Can Spectrum Pharmaceuticals Benefit from FDA Action on Zevalin?

According to the American Cancer Society [ACS], non-Hodgkin lymphoma [also known as non-Hodgkin’s lymphoma, NHL, or sometimes just lymphoma] is a cancer that starts in cells of the lymph system, which is part of the body’s immune system. NHL is the fifth most common cancer in both men and women in the United States [not counting skin cancers]. In 2009, the ACS estimates that there will be nearly 66,000 new cases of NHL in the United States and that about 20,000 people will die from the disease. In general, the overall 5-year relative survival rate for people with NHL is 65%, and 10-year relative survival is 54%.

By 2003, the U.S. Food and Drug Administration [FDA] had approved two radioactive labeled monoclonal antibodies for the treatment of patients with “relapsed” or “refractory”, low-grade or follicular B-cell NHL. Refractory NHL is disease that never responded or has stopped responding to standard therapies. Relapsed NHL is disease that has returned after successful initial treatment.

Both products utilize monoclonal antibodies that target an antigen expressed by certain normal and malignant B-cell lymphocytes [CD20] combined with the killing power of radiation to eradicate tumor cells. Zevalin® [ibritumomab tiuxetan] by Spectrum Pharmaceuticals, Inc. (SPPI) in the United States and Bayer Schering Pharma ex-United States employs yttrium-90 as its therapeutic payload, while Bexxar® [tositumomab] by GlaxoSmithKline (GSK) uses iodine-131.

In April 2008, the European Commission extended the marketing authorization for Zevalin in Europe to include first line consolidation therapy for patients with NHL. The decision by the European Commission to expand Zevalin’s indication was based on data from the pivotal Phase 3 First-Line Indolent Trial [FIT] demonstrating that the addition of Zevalin significantly prolonged the median progression-free survival time from 13.5 months [control arm] to 37 months [p<0.0001]. The data were presented for the first time at the 49th Annual Meeting of the American Society of Hematology [ASH] in December 2007.

In November 2008, the FDA accepted and granted priority review status for Spectrum Pharmaceuticals’ supplemental Biologics License Application [sBLA] for expanded use of Zevalin as a first line consolidation therapy for patients with NHL. A Prescription Drug User Fee Act [PDUFA] target date of July 2, 2009 has been established by the FDA for a decision regarding the Zevalin sBLA, although PDUFA dates appear to be a moving target with the agency nowadays.

Assuming the sBLA is approved, which appears likely based on the European Commission decision, Spectrum Pharmaceuticals stated that Zevalin’s addressable patient population would increase by approximately 18,000. At an approximate cost of $25,000 per treatment, the additional market for Zevalin would be worth $450 million. Not bad.

Unfortunately, despite the fact that both Zevalin and Bexxar have been demonstrated as safe and effective treatments for patients with relapsed or refractory NHL for years, it has been reported that fewer than 10% of patients who are candidates for the products ever receive them. Recall the aforementioned statistic regarding NHL relative survival rates, indicating that a significant number of patients experience relapsed or refractory NHL. According to Spectrum Pharmaceuticals, Zevalin’s annual sales in the United States were a mere $11.4 million in 2008.

Therefore, while an expanded indication for Zevalin is nice, the fact that the product has yet to penetrate the market indication afforded approximately five years ago implies that there are other obstacles to the product’s success. For example, while medical oncologists are the key prescribing audience for Zevalin and Bexxar, most aren’t licensed to administer radiopharmaceuticals – resulting in patient referrals to radiation oncologists and/or nuclear medicine physicians in the hospital setting. This may provide an economic incentive to medical oncologists to exhaust all non-radioactive options, such as chemotherapy, before referring NHL patients to receive products that will not improve their bottom line. Sad but true, this and other factors were discussed in my opinion editorial for Oncology Business Review [OBR] back in September 2007 titled “Radiopharmaceuticals Need a Jump-STaRT.”

Spectrum Pharmaceuticals’ stock has been strong as of late – but perhaps more a result of Russell Investments adding Spectrum Pharmaceuticals to the Russell Global®, the Russell 3000® and the Russell 2000® Indexes. For investors, significantly improved sales of Zevalin in future quarters will be much more important to Spectrum Pharmaceuticals than near-term approval of the sBLA.

Disclosure: No positions

Comments

[tobyhubner:]

One of my best friends had NHL, it was a death sentence then, and he was literally cured by Rituxin. So I have seen these drugs work wonders. If Zevalin works as well as they say it does, and even better and/or as an alternative to Rituxin, then the value to SPPI and patients is...enormous. For once there is a stock analysis that finally makes some sense. I agree with Hall's articles that SPPI could go through the roof.

Jul 01 05:53 AM

[Michael Becker:]

For five years, Zevalin has been approved for the treatment of patients with “relapsed” or “refractory” NHL, which includes Rituxan (rituximab) failures. The efficacy/safety data in this setting are compelling and this is a significant patient population, yet Zevalin did a mere $11.4 million in sales for 2008. And if Zevalin cannot penetrate the market for Rituxan failures, I certainly don't see the rationale for Zevalin replacing Rituxan. Further, the positive first line consolidation therapy data were presented at the ASH annual meeting back in December 2007 and the EU approved this indication more than a year ago. So again, significant quarterly growth with Zevalin will be the best metric for investors going forward. It isn't a question of whether or not Zevalin works, it is a matter of getting medical oncologists to embrace radiopharmaceuticals - and that has been tough for even big pharma as evidenced by GlaxoSmithKline (GSK) with Bexxar.




On Jul 01 05:53 AM tobyhubner wrote:

> One of my best friends had NHL, it was a death sentence then, and
> he was literally cured by Rituxin. So I have seen these drugs work
> wonders. If Zevalin works as well as they say it does, and even better
> and/or as an alternative to Rituxin, then the value to SPPI and patients
> is...enormous. For once there is a stock analysis that finally makes
> some sense. I agree with Hall's articles that SPPI could go through
> the roof.

Jul 01 09:03 AM

[Michael Becker:]

The PDUFA date of July 2 for the Zevalin sBLA came and went without any word from the company until a mid-Sunday (July 5) press release annoucning the receipt of a complete response letter from FDA requesting data from the FIT study to validate a subset of the sBLA. The company stated in the PR that it will provide all data requested to FDA as part of a formal response by Wednesday, July 8 and that the FDA's request does not involve new clinical studies or new data analyses. The company's stock was weak as the PDUFA date came and went in addition to the announcement of a $21 million registered direct offering priced at $7.1525 (with 50% warrant coverage) that is expected to be consummated no later than July 6, 2009, subject to customary closing conditions. In view of the stock weakness and regulatory delay, it is not clear whether or not the financing will proceed as planned. As stated, however, significantly improved sales of Zevalin in future quarters will be much more important to Spectrum Pharmaceuticals than near-term approval of the sBLA.

Jul 05 05:20 PM