J&J (JNJ) Gets FDA Nod For New Prostrate Cancer Treatment

Johnson & Johnson’s (NYSE:JNJ) subsidiary, Janssen Biotech announced that the FDA has approved its new drug application (NDA) for apalutamide for the treatment of men with non-metastatic castration-resistant prostate cancer (“nmCRPC”). Apalutamide, J&J’s next-generation oral androgen receptor (“AR”) inhibitor, will be marketed under the trade name of Erleada.

The FDA decision comes much earlier than expected. Please note that in December last year, the NDA was granted priority review by the FDA. With the FDA granting priority review, a response was expected in April 2018.

Erleada’s NDA submission was based on positive data from the phase III SPARTAN study.

Last week, J&J presented positive data from the SPARTAN study at the American Society of Clinical Oncology Genitourinary Cancers Symposium meeting. The data from the study showed that Erleada (apalutamide) significantly reduced the risk of metastatis or death by 72% and increased median metastatis-free survival by more than two years in patients with nmCRPC.

J&J stock has returned 9.8% in the past year, which compares favorably with a gain of 9.6% recorded by the industry.

Given that there are no FDA-approved treatments available for this patient population, Erleada’s approval is a significant boost for the company’s cancer portfolio.

Also, Erleada’s approval has strengthened J&J’s prostate cancer franchise, especially with key drug Zytiga, approved for treating metastatic CRPC, facing patent challenges.

Several companies like Amneal, Apotex, Dr. Reddy’s (NYSE:RDY) , Mylan (NASDAQ:MYL) and Teva (NYSE:TEVA) among others are looking for an FDA approval of their generic versions of Zytiga.

Last month, J&J announced that the U.S. PTO issued a final written decision in an inter parties review (IPR) by a generic manufacturer, invalidating J&J’s ‘438 patent for Zytiga

Zytiga was a key driver of revenue growth at J&J last year. Zytiga sales rose 10.8% to $2.5 billion in 2017 due to improved market share in a growing metastatic castration-resistant prostate cancer market.

Though J&J does not expect any biosimilar entrants for Zytiga this year, it is confident that its guidance for 2017 organic sales growth (of 2.5%-3.5%) can absorb the impact of any potential Zytiga headwind such as an earlier-than-expected generics launch in 2018. In addition, Erleada’s early approval can somewhat make up for any lost sales of Zytiga in case a generic is launched this year.

Apalutamide was added to J&J’s portfolio through the August 2012 Aragon acquisition.

J&J carries a Zacks Rank #3 (Hold).

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