UPDATED: Aratana predicts full launch of two lymphoma drugs for dogs in late 2016

Of all the animal health startups that have enthralled investors over the last year, Aratana ($PETX) has unique bragging rights: Two approved cancer drugs for dogs, one of which is fully licensed by the USDA, giving the company the right to mass-market it. The problem is, Aratana has not yet built up enough manufacturing capacity to support the demand for that approved drug--AT-004 for canine B-cell lymphoma--or for AT-005, a treatment for T-cell lymphoma that it's selling on a limited basis under a conditional license from the USDA.

So on Wednesday, the company told investors not to expect a full launch of either lymphoma product until late 2016.

Aratana has completed enrollment of a second trial of AT-005 and expects to release results from that study, as well as data from an initial trial of the drug, in mid-2016, according to a press release. The USDA is already assessing data on the drug, and Aratana expects a full approval sometime this year. Even with that approval, however, Aratana is not yet ready to distribute AT-005 beyond the 70 veterinary clinics that are getting it now, the company said.

As for AT-004, Aratana said it will initiate additional studies of the drug in combination with chemotherapy. The USDA recently completed an inspection of Aratana's San Diego factory, and the company is working with a third party to set up a second manufacturing site, it said. But the availability of AT-004 will still be constrained until that site is up and running.

This news isn't entirely surprising. Aratana initially developed AT-004 under a licensing agreement with Novartis ($NVS) Animal Health, which was bought by Eli Lilly ($LLY) in 2014. In February of this year, Aratana broke free of that agreement and regained the full rights to the product for $2.5 million, but the company said at the time that it did not have enough capacity in San Diego to support a full launch.

Aratana CEO Steven St. Peter

Despite the challenges that have been hampering Aratana's lymphoma business, the company is enjoying a good run of late. On July 14, its shares soared on news that its drug to treat postsurgical pain in dogs, AT-003, did well in a pivotal trial. In late June, Aratana announced that capromorelin (AT-002), its experimental appetite stimulator for dogs, also succeeded in a late-stage trial. And on Monday, Aratana said capromorelin also turned in positive results in a field study in cats with chronic kidney disease. The company's stock price has jumped 41% since June 1 to $19.

Still, Aratana brought in just $156,000 in sales in the first quarter, and investors are counting on the lymphoma franchise to breathe some life into the top line. CEO Steven St. Peter is urging them to be patient as the company works to "fully realize the potential" of its fledgling oncology business. "Our innovative products for the treatment of lymphoma continue to generate high interest by the veterinary community, and we are very encouraged," he said in the release.

- here's the lymphoma press release
- read the release on the latest cat trial here

Editor's note: This story was updated to include the news on the feline campromorelin field trial.