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AstraZeneca's (AZN) Enhertu Gets FDA Nod for Gastric Cancer

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AstraZeneca (AZN - Free Report) and its Japan-based partner Daiichi Sankyo announced that the FDA has granted approval to its breast cancer drug, Enhertu (trastuzumab deruxtecan) for the second indication — HER2-positive metastatic gastric cancer. The approval is for patients who have received a prior trastuzumab-based regimen.

The approval was based on positive results from the randomized DESTINY-Gastric01 phase II study. Data from the study showed that treatment with Enhertu, an antibody drug conjugate, led to a statistically significant and clinically meaningful improvement in overall survival (OS) and objective response rate (ORR) versus chemotherapy in patients with metastatic HER2-positive gastric cancer with progression following first-line treatment. With the approval, Enhertu becomes the first HER2-directed medicine approved in a decade for patients with HER2-positive metastatic gastric cancer.

Following the U.S. approval for the gastric cancer indication, AstraZeneca is due to make a milestone payment of $115 million to Daiichi Sankyo.

The FDA had earlier granted Enhertu Breakthrough Therapy Designation (BTD) in HER2-positive metastatic gastric cancer and Orphan Drug Designation for gastric cancer.

In the past six months, AstraZeneca’s shares have lost 12.5% against an increase of 3.7% for the industry.



AstraZeneca had acquired joint development and commercialization rights to trastuzumab deruxtecan from Daiichi in April 2019. Trastuzumab deruxtecan was approved by the FDA in third-line HER2-positive metastatic breast cancer in December 2019 and immediately launched under the brand name of Enhertu.

Sales of Enhertu in the United States are recognized by Daiichi Sankyo while AstraZeneca records its share of profit from sales of the drug in the United States as collaboration revenues. In the first nine months of 2020, Enhertu generated collaboration revenues of $63 million for AstraZeneca. The collaboration revenues should increase with the FDA approval for the gastric cancer indication.

Enhertu is part of AstraZeneca’s flourishing oncology portfolio. Other key oncology drugs in AstraZeneca’s portfolio areTagrisso, Lynparza and Imfinzi. AstraZeneca markets Lynparza in partnership with Merck (MRK - Free Report) .

AstraZeneca currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked drug/biotech stocks are Novavax (NVAX - Free Report) and Alexion Pharmaceuticals (ALXN - Free Report) . While Novavax has a Zacks Rank #1 (Strong Buy), Alexion has a Zacks Rank #2 (Buy).

Novavax’s shares have risen 2120.3% in the past one year while its earnings estimate for 2021 have risen 30.7% over the past 60 days.

Alexion’s shares have gained 38.3% in the past one year while its earnings estimates for 2021 have risen 2.9% over the past 90 days.

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