Astellas' sNDA for Tarceva Accepted

Astellas Pharmaceuticals Inc. ( ALPMY ) recently announced that the US Food and Drug Administration (FDA) has accepted its supplemental new drug application (sNDA) for Tarceva (erlotinib). Astellas is looking to expand the label of Tarceva to first-line use in patients suffering from locally advanced or metastatic non-small cell lung cancer (NSCLC) whose tumors have epidermal growth factor receptor (EGFR) activating mutations. Tarceva is currently approved and marketed for maintenance therapy and second- or third-line therapy in advanced Non-Small Cell Lung Cancer (NSCLC).

FDA will review the application on a priority basis. Priority review status means that a response from the agency will be out in six months instead of the usual 10 month review period. The US regulatory authority generally reviews those drugs on a priority basis, which offer major advances in treating diseases that do not have adequate therapy. As such, a response from the FDA should be out in second quarter of 2013.

The application was submitted on the basis of data from an international trial, EURTAC (European Randomised Trial of Tarceva vs. Chemotherapy), which was designed and sponsored by the Spanish Lung Cancer Group (SLCG) and conducted in Spain, France and Italy in cooperation with Roche Holding AG ( RHHBY ) . The study evaluated the first-line use of Tarceva versus platinum based chemotherapy in patients with EGFR activating mutation-positive advanced NSCLC.

Astellas stated in its press release that 10% patients in western countries with lung cancer and 30% patients in Asian countries with lung cancer have EGFR activating mutations. We believe the successful label expansion of Tarceva will increase its sales potential.

According to Astellas over 226,000 Americans were diagnosed with lung cancer, and NSCLC accounted for 85% of all lung cancers in 2012. Around 60% was diagnosed in the advanced stages.

Astellas carries a Zacks Rank #4 (Sell). Right now Valeant Pharmaceuticals International, Inc. ( VRX - Snapshot Report ) looks more attractive with a Zacks Rank #1 (Strong Buy).