Canadian Approval for BMY's Drug

Good news flowed in at Bristol-Myers Squibb ( BMY - Analyst Report ) from Canada when Health Canada, the federal department responsible for health related matters in the country, cleared its cancer drug Erbitux for an additional indication.

The Canadian unit of Bristol-Myers announced that the approval was for the use of Erbitux as a first-line treatment in combination with FOLFIRI (irinotecan, 5-fluorouracil, leucovorin) in patients with wild-type KRAS, epidermal growth factor receptor (EGFR)-expressing metastatic colorectal cancer (mCRC).

Health Canada approved Erbitux for the new indication on the basis of data from an open-label, randomized, multicenter, European phase III study (CRYSTAL). This is the first new biologic therapy to be cleared in eight years for patients newly diagnosed with mCRC.

We note that Erbitux is available in Canada since 2008 for the treatment of EGFR-expressing metastatic colorectal cancer in patients whose disease progressed after chemotherapy. The label expansion of Erbitux in the country should boost the sales potential of the cancer drug.

The colorectal cancer market represents huge potential. According to the data provided by the company in its press release, about 23,300 cases of colorectal cancer occurred in 2012. It is estimated that colorectal cancer was responsible for 9,200 deaths in Canada in 2012.It is estimated that colorectal cancer was responsible for 9,200 deaths in Canada in 2012. Apart from Erbitux, the colorectal cancer market includes Amgen’s ( AMGN - Analyst Report ) Vectibix.

We currently have a Neutral recommendation on Bristol-Myers, which carries a Zacks Rank #3 (Hold). Large-cap pharma companies that currently look more attractive include Novartis ( NVS - Snapshot Report ) , Bayer ( BAYRY - Analyst Report ) and Sanofi ( SNY - Analyst Report ) . These Zacks #2 Ranked (Buy) stocks are expected to perform strongly in the coming quarters.