It should come as no surprise to anyone that the Food and Drug Administration granted a priority review for Pharmacyclics (NASDAQ: PCYC) and Johnson & Johnson's (NYSE:JNJ) blood cancer drug ibrutinib.

The agency is clearly in love with the drug. It's already granted a Breakthrough Therapy Designation to the drug for many different indications.

The priority review shaves four months off the standard review time, and the Breakthrough Designation should speed up the process even more. I doubt the FDA will take the full six months it's allotted under the priority review. An approval by the end of the year seems highly likely.

Of course, the FDA's Office of Hematology and Oncology Products was handing down decisions well ahead of its internal deadlines before the Breakthrough Designation came about, so it isn't clear exactly how much the new designation will help speed the process. Clearly if the agency thinks the drug is important, it'll put more personnel on the review.

While it might not help the company all that much, the designation does give investors an idea of what the agency thinks of the early data. Unlike the old fast-track designation, there seems to be some discrimination in what drugs get the indication. The division that reviews ibrutinib has granted 44% of the Breakthrough Therapy requests it's acted on.

The new drug application covers treating two B-cell malignancy indications: previously treated mantle cell lymphoma and previously treated chronic lymphocytic leukemia/small lymphocytic lymphoma. The data for that population has been outstanding with overall response rate of 68%, which is especially promising since the patients have already failed Celgene's (NASDAQ:CELG) Revlimid or Takeda's Velcade.

The efficacy should give investors confidence that ibrutinib could compete directly with Revlimid and Velcade, although most doctors won't prescribe it as a first-line treatment until Pharmacyclics and Johnson & Johnson run a head-to-head trial. The companies are also testing ibrutinib in a couple of other blood cancers.

The FDA's acceptance of the filing triggers a $75 million payment from Johnson & Johnson to Pharmacyclics, which should help the biotech pay for the clinical trials. In addition to ibrutinib, Pharmacyclics has three other drugs in development.

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