AstraZeneca (AZN) recently gained US Food and Drug Administration (FDA) approval for its orphan drug vandetanib for the treatment of non-operable (unresectable) locally advanced or metastatic medullary thyroid cancer (MTC).
The approval, however, comes with a boxed warning and a Risk Evaluation and Mitigation Strategy (REMS). The boxed warning relates to QT prolongation, Torsades de pointes, and sudden death.
Vandetanib’s approval was based on encouraging phase III data which showed that treatment with vandetanib resulted in a 65% reduction in the rate of disease progression compared to placebo.
In addition to achieving the primary endpoint of progression-free survival, vandetanib also showed improvement compared to placebo in the secondary endpoints, which were objective response rate and disease control rate.
The randomized, double-blind, placebo-controlled, multi-center study ZETA was conducted with 331 patients suffering from advanced MTC. Common adverse events included rash, diarrhea, hypertension, nausea and headache.
The American Cancer Society estimates that more than 44,000 new cases of thyroid cancer were diagnosed in 2010 in the US. Medullary tumors account for 4% of all thyroid cancers.
Neutral on AstraZeneca
We currently have a Neutral recommendation on AstraZeneca, which is supported by a Zacks #3 Rank (short-term Hold rating). Although the market for medullary thyroid cancer may not be huge, vandetanib should be able to capture a significant share of the market as no approved treatments are currently available. Vandetanib is also under regulatory review in the EU and Canada.
Meanwhile, we remain concerned about the generic competition or generic risk being faced by some products in AstraZeneca’s portfolio in the 2010 to 2013 time frame. AstraZeneca is facing patent challenges from generic companies like Teva (TEVA) and Mylan (MYL) among others for certain products.
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