Jazz nabs early FDA nod for AML med Vyxeos. Is diversifying M&A next?

FDA
The FDA said Jazz's new acute myeloid leukemia drug, a combination of two chemotherapies, can work better than the two meds given alone.

Jazz Pharmaceuticals won a month-early approval for Vyxeos, its third blood cancer drug and the first treatment for patients with certain types of high-risk acute myeloid leukemia (AML). 

As fixed-dose combination of two chemotherapy drugs, daunorubicin and cytarabine, Vyxeos might seem to be one of those combination drugs that has a difficult time winning payer coverage. That may prove to be true, but the FDA says the Jazz formula actually has life-prolonging benefits over taking the two chemotherapies alone.

“Vyxeos combines two commonly used chemotherapies into a single formulation that may help some patients live longer than if they were to receive the two therapies separately,” Richard Pazdur, director of the agency’s oncology center, said in a Thursday statement.

Vyxeos beat the standard of care—daunorubicin and cytarabine separately—in a phase 3 study, where Vyxeos patients lived a median 9.6 months after therapy, compared with 5.9 months for patients on the two-drug regimen, the FDA said.

The agency had been scheduled to decide on Vyxeos in September, and its approval is the latest in a rapid-fire series of nods from the agency, several of them ahead of schedule. The Vyxeos approval had been anticipated by analysts as a boon for Jazz at a time when it’s building up its portfolio to handle earlier-than-expected generic competition for Xyrem, its drug for narcolepsy patients. The drugmaker inked a patent settlement with Hikma Pharma earlier this year, setting a launch date in 2023.

That settlement, plus anticipation of Vyxeos' approval and some strong data for its follow-up narcolepsy med, JZP-110, has investors, well, jazzed. The company “has been the star of the [specialty pharma] group, up nearly 50% year to date, after delivering strong data for JZP-110 as well as providing a measure of visibility on Xyrem’s durability by settling with first-to-file Hikma,” Barclays analyst Douglas Tsao wrote in an investor note last week.

The series of events has some analysts talking about Jazz becoming a buyer, rather than a potential takeover target as investors might have expected a couple years ago. Snapping up an acquisition could further Jazz's attempts to build out its offerings.

"Further business development is becoming increasingly likely," RBC Capital Markets analyst Randall Stanicky said in a note to investors in mid-May. "While there is potential for more deals within either sleep or hematology/oncology, which could come with significant synergy opportunities, there is also an opportunity to add a third therapeutic leg to the portfolio with significant balance sheet capacity to support a sizable deal." 

RBC expects Vyxeos to bring in $235 million in peak sales in 2022; a launch had been expected in the fourth quarter. Jazz says the drug will be available for patients within a week. It’s Jazz’s first based on its CombiPlex technology for developing combination meds.

“Vyxeos is the first chemotherapy to demonstrate an overall survival advantage over the standard of care in a Phase 3 randomized study of older adults with newly-diagnosed therapy-related AML or AML with myelodysplasia-related changes," Jeffrey E. Lancet, MD, chair of the Department of Malignant Hematology at Moffitt Cancer Center, said in a release. “The prognosis for these patients is poor, so the FDA approval of this new drug provides a welcome therapeutic advance.”

Editor's note: This story was updated to show Jazz had expected approval for Vyxeos in September rather than November.