In July 2012, the Food and Drug Administration Safety and Innovation Act was signed into law; and little did we know at the time, but the drug development process was about to be altered forever. This bill expanded many of the existing governing powers of the FDA, but also added one intriguing new provision -- the breakthrough therapy designation.
Recognizing unique therapies
This new designation, as described on the FDA's website, is to "assist drug developers to expedite the development and review of new drugs with preliminary clinical evidence that indicates the drug may offer a substantial improvement over available therapies for patients with serious or life-threatening diseases."
Put even more simply, the breakthrough therapy designation is a monumental step in potentially bringing clinically superior drugs to market years ahead of the schedule they'd normally have to follow. Previously, drug developers had to run three separate clinical stage trials. Now, for drugs with the breakthrough therapy designation, preliminary data, (i.e., phase 1/2) can be used as the precursor for a new drug filing, shaving anywhere from one or maybe multiple years off the process of bringing a revolutionary drug to market.
According to the FDA, since Oct. 1, 2012, the agency has received 61 separate breakthrough therapy designation requests. Through June 28, 2013, it had granted 23, denied 15, and had an additional 23 pending.
What's perhaps more remarkable is the fact that Pharmacyclics (NASDAQ: PCYC ) has three of those 23 approved breakthrough therapy designations for its lead experimental drug, ibrutinib. Ibrutinib, which is also licensed to Johnson & Johnson (NYSE: JNJ ) subsidiary Janssen Pharmaceuticals, was designated as a breakthrough therapy for patients with chronic lymphocytic leukemia, mantle cell lymphoma, and Waldenstrom's macroglobulinemia. The big potential indication here is CLL, which is the most common adulthood leukemia and occurs in 113,000 people in the U.S. By comparison, MCL diagnoses number about 5,000 each year.
Is this the breakthrough of all breakthrough therapies?
But, if you thought all of the fun stopped at the actual breakthrough therapy designation, then you have another thing coming. Yesterday, Pharmacyclics and J&J took the first step toward proving whether this new designation pathway is going to have some merit by filing for a new drug application for ibrutinib.
The trial results, published in The New England Journal of Medicine last month appear to be unmistakably in favor of an eventual approval for ibrutinib. In the MCL trial across both cohorts (those who had taken Takeda Pharmaceuticals' Velcade and those who were Velcade-naive), ibrutinib delivered a 68% overall response rate with a median response duration of a whopping 17.5 months. The results in the CLL and small lymphocytic leukemia, or SLL, trial were even more impressive, with ibrutinib delivering an overall response rate across the two doses being tested of 71%. Furthermore, estimated progression-free survival at 26 months was estimated at an incredible 75%!
The results sort of speak for themselves, but even more than that it speaks to the breakthrough in the NDA process via the new breakthrough therapy designation. Ibrutinib, whether it likes it or not, will be the guinea pig of the breakthrough therapy drug approval process, thus making it the breakthrough candidate of breakthrough-designated drugs.
In addition, by moving ibrutinib along via this expedited pathway, it gives a previous small fry in the biotech sector, Pharmacyclics, a chance to kick around the big boys like AbbVie (NYSE: ABBV ) and Celgene (NASDAQ: CELG ) . AbbVie's experimental late-stage CLL and SLL drug, ABT-199, was placed on clinical hold in February following the death of two patients from a condition known as tumor lysis syndrome. This hold will delay any additional trials until the proper dosing is worked out and gives ibrutinib a chance to run away in treating CLL/SLL. For Celgene, which just received the added indication for Revlimid to treat MCL, it's a kick in the pants. Revlimid's MCL trial overall response rate was 26% compared to the 68% ORR in ibrutinib's mid-stage trial.
Not so fast, optimists...
As exciting of a time as this might be for biotechnology and pharmaceutical companies, there are a lot of factors still to play out here. In trials, ibrutinib showed what I feel is reasonable safety, with most adverse events being reported as grade 1/2 (i.e., not serious). But, with such a small subset of patients being tested in some of these trials, the potential concerns over drug safety and their effect on the body over time cannot be discounted.
Another factor to consider is whether there will be sufficient data from an early stage or mid-stage trial to merit confidence in physicians and insurers to prescribe a drug. Again, I'm not trying to pick on ibrutinib at all here, but simply point out that with a small subset of patients, even the stamp of approval from the FDA may not be enough to get insurers or physicians to go along with prescribing the drug.
Let's not forget that drug approvals are only half of the battle. Once approved, properly pricing a drug and marketing it effectively to patients and physicians is the other half of the battle. Too many drugs are approved with plenty of promise, only to flop miserably once on pharmacy shelves. In sum, keep your emotions and expectations in check.
Which drug could be next?
On top of watching ibrutinib move through the process, yesterday's NDA filing is only bound to increase the chatter over which drug could follow next. Although it's unlikely to come until the first-half of next year because of ongoing late-stage trials, I feel Pfizer's (NYSE: PFE ) palbociclib may be next.
In mid-stage metastatic breast cancer trials, when combined with Novartis' Femara, palbociclib more than tripled progression-free survival to 26.1 months compared to just 7.5 months on Femara alone. If the ongoing late-stage data remains even remotely consistent to what we saw in mid-stage trials, expect an NDA filing around mid-2014.
It's no secret that biotech stocks like Pharmacyclics have been soaring recently, but the best investment strategy is to pick great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" not only shares stocks that could help you build long-term wealth, but also winning strategies that every investor should know. Click here to grab your free copy today.