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One of the biggest subgroups of non-small cell lung cancer (NSCLC) is the so-called "ALK-positive" type, which accounts for around 5% of all new cases. The disease results from a chromosomal rearrangement involving the ALK gene, which ends up fusing it to an odd partner. The protein made by the fusion gene is highly active in promoting the growth of cells, which can lead to cancer.
Pfizer (PFE) was a pioneer in therapy for ALK-positive NSCLC, since they developed the first approved therapy for the disease, a tyrosine kinase inhibitor called crizotinib (branded Xalkori), which entered the market in 2011.
For a long time, it sat alone as the dominant player in this space, garnering hundreds of millions in sales for a relatively small marketplace (although, to be fair, any piece of the NSCLC market is rather substantial). But in 2014 we started seeing the emergence of "next-generation" ALK inhibitors to address the problem that we see in a lot of targeted therapy: resistance.
In general, anywhere where we have seen some level of success for targeted therapy using these small molecule inhibitors, you can count on the patient eventually developing resistance and needing new treatment options. This is certainly the case in ALK-positive NSCLC, where eventual disease relapse is considered inevitable.
The real challenge came when these agents started receiving approval for first-line therapy, since Roche's (OTCQX:RHHBF) alectinib and Takeda's (OTCPK:TKPYY) brigatinib were both shown to provide longer disease control than PFE's entry. Novartis (NVS) also entered the fray with ceritinib, which appeared to have similar efficacy to alectinib, but this agent has not yet been tested in a head-to-head comparison with crizotinib.
With all of this competition looming large, the pressure has been on PFE to develop a drug that can go toe-to-toe with the next-generation inhibitors.
PFE now has its answer. The company announced that the FDA has approved their next-generation tyrosine kinase inhibitor lorlatinib (branded Lorbrena) for the treatment of patients with metastatic, ALK-positive NSCLC who have either 1) progressed on crizotinib and at least one other inhibitor or 2) progressed on first-line alectinib or ceritinib.
The approval was based on findings from a phase 1/2 study demonstrating a 48% response rate in patients who had progressed on prior ALK inhibitor therapy. In addition, lorlatinib showed a striking ability to help against brain metastases, showing a 60% intracranial response rate in those patients.
At first glance, this news looks a bit iterative. Yet another next-generation kinase inhibitor doesn't seem very exciting, but this one might be a bit more encouraging. For starters, we have the just-mentioned activity in brain metastases, which crizotinib basically does not have.
Perhaps more importantly, the mutations that can confer resistance to lorlatinib differ substantially from those for other kinase inhibitors. This means that PFE's new agent could be an answer for specific forms of resistant disease, which can be determined using molecular analysis to help pick the best drug.
Of course, this isn't the approved indication, but doctors are going to want clarity on how to select from among the growing arsenal of treatment options. So we may see an increasing emphasis placed on molecular analysis in the near future.
It's no surprise that the lorlatinib train won't stop here, either. PFE is conducting a phase 3 trial, CROWN, to see which of their two kinase inhibitors is best for patients who have not yet received therapy. Now that we have this approval, it's tempting to hope that this new generation of kinase inhibitors can become a leading agent, replacing crizotinib and usurping the current dominators like alectinib and ceritinib.
Key investment takeaways
For PFE, any single drug approval is a relatively small drop in the bucket. Even crizotinib, which has been predicted to contribute upwards of $1 billion in annual sales, and this figure is completely dwarfed by their overall revenues. Therefore, you can't look at this event the way you might with a small-cap biotech.
However, there are implications that we can draw from this news. For starters, brigatinib was one of the big draws for the TKPYY acquisition of Ariad Pharmaceuticals, and lorlatinib represents a serious competitor in that space. So this news does not bode extremely well for TKPYY. RHHBF and NVS may also need to get ready for the intrusion, as well, but they have similarly massive revenue streams from a variety of other products to compensate.
In all, do I buy PFE based on this news alone? Definitely not. However, this fight is one to watch in the oncology space, as sales of lorlatinib could be substantial in the coming years if it proves to be better than crizotinib.
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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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