Data showing the overwhelming effectiveness of its lead compound has prompted Motley Fool Rule Breakers pick Millennium Pharmaceuticals (NASDAQ:MLNM) to stop its phase 3 study of VELCADE and announce its plans to proceed to the FDA in the first quarter of next year.  

VELCADE has been approved as a second-line treatment for the cancer multiple myeloma since 2003. The compound is co-promoted by Millennium and Johnson and Johnson (NYSE:JNJ) in the U.S., where sales of the drug were $220 million last year.

Millennium has been testing VELCADE as a front-line therapy in multiple phase 3 studies. Expanding the drug's use would help it compete better against multiple myeloma agents such as Celgene's (NASDAQ:CELG) Revlimid and Thalomid.

Currently, Thalomid is the only one of the three approved as a front-line treatment, although Revlimid is used significantly off-label in this stage of the disease as well, due to its good safety profile.

Although no study results were released yesterday, Millennium said that an interim analysis of one of the phase 3 studies by an independent committee showed such strong efficacy that it was halting the trial and allowing patients in the placebo arm to have access to VELCADE.

Based on these results Millennium plans to file a marketing application in the first quarter next year to expand the VELCADE label to front-line multiple myeloma treatment. Not only would this help in the marketing of the drug, it would also improve the coverage that insurance companies grant it relative to Revlimid.

As Millennium's management has mentioned before, the size of the patient population for first-line multiple myeloma agents is about the same at VELCADE's current on-label treatment opportunity. This doesn't mean investors should expect VELCADE sales to double if the FDA allows the improved labeling for front-line treatment, but it will be a big boost to VELCADE sales nonetheless.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. Johnson & Johnson is a selection of the Income Investor newsletter. The Fool's disclosure policy has shown statistically significant positive results.