Yesterday, Rule Breakers pick CV Therapeutics (NASDAQ:CVTX) submitted a marketing application to the FDA to expand the label of its lead drug Ranexa.

CVT received marketing approval for Ranexa in January of last year as a treatment for angina in patients not responding to other therapies. In order to get Ranexa approved as front-line antianginal agent, CVT tested Ranexa in a large phase 3 study dubbed Merlin.

The FDA agreed to a Special Protocol Assessment with CVT over the Merlin study, whereby if the drug did not increase death or arrhythmia compared to placebo in the study, then the agency would likely allow its use as a front-line agent for chronic angina.

When CVT announced the results of the Merlin study earlier this year, Ranexa was successful on this endpoint. The supplemental New Drug Application (sNDA) that CVT submitted today is the culmination of this result.

Like the angina that it treats, sales of Ranexa have been relatively painful to date. The number of patients taking drugs to treat chronic angina is estimated to be at least 8.9 million, according to the American Heart Association, but most of the drugs used to treat the condition are generic compounds.

The main thing hurting sales is that some insurance companies have been reluctant to cover the expenses of Ranexa and either don't cover its use at all or have it as a non-preferred treatment. Further affecting sales is that earlier in the year, CVT smartly cut back the unprofitable portions of its sales force in a cost-saving move after Ranexa sales growth wasn't what it expected.

Ranexa Sales

Quarter-Over-Quarter
Change

Q2 07

$15.3 million

28%

Q1 07

$12 million

33%

Q4 06

$9 million

10%

Q3 06

$8.2 million*

583%**
*Includes recognition of deferred product revenue from previous quarter.
**Skewed due to deferred product revenue recognition related to possible sales returns from previous quarter.

CVT should get a standard 10-month review on the Ranexa sNDA. This puts possible approval in the third quarter of next year. The likely FDA approval to change the Ranexa label and allow it to be a front-line angina treatment will undoubtedly help the drug's sales.

The improved label will make marketing the compound easier, expand the potential patient population it can be used in, and likely dramatically improve insurance companies' coverage of the drug. Will it be enough to turn CVT's bottom line into the black is the more important question.

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