The age of personalized medicine is upon us. Earlier this month, the FDA approved Roche's melanoma drug Zelboraf for patients with a specific mutation in BRAF. And on Friday, the agency approved Pfizer's
Both drugs were approved alongside companion diagnostics, which determine whether the patient has the right genetic makeup to receive the drug. Roche developed its own since it has a diagnostic division, while Pfizer enlisted the help of Abbott Labs
Half of metastatic melanoma patients have the BRAF mutations, so there will be plenty of patients for Roche to go after as it competes with Bristol-Myers Squibb's
The ALK gene abnormality is considerably rarer; only about 1% to 7% of non-small cell lung cancer patients have the mutation. Fortunately for Pfizer, lung cancer is fairly common, so there's still a decent potential treatment population. Abbott should make out well, too, since all the patients will need to be tested in order to determine if they qualify to take Xalkori. The drug could be used to treat patients with other types of ALK-positive cancers as well. Xalkori seems to work for patients with anaplastic large-cell lymphoma, although the number of patients treated was extremely low.
The good news about these drugs is that they work so much better than the current treatments that they should be able to gain a substantial portion of the market for which they're approved -- however small that may be.
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Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Abbott Laboratories. Motley Fool newsletter services have recommended buying shares of Abbott Laboratories and Pfizer. 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.