The age of personalized medicine is upon us. Earlier this month, the FDA approved Roche's melanoma drug Zelboraf for patients with a specific mutation in BRAF. And on Friday, the agency approved Pfizer's (NYSE: PFE ) Xalkori for lung cancer patients that are ALK-positive.
Both drugs were approved alongside companion diagnostics, which determine whether the patient has the right genetic makeup to receive the drug. Roche developed its own since it has a diagnostic division, while Pfizer enlisted the help of Abbott Labs (NYSE: ABT ) for the ALK test.
Half of metastatic melanoma patients have the BRAF mutations, so there will be plenty of patients for Roche to go after as it competes with Bristol-Myers Squibb's (NYSE: BMY ) Yervoy, which isn't specific for any mutations. The two companies are testing their drugs together, but until the data is available, doctors will likely use one drug or the other, perhaps in succession.
The ALK gene abnormality is considerably rarer; only about 1% to 7% of non-small cell lung cancer patients have the mutation. Fortunately for Pfizer, lung cancer is fairly common, so there's still a decent potential treatment population. Abbott should make out well, too, since all the patients will need to be tested in order to determine if they qualify to take Xalkori. The drug could be used to treat patients with other types of ALK-positive cancers as well. Xalkori seems to work for patients with anaplastic large-cell lymphoma, although the number of patients treated was extremely low.
The good news about these drugs is that they work so much better than the current treatments that they should be able to gain a substantial portion of the market for which they're approved -- however small that may be.
Follow Pfizer as it launches Xalkori and advances the rest of its pipeline by adding it to the Fool's free My Watchlist service. Just click here to get started.