Johnson & Johnson’s (JNJ - Free Report) subsidiary, Janssen, announced that the FDA has granted approval to its prostate cancer drug, Zytiga, (abiraterone acetate) in combination with prednisone to treat an early stage of prostate cancer.
Notably, Zytiga, was earlier approved in both the United States and the EU to treat metastatic castration-resistant prostate cancer (mCRPC) in treatment-experienced patients, whose chemotherapy contained docetaxel. With this latest nod from the regulatory body, the drug’s label has been expanded to treat newly-diagnosed patients with metastatic high-risk castration-sensitive prostate cancer (CSPC).
Zytiga was approved for treatment of newly diagnosed CSPC patients in the EU in November 2017. The company also submitted regulatory filings for the combination therapy in Japan, Canada, Mexico, Switzerland, Singapore and Philippines for the given indication.
J&J’s shares have outperformed the industry in a year’s time. The stock has increased 10.8%, comparing favorably with the industry’s 10.1% rally.
The FDA approval for the expanded patient population was supported by encouraging data from a pivotal phase III LATITUDE study, evaluating Zytiga/prednisone’s combination on CSPC patients with no prior experience of cytotoxic chemotherapy. Data from the trial demonstrated a statistically significant and improvement in overall survival in the given patients’ population. The combination regimen showed a reduction in death risk by 38% compared with placebos.
It is important to note that Zytiga is one of the most important and successful products in the company’s oncology portfolio. The drug’s sales surged 45.5% to $755 million in fourth-quarter 2017 owing to an improved share in a growing metastatic castration-resistant prostate cancer market. It was the highest prescribed oral medication in the United States for patients with metastatic CRPC in 2016.
Approval for the combination therapy on CSPC patient population should increase Zytiga’s sales in the future quarters.
Incidentally, another marketed drug for CSPC patients, having received docetaxel therapy, is Pfizer (PFE - Free Report) and Japanese company, Astellas Pharma’s, combined Xtandi (enzalutamide).
Though Zytiga is facing patent challenges in the United States, the company anticipates no impact from generic competition for the drug this year. Also, J&J is confident that it can absorb the effect of any potential Zytiga headwind, should there be an earlier-than-expected generic launch in 2018.
Zacks Rank & Key Picks
J&J carries a Zacks Rank #3 (Hold). Two better-ranked stocks in the health care sector are Exelixis, Inc. (EXEL - Free Report) and XOMA Corporation (XOMA - Free Report) . While XOMA sport a Zacks Rank #1 (Strong Buy), Exelixis carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Exelixis’ earnings per share estimates have been revised upward from 72 cents to 77 cents for 2018 over the last 60 days. The company pulled off a positive surprise in all the trailing four quarters with an average beat of 572.92%. Share price of the company has soared 22.6% in a year’s time.
XOMA’s loss per share estimates have narrowed from 99 cents to 42 cents for 2018 over the last 60 days. The company came up with an average beat of 47.92%. The stock has skyrocketed 541.0% in the last 12 months.
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