Teva's High Hopes for Custirsen

Teva Pharmaceutical  (NYSE: TEVA  )  hopes that results from its ongoing phase 3 study evaluating Custirsen in prostate cancer will be as good as phase 2 when they're reported in the first half of 2014. If so, it would mark an important win for Teva given that its blockbuster, Copaxone, will soon lose patent protection.

A treatment agnostic role
In phase 2 trials, Custirsen was paired with popular first-line treatment docetaxol in metastatic castration-resistant prostate cancer, or mCRPC, patients.

In that mid-stage trial, patients treated with the Custirsen combination therapy saw median overall survival of 23.8 months, versus 16.9 months when treated with docetaxol alone. 

What's unique about Custirsen is its ability to prevent a protein, clusterin, from protecting cancer cells.  Because it doesn't target the cancer itself, Teva thinks the drug can have a wide role as part of combination therapies. 

As a result, Teva isn't just positioning Custirsen as a companion to the widely used first-line prostate drug docetaxol. It's also studying Custirsen alongside other prostate cancer treatments; a move the company thinks may position it to capture additional market share.

Its Phase 3 AFFINITY trial matches Custirsen up with Sanofi's (NYSE: SNY  ) Jevtana, a drug launched by Sanofi in 2010 to succeed its blockbuster Taxotere -- the brand name version of docetaxol.  While Jevtana's sales haven't lived up to expectations in mCRPC, the drug has still generated sales of $165 million over the first nine months of this year.

An increasingly competitive landscape
Pairing Custirsen up with docetaxol and Jevtana opens up a wide patient pool. But, the prostate cancer drug market is getting increasingly crowded with other treatment options. 

Johnson & Johnson (NYSE: JNJ  ) has had success winning third- and second-line market share with Zytiga. J&J's drug, approved in April 2011 for third line and in December 2012 for second line, saw sales jump 75% to $464 million worldwide in the third quarter from last year. Medivation's (NASDAQ: MDVN  ) Xtandi is also growing quickly.  Medivation won approval as a third-line treatment in August 2012, and sales grew nearly 32% to $108 million in the third quarter from the second quarter.  Medivation hopes it can close the gap with J&J's Zytiga by winning approval as a second-line treatment soon.

However, while new antiandrogen therapies from J&J and Medivation offer hope to prostate cancer patients, it doesn't necessarily preclude market share for Custirsen. Custirsen may eventually prove effective when combined with these therapies, too. 

More than one winner
If Teva successfully commercializes Custirsen it would mark a win for Isis Pharmaceuticals (NASDAQ: ISIS  ) .  Why? Custirsen was developed using Isis' second-generation antisense technology and is licensed from the company. As a result, if Custirsen makes it to market, Isis stands to collect a mid-single-digit percentage of sales in royalties.

Approval would also help small-cap biotech Oncogenex, a micro-cap drug company that initially licensed Custirsen from Isis before partnering with the deeper-pocketed Teva on development.

Potential beyond prostate
Because Custirsen's action targets the clusterin protein -- and that protein is over-expressed in other cancers including lung, breast and bladder -- Teva may have opportunity to market the drug for other lucrative indications, too.

As a result, Teva has a phase 3 trial studying Custirsen as a treatment for non-small-cell lung cancer. That trial, named Enspirit, began enrollment late last year. Like in the prostate cancer trial, Custirsen is dosed alongside docetaxol. The drug showed promise in phase 2 trials, where median survival for treated patients was 14.1 months. If the drug produces similar results in phase 3, it could increase the addressable market markedly given that non-small-celll lung cancer accounts for 85% of all lung cancers. 

A Fool's final take
Custirsen's potential as part of combination therapies could allow it to win sales in both first and second line treatment of prostate cancer. That means that investors should watch for phase 3 trial data early next year to see whether results matched earlier studies. Additionally, since the drug's non-small-cell lung cancer trial is also in late-stage trials, investors should keep an eye out for those results, too. If Custirsen passes those hurdles and gains FDA approval, it could serve as a positive catalyst for an otherwise troubled Teva.

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