Johnson & Johnson ($J&J) is one step closer to a new Zytiga indication that could double its sales. If the company gets its way, U.S. and European regulators will soon approve the prostate cancer drug for patients who've never had chemo. The new use would triple the size of Zytiga's market.
The approval applications are based on a Phase III study that compared Zytiga versus placebo as an add-on to prednisone therapy. The 1,000-plus patient study was unblinded early because its data monitoring committee recommended opening up the control arm to Zytiga therapy. Because of this, no overall survival benefit was apparent. Progression-free survival increased to an estimated 16 months in Zytiga patients versus 8 months in the placebo patients.
After the study was stopped in April, analysts started rejigging their sales forecasts for the drug. Wells Fargo's Larry Biegelsen pointed out that there are twice as many pre-chemo patients as there are post-chemo patients, which currently make up Zytiga's target market. He's reworking his estimates, which called for around $900 million in sales next year. Citi's Bryan Huang figures that the pre-chemo market could be worth $2.5 billion, while post-chemo he estimated at $800 million.
When the study data was presented at ASCO, Biegelsen said his sales estimates for this year might even be too low, at $525 million. Analysts didn't see Dendreon's ($DNDN) Provenge as a problem for Zytiga's entry into that pre-chemo market; they figure doctors will prefer the oral Zytiga over the infused-and-personalized Provenge. That remains to be seen, but J&J may soon have the opportunity to test that theory.