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What: After reporting success in a phase 3 ovarian cancer trial at the end of June, shares in Tesaro, Inc. (NASDAQ: TSRO) spiked 15% in July, according to S&P Global Market Intelligence.

So what: Tesaro is run by Lonnie Moulder, the former head of MGI Pharma, a biotech that developed the chemotherapy nausea and vomiting drug Aloxi and that was sold for $3.9 billion to Eisai in 2008. Prior to founding Tesaro, Moulder also ran Patrick Soon-Shiong's Abraxis for a brief stint prior to its acquisition by Celgene for $2.9 billion in 2010.

Last fall, Tesaro won Food and Drug Administration approval for Varubi, a chemotherapy nausea and vomiting drug that it licensed from Opko Health back in 2010, and at the end of June, the company's niraparib significantly improved progression-free survival in relapsing/recurring ovarian cancer patients who were identified as carriers of the germline BRCA mutation.  Progression-free survival for niraparib patients was a median 21 months while progression-free survival for non-niraparib patients was only 5.5 months. 

The findings clear the way for Moulder's Tesaro to file for FDA approval of niraparib in this patient population by the end of 2016 and that has management targeting a commercial launch of the drug in the first half of next year. 

Now what: Up to 85% of ovarian cancer patients see their cancer return, and despite advances in care, ovarian cancer remains the second most deadly cancer in women. If approved, niraparib will be the first PARP inhibitor to target the market and that could make niraparib a nine-figure drug. Additional studies that could expand niraparib's use into other patient populations are ongoing.

So far, commercial sales of Varubi reported by Tesaro have been tepid. However, Moulder has significant experience in the CINV market and the company continues to believe that Varubi can be a top seller in the indication. 

Overall, Tesaro is transforming from a clinical-stage company to a commercial one, and while it hasn't yet turned a profit, a potential approval of niraparib could help get it into the black. Since Moulder is a proven operator with a history of successfully unlocking shareholder value, this company may be one to watch.

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