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Blueprint Medicines' Avapritinib Grows to Curb Revenue Reliance

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On Oct 11, we issued an updated research report on Blueprint Medicines Corporation (BPMC - Free Report) .

The company's top line mainly comprises collaboration revenues generated from its partnership with Roche (RHHBY - Free Report) and CStone Pharmaceuticals for the development and commercialization of its pipeline candidates.

Blueprint Medicines’ lead pipeline candidate avapritinib, an inhibitor of KIT and PDGFRA proteins, is being evaluated in several late-stage studies for cancer indications. This August, the FDA accepted the new drug application (NDA) for avapritinib to treat patients with PDGFRA Exon 18 mutant gastrointestinal stromal tumors (GIST), regardless of any prior therapy and the fourth-line GIST. The indication currently has no approved therapy.

The regulatory body granted a priority review and has set an action date of Feb 14, 2020.

In July 2019, the marketing application in Europe for avapritinib to treat adult patients with PDGFRα D842V mutant GIST, regardless of any prior therapy and the fourth-line GIST was validated by the European Medicines Agency (EMA).

Blueprint Medicines is also investigating avapritinib in other settings for GIST. The phase III VOYAGER study is evaluating the safety and efficacy of avapritinib compared to Bayer’s (BAYRY - Free Report) Stivarga (regorafenib) in patients with the third-line GIST. The company also plans to initiate a global phase III precision medicine study — COMPASS-2L — to evaluate the safety and efficacy of avapritinib for treating second-line GIST.

Other than GIST, Blueprint Medicines is pursuing a broad clinical development program for avapritinib across the advanced, indolent and smoldering forms of systemic mastocytosis (SM). The company plans to submit an NDA for avapritinib for the advanced SM indication in the first quarter of 2020.

Shares of Blueprint Medicines have surged 36.6% so far this year against the industry’s decline of 6.9%.

Apart from avapritinib, Blueprint Medicines has several pipeline candidates in early developmental stages.

Pralsetinib (formerly BLU-667) in being studied in the phase I/II ARROW study in previously-treated patients with receptor tyrosine RET-fusion non-small cell lung cancer (NSCLC) and RET-mutant medullary thyroid carcinoma (MTC). The company plans to submit an NDA for pralsetinib pertaining to the NSCLC indication in the first quarter of 2020 while the NDA for the MTC indication is expected to be filed in the first half of next year.

Other pipeline candidates in phase I development are fisogatinib (formerly BLU-554) for hepatocellular carcinoma (HCC), a type of liver cancer and BLU-782 for fibrodysplasia ossificans progressive (FOP), a severely disabling genetic disease caused by mutations in the ALK2 gene.

We note that Blueprint Medicines currently has no approved product in its portfolio. Thus, an approval of avapritinib will lower the company’s heavy dependence on its partners for revenue generation. However, any regulatory setback in its pipeline development will severely hurt the stock in the future.

Zacks Rank & Key Pick

Blueprint Medicines currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the healthcare sector is Incyte Corporation (INCY - Free Report) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Incyte’s earnings estimates have been revised 5.3% upward for 2019 and 4.9% for 2020 over the past 60 days. The stock has rallied 19.7% year to date.

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