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Today, ARIAD Pharmaceuticals (Nasdaq: ARIA ) and Merck (NYSE: MRK ) are expecting to hear back from the Food and Drug Administration about their soft-tissue and bone sarcoma drug ridaforolimus. Considering the 13-1 vote by the advisory committee recommending against approval of the drug, a rejection appears to be the most likely answer today.
But there's still reason for Ariad's investors to be excited. Unlike ridaforolimus, the company's leukemia drug ponatinib looks a lot more approvable based on data presented at ASCO.
In patients that had failed Novartis' (NYSE: NVS ) Tasigna, or Otsuka (OTC: OTSKF) and Bristol-Myers Squibb's (NYSE: BMY ) Sprycel, or who have a mutation that doesn't allow them to be treated with those drugs, a solid 54% of chronic-phase CML patients had a major cytogenetic response, defined as a reduction of mutated cells. If you look at just the patients with mutations, an even more impressive 70% of patients responded to the drug. The same phenomenon happened with patients that had only received either Tasigna or Sprycel but not both. In those patients, which are presumably less advanced, 86% of patients responded to the drug.
And the response appears to be durable. Of the patients that responded, 93% are projected to remain in major cytogenetic response after one year.
Obviously, survival data would be better than response rates, but considering the patients have limited options and cytogenetic response rates are a good surrogate for survival in leukemia patients, ARIAD should have no problem getting ponatinib approved with this data.
ARIAD plans to file for FDA and EU approval in the third quarter of this year. Ponatinib could be on the U.S. market by this time next year, perhaps earlier if the FDA gives it a priority review, which seems likely. Waiting an extra year to have revenue coming in isn't ideal, but ARIAD owns ponatinib in its entirety, so it doesn't have to share revenue like it does for ridaforolimus. If only one was going to work, it might as well be ponatinib.
And ridaforolimus isn't even dead. Merck is testing the drug in breast cancer and other solid tumors. For now, though, it's all about ponatinib. Investors can ignore the almost-certain ridaforolimus rejection.