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Gleevec from Novartis (NYSE:NVS) is the gold standard of chronic myeloid leukemia [CML] treatment. Before Gleevec came to the market about 20 years ago, median survival for patients with this disease was three to six years, and was treated with interferon-alpha or allogeneic stem cell transplantation.

With Gleevec, the 10-year survival rate now stands at 68%. The complete response rate is at 85%. Clearly, Gleevec is a blockbuster drug. $4.6 billion worth of the drug was sold in 2011, a 9% increase from the previous year. As great a drug as Gleevec is, statistics show that eventually 40 percent of all patients discontinue therapy due to resistance or intolerance to it.

Gleevec does not cure CML, and one of the reasons is, according to some scientists, that Gleevec does not kill leukemia stem cells in CML. Leukemia stem cells survive and so does the cancer.

Therefore, the search for replacement or improvement is ongoing. Leukemia is a cancer of the early blood-forming cells. Chronic myeloid leukemia is a cancer of the white blood cells. In a person with leukemia, the bone marrow makes abnormal white blood cells. The abnormal cells are leukemia cells. Unlike normal blood cells, leukemia cells don't die when they should. They may crowd out normal white blood cells, red blood cells and platelets. This makes it hard for normal blood cells to do their work.

Chronic myeloid leukemia represents about 15 percent of adult leukemias. Although CML is a relatively rare disease, with an incidence of only 4,900 new cases per year in the United States and approximately the same number in Europe, it is predicted to increase significantly as more patients survive on current therapies.

Currently, those who cannot take Gleevec will be directed to Sprycel (Dasatinib) from Bristol-Myers Squibb (NYSE:BMY) or Tasigna (Nilotinib), also from Novartis. Sprycel's 2011 sales were $803 million and Tasigna's 2011 sales were $207 million and increasing rapidly.

Cost: These medications are expensive.

According to the DestinationRx.com website, US patients have to pay

For Gleevec: $6,284 a month for 30 tablets, 400 mg each

For Tasigna: $8,835 a month, for 120 capsules and

For Sprycel: $2,209 a month for 30 tablets, 20 mg each

This does not include doctor and hospital fees.

Ponatinib: Ponatinib, also known as AP24534, from Ariad Pharmaceuticals (NASDAQ:ARIA), is a new drug in the works. The company is planning to apply for FDA and European approval later in 2012.

Ponatinib targets the BCR-ABL fusion proteins.

BCR-ABL is an abnormal tyrosine kinase that is the hallmark of chronic myeloid leukemia and Philadelphia chromosome positive ((Ph+)) acute lymphoblastic leukemia [ALL].

The drug is designed to inhibit the entire spectrum of mutations, including the T315I mutation, which is resistant to all current therapies. T315I represents about 15-20 percent of all clinically observed BCR-ABL mutations.

In December 2011, the company reported that in a Phase 1 trial, 66 percent of patients on the drug showed a major cytogenetic response, evidence that the drug was weakening their cancer. Ponatinib has blockbuster potential.

Phil Nadeau, an analyst with Cowen & Co. in New York, estimates that Ponatinib, if approved, may draw $350 million in 2016 revenue, and $2.5 billion in annual worldwide sales before it loses patent protection in 2026. Considering that approximately fifty percent of patients will fail either of these two treatments (Sprycel and Tasigna), Ariad expects the initial market opportunity for Ponatinib to be approximately half of this current sized market (about $500 million a year). Ponatinib is self-administered by the patient. The dose in the Phase 2 trial was a 45 mg tablet taken orally once a day.

Another candidate is Pfizer's (NYSE:PFE) Bosutinib (other name SKI 606), an oral, once-daily, investigational dual Src and Abl kinase inhibitor. Bosutinib may inhibit signaling in CML cells that allows the cells to grow, survive and reproduce.

In January 2012 it was submitted to the FDA for approval. Currently a phase 3 trial is conducted, comparing Bosutinib to Gleevec. The primary endpoint is cytogenetic response rate at one year. Cytogenetic response is the reduction in or the elimination of the number of cells expressing the Philadelphia Chromosome in a CML patient.

Currently, there are no approved therapies after second-line treatment with Sprycel or Tasigna. Ponatinib and Bosutinib may become options for resistant patients. CML is a small part of a huge problem.

More than 1 million people suffer from a hematologic malignancy in the United States, and every year another 148,000 men, women, and children are diagnosed with lymphoma, leukemia, or myeloma.

And the medical practice still relies principally on the same two drug types to treat acute myeloid leukemia [AML] that was used 40 years ago: chemotherapy cytarabine and an anthracycline antibiotic such as Daunomycin.

To find new therapies for these cancers, broad and aggressive research programs, new paradigms and genius are needed.

Investor's take: In pharmaceutical investing, it is important to always search for the next blockbuster. It is a persistent and patient search. Finding one does not necessarily mean investing success, but without it, you got nothing.

You notice that most large and some midsize pharmas and biotechs basically depend on one or two blockbusters, more so than they would like you to believe. Here, in this situation Ponatinib's maker, Ariad Pharmaceuticals has a very promising drug at hand. However, Ariad is a small company, with no income and no approved drug. Moreover, Ariad wants to commercialize the drug alone, without major partners and deep pockets. From the investor's standpoint, this is a highly speculative situation.

For giant Pfizer, the success of Bosutinib would only mean anything if it turned out to be a runaway bestseller, not that Pfizer is not desperately looking these days for runaway bestsellers to replace Lipitor. Novartis and Bristol-Myers Squibb will do well on their existing franchises, as long as the competition is not catching up, which is very hard to time.

But sometimes catching up in this business happens unexpectedly fast. Therefore, you have to pay attention all the time.

Source: After Gleevec: In Search Of The Next Wonder Drug