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Pharmacyclics Inc. (PCYC - Analyst Report) recently announced that the U.S. Food and Drug Administration (FDA) will review the company’s New Drug Application (NDA) for its oncology candidate ibrutinib on a priority basis. The news impacted Pharmacyclics’ stock price positively.

We note that the U.S. regulatory authority generally reviews those drugs on a priority basis which offer major advances in treating diseases having no adequate therapy. Applications for priority review designated drugs are reviewed by the FDA within eight months of submission as against the usual twelve months.

The company is looking to get ibrutinib approved for two oncology indications: previously treated mantle cell lymphoma (MCL) and previously treated chronic lymphocytic leukemia (CLL)/small lymphocytic lymphoma (SLL). The NDA was submitted to the FDA on Jun 28, 2013.

The positive move by the FDA triggered a milestone payment of $75 million to Pharmacyclics from partner Janssen Biotech, a Johnson & Johnson (JNJ - Analyst Report) company. We are positive on the company’s collaboration with Janssen for ibrutinib. Janssen is a suitable partner for Pharmacyclics. Janssen’s strong global presence bodes well for the commercialization of ibrutinib, once it is approved.

Successful development and commercialization of ibrutinib would bring in substantial revenues to Pharmacyclics. The candidate is being developed to treat other cancer forms as well.

We remind investors that in Apr 2013, the FDA had granted breakthrough therapy designation to ibrutinib for treating CLL/small lymphocytic lymphoma patients with a deletion of chromosome 17p. Earlier in the year, the U.S. regulatory body granted breakthrough therapy designation to ibrutinib for treating mantle cell lymphoma patients as a monotherapy. The FDA granted a similar status to the candidate for treating patients suffering from Waldenström's macroglobulinemia also as a monotherapy. We expect investor focus to remain on the development of ibrutinib.

Pharmacyclics, a biopharmaceutical company, carries a Zacks Rank #2 (Buy). However, biopharma stocks that appear to be more attractive are Gilead Sciences Inc. (GILD - Analyst Report) and Actelion Ltd. (ALIOF). Both the stocks carry a Zacks Rank #1 (Strong Buy).

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