The U.S. Food and Drug Administration's made it clear that granting a priority review to an application isn't exactly the same thing as making an application's review a top priority.
Over the past five weeks, the agency stamped approvals on five new drugs months ahead of an already shortened schedule.
|Company||Drug||Indication||Approval Date||PDUFA Date|
|Global Blood Therapeutics (NASDAQ:GBT)||Oxbryta (voxelotor)||SCD||11/26/2019||2/26/2020|
|Alnylam (NASDAQ:ALNY)||Givlaari (givosiran)||Hepatic porphyria||11/20/2019||2/4/2020|
|Novartis (NYSE:NVS)||Adakveo (crizanlizumab)||SCD complications||11/15/2019||1/16/2020|
|Beigene (NASDAQ:BGNE)||Brukinsa (zanubrutinib)||Lymphoma||11/14/2019||2/27/2020|
|Vertex Pharmaceuticals (NASDAQ:VRTX)||Trikafta (elexacaftor/ivacaftor/tezacaftor)||Cystic fibrosis||10/21/2019||3/19/2020|
You'll be relieved to know the FDA doesn't allow biopharmaceutical companies to cut in line without good reasons. If you'd like to know more about what works, have a look at some things they have in common.
Developing first-in-class new drug candidates for life-threatening illnesses that lack treatment options is the best way to get the FDA's attention. Four of these new drugs are the first available option for the indications they were quickly approved to treat.
Givlaari's the first drug approved to help prevent acute hepatic porphyria by interfering with the production of an overactive enzyme responsible for the disorder.
Oxbryta's the first tablet that boosts hemoglobin's affinity for oxygen, which appears to prevent red blood cells from forming a sickle shape. Adakveo's an injection that helps SCD patients by preventing sickle-shaped red blood cells from clumping together and causing painful blockages that put patients in the hospital, or worse.
There are literally hundreds of different mutations associated with cystic fibrosis, and Trikafta works for patients with around 90% of them. Two components of the triplet therapy are already used to keep airways open for some cystic fibrosis patients, but Trikafta's the first available option for around 6,000 patients with the rare disease.
Treatments that could save lives because they appear superior to available care also tend to grab the FDA's attention. Brukinsa from Beigene isn't the first Bruton's tyrosine kinase inhibitor approved to treat mantel cell lymphoma, but it might be significantly better than the current standard, Imbruvica.
In studies leading to its approval, Brukinsa shrank tumors for 84% of patients, a majority of whom didn't get any worse for at least 18.5 months. During a similar study, Imbruvica shrank tumors for around 69% of patients with a median response duration of 17.5 months.
Another feature that speedy new drug approvals generally have in common, blockbuster potential is of no concern to the FDA but it means everything to investors. All five of the above treatments could generate sales exceeding $1 billion annually.
Brukinsa's only real competitor for mantle cell lymphoma patients, Imbruvica earned its first approval in 2013. Sales of the blood-cancer tablet are already on pace to reach $5 billion for AbbVie in 2019.
In the U.S., only around 100,000 patients have severe SCD. This isn't a big population but without competing options, Oxbryta, and Adakveo can still produce 10-figure annual sales. A lack of competing treatments means Global Blood Therapeutics and Novartis can charge around the same amount that healthcare systems would otherwise pay for today's standard care.
New SCD drugs are expensive but they pale in comparison go new treatments aimed at even smaller populations. Trikafta's approved to treat fewer than 30,000 patients in the U.S., and Givlaari's patient population is estimated at just 3,000 in the U.S. and EU combined. A year of treatment with Trikafta and Givlaari will cost around $311,000 and $442,000, respectively.
A sign of commercial success?
The types of drugs that the FDA gives top priority tend to carry enormous price tags, but a successful commercial launch isn't guaranteed.
Back in 2017, the FDA approved a cellular cancer therapy from Novartis called Kymriah more than a month ahead of schedule. Sadly, a complicated manufacturing process that involves harvesting stem cells and modifying them to attack cancer before they're reinfused created a lot of hurdles to cross. As a result, Kymriah sales are on pace to reach around $250 million in 2019.
What to look for
It doesn't happen often, but drugs approved well ahead of schedule don't always succeed in the commercial stage. That said, Kymriah's commercial-stage flop wasn't unpredictable. Avoiding stocks pinned to treatments that are difficult to administer is probably a good idea.
If you're going to keep an eye open for the next stock like Global Blood Therapeutics that could spike in response to an early approval, remember to look for telltale signs. New drug candidates don't necessarily need to be the first-ever treatment for a life-threatening disorder, but it sure helps. If the experimental drug in question could save lives by reaching the market just a month or two early, its chances are even better.