How to Fight Breast Cancer and Make Money
Jan 22nd 2013 9:49AM
Updated Jan 22nd 2013 10:20AM
Most of us can't cure life-threatening diseases on our own, but we can invest in health care companies that create novel therapies for the world's worst ailments. As an added bonus, our portfolios are rewarded when we invest in the best.
Health care giant Roche and biotech firm Immunogen are setting up just the breakthrough needed in battling one of the most talked-about ailments out there: breast cancer. Their T-DM1 drug therapy looks to be on the path to approval from the Food and Drug Administration; however, is this the kind of blockbuster pharmaceutical product that you should put your money behind?
The promising drug you've been waiting for
Roche and Immunogen's T-DM1 -- a drug packed with the antibody trastuzumab paired with the chemotherapy agent DM1 -- could be a new blockbuster from these two companies. The FDA has granted the drug a priority review, and with a decision date in late February, you won't have to wait long to see whether T-DM1 is ready to hit the market.
The drug, meant to battle HER2-positive breast cancer, should see a large consumer base. Cancers produced by the HER2 type represent between 15% and 20% of all breast cancer, and with more than 230,000 new invasive breast cancer cases reported in the U.S. women population alone in 2011, Roche and Immunogen have a lot to work with.
How much does this add up to? Peak sales for T-DM1 are absolutely astronomical; projections range from a conservative $2 billion annually to $5 billion or more in sales per year. Even revenues on the low end of that range would be enough to power Roche and Immunogen -- which will make single-digit percentage royalties from the drug -- successfully into the future.
Can this drug be stopped?
While T-DM1 hasn't been approved yet, the risk there is almost inconsequential. While the drug was originally rejected back in 2010 by the FDA, T-DM1 absolutely crushed its most recent phase 3 trial that formed the basis for its priority review. Roche and Immunogen's product reduced death risk by 32% in the most recent trial as compared to standard-of-care.
With the European Medicines Agency also accepting a marketing application for review, the potential market for T-DM1 is enormous. Roche looks to especially benefit off the promise of this drug, as its other cancer therapy of the future, Perjeta, received FDA approval for HER2 breast cancer treatment in June 2012.
Perjeta does represent some competition to T-DM1 -- something Roche investors can happily ignore -- but it's not the only opponent looking to reach the market.
Among other breast cancer drugs, Puma Biotechnology's neratinib recorded strong marks in a recent phase 2 study. As neratinib showed significant clinical progress for patients with HER2+ breast cancer, it's important that Roche and Immunogen are able to beat this drug -- and other competition -- to the market. A strong first-mover advantage will give T-DM1 a solid market foundation to work with in the face of competition.
All signs point to success
In the end, T-DM1 looks well on its way to blockbuster status -- and to rewarding Roche and Immunogen shareholders for their investments. The breast cancer market is absolutely gigantic, and T-DM1's clinical data and acceptance for the FDA's priority review both point to impending regulatory approval. If you're looking for two health care stocks with some surefire punch for the future, Roche and Immunogen are more than worthy of adding a boost to your portfolio on the back of T-DM1.
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The article How to Fight Breast Cancer and Make Money originally appeared on Fool.com.Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends ImmunoGen. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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