Onyx Pharmaceuticals (ONXX): Upside Expected $42

After the release of updated phase IIb data for proteasome inhibitor carfilzomib, Barclays Capital (NYSE: BCS) maintains an overweight rating on Onyx Pharmaceuticals (NASDAQ: ONXX).

The data presented at the American Society of Hematology meeting suggested low grade III/IV Aes. ONXX reported the data updated this weekend. .

With the limited efficacy data available, Barclays believes that safety and tolerability is encouraging with some patients on long-term therapy is up to 48 weeks. Carfilzomib is well tolerated by the patients, however efficacy data is the key.

BCS forecast a $42 price target by applying a 22x multiple to 2010 EPS of $1.91. The multiple is a function of diversified growth story with Proteolix acquisition.

The risks for ONXX include the inability to gain approval from the FDA for sorafenib for kidney cancer and the competition from other targeted cancer therapies, including PFE's Sutents and liver cancer but are not limited to these only.

Currently ONXX is trading at $29.77.