New FDA lung cancer OK for Celgene's Abraxane should boost sales

When Celgene ($CELG) bought out Abraxis two years ago for an eye-popping $2.9 billion, it set out to prove that it could do a better job selling the drug for breast cancer while expanding the drug's use with additional approvals. Today it delivered on part of that promise with an FDA OK on first-line use for advanced or metastatic non-small cell lung cancer. 

In Phase III, investigators pitted Abraxane combined with carboplatin against the chemo drug paclitaxel and carboplatin, achieving an overall response rate of 33% compared to 25%, which was statistically significant. But the drug disappointed analysts by failing to provide a survival benefit for patients, dulling their expectations at a time many were disappointed by lackluster sales of the drug, which hit $390 million last year. 

The approval will help Celgene push up sales, perhaps significantly, as it continues to believe that this drug will deliver on the sales side. Barclays has estimated peak potential sales for lung cancer at $110 million a year, according to a report in Reuters. The regulatory green light should also certainly please the owners of Abraxis, who were in line for $650 million in milestones based on additional approvals.

"Non-small cell is the most common type of lung cancer, the leading cause of cancer death in the United States," said Dr. Mark A. Socinski, a lung cancer expert at the University of Pittsburgh and lead investigator of Abraxane Phase II and Phase III lung cancer trials. "The FDA approval of Abraxane is exciting for healthcare professionals because it offers an important new treatment option for all types of non-small cell lung cancer patients, in an area that has seen few treatment advancements in recent years."

A much bigger payout, though, could depend on a late-stage study of pancreatic cancer. Success in this indication is seen by some analysts, including TheStreet's Adam Feuerstein, as a potential winner for investors hanging on to the Celgene CVR.

- here's the press release
- read the story from Reuters

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