Flexion Therapeutics (NASDAQ:FLXN), Puma Biotechnology (NASDAQ:PBYI), and Portola Pharmaceuticals (NASDAQ:PTLA) are clinical-stage companies without any revenue producers on the market, but that could change soon. The Food and Drug Administration is expected to issue go/no-go decisions on drugs developed by each of these companies in the coming months, and if they get an OK, it could move the needle significantly for investors.

Overcoming pain

On Oct. 6, the FDA is scheduled to either approve or reject Flexion Therapeutics' novel therapy for treating knee pain caused by osteoarthritis. If approved, Zilretta will provide doctors and patients with a non-opioid therapy that may work better in patients than quarterly corticosteroid injections. 

A golden pill sits atop a pile of gold coins.


Last year, the FDA informed Flexion Therapeutics that it wouldn't require a second trial to confirm the efficacy delivered by Zilretta in its one phase 3 study. The news prompted the company to file an application for Zilretta's approval in December, and the FDA officially accepted that application in February, clearing the way for a decision this fall. 

Because Zilretta's addressable patient pool totals about 5 million people who currently get corticosteroid shots, an approval could turn this drug into a top seller. Corticosteroid shots offer pain relief for many. However, that relief tends to fade long before the next quarterly injection. In phase 3 trials, patients taking Zilretta saw a median 50% improvement in knee pain and, importantly, that pain relief persisted throughout the three-month period.

Management thinks that Zilretta could fetch about $2,000 per year, and if so, then it wouldn't take a lot of market share to turn this drug into a nine-figure revenue drug. Since Flexion Therapeutics retains all the rights to Zilretta, its launch could be a big win for investors.

A new weapon to fend off cancer

Puma Biotechnology may finally get its breast cancer drug neratinib across the FDA finish line this year. The company filed for neratinib's approval last fall, and an FDA decision on it could come in July.

If approved, neratinib would be used as a follow-up therapy to Herceptin in breast cancer patients with an amenable genetic makeup. Specifically, early-stage HER2 positive breast cancer patients who have received treatment, plus one-year of follow-on therapy with Herceptin, could use neratinib to potentially delay disease recurrence or death. In trials, neratinib patients had a 33% reduction in those risks versus placebo.

Delaying a recurrence in patients is critical because breast cancer is incredibly common, and it's the cause of more than 40,000 deaths in the U.S. annually. Overall, about one in eight women develop breast cancer in their lifetime, and roughly 246,000 new cases are diagnosed in the U.S. per year.  

Certainly, an approval could make this an important weapon in doctors arsenal. However, a green light is far from guaranteed. In its studies, about 40% of neratinib patients suffer from grade 3 or higher diarrhea. Ideally, you'd want to see a rate that's half that or lower. Puma Biotechnology recognizes that and is studying how the use of Imodium alongside neratinib works, but so far, rates for that approach have remained north of 20%. An option that adds a corticosteroid to the mix, too, may yield better results.

Preventing blood clots in elderly patients

The FDA will decide on Portola Pharmaceuticals' betrixaban anticoagulant on June 24, and based on sales of other anticoagulants that work similarly to it, an OK could pave the way to a billion-dollar blockbuster status.

Portola Pharmaceuticals is evaluating betrixaban as a better option for preventing blood clots than Lovenox in acute, medically ill patients. In a massive phase 3 study involving more than 7,500 patients, giving patients betrixaban for 35 days compared to standard-duration Lovenox for 10 plus four days reduced the risk of clots, with similar numbers of bleeding events.

Like the billion-dollar top-selling anticoagulants Xarelto and Eliquis, betrixaban helps prevent clots by targeting Factor Xa, an important part of the coagulation cascade. Xarelto and Eliquis are massive commercial successes, but neither is approved for use in the indication for which betrixaban could be approved. 

That's important, because it means betrixaban has an opportunity to reshape treatment in what is a very large addressable market. In the G7 countries, there are an estimated 20 million acute medically ill patients at risk of developing clots in their veins in either the hospital or after being discharged. Over 1 million cases of this type of clots occur annually, and 150,000 acute medically ill people pass away annually because of clots that have formed in their veins.

While the numbers suggest there's a big unmet need that betrixaban could address, it's not a given that the FDA will sign off on betrixaban yet. Last year, Portola Pharmaceuticals' shares fell after the release of betrixaban's trial results, because betrixaban didn't achieve statistical significance in a small subset of patients most likely to develop clots. Betrixaban was effective across the entirety of the study population, but it's still unclear whether the failure in that one cohort could cause regulators to balk. Because of the risks, investors without a tolerance for losses might want to hunt for other investment ideas.

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