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Two early Food and Drug Administration approvals in two days? I could get used to this.
Monday Roche and Curis (Nasdaq: CRIS ) gained Food and Drug Administration approval for their basal-cell carcinoma drug, Erivedge. And yesterday Vertex Pharmaceuticals' (Nasdaq: VRTX ) cystic fibrosis drug Kalydeco got a thumbs up from regulators.
Both occurred well before their PDUFA dates, the date the FDA sets as a goal for making a decision about a product, which is a good sign for the entire drug-development industry. The agency appears willing to speed things along when innovative products hit its desk. Erivedge is the first drug approved to treat basal-cell carcinoma, and, while there are other drugs that treat the symptoms of cystic fibrosis -- antibiotics Tobi from Novartis (NYSE: NVS ) and Cayston from Gilead Sciences (Nasdaq: GILD ) -- Kalydeco is the first drug to get after the root cause of the disease.
The only people really upset about decisions not coming on the PDUFA dates are the short-term traders that jump in before the expected decision. Boo-hoo.
In addition to the regulatory speed, going after the unmet need also has its advantages in the market where premium pricing is possible. Erivedge will cost about $75,000 for a full treatment, and Kalydeco, which treats far fewer patients, will command a premium price of $294,000 per year. About 1,200 cystic fibrosis patients in the U.S. have the genetic defect that Kalydeco is designed to treat and 200 of those are too young to receive the drug. That makes for some easy math to calculate the potential market of $2.94 billion.
Of course Vertex won't be able to hit that. It would require every patient to be diagnosed properly -- cystic fibrosis is caused by different mutations -- and be paying full price for the medication, which isn't going to happen. There's a patient-assistance program to help patients afford the medication.
But there's potential for the maximum market to go up. Vertex is trying to get Kalydeco approved in Europe and is testing the drug in combination with another other cystic fibrosis drug in its pipeline in hopes that the combination will help patients with other mutations.
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