Christmas came early for one of my Black Friday biotech bargain picks. Ariad Pharmaceuticals (NASDAQ:ARIA) said today that the Food and Drug Administration will allow Ariad's leukemia drug Iclusig back on the market.
It's a bit astonishing how quickly the FDA and Ariad worked out the details to bring the drug back after pulling it from the market at the end of October over the potential for blood clots. Apparently, even Ariad didn't expect the drug to get back on the market this quickly; the biotech shipped free three-month supplies to some patients who had special permission from the FDA to stay on the drug while the details for Iclusig's return were being worked out. When Iclusig goes back on the market next month, those patients will still be working through their free supplies.
As expected, the new label is more restrictive than the old one. Iclusig is still recommended for patients with a mutation called T315I that makes the tumor resistant to tyrosine-kinase inhibitors, such as Novartis' (NYSE:NVS) Gleevec and Bristol-Myers Squibb's (NYSE:BMY) Sprycel. Previously, the drug could also be used as a second-line therapy after patients had failed Novartis' or Bristol-Myers' drugs, but now the drug is only recommended when all the tyrosine-kinase inhibitors are no longer an option. Essentially, Iclusig will be used as a drug of last resort.
Ariad thinks the U.S. market for the new indication is about 1,300 patients. There were about 640 patients on the drug as it was ramping up its launch before Iclusig was pulled from the market. The drug exited the third quarter with a run rate of $67 million in sales. Factor in a price increase, and the fact that those sales came from fewer than 640 patients because they were accruing for the entire quarter and a month after, and it looks like the U.S. market potential could be around $200 million.
The FDA had already granted 350 patients permission to use the drug while it's off the market, so Ariad will be working off that base of patients, plus a few more who sign up in the coming weeks when it relaunches next month. Getting up to 1,300 patients won't come quickly; Ariad plans to use half the commercial staff it had before the drug was pulled from the market.
As part of the deal with the FDA, Ariad will have to run a clinical trial to test different doses of Iclusig to see if fewer blood clots occur at lower doses. If the drug is safer, but works just as well at a lower dose, Iclusig could potentially expand beyond those 1,300 patients; but we won't have that data for a couple of years.
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