Roche gained Food and Drug Administration approval for its chronic lymphocytic leukemia agent Gazyva (obinutuzumab) this past week. This drug, coupled with chemotherapeutic agent chlorambucil, is the expected successor to blockbuster Rituxan, a cancer therapy responsible for $6 billion in sales but beginning to be threatened by competitors. The new approval of Gazyva puts Roche back in an advantageous position, with peak annual sales estimated at $1.5 billion to $2.5 billion.
As patent expiry in Europe looms later this year, competitors have been vying for a piece of the pie. No competing biologics have been approved yet, and Gazyva is a great pre-emptive strike by Roche, with studies reporting success over even Rituxan. Gazyva showed improved efficacy over Rituxan when combined with chlorambucil. Both Rituxan and Gazyva target a CD20 market to directly attack cancer cells, but Gazyva also has unique sugar molecules that trigger the immune system to attack tumors. Roche's scientists are also exploring the use of Gazyva in other cancers such as lymphoma.
Gazyva's approval came much earlier than the expected Dec. 20 decision date, helped by the FDA granting it breakthrough therapy designation, priority review, and orphan status. Gazyva is the first drug to be approved with FDA breakthrough therapy designation, a label given by the FDA dependent on the life-threatening nature of disease and initial clinical evidence indicating significant improvement over current therapies.
This first approval is an important one for the FDA's Breakthrough Therapy program, showing the potential collaboration possible between pharmaceutical companies and the FDA to expedite approval of important drugs.
Among those is Gazyva and Rituxan's potential competitor, GlaxoSmithKline's Arzerra, developed in combination with Genmab. Licensed three years ago by Glaxo for $2.1 billion, Arzerra was approved for second-line use in CLL, but only brought in a paltry $100 million in 2012. It gained breakthrough therapy designation from the FDA in September for first-line use against CLL, hopefully fast-tracking approval for the agent as Glaxo battles probes into bribery in China and serious competitors against its own blockbuster respiratory agent Advair.
Celgene was also developing a possible contender, Revlimid, which fell off in July upon reports of twice as many deaths from the agent as compared to controls in studies. The drug was already approved as treatment for anemia in myelodysplastic syndromes, as well as multiple myeloma and mantle cell lymphoma, and accounted for more than 68% of Celgene's revenue. Nonetheless, the FDA halted trials for CLL.
Roche now counts five cancer therapies approved in the past three years -- several in partnership with Biogen Idec , Gazyva included. In a press release, Roche indicated its pipeline for hematology includes "two antibody-drug conjugates (anti-CD79b [RG7596] and anti-CD22 [RG7593]), a small molecule antagonist of MDM2 (RG7112) and in collaboration with AbbVie, a small molecule BCL-2 inhibitor (RG7601/GDC-0199/ABT-199)."
Roche has always been a strong player in cancer drugs, with Biogen Idec equally strong in R&D. Coupled with the impressive marketing by both companies, it'd be no surprise if Gazyva were to beat sales estimate. While Glaxo does have a viable contender, Roche might see the staunchest competition against Gazyva in its own predecessor Rituximab. Not a bad problem to have, with the National Cancer Institute expecting more than 15,000 newly diagnoses cases of CLL this year in the U.S. alone.
The huge catalyst affecting health care stocks
Obamacare seems complex, but it doesn't have to be. In only minutes, you can learn the critical facts you need to know in a special free report called Everything You Need to Know About Obamacare. But don't hesitate; because it's not often that we release a FREE guide containing this much information and money-making advice. Please click here to access your free copy.
The article Roche's Gazyva Approval Marks Success in Oncology and New FDA Designation originally appeared on Fool.com.Fool contributor Amy Ho has no position in any stocks mentioned. The Motley Fool recommends Celgene. 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.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.