Tesaro (NASDAQ:TSRO) delivered some needed good news Monday, reporting that its third and final phase 3 trial for its anti-nausea cancer drug rolapitant met both primary and secondary endpoints for reducing both nausea and vomiting.

That move comes after Tesaro reported in December that rolapitant had met its primary endpoint, but failed to meet its secondary endpoint in another phase 3 trial -- news that had sent shares of Tesaro and its development partner Opko Health (NASDAQ:OPK)reeling.

Since Tesaro was down 15% this year heading into this week's news, let's take a look at rolapitant and what it may mean for the company, and its shares, in the future.

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First, a bit of background
Both Tesaro and Opko Health are led by long-time industry veterans who have enjoyed significant success in building and selling companies.

Tesaro is led by Lonnie Moulder, the former President and CEO of Abraxis. Abraxis developed the cancer drug Abraxane, which reached $648.9 billion in sales in 2013 and was sold to Celgene for $3 billion in 2010.

However, Abraxis isn't Moulder's only oncology success story. Moulder also built and sold MGI Pharma --  the maker of another high profile anti-nausea drug -- to Japan's Eisai for nearly $4 billion back in 2007.

Opko's C-suite is led by prominent industry veteran Philip Frost, who is arguably one of the most successful -- and prolific -- biotech leaders and investors of our time.

Frost bought Key Pharmaceuticals in 1972 and sold it for $600 million to Schering Plough in 1986. Shortly after, Frost took the head job at Ivax, where he orchestrated a string of bolt-on acquisitions over the next 20 years before selling the company to Teva Pharmaceuticals (where he remains as Chairman) in 2006 for more than $7 billion. 

In 2010, those two leaders agreed to partner on rolapitant, a drug that Opko had acquired from Schering-Plough in 2009.

In licensing rolapitant to Tesaro, Opko gained a small equity stake in Tesaro, upfront money, and a development partner with a proven track record of ushering cancer compounds through trials to commercialization.

For its part, Tesaro gained a lead product (for an indication Moulder understands thanks to his experience at MGI Pharma) that could quickly get in front of the FDA.

Addressing an unmet need
The market for anti-nausea and vomiting drugs tied to cancer chemotherapy is an important one. Current treatment consists of a combination of 5-HT3 receptor antagonists, such as GlaxoSmithKline's Zofran/ondansetron, or Eisai's (by way of MGI Pharma) Aloxi/palonosetron. Those drugs reduce nausea and vomiting by blocking key serotonin receptors and are usually prescribed alongside dexamethosone and Merck's Emend in patients where severe nausea is likely.

However, 5-HT3 drugs can require multiple doses and offer mixed results. In the case of Zofran, patients are treated up to three times a day for up to two days following chemo. And while Zofran does a good job controlling nausea in the first 24 hours, it hasn't been proven effective in days two through five following chemo. Only Aloxi has been shown to be effective in controlling those cases. Importantly, while those 5-HT3 drugs have been around for years, many patients still fail to have their nausea effectively controlled.

That suggests that there's room for rolapitant to capture market share. Prior to Glaxo's Zofran losing patent protection in 2006, the drug was the 20th best selling therapy in the U.S., with sales of more than $1 billion annually. Sales of Eisai's Aloxi totaled more than $400 million in 2012 and $324 million through the first nine months of its fiscal 2013, which ended in December. So it's a big and potentially lucrative market.

Fool-worthy final thoughts
Despite plenty of anti-nausea and vomiting treatment options, 30% to 45% of patients still experience nausea or vomiting following chemotherapy. That high percentage means there's significant room for Tesaro and Opko's rolapitant, but they need to win FDA approval first.

Tesaro expects to file rolapitant with the FDA for approval by midyear, so investors won't know how well received the drug is with doctors until 2015. Regardless, the positive trial data puts Tesaro on track to start generating revenue next year. That revenue will come in handy given Tesaro's other ongoing research programs, which include ovarian cancer drug niraparib and SHM-XEL platform antibody drugs.

Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not have positions in the companies mentioned. Todd owns Gundalow Advisors, LLC. Gundalow's clients do not have positions in the companies mentioned. The Motley Fool recommends Celgene and Teva Pharmaceutical Industries. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.