With nothing more than a passing glance, the U.S. Food & Drug Administration's (FDA) approval of Roche Holdings' (RHHBY 6.34%) cancer drug entrectinib last month was a run-of-the-mill announcement. In fact, it was almost boilerplate in its tone and feel.
Greenlighting the drug, however, means that Roche has secured more than just another profit center. Entrectinib also helps to usher in an entirely new era of oncology. It's only the third FDA-approved treatment to combat certain types of tumors, regardless of where they're found in the body. Until now, pharmaceutical companies effectively were required to pinpoint where a tumor was being targeted in order to secure regulatory approval.
In other words, with the third such therapy now in the books, Roche may have made the idea of "tissue agnostic" tumor treatments a new norm.
Rozlytrek is a big fish in a little pond
Technically speaking, it was Roche subsidiary Genentech that was able to win the FDA's approval. Entrectinib is also only the scientific name. The drug will also be marketed as Rozlytrek.
The monikers are largely irrelevant though. The take-away for investors is the FDA's recognition of a drug's versatility regardless of a tumor's bodily location.
To be clear, it's not a sweeping cure for any and all cancers. Rozlytrek/entrectinib is still only meant to combat the 1% of all tumors that indicate a neurotrophic tyrosine receptor kinase (NTRK) gene fusion, or the mutation of genetic code which can cause the development of abnormal proteins. These proteins, in turn, can give rise to tumors. .
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But, it's a therapy that effectively targets tumors which are not only tough to treat, but more likely to metastasize. The NTRK fusion is found decidedly more often in cases of cutaneous squamous cell carcinomas, prostate and pancreatic cancers, mesoblastic nephroma, and Spitz tumors, as well as other rare and difficult-to-treat instances. These cancers are particularly more prone than others to spread to the brain, irrespective of their origin point.
As for efficacy, the drug was found to have reduced tumor size for several months in more than half of patients with the NTRK mutation. Better still, it demonstrated that effectiveness across ten different tumor types found in various bodily locations.
Solid proof of the concept
All told, the NTRK mutation in tumors opens up a market that Jeffries believes could lead Rozlytrek to peak annualized sales of $700 million for Roche subsidiary Genentech.
It's not a lot of money, nor will it come easy for Genentech. It will be competing with a drug called Vitrakvi, marketed by a joint venture of Bayer (BAYRY 0.91%) and Loxo Oncology, which takes aim at the same neurotrophic tyrosine receptor kinase mutation.
As a proof-of-concept, though, Rozlytrek's approval makes it increasingly clear that a genetics-based approach to treating tumors has become palatable to regulatory bodies, at least in the United States.
To that end, it's no mere coincidence that Roche opted late last year to shell out another $2.4 billion to acquire the remainder of Foundation Medicine it didn't already own. Foundation Medicine specializes in identifying the genetic makeup of cancer patients as a means of identifying which therapies would prove most effective for them. There is no FDA-approved test for NTRK fusions yet, but Foundation Medicine is moving in that direction. Such a test clearly would make Rozlytrek a highly marketable follow-up option.
Becoming a new norm for oncology drugs
Unfortunately, Genentech's help in pushing the cancer rock a little further up the hill doesn't make Roche any more of a buy than it was before. It will still take years for the genetics-based approach to supplant molecular and radiation-based treatments.
A true cancer cure-all also remains elusive and probably always will. The disease is too complicated at its roots to be addressed by a one-stop solution. Indeed, at its heart, all forms of cancer are the result of damaged DNA the body can't repair on its own. Genetic material is inherently complex stuff.
Years of DNA sequencing and genome work are starting to pay off, however. With Merck's (MRK 3.56%) Keytruda, Vitrakvi, and now Genentech's Rozlytrek all winning the FDA's approval , the path toward more broad-based cancer solutions is clear. All three drugs target the faulty genetic code of cancerous cells rather than targeting a specific spot within a body. Investors who make buy and sell decisions based on scientific developments will want to add the term "tissue agnostic" to their lexicon.
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