Last Friday, AstraZeneca (NYSE:AZN) reported that its lung cancer drug, Iressa, did not have any benefit to cancer patients with respect to increasing patient survival. That is a very disappointing result. Iressa was initially approved by the FDA in May 2003 for use in patients with metastatic lung cancer. Iressa's approval came under the FDA's accelerated approval program, which requires additional clinical studies after the drug hits the market. The clinical trial from which data was just released was conducted to fulfill that requirement.
Iressa's failure to improve patient survival is somewhat surprising when viewed in context with the results from a competing drug, Tarceva, from Genentech (NYSE:DNA) and OSI Pharmaceuticals (NASDAQ:OSIP). Tarceva, which like Iressa is a small molecule inhibitor of the epidermal growth factor receptor, was approved by the FDA last month. Lung cancer patients using Tarceva lived two months longer than patients taking a placebo. That is a meaningful clinical benefit that Iressa cannot offer, opening the door for Tarceva to become the leader in this market.
I am surprised that the drugs had such different results given the similarities. But they do, and that is the bottom line. At one time, Iressa would have seemed to have had the competitive advantage, as it was the first to market. Whatever edge it may have had has now evaporated, as there is a clearly superior competitor.
AstraZeneca's setback also could make room in this market for Erbitux from ImClone Systems (NASDAQ:IMCL) and Bristol-Myers Squibb (NYSE:BMY). The companies are going to conduct phase 3 trials of Erbitux in the treatment of non-small cell lung cancer. If the results are positive, Erbitux should be approved. Since Erbitux was so far behind Iressa and Tarceva in lung cancer, I thought it would have a tough road to gaining market share against entrenched competitors, but Iressa's setback would seem to bode well for Erbitux here.
For additional articles on the biotech industry, see:
- Spin the Medicine Bottle
- Picking Biotech's Winners
- Finding Biotech's 50-Baggers
- Are Stem Cells a Rule Breaker?
Fool contributor Charly Travers is the Motley Fool Rule Breakers biotech analyst. He does not own shares of any company mentioned in this article.
