Johnson & Johnson's Potential Blockbuster For Multiple Myeloma And Its Competitors

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In May the FDA granted a "breakthrough" designation to the experimental drug daratumumab from Johnson & Johnson (JNJ), which is developed with Danish partner Genmab.

Daratumumab is a treatment for patients with multiple myeloma who have received at least three prior lines of therapy including a proteasome inhibitor (NASDAQ:PI) like Velcade and an immunomodulatory agent ((IMiD)) like Revlimid or who are resistant to both PI and IMiD.

FDA's "breakthrough" designation is gaining in prestige among biotech companies.

In theory, drugmakers may win approval for a lifesaving new drug after Phase 1, rather than Phase 3, in an effort to speed it to patients. A breakthrough designation could possibly revolutionize a drugmaker's commercial prospects.


Daratumumab is a monoclonal antibody with broad-spectrum killing activity which targets the CD38 molecule found on the surface of multiple myeloma cells and other blood cancer cells. Once bound to the CD38 molecule on cancer cells, the drug signals for the immune system to kill the cells.

Daratumumab is currently in Phase 1 and 2 trials. In one of the trials it is tested in combination with Velcade and dexamethasone and in the other in combination with Revlimid and dexamethasone in patients with relapsed or refractory multiple myeloma. Dexamethasone is a corticosteroid.

Preliminary data were presented by Dr. Torben Plesner from the Vejle Hospital in Denmark at the American Society of Hematology meeting in Atlanta last December.

Thirty-two heavily pretreated myeloma patients were included in the study who had received a median of 6.3 prior treatment regimens. Participants received escalating doses of daratumumab ranging from 0.005 mg/kg to 24 mg/kg.

Of the 32 patients, 47 percent showed a reduction in the amount of monoclonal protein in the blood or urine, which corresponded to the following response rates: 13 percent of patients achieved a partial response, 19 percent a minor response, and 16 percent stable disease. Daratumumab showed a favorable safety profile.

In the past 20 years, a number of monoclonal antibodies have been developed, but virtually none of these had anti-myeloma activity by itself. For example Elotuzumab, currently jointly developed by AbbVie (NYSE:ABBV) and Bristol-Myers Squibb (NYSE:BMS), is effective in combination, yet has minimal effect as a single-agent.

Daratumumab shows activity as a single agent in early studies. This would allow for its use alone, with no requirement for combination with other agents. This feature makes it ideal for maintenance therapy after induction treatment or transplant.

The license to commercialize daratumumab was acquired in August 2012 by Janssen Biotech, a subsidiary of J&J, from Genmab. J&J took an $80 million equity stake in Genmab and paid a $55 million upfront fee. The total deal, including potential milestones, amounts to $1.1 billion. J&J will cover all development costs, including the bills for the two Phase 1 and 2 studies.

Multiple myeloma is a cancer of the plasma cells and although it accounts for only about 1 percent of all cancers, it is the most prevalent blood cancer in the US and second in Europe. According to American Society of Cancer estimates, approximately 21,700 new cases of multiple myeloma were diagnosed and approximately 10,710 deaths occurred in the U.S. in 2012. At present, no cure is available.


Progress in the treatment has been made.

Fifty years ago, the use of the chemotherapy Alkeran and the steroid prednisone improved the survival of myeloma patients to a median of two to three years. Following that, the use of high-dose chemotherapy and stem cell transplantation further improved survival to a median of four to five years.

The novel agents thalidomide from Celgene (NASDAQ:CELG), Velcade from Johnson & Johnson and Takeda and Revlimid from Celgene have transformed the myeloma outlook: the median survival for myeloma patients has increased to over seven years.

Despite these advances and the recent approvals of Kyprolis from Onyx (NASDAQ:ONXX) and Ono Pharma and Pomalyst from Celgene, myeloma remains incurable for most patients. New therapies and combinations are needed.

Competition: Proteasome Inhibitors

Proteasome inhibitors are a class of drugs that work by preventing the breakdown of protein in cancer cells, triggering their death.

Velcade has been extremely beneficial for newly diagnosed as well as relapsed and refractory myeloma patients. However, not all patients respond to Velcade and that those who do, eventually relapse.

Kyprolis, another proteasome inhibitor, was approved in 2012. Kyprolis improves upon Velcade by irreversibly inhibiting the proteasome and by causing less peripheral neuropathy, a side effect of Velcade which causes pain, tingling or loss of sensation in the extremities.

The combination of Kyprolis plus Revlimid and dexamethasone appears effective in both relapsed and newly diagnosed patients.

Results from the testing of the experimental ixazomib ((MLN9708)), made by Takeda, an oral proteasome inhibitor, show that the drug is effective for relapsed and refractory myeloma patients as well as in combination with Revlimid and dexamethasone for newly diagnosed patients.

Immunomodulatory Drugs

Immunomodulatory drugs are a class that includes thalidomide, Revlimid, and Pomalyst and work by inducing a patient's immune system to attack and destroy myeloma cells.

Thalidomide and Revlimid have become commonly used for newly diagnosed and relapsed myeloma patients as well as part of maintenance therapy.

Pomalyst was approved in February for use in relapsed multiple myeloma patients, and it is the most potent of the three, with an overall response rate of 30 to 40 percent in patients who are both Revlimid and Velcade resistant.

Monoclonal Antibodies

Monoclonal antibodies teach a patient's own immune system to attack and eliminate cancer cells.

Elotuzumab is one of the most promising in this group. Although clinical studies have shown that elotuzumab has limited efficacy by itself, it is most effective in combination with Revlimid and dexamethasone in relapsed myeloma patients. The overall response rate for the combination was 82 percent.

Another combination is BT-062 from the German company Biotest AG. It consists of a chemotherapeutic drug combined with an antibody that helps deliver the drug to myeloma and other cancer cells.

Investor summary

IMS Health reports that among the top 10 global pharmaceutical companies, the pharmaceuticals business of Johnson & Johnson was the fastest growing in the U.S., Europe and Japan in 2012, with sales of $25.4 billion, an operational increase of nearly 7 percent versus 2011.

Strong sales growth in the segment continued in the first quarter of 2013, with worldwide sales of $6.8 billion, an operational increase of over 11 percent versus the prior year. Emerging markets, including China, Brazil, Russia and India, comprised nearly 20 percent of worldwide pharmaceutical sales in the first quarter of 2013.

The pharmaceutical segment promises to be a driving force for J&J as by 2017 the company is planning to file for 10 new products and 25 significant brand line extensions.

Late stage candidates for approval include simeprevir for hepatitis C, which is filed already in Japan and Europe, ibrutinib and daratumumab for the treatment of hematologic malignancies, which both received FDA's breakthrough designation, sirukumab and guselkumab for important immune mediated diseases, a three-month formulation of Invega Sustenna with a potential to change the treatment for schizophrenia, and novel vaccines for treating influenza, rabies and polio.

The pharmaceuticals segment of JNJ has built a great pipeline that has yielded 11 new product launches since 2009. These new products, coupled with core growth brands, have fueled 12 consecutive quarters of operational sales growth in the segment. New drugs and older drugs with line extensions are clearly a promising growth engine for Johnson & Johnson.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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