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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2007
 or
 o
    
    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.
  Delaware
    
    94-3154463(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer ID Number)
 
 
  þ o
  o þ o
  o þ




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##### 



INDEX
 PagePART I: FINANCIAL INFORMATIONItem 1.
    
    Financial Statements (Unaudited)Condensed Balance Sheets  June 30, 2007 and December 31, 2006
    
    
    3Condensed Statements of Operations  Three and six months ended June 30, 2007 and 2006
    
    
    4Condensed Statements of Cash Flows  Six months ended June 30, 2007 and 2006
    
    
    5Notes to Condensed Financial Statements
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    10Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    16Item 4.
    
    Controls and Procedures
    
    
    16PART II: OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    17Item 1A.
    
    Risk Factors
    
    
    17Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    33Item 3.
    
    Defaults Upon Senior Securities
    
    
    33Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    33Item 5.
    
    Other Information
    
    
    33Item 6.
    
    Exhibits
    
    
    33SIGNATURESEXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
  2




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PART I: FINANCIAL INFORMATION
 
 Item 1. Financial Statements (Unaudited)
 ONYX PHARMACEUTICALS, INC.
 
 CONDENSED BALANCE SHEETS
 (In thousands)
 June 30,
    
    
    December 31,2007
    
    
    2006(Unaudited)
    
    
    (Note 1)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    214,233
    
    
    $
    94,413Short-term marketable securities
    
    
    240,190
    
    
    
    172,545Receivable from collaboration partner
    
    
    7,104
    
    
    
    9,281Prepaid
expenses and other current assets
    
    
    6,550
    
    
    
    3,659Total current assets
    
    
    468,077
    
    
    
    279,898Long-term marketable securities
    
    
    
    
    
    
    4,445Property and equipment, net
    
    
    3,387
    
    
    
    1,478Other assets
    
    
    530
    
    
    
    425$
    471,994
    
    
    $
    286,246LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    554
    
    
    $
    297Payable to collaboration partner
    
    
    
    
    
    
    8,391Accrued liabilities
    
    
    3,694
    
    
    
    3,194Accrued clinical trials and related expenses
    
    
    3,658
    
    
    
    8,263Accrued compensation
    
    
    3,432
    
    
    
    3,321Total current liabilities
    
    
    11,338
    
    
    
    23,466Advance from collaboration partner
    
    
    40,000
    
    
    
    40,000Deferred lease incentives
    
    
    727
    
    
    
    Total long-term liabilities
    
    
    40,727
    
    
    
    40,000Stockholders equity:Common stock
    
    
    55
    
    
    
    46Additional paid-in capital
    
    
    881,485
    
    
    
    661,402Accumulated other comprehensive loss
    
    
    (99
    )
    
    
    (177
    )Accumulated deficit
    
    
    (461,512
    )
    
    
    (438,491
    )Total stockholders equity
    
    
    419,929
    
    
    
    222,780$
    471,994
    
    
    $
    286,246
  3




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ONYX PHARMACEUTICALS, INC.
 
 CONDENSED STATEMENTS OF OPERATIONS
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenue:License fee
    
    $
    
    
    
    $
    150
    
    
    $
    
    
    
    $
    150Operating expenses:Net expense due (from) to unconsolidated joint business
    
    
    (7,470
    )
    
    
    12,449
    
    
    
    (10,495
    )
    
    
    16,551Research and development
    
    
    6,448
    
    
    
    8,693
    
    
    
    11,982
    
    
    
    16,493Selling, general and administrative
    
    
    15,712
    
    
    
    13,421
    
    
    
    28,895
    
    
    
    25,044Total operating expenses
    
    
    14,690
    
    
    
    34,563
    
    
    
    30,382
    
    
    
    58,088Loss from operations
    
    
    (14,690
    )
    
    
    (34,413
    )
    
    
    (30,382
    )
    
    
    (57,938
    )Interest income, net
    
    
    3,864
    
    
    
    2,939
    
    
    
    7,361
    
    
    
    6,112Net loss
    
    $
    (10,826
    )
    
    $
    (31,474
    )
    
    $
    (23,021
    )
    
    $
    (51,826
    )Basic and diluted net loss per share
    
    $
    (0.22
    )
    
    $
    (0.76
    )
    
    $
    (0.49
    )
    
    $
    (1.25
    )Shares used in computing basic and diluted net loss
per share
    
    
    48,242
    
    
    
    41,422
    
    
    
    47,265
    
    
    
    41,357
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ONYX PHARMACEUTICALS, INC.
 
 CONDENSED STATEMENTS OF CASH FLOWS
   Six Months Ended June 30,2007
    
    
    2006Cash flows from operating activities:Net loss
    
    $
    (23,021
    )
    
    $
    (51,826
    )Adjustments to reconcile net loss to net cash used
in operating activities:Depreciation and amortization
    
    
    434
    
    
    
    379Stock-based compensation
    
    
    7,145
    
    
    
    7,493Changes in assets and liabilities:Receivable from collaboration partner
    
    
    2,177
    
    
    
    (262
    )Prepaid expenses and other current assets
    
    
    (2,891
    )
    
    
    (431
    )Other assets
    
    
    (105
    )
    
    
    13Accounts payable
    
    
    257
    
    
    
    (303
    )Accrued liabilities
    
    
    500
    
    
    
    1,762Accrued clinical trials and related expenses
    
    
    (4,605
    )
    
    
    4,684Payable to collaboration partner
    
    
    (8,391
    )
    
    
    (13,722
    )Accrued compensation
    
    
    111
    
    
    
    (252
    )Deferred
lease incentives
    
    
    727
    
    
    
    Net cash used in operating activities
    
    
    (27,662
    )
    
    
    (52,465
    )Cash flows from investing activities:Purchases of marketable securities
    
    
    (175,671
    )
    
    
    (153,606
    )Maturities of marketable securities
    
    
    112,549
    
    
    
    182,417Capital expenditures
    
    
    (2,343
    )
    
    
    (58
    )Net cash provided by (used in) investing activities
    
    
    (65,465
    )
    
    
    28,753Cash flows from financing activities:Advance from collaboration partner
    
    
    
    
    
    
    10,000Net proceeds from issuances of common stock
    
    
    212,947
    
    
    
    1,571Net cash provided by financing activities
    
    
    212,947
    
    
    
    11,571Net decrease in cash and cash equivalents
    
    
    119,820
    
    
    
    (12,141
    )Cash and cash equivalents at beginning of period
    
    
    94,413
    
    
    
    46,064Cash and cash equivalents at end of period
    
    $
    214,233
    
    
    $
    33,923
  5




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NOTES TO CONDENSED FINANCIAL STATEMENTS
June 30, 2007
(Unaudited)
 Note 1. Basis of Presentation
    Note 2. Net Expense due (from) to Unconsolidated Joint Business
      6




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Three Months Ended June 30,
    
    
    Six Months Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in thousands)
    
    
    (in thousands)Onyxs share of collaboration loss
    
    $
    1,405
    
    
    $
    21,674
    
    
    $
    5,834
    
    
    $
    33,670Reimbursement of Onyxs direct
development and marketing
expenses
    
    
    (8,875
    )
    
    
    (9,225
    )
    
    
    (16,329
    )
    
    
    (17,119
    )Net expense due (from) to
unconsolidated joint business
    
    $
    (7,470
    )
    
    $
    12,449
    
    
    $
    (10,495
    )
    
    $
    16,551
  Note 3. Stock-Based Compensation
 ,
  Employee Stock Plans
  Valuation Assumptions
 7




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Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006Stock Option Plans:Risk-free interest rate
    
    
    4.58
    %
    
    
    4.57
    %
    
    
    4.70
    %
    
    
    4.57
    %Expected life
    
    4.3 years

        
    4.2 years
    

    4.3 years
    
    
    4.2 yearsExpected volatility
    
    
    64
    %
    
    
    60
    %
    
    
    64
    %
    
    
    60
    %Expected dividends
    
    None
    
    
    None
    

    
    None
    
    
    NoneWeighted average option fair value
    
    $
    16.06
    
    
    $
    7.95
    
    
    $
    13.55
    
    
    $
    12.88Stock bonus awards:Expected life
    
3 years
    
    
3 years
    
    
    3 years
    
    
    3 yearsExpected dividends
    
    None
    


    
    None
    


    
    None
    


    
    NoneWeighted average fair value per share
    
    $
    24.84
    
    
    $
    21.04
    
    
    $
    24.84
    
    
    $
    21.04ESPP:Risk-free interest rate
    
    
    5.17
    %
    
    
    4.33
    %
    
    
    5.17
    %
    
    
    4.33
    %Expected life
    
6 months
    
    
6 months
    
    
    6 months
    
    
    6 monthsExpected volatility
    
    
    60
    %
    
    
    60
    %
    
    
    60
    %
    
    
    60
    %Expected dividends
    
    None
    


    
    None
    


    
    None
    


    
    NoneWeighted average shares fair value
    
    $
    4.97
    
    
    $
    9.32
    
    
    $
    4.97
    
    
    $
    9.32
 Note 4. Revenue
   Note 5. Net Loss Per Share
  Note 6. Comprehensive Loss
  8




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Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006(In thousands)
    
    (In thousands)Net loss  as reported
    
    $
    (10,826
    )
    
    $
    (31,474
    )
    
    $
    (23,021
    )
    
    $
    (51,826
    )Other comprehensive loss:Change in unrealized
gain (loss) on
available-for-sale
securities
    
    
    5
    
    
    
    20
    
    
    
    78
    
    
    
    (261
    )Comprehensive loss
    
    $
    (10,821
    )
    
    $
    (31,454
    )
    
    $
    (22,943
    )
    
    $
    (52,087
    )
 Note 7. Income Taxes
  Note 8. Recently Issued Accounting Standards
  Note 9. Common Stock Offering
  9




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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 this Quarterly Report on 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 Item 1A Risk Factors
in this Form 10-Q .
 Overview
 changing the way cancer is treated 
 ®
      10




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Critical Accounting Policies and the Use of Estimates
  Results of Operations
 Three and six months ended June 30, 2007 and 2006
 Revenue
   Net Expense due (from) to Unconsolidated Joint Business
    11




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Three Months Ended June 30,
    
    
    Six Months Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in thousands)
    
    
    (in thousands)Product revenue, net (as recorded by Bayer)
    
    $
    81,332
    
    
    $
    32,190
    
    
    $
    142,212
    
    
    $
    55,937Combined cost of goods sold, distribution,
selling, general and administrative
expenses
    
    
    49,285
    
    
    
    26,175
    
    
    
    85,734
    
    
    
    43,883Combined research and development expenses
    
    
    34,856
    
    
    
    49,362
    
    
    
    68,146
    
    
    
    79,393Combined collaboration loss
    
    $
    2,809
    
    
    $
    43,347
    
    
    $
    11,668
    
    
    $
    67,339Onyxs share of collaboration loss
    
    $
    1,405
    
    
    $
    21,674
    
    
    $
    5,834
    
    
    $
    33,670Reimbursement of Onyxs direct development
and marketing expenses
    
    
    (8,875
    )
    
    
    (9,225
    )
    
    
    (16,329
    )
    
    
    (17,119
    )Onyx net expense due (from) to
unconsolidated joint business
    
    $
    (7,470
    )
    
    $
    12,449
    
    
    $
    (10,495
    )
    
    $
    16,551
 Research and Development Expenses
    Selling, General and Administrative Expenses
  13




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Interest Income
  Liquidity and Capital Resources
      14




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Recently Issued Accounting Standards
   15




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
   June 30, 2007
    
    December 31, 2006Average
    
    
    
    
    
    
    
    
    
    AverageFair Value
    
    Interest
    
    
    
    
    
    Fair Value
    
    InterestMaturity
    
    (In millions)
    
    Rate
    
    Maturity
    
    (In millions)
    
    RateCash equivalents, fixed rate
    
    0  2 months
    
    $
    210.1
    
    
    
    5.47
    %
    
    0  2 months
    
    $
    94.1
    
    
    
    5.34
    %Marketable securities,
fixed rate
    
    0  23 months
    
    $
    240.2
    
    
    
    5.38
    %
    
    0  13 months
    
    $
    177.0
    
    
    
    4.91
    %
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures:
 Changes in Internal Control over Financial Reporting:
 Inherent Limitations on Effectiveness of Controls:
 16




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PART II: OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
 You should carefully consider the risks described below, together with all of the other
information included in this report, in considering our business and prospects. The risks and
uncertainties described below contain forward-looking statements, and our actual results may differ
materially from those discussed here. Additional risks and uncertainties not presently known to us
or that we currently deem immaterial also may impair our business operations. Each of these risk
factors could adversely affect our business, operating results and financial condition, as well as
adversely affect the value of an investment in our common stock and/or contingent value rights.
 We have marked with an asterisk (*) those risk factors below that reflect material changes
from the risk factors included in our Annual Report on Form 10-K filed with the Securities and
Exchange Commission on March 5, 2007.
 Nexavar ® (sorafenib) tablets is our only product, and we do not have any other
product candidates in Phase 2 or Phase 3 clinical development. If Nexavar is not commercially
successful, we may be unable to identify and promote alternative product candidates and our
business would fail.
  If our clinical trials fail to demonstrate that Nexavar is safe and effective for cancer types
other than kidney and liver cancers, we will be unable to broadly commercialize Nexavar as a
treatment for cancer, and our business may fail.
     17




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Although we have stopped the Phase 3 liver cancer trial, Nexavar may never be approved for use
in this indication, or its approval may be significantly delayed.
   There are competing therapies approved for the treatment of advanced kidney and other types of
cancer for which we are developing Nexavar. We expect the number of approved therapies to rapidly
increase, which could harm the prospects for Nexavar in advanced kidney cancer and other
indications.
  18




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We are dependent upon our collaborative relationship with Bayer to manufacture and to further
develop and commercialize Nexavar. There may be circumstances that delay or prevent the development
and commercialization of Nexavar.
   
    
    the amount and timing of resource expenditures can vary because of decisions by Bayer;
 19




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##### Table of Contents




    
    possible 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
    
    possible disagreements with Bayer regarding the collaboration agreement or ownership of
proprietary rights.
   We face intense competition and rapid technological change, and many of our competitors have
substantially greater resources than we have.
   
    
    developing products;
    
    undertaking preclinical testing and human clinical trials;
    
    obtaining FDA and other regulatory approvals of products; and
    
    manufacturing and marketing products.
  20




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Our clinical trials could take longer to complete than we project or may not be completed at
all.
    If serious adverse side effects are associated with Nexavar, approval for Nexavar could be
revoked, sales of Nexavar could decline, and we may be unable to develop Nexavar as a treatment for
other types of cancer.
  
    
    Hypertension may occur early in the course of therapy and blood pressure should be
monitored weekly during the first six weeks of therapy and treated as needed.
    
    Gastrointestinal perforation has been reported in less than one percent of patients
taking Nexavar.
    
    Incidence of bleeding, regardless of causality, was 15 percent for Nexavar vs. 8
percent for placebo and the incidence of treatment-emergent cardiac ischemia/infarction was
2.9 percent for Nexavar vs. 0.4 percent for placebo.
    
    Most common treatment-emergent adverse events with Nexavar were diarrhea,
rash/desquamation, fatigue, hand-foot skin reaction, alopecia and nausea. Grade 3/4
adverse events were 38 percent for Nexavar vs. 28 percent for placebo.
    
    Women of child-bearing potential should be advised to avoid becoming pregnant and
advised against breast-feeding.
    
    In cases of any severe or persistent side effects, temporary treatment
interruption, dose modification or permanent discontinuation should be considered.
  Our operating results are unpredictable and may fluctuate. If our operating results are below
the expectations of securities analysts or investors, the trading price of our stock could decline.
    21




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We have a history of losses, and we expect to continue to incur losses.
   We are subject to extensive government regulation, which can be costly, time consuming and
subject us to unanticipated delays.
   22




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
    
    adversely affect the successful commercialization of Nexavar;
    
    impose costly procedures on us;
    
    diminish any competitive advantages that we may attain; and
    
    adversely affect our receipt of revenues or royalties.
  We are dependent on the efforts of and funding by Bayer for the development Nexavar.
   23




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We are dependent on the efforts of Bayer to market and promote Nexavar.
     We do not have manufacturing expertise or capabilities and are dependent on Bayer to fulfill
our manufacturing needs, which could result in lost sales and the delay of clinical trials or
regulatory approval.
  24




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If Bayers business strategy changes, it may adversely affect our collaborative relationship.
  The market may not accept our products and pharmaceutical pricing and reimbursement pressures
may reduce profitability.
    
    
    rate of adoption by healthcare practitioners;
    
    treatment guidelines issued by government and non-government agencies;
 25




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
    
    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;
    
    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 we lose our key employees and consultants or are unable to attract or retain qualified
personnel, our business could suffer.
  We may need substantial additional funds, and our future access to capital is uncertain.
  
    
    the size and complexity of our Nexavar program;
    
    global product commercialization activities;
    
    decisions made by Bayer and Onyx to alter the size, scope and schedule of clinical
development;
    
    repayment of our of milestone-based advances;
    
    progress with clinical trials;
    
    the time and costs involved in obtaining regulatory approvals;
 26




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
    
    the cost involved in enforcing patent claims against third parties and defending claims
by third parties (both of which are shared with Bayer);
    
    the costs associated with acquisitions or licenses of additional products; and
    
    competing technological and market developments.
   While Nexavar has received approvals for sale in several countries outside of the United
States, it has not received pricing approval in all of these foreign countries, and may receive
limited marketing approval or may be denied marketing approval in additional countries.
   If the specialty pharmacies and distributors that we and Bayer rely upon to sell our products
fail to perform, our business may be adversely affected.
  
    
    not provide us with accurate or timely information regarding their inventories, the
number of patients who are using Nexavar or complaints about Nexavar;
    
    not effectively sell or support Nexavar;
    
    reduce their efforts or discontinue to sell or support Nexavar;
    
    not devote the resources necessary to sell Nexavar in the volumes and within the time
frames that we expect;
    
    be unable to satisfy financial obligations to us or others; and
    
    cease operations.
  28




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We may not be able to protect our intellectual property or operate our business without
infringing upon the intellectual property rights of others.
  
    
    obtain patents;
    
    license technology rights from others;
    
    protect trade secrets;
    
    operate without infringing upon the proprietary rights of others; and
    
    prevent others from infringing on our proprietary rights.
     We may incur significant liability if it is determined that we are promoting the off-label
use of drugs or are otherwise found in violation of federal and state regulations in the United
States or elsewhere.
  29




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We face product liability risks and may not be able to obtain adequate insurance.
   
    
    decreased demand for a product;
    
    injury to our reputation;
    
    withdrawal of clinical trial volunteers; and
    
    loss of revenues.
  If we do not receive timely and accurate financial and market information from Bayer regarding
the development and sale of Nexavar, we may be unable to accurately report our results of
operations.
  Provisions in our collaboration agreement with Bayer may prevent or delay a change in control.
  Accounting pronouncements may affect our future financial position and results of operations.
  Our stock price is volatile.
  
    
    reported sales of Nexavar;
    
    interim or final results of, or speculation about, clinical trials from Nexavar;
    
    decisions by regulatory agencies;
    
    changes in the regulatory approval requirements;
    
    ability to accrue patients into clinical trials;
    
    success or failure in, or speculation about, 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;
 30




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
    
    changes in healthcare reimbursement policies;
    
    sales of our common stock by existing holders, or sales of shares issuable upon
exercise of outstanding options and warrants; and
    
    sales by us of our common stock, including sales under our committed equity financing
facility arrangement with Azimuth
 Existing stockholders have significant influence over us.
   We are at risk of securities class action litigation due to our expected stock price
volatility.
  Provisions in Delaware law, our charter and executive change of control agreements we have
entered into may prevent or delay a change of control.
  
    
    the board of directors approved the transaction where the stockholder acquired 15
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
 31




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##### Table of Contents




    
    on or after this date, the merger or sale is approved by the board of directors and the
holders of at least two-thirds of the outstanding voting stock that is not owned by the
stockholder.
   
    
    our board is classified into three classes of directors as nearly equal in size as
possible with staggered three-year terms;
    
    the authority of our board to issue up to 5,000,000 shares of preferred stock and to
determine the price, rights, preferences and privileges of these shares, without
stockholder approval;
    
    all stockholder actions must be effected at a duly called meeting of stockholders and
not by written consent;
    
    special meetings of the stockholders may be called only by the chairman of the board,
the chief executive officer, the board or ten percent or more of the stockholders entitled
to vote at the meeting; and
    
    no cumulative voting.
   32




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##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  (a)
    
    Both of the nominees of the Board of Directors were elected to serve until our
annual meeting of stockholders in 2010. The nominees were: Corinne H. Lyle; 40,043,818
common shares for, none against and 171,847 withheld; and Thomas G. Wiggans;
36,406,700 commons shares for, none against and 3,808,965 withheld. The term of
office of directors Magnus Lundberg and Hollings C. Renton continues until our annual
meeting of stockholders in 2008. The term of office of directors Paul Goddard, Ph.D,
Antonio J. Grillo-Lopez, M.D., and Wendell Wierenga, Ph.D, continues until our annual
meeting of stockholders in 2009.(b)
    
    The stockholders approved the amendment to the Companys Equity Incentive Plan
to increase the aggregate number of shares of Common Stock authorized for issuance
under that plan by 1,600,000 shares: 22,775,753 common shares for, 4,138,104 against,
24,932 abstaining and 13,276,876 broker non-votes.(c)
    
    The stockholders approved the amendment to the Companys Employee Stock
Purchase Plan to increase the aggregate number of shares of Common Stock authorized
for issuance under that plan by 500,000 shares: 23,912,648 common shares for,
3,005,163 against, 20,978 abstaining and 13,276,876 broker non-votes.(d)
    
    The stockholders ratified the selection by the Audit Committee of the Board of
Directors of Ernst & Young LLP as our independent registered public accounting firm
for our fiscal year ending December 31, 2007: 40,100,953 common shares for, 89,205
against, 25,507 abstaining and zero broker non-votes.
 
 Item 5. Other Information
  
 Item 6. Exhibits
 3.1 (1)
    
    Restated Certificate of Incorporation of the Company.3.2 (2)
    
    Amended and Restated Bylaws of the Company.3.3 (3)
    
    Certificate of Amendment to Amended and Restated Certificate of Incorporation.3.4 (4)
    
    Certificate of Amendment to Amended and Restated Certificate of Incorporation.4.1
    
    Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4.4.2 (1)
    
    Specimen Stock Certificate.10.7 (2)
    
    1996 Employee Stock Purchase Plan.
 33




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##### Table of Contents



10.13 (2)
    
    2005 Equity Incentive Plan.10.26
(5)
    
    Retirement Agreement between Edward
F. Kenney and the Company, dated April 13, 2007.31.1 (6)
    
    Certification of Chief Executive Officer as required by Rule 13a-14(a) or
Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.31.2 (6)
    
    Certification of Principal Financial Officer as required by Rule 13a-14(a) or
Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.32.1 (6)
    
    Certifications required by Rule 13a-14(b) or Rule 15d-14(b) of the Securities
Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18
of the United States Code (18 U.S.C. 1350).
 
 (1)
    
    Filed as an exhibit to the Companys Registration Statement on Form SB-2 (No. 333-3176-LA).(2)
    
    Filed as an exhibit to the Companys Current Report on Form 8-K filed on May 25, 2007.(3)
    
    Filed as an exhibit to the Companys Quarterly Report on Form 10-Q for the quarter ended
June 30, 2000.(4)
    
    Filed as an exhibit to the Companys Registration Statement on Form S-3 (No. 333-134565)
filed on May 30, 2006.(5)
    
    Filed as an exhibit to the Companys Quarterly Report on
Form 10-Q for the quarter ended March 31, 2007.(6)
    
    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. 34




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##### Table of Contents



SIGNATURES
  ONYX PHARMACEUTICALS, INC.Date: August 8, 2007
    By:
    /s/ Hollings C. RentonHollings C. RentonChairman of the Board,
President and Chief Executive Officer
(Principal Executive Officer)Date: August 8, 2007
    By:
    /s/ Gregory W. SchaferGregory W. SchaferVice President and Chief Financial Officer
(Principal Financial Officer) 35




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##### Table of Contents



EXHIBIT INDEX
 3.1 (1)
    
    Restated Certificate of Incorporation of the Company.3.2 (2)
    
    Amended and Restated Bylaws of the Company.3.3 (3)
    
    Certificate of Amendment to Amended and Restated Certificate of Incorporation.3.4 (4)
    
    Certificate of Amendment to Amended and Restated Certificate of Incorporation.4.1
    
    Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4.4.2 (1)
    
    Specimen Stock Certificate.10.7 (2)
    
    1996 Employee Stock Purchase Plan.
 10.13 (2)
    
    2005 Equity Incentive Plan.10.26
(5)
    
    Retirement Agreement between Edward
F. Kenney and the Company, dated April 13, 2007.31.1 (6)
    
    Certification of Chief Executive Officer as required by Rule 13a-14(a) or
Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.31.2 (6)
    
    Certification of Principal Financial Officer as required by Rule 13a-14(a) or
Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.32.1 (6)
    
    Certifications required by Rule 13a-14(b) or Rule 15d-14(b) of the Securities
Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18
of the United States Code (18 U.S.C. 1350).
 
 (1)
    
    Filed as an exhibit to the Companys Registration Statement on Form SB-2 (No. 333-3176-LA).(2)
    
    Filed as an exhibit to the Companys Current Report on Form 8-K filed on May 25, 2007.(3)
    
    Filed as an exhibit to the Companys Quarterly Report on Form 10-Q for the quarter ended
June 30, 2000.(4)
    
    Filed as an exhibit to the Companys Registration Statement on Form S-3 (No. 333-134565)
filed on May 30, 2006.(5)
    
    Filed as an exhibit to the Companys Quarterly Report on
Form 10-Q for the quarter ended March 31, 2007.(6)
    
    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. 36