securities litigation
could result in substantial costs, could divert managements attention and
resources, and could seriously harm our business, financial condition and
results of operations.

Provisions in Delaware law, our charter and executive change of control
agreements we have entered into may prevent or delay a change of control.

We are subject to the Delaware anti-takeover laws regulating corporate
takeovers. These anti-takeover laws prevent Delaware corporations from engaging
in a merger or sale of more than 10 percent of its assets with any stockholder,
including all affiliates and associates of the stockholder, who owns 15 percent
or more of the corporations outstanding voting stock, for three years
following the date that the stockholder acquired 15 percent or more of the
corporations stock unless:



| |  |  | the board of directors approved the transaction where the stockholder
acquired 15 percent or more of the corporations stock;                                                                                                                                                                                                                                                                                                                
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | after the transaction in which the stockholder acquired 15 percent or
more of the corporations stock, the stockholder owned at least 85
percent 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.                                                                                                                                                                                                                                                 

As such, these laws could prohibit or delay mergers or a change of control
of us and may discourage attempts by other companies to acquire us.

Our certificate of incorporation and bylaws include a number of provisions
that may deter or impede hostile takeovers or changes of control or management.
These provisions include:



| |  |  | 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 percent or more of the stockholders entitled to vote at the meeting; and

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ONYX PHARMACEUTICALS, INC.



| |  |  | no cumulative voting.
| | - |  | ---------------------

These provisions may have the effect of delaying or preventing a change of
control, even at stock prices higher than the then current stock price.

We have entered into change of control severance agreements with each of
our executive officers. These agreements provide for the payment of severance
benefits and the acceleration of stock option vesting if the executive
officers employment is terminated within 13 months of a change in control of
Onyx. These change of control severance agreements may have the effect of
preventing a change of control.




Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market rate risk for changes in interest rates relates
primarily to our investment portfolio. We do not use derivative financial
instruments in our investment portfolio. By policy, we place our investments
with high quality debt security issuers, limit the amount of credit exposure to
any one issuer, limit duration by restricting the term, and hold investments to
maturity except under rare circumstances. We classify our cash equivalents or
marketable securities as fixed rate if the rate of return on an instrument
remains fixed over its term. As of September 30, 2003, all of our cash
equivalents and marketable securities were classified as fixed rate. There
were no significant changes in our market risk exposures during the three
months ended September 30, 2003. For further discussion of our market risk
exposures, refer to Part II, Item 7A Quantitative and Qualitative Disclosures
About Market Risk in our Annual Report on Form 10-K for the year ended
December 31, 2002.




Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures:The Companys principal
executive and financial officer reviewed and evaluated the Companys disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended). Based on that evaluation, the
Companys principal executive and financial officer concluded that the
Companys disclosure controls and procedures were sufficiently effective as of
September 30, 2003 to ensure that information required to be disclosed by the
Company in this Quarterly Report on Form 10-Q was recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commissions rules and Form 10-Q.

Changes in internal controls over financial reporting:There were no
changes in the Companys internal controls over financial reporting during the
three months ended September 30, 2003 that have materially affected, or are
reasonably likely to materially affect, the Companys internal control over
financial reporting.

Limitation on the effectiveness of controls:A control system, no matter
how well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Because of
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues, if any, within a company
have been detected.

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ONYX PHARMACEUTICALS, INC.




PART II: OTHER INFORMATION




Item 6. Exhibits and Reports on Form 8-K

a) Exhibits

| |  |  |      |  |  |                                                                                                                                                       
| |  |  | ---- |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | 3.1  |  |  | Restated Certificate of Incorporation of the Company. (1)                                                                                             
| |  |  |      |  |  |                                                                                                                                                       
| |  |  | 3.2  |  |  | Bylaws of the Company. (1)                                                                                                                            
| |  |  |      |  |  |                                                                                                                                                       
| |  |  | 3.3  |  |  | Certificate of Amendment to Amended and Restated Certificate of Incorporation. (2)                                                                    
| |  |  |      |  |  |                                                                                                                                                       
| |  |  | 4.1  |  |  | Specimen Stock Certificate. (1)                                                                                                                       
| |  |  |      |  |  |                                                                                                                                                       
| |  |  | 31.1 |  |  | Certification 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). (3)

b) Reports on Form 8-K



| |  |  | On July 14, 2003, the Company filed a Current Report on Form 8-K,
reporting under Item 5 that on July 14, 2003 the Company announced
plans to publicly offer 4,000,000 shares of its common stock
pursuant to an effective registration statement previously filed
with the Securities and Exchange Commission. In addition, the
Company announced plans to grant to the underwriters in connection
with the offering an option to purchase up to an additional 600,000
shares of common stock.
| |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | On July 22, 2003, the Company filed a Current Report on Form 8-K,
reporting under Item 5 that on July 21, 2003 the Company entered
into an Underwriting Agreement with Morgan Stanley & Co.
Incorporated, Lehman Brothers Inc. and SG Cowen Securities
Corporation relating to the sale of 5,000,000 shares of the
Companys common stock at an offering price to the public of $15.25
per share.                                                                                              
|
| |  |  | On August 4, 2003, the Company filed a Current Report on Form 8-K,
to furnish under Item 12 its July 31, 2003 public announcement of
financial results for the second quarter and six months ended June
30, 2003.                                                                                                                                                                                                                                                                              



---

|(1) |  | Filed as an exhibit to the registrants Registration Statement on Form
SB-2 (No. 333-3176-LA).                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Filed as an exhibit to the registrants Quarterly Report on Form 10-Q for
the quarter ended June 30, 2000.                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(3) |  | This certification accompanies the Quarterly Report on Form 10-Q to
which it relates, is not deemed filed with the Securities and Exchange
Commission and is not to be incorporated by reference into any filing of Onyx
Pharmaceuticals, Inc. under the Securities Act of 1933, as amended or the
Securities Exchange Act of 1934, as amended (whether made before or after the
date of the Quarterly Report on Form 10-Q), irrespective of any general
incorporation language contained in such filing.

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ONYX PHARMACEUTICALS, INC.




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

ONYX PHARMACEUTICALS, INC.

|                        |  |     |  |                                                                                                                                  
|----------------------- |  | --- |  | ---------------------------------------------------------------------------------------------------------------------------------
|Date: November 13, 2003 |  | By: |  | /s/ Hollings C. Renton                                                                                                           
|                        |  |     |  |                                                                                                                                  
|                        |  |     |  | Hollings C. Renton   Chairman
of the Board,   President
and Chief Executive Officer   (Principal
Executive and Financial Officer)
|                        |  |     |  |                                                                                                                                  
|Date: November 13, 2003 |  | By: |  | /s/ Marilyn E. Wortzman                                                                                                          
|                        |  |     |  |                                                                                                                                  
|                        |  |     |  | Marilyn E. Wortzman   Vice
President, Finance
   (Principal Accounting Officer)                                                  

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ONYX PHARMACEUTICALS, INC.




EXHIBIT INDEX

| |      |  |                                                                                                                                                       
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3.1  |  | Restated Certificate of Incorporation of the Company. (1)                                                                                             
| |      | 
| | 3.2  |  | Bylaws of the Company. (1)                                                                                                                            
| |      | 
| | 3.3  |  | Certificate of Amendment to Amended and Restated Certificate of Incorporation. (2)                                                                    
| |      | 
| | 4.1  |  | Specimen Stock Certificate. (1)                                                                                                                       
| |      | 
| | 31.1 |  | Certification 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). (3)



---



|(1) |  | Filed as an exhibit to the registrants Registration Statement on Form
SB-2 (No. 333-3176-LA).                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Filed as an exhibit to the registrants Quarterly Report on Form 10-Q
for the quarter ended June 30, 2000.                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(3) |  | This certification accompanies the Quarterly Report on Form 10-Q to
which it relates, is not deemed filed with the Securities and Exchange
Commission and is not to be incorporated by reference into any filing of Onyx
Pharmaceuticals, Inc. under the Securities Act of 1933, as amended or the
Securities Exchange Act of 1934, as amended (whether made before or after the
date of the Quarterly Report on Form 10-Q), irrespective of any general
incorporation language contained in such filing.

29