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Will a New Use Help Schering-Plough's Near-Blockbuster Drug?

Schering-Plough (NYSE: SGP  ) is trying to get its hepatitis C treatment, Pegintron, a new purpose in life. It's just in time, too, as the race to make the next hepatitis C blockbuster is seriously heating up.

On Friday, Schering said that Pegintron, which stimulates the immune system, was able to extend the time it took for melanoma to return after the skin cancer was surgically removed from the lymph nodes.

The big question is whether slowing the return of cancer will be enough to get Pegintron approved as a treatment for melanoma, or whether the FDA will want to see data that proves that the added treatment extends patients' lives. The clinical trial didn't show that Pegintron helped with overall survival, but the study isn't entirely completed.

While Genentech (NYSE: DNA  ) was able to get Avastin approved for breast cancer without proving an overall survival benefit, the FDA delayed Medarex's (Nasdaq: MEDX  ) and partner Bristol-Myers Squibb's (NYSE: BMY  ) melanoma treatment, ipilimumab, to see more survival data. So Schering probably shouldn't start working on the Pegintron marketing materials quite yet. 

Schering's best hope for getting Pegintron approved to treat melanoma lies in the fact that melanoma has few treatment options. The cancer has been a wasteland for drugs like Pfizer's (NYSE: PFE  ) tremelimumab, which failed to treat the disease successfully. Even drugs that work in other cancers, like Onyx Pharmaceuticals' (Nasdaq: ONXX  ) Nexavar, haven't tackled melanoma.

Since Pegintron is an immunotherapy, it could be safe from competition from upcoming melanoma chemotherapy treatments like Array BioPharma's (Nasdaq: ARRY  ) ARRY-886, should they prove successful in the clinic. That's because there's some evidence that chemotherapy and immunotherapy can work together successfully.

Investors will have to wait and see what the FDA does, but I don't think they should count on much of a bump from cancer sales for this near-blockbuster drug.

Array is a Motley Fool Rule Breakers pick. The newsletter is always on the hunt for hot drug stocks and other cutting-edge picks. Click here to see all of our latest discoveries with a free 30-day trial subscription. 

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is a pick of both the Income Investor and Inside Value newsletters. The Fool has a disclosure policy.

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