Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
Good morning, fellow Foolish investors! Let's check in on four health care stocks -- Johnson & Johnson (NYSE:JNJ), Orexigen Therapeutics (NASDAQ:OREX), Repros Therapeutics (NASDAQ:RPRX), and Auxilium Pharmaceuticals (UNKNOWN:AUXL.DL) -- which are making headlines today.
Johnson & Johnson's Invokana gains EU approval
On Nov. 23, Johnson & Johnson's diabetes treatment, Invokana, was approved in the EU for the treatment of type 2 diabetes. Invokana was approved by the FDA in March, and is currently the only approved SGLT2 inhibitor available in the United States.
SGLT2 inhibitors belong to a new class of diabetes treatments that help patients excrete more blood glucose through the urine, with the target of reducing the number of daily insulin injections.
The only other approved SGLT2 inhibitor on the market is Forxiga, from Bristol-Myers Squibb and AstraZeneca. Forxiga is approved in the EU, but was rejected by the FDA in January 2012 due to safety concerns. Bristol-Myers and AstraZeneca haven't given up on bringing Forxiga to the U.S., and have submitted new clinical trial data to the FDA regarding the drug. A final FDA decision regarding Forxiga is expected in January 2014.
Therefore, Invokana is currently the leader in SGLT2 treatments, and analysts believe that peak annual sales of the drug could rise as high as $2.5 billion. Invokana, along with J&J and Pharmacyclics' new blood disorder drug Imbruvica, are the company's hottest growing products -- which will come into play when its blockbuster arthritis treatment, Remicade, loses patent protection in 2015. Remicade accounts for roughly a fourth of J&J's total pharmaceutical revenue.
Orexigen's weight-loss drug moves closer to an FDA approval
Orexigen Therapeutics, usually considered a distant third-place player in weight-loss treatments after Arena Pharmaceuticals (NASDAQ:ARNA) and VIVUS, could soar today after announcing successful results from an interim analysis of Contrave, its lead drug candidate. Based on the study results, Orexigen has decided to resubmit an NDA (new drug application) for Contrave to the FDA for a potential approval by June 2014.
The FDA initially rejected Contrave back in 2011, telling Orexigen that it needed to show long-term data that proved that the drug did not raise the risk of heart attacks. The FDA had stated that if the interim analysis met its specified criteria to exclude cardiovascular risk, then the drug could be approved. The original clinical trials for Contrave tested the treatment on 4,500 patients, whereas the newer interim study focused on a much larger test group of 8,900 patients.
Although this is definitely good news for Orexigen shareholders, investors should take this news with a grain of salt, since the market has been vicious to its two main competitors, Arena and VIVUS. Both have struggled over the past year to prove to investors that there is a viable market for their respective weight-loss drugs, Belviq and Qsymia.
Unfortunately, sales of Belviq and Qsymia only came in at $2.0 million and $6.4 million last quarter, respectively -- far below the blockbuster potential that Wall Street had expected.
Repros sits down with the FDA to discuss its top drug candidate
It could also be an interesting morning for Repros Therapeutics, which just announced that it had been granted a face-to-face meeting with the FDA to discuss the efficacy of Androxal, its oral medication for secondary hypogonadism, a condition associated with obesity and low testosterone levels in men. Androxal is currently in phase 3 trials, and the company expects to file an NDA for the drug in 2014, with a possible commercial launch by 2015.
To date, there are only two other approved treatments for secondary hypogonadism -- AndroGel, from AbbVie and Eli Lilly, and Testim, from Auxilium Pharmaceuticals. Both treatments are gels, whereas Androxal is a pill. Repros also claims that Androxal has a better side effect profile than competing treatments. Top-line results showed that Androxal brought 81% of treated patients back to normal testosterone levels -- exceeding the 75% efficacy rate requested by the FDA.
Repros does not have any marketed products, so it has a lot riding on the success of Androxal. The drug is forecast to generate $450 million in peak annual sales by 2020 -- not bad for a company that has a market cap of $350 million.
Auxilium's Xiaflex could be closer to being approved for a secondary indication
Last but not least, keep an eye on Auxilium, which has a second marketed product in addition to Testim, known as Xiaflex. Xiaflex is an injectable enzyme approved for the treatment of Dupuytren's contracture -- a thickening and contracture of the tissue beneath the skin of the fingers and palms.
Xiaflex is a much more important product to Auxilium's top-line growth than Testim. Sales of Xiaflex jumped 20% year over year last quarter to $15.9 million, compared to Testim, which fell 7% to $50.7 million. Auxilium has been pursuing three additional indications for Xiaflex, for the treatment of Peyronie's disease, Frozen Shoulder syndrome, and cellulite.
This morning, Auxilium announced that phase 3 studies for Xiaflex as a treatment for Peyronie's disease had met the primary endpoints -- an encouraging development for the drug's eventual approval for additional uses.