3 Breakthrough Drugs Yield 1 Instant Blockbuster
The FDA approved 27 new drugs in 2013, including three drugs that were approved under the FDA's breakthrough therapy pathway. That pathway was established by the FDA to speed up clinical trials and FDA approval timelines in a bid to get promising new therapies to patients more quickly.
Those three drugs -- Roche's Gazyva, Johnson and Johnson's Imbruvica, and Gilead's Sovaldi -- have now been available for at least one full quarter, so let's see how they did and whether they're likely to move share prices higher this year.
1. Roche's Gazyva
Gazyva was codeveloped by Rocheand Biogen and is approved to treat chronic lymphocytic leukemia, or CLL, a bone marrow cancer that results in the overproduction of abnormal white blood cells known as leukemia cells. There are more than 15,000 new cases of CLL diagnosed every year, and more than 4,600 people in the United States die from the disease annually.
While CLL is a rare disease, it's also a very important disease in need of new treatment options. The five year survival rate is roughly 60%, and the 10 year survival rate is just 35%.
As a result, the FDA awarded Roche's Gazyva breakthrough status in May 2013 following impressive early stage clinical trial results showing that combining Gazyva with chemotherapy extended the time it took for the disease to progress to 23 months. That was far better than the 11 month progression free survival seen in patients receiving chemotherapy alone.
Roche submitted Gazyva for FDA approval shortly thereafter and was granted priority review, which speeds up the FDA's decision making timeline to six months from the normal 10 months. The FDA approved Gazyva in November, making the first quarter Gazyva's first full quarter on the market.
So far, sales appear tepid at just $9 million in the first quarter. However, Roche is studying Gazyva in phase 3 trials for non-Hodgkin's lymphoma and large B cell lymphoma. That suggests Gazyva's patient population and revenue potential may be much higher than it is currently over the coming couple years. Industry analysts estimate Gazyva's peak annual sales could be north of $1.5 billion.
2. Johnson's Imbruvica
Johnson and its codeveloper Pharmacyclics won FDA approval for Imbruvica for mantle cell lymphoma, or MCL, in November. MCL is a rare B-cell lymphoma that affects less than 200,000 people, with just shy of 3,000 new cases diagnosed every year in the United States.
The FDA awarded Imbruvica breakthrough status based on midstage trials showing that 65% of patients responded to Imbruvica, netting a median duration of 17.5 months. Johnson and Pharmacyclics filed for the drug's approval in June and the FDA granted approval just four months later.
Currently, treatment typically includes combination therapies using Roche's blockbuster Rituxan. Those treatments have helped overall survival rates double in the past 10 years; however, there's tremendous work that still needs to be done given overall survival following diagnosis is typically less than seven years.
Imbruvica, which comes with a heady $130,000 per year price tag, produced net product revenue of $42 million in the fourth quarter as the industry built up inventory, and $56 million in net product sales for Pharmacyclics during the first quarter.
Pharmacyclics and Johnson won approval for use in CLL patients as a second line treatment in February, and Pharmacyclics issued net product sales guidance of nearly $300 million for this year during its first quarter conference call.
But the companies are also studying Imbruvica's use in large B-cell lymphoma, multiple myeloma, follicular lymphoma, and Waldenstrom's, which is a less common non-Hodgkin's lymphoma. If the drug wins approval in those indicsations, Imbruvica's sales could head steadily higher. Analysts think Imbruvica revenue could someday hit a peak annual rate of more than $1 billion.
3. Gilead's Sovaldi
Excitement has surrounded Gilead's Sovaldi since Gilead paid more than $11 billion to acquire its developer, Pharmasset, in 2012. The hepatitis C drug was so promising in trials that doctors warehoused patients for treatment throughout 2013 in anticipation of its approval.
Sovaldi got the FDA green light in December, and Gilead reported that despite being on sale for less than a month, Sovaldi sales totaled $140 million in the fourth quarter. But that only hinted at Sovaldi's potential. Sales of the drug surged to more than $2 billion in the first quarter as it quickly became the standard of care treatment.
That designation as a first line hepatitis C treatment stems from impressive trial results showing that Sovaldi cleared the infection in between 50% and 90% of patients, depending on the genotype.
The company's next generation regimen combines Sovaldi with another Gilead drug, ledipasvir, and that combination has generated effective cure rates well into the 90% range without the use of toxic prior generation therapies peginterferon and ribavirin.
As Gilead launches Sovaldi in more countries, sales seem likely to keep impressing. The World Health Organization estimates that between 130 million and 150 million people have chronic hepatitis C globally, and that more than 350,000 people die annually from liver disease caused by the infection. The sheer market size and potential launch of new treatments including the Sovaldi and ledipasvir combination has Express Scripts forecasting that spending on hepatitis C drugs is expected to surge more than 100% this year and more than 200% in 2015.
Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.
The article 3 Breakthrough Drugs Yield 1 Instant Blockbuster originally appeared on Fool.com.Todd Campbell owns shares of Gilead Sciences. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not have positions in the companies mentioned. Todd owns Gundalow Advisors, LLC. Gundalow's clients do not have positions in the companies mentioned. The Motley Fool recommends Gilead Sciences and Johnson & Johnson. The Motley Fool owns shares of Gilead Sciences and Johnson & Johnson. 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 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.