The Zacks Analyst Blog Highlights: Phillips 66, Global Partners, Tesoro, ConocoPhillips and Onyx Pharmaceuticals

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Jan 10, 2013, 09:30 ET

CHICAGO, Jan. 10, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog includePhillips 66 (NYSE:PSX), Global Partners L.P. (NYSE:GLP), Tesoro Corporation (NYSE:TSO), ConocoPhillips (NYSE:COP) and Onyx Pharmaceuticals, Inc. (Nasdaq:ONXX).

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Here are highlights from Wednesday's Analyst Blog:

Phillips Inks Oil-by-Rail Deal

Downstream energy company, Phillips 66 (NYSE:PSX) has struck a five-year deal with Global Partners L.P. (NYSE:GLP) for 50,000 barrels per day (BPD) or 91 million barrels of North Dakota crude oil that is to be delivered by rail to its Bayway refinery in New Jersey.

Per the contract, Phillips 66 will utilize Global Partners' rail transloading, logistics and transportation system to carry crude oil from the Bakken region in North Dakota to Phillips 66's New Jersey refinery. The cost of the transaction, which is expected to close in the first quarter of this year, was not disclosed.

Growing oil production from the Bakken oil field has doubled during the last two years and most of the pipelines transport oil from West Canada and North Dakota to the Gulf Coast. This leaves the East Coast refiners dependent on railcars to ship domestic oil.

In 2012, the company already made expansions to deliver more shale crude to its refineries by truck, rail, barge, ocean-going vessels, and pipelines. Management also asserted that Phillips 66 is the first company to ship shale crude to the East Coast.

The energy market in the East Coast region is considered the biggest in the country. According to the U.S. Energy Information Administration, in October 2012, 4.6 million BPD of gasoline, diesel and other petroleum products were sold.

With the advent of new drilling techniques, oil and gas production has increased to a considerable amount but logistics and construction issues have slowed down new pipeline projects. Hence, the rail companies benefit from their capability to employ their existing means to connect.

In 2012, Phillips 66 purchased 2,000 rail cars to provide domestic crude oil to its refineries. Another refiner Tesoro Corporation (NYSE:TSO) built a 10,000-car "pipeline on rails" to transport crude oil from the Bakken field to its refinery in Anacortes, Washington.

Phillips 66, an independent publicly traded company, was formed after the spin-off of the refining/sales business of ConocoPhillips (NYSE:COP) in May 2012. The move has resulted in the creation of the largest refining company in the U.S. and the largest exploration and production player based on oil and gas reserves.

Phillips 66 currently retains a Zacks Rank #2, which translates into a short-term Buy rating.

Catalyst-Filled 2013 for Onyx

Onyx Pharmaceuticals, Inc. (Nasdaq:ONXX) recently provided an update on its performance in 2012 and its plans for 2013.

Kyprolis Off to a Strong Start

Oncology product Kyprolis, which was launched in late July 2012, is off to a solid start with 2012 sales expected to cross $62 million. Strong adoption trends and rapid account penetration should ensure continued strong ramp of Kyprolis sales. The company estimates that about 25% of the 10-15k targeted patient population has received Kyprolis as of October 2012.

Onyx Pharma is currently evaluating Kyprolis in other studies including the FOCUS study which is being conducted to support the European filing of Kyprolis as a treatment for relapsed and refractory myeloma. Interim results should be out in the second half of 2013. The company is also looking for partnership deals in other countries where marketing authorization could be gained on the basis of US approval.

Nexavar Label Expansion Efforts

Onyx Pharma continues to work on expanding Nexavar's label. Nexavar, which is currently approved and marketed worldwide for the treatment of HCC or liver cancer and advanced renal cell carcinoma (RCC) or advanced kidney cancer, recently fared well in a late-stage study conducted in patients suffering from with locally advanced or metastatic radioactive iodine (RAI)-refractory differentiated thyroid cancer. A supplemental new drug application (sNDA) for the thyroid indication could be filed in 2013.

Another late-stage study is being conducted in patients suffering from locally advanced or metastatic HER2-negative breast cancer.

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