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Drug Approved! But Where's the Name?

By Brian Orelli, PhD - Updated Apr 6, 2017 at 10:30PM

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AstraZeneca prepares to cash in on a minuscule market.

Is it possible that AstraZeneca's (NYSE: AZN) marketing department got caught off guard? The Food and Drug Administration approved its cancer drug vandetanib yesterday, but the drug doesn't have a brand name yet.

The approval came one day before the drug's PDUFA date, so it wasn't a shockingly early approval, like sanofi-aventis (NYSE: SNY) got with Jevtana. I have a hard time imagining that the company wasn't ready to launch.

One plausible explanation is that Astra's proposed name was rejected by the FDA. It's not uncommon to see brand names change; MannKind (Nasdaq: MNKD) changed Afessa to Afrezza, and Novartis (NYSE: NVS) made a minor change of Gilenia to Gilenya when the FDA approved its multiple sclerosis drug. The agency is often worried about name confusion with a currently approved drug. Doctors' sloppy handwriting doesn't help the situation.

If that's the case, kudos to the FDA for not holding up the approval. They can hash out an acceptable name and slap on a label soon enough.

Vandetanib is the only drug approved to treat late-stage medullary thyroid cancer, so it shouldn't have problems selling the drug, even with the burdensome side effects -- death included. There won't be many potential patients to sell it to, though, since this subtype of thyroid cancer only affects about 1,300 to 2,200 patients. And because many of those patients will end up getting surgery, the actual market is even smaller.

What the company lacks in volume, it'll make up for in price. I expect vandetanib to be priced far in excess of what Bristol-Myers Squibb (NYSE: BMY) and Dendreon (Nasdaq: DNDN) charge for their costly oncology drugs.

If AstraZeneca's still hunting for a name, might I suggest TreatsAFewCostALot, or Tafcal for short?

Going international? Check out this free report from The Motley Fool, "This Stock is Set to Soar as China's First Global Brand Emerges."

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

AstraZeneca PLC Stock Quote
AstraZeneca PLC
AZN
$54.79 (-0.16%) $0.09
MannKind Corporation Stock Quote
MannKind Corporation
MNKD
Sanofi Stock Quote
Sanofi
SNY
$47.69 (-0.77%) $0.37
Novartis AG Stock Quote
Novartis AG
NVS
$79.95 (0.16%) $0.13
Bristol Myers Squibb Company Stock Quote
Bristol Myers Squibb Company
BMY
$55.41 (0.84%) $0.46

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