Cephalon’s Treanda Poised for 10-Fold Sales Surge on New Data
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By Meg Tirrell
Dec. 7 (Bloomberg) -- Cephalon Inc.’s tumor fighter Treanda may reach $1 billion in annual sales, more than ten times revenue last year, with data supporting its use as a first- choice therapy for doctors against immune system cancers.
Treanda is approved for patients with a slow-growing form of non-Hodgkin lymphoma that doesn’t respond to other drugs. About 30,000 Americans have the disease. When used with Roche Holding AG’s Rituxan in a study, Treanda stalled cancer growth 20 months longer than a four-drug chemotherapy cocktail also paired with Rituxan, the current standard of care.
Lymphomas attack immune system filters in the body, called nodes, which trap infections and allow them to be destroyed by white blood cells. The newest data on Treanda was reported Dec. 5 at the American Society of Hematology meeting in New Orleans. It may make the drug, with only $75 million in 2008 revenue, the first therapy doctors use to treat this disease, and a company top-seller, said David Amsellem, of Piper Jaffray & Co.
“It could be a widely used alternative” to the chemotherapy standard, said Amsellem, an analyst based in New York, in a Dec. 3 interview. “Could it make Treanda into blockbuster type of agent, up to $1 billion in peak sales? I don’t think that’s beyond the realm of possibility.”
Cephalon, based in Frazer, Pennsylvania, declined 7 cents, or less than 1 percent, to $55.38 in Nasdaq Stock Market trading on Dec. 4. The shares lost 28 percent in 2009 before today.
3.8% of Revenue
The cancer drug generated just 3.8 percent of Cephalon’s $1.97 billion in revenue last year, its first on the market. The company’s top product, Provigil for sleep disorders, had 2008 sales of $998.4 million.
Treanda was cleared on March 20, 2008, for patients with chronic lymphocytic leukemia, a cancer of the soft tissue inside bones where blood cells are made. The drug won U.S. approval seven months later as a back-up therapy for patients with the slow-growing form of non-Hodgkin lymphoma, or NHL.
The trial, with more than 500 patients, showed Treanda delayed cancer growth for 55 months, compared with 35 months for those taking the standard regimen. After a median observation time of 32 months, 40 percent of the Treanda-treated patients had the disease completely disappear, compared with 31 percent on the older therapy, the data show.
Treanda also had fewer infections and less hair loss than the standard therapy, the research found.
‘A Homerun’
“It’s basically a homerun -- not only was it less toxic, but it was more efficacious,” said Richard Van Etten, director of the Tufts Medical Center Cancer Center in Boston, in a Dec. 5 interview. “It is potentially practice-changing.”
The four-drug chemotherapy, called CHOP, includes cyclophosphamide, adriamycin, vincristine and the steroid prednisone. Rituxan, with $2.59 billion in the U.S. sales last year for Roche’s Genentech unit, is typically added to the older medicines to improve survival. Cambridge, Massachusetts-based Biogen Idec Inc. co-markets Rituxan with Roche.
“CHOP has been the standard of care for three decades, and this is the first truly different combination,” said Vincent Picozzi, a hematologist and oncologist at the Virginia Mason Clinic in Seattle, and a scientific committee member at ASH, in an interview.
Using Treanda instead of the CHOP cocktail in slow-moving NHL treatment could increase the number of U.S. patients taking Treanda each year to about 30,000 people, Piper Jaffray’s Amsellem said.
‘First-Choice Potential’
The Treanda-Rituxan combination “has the potential to become the treatment of first choice,” said Mathias J. Rummel, the lead study author and head of the hematology department at the University Hospital in Giessen, Germany. His research was done without funding from Cephalon.
Almost 66,000 people will be diagnosed this year with non- Hodgkin lymphoma, or NHL, according to the White Plains, New York-based Leukemia & Lymphoma Society. About half will have an indolent, or slowly progressing, form of the disease.
Treanda costs about $36,000 a year, representing a sales opportunity of about $275 million if a quarter of the indolent non-Hodgkin lymphoma patients in the U.S. use the drug, Amsellem said. The treatment is also being prescribed with increasing frequency to patients as a first-line attack on chronic lymphocytic leukemia, or CLL, an approved indication, he said.
“Adding up usage in CLL, usage in relapsed/refractory NHL and first-line NHL, one could envision Treanda approaching $1 billion in sales three to four years from now,” Amsellem wrote in an e-mail.
Second Study
Another Treanda study at the hematology meeting combines the drug with Rituxan for chronic lymphocytic leukemia, and showed “very encouraging efficacy,” Cephalon Chief Medical Officer Lesley Russell said in an interview.
The company needs to examine the data and documentation in the study to determine whether it can be submitted to the U.S. Food & Drug Administration for approval of a new use of Treanda, she said.
“I would hope that toward the middle of next year we would have some idea of whether we can do this,” Russell said by telephone Dec. 3. “To see better efficacy and better tolerability is quite a significant advance.”
Treanda may be included in reference books called compendia that Medicare uses to decide whether to pay for cancer patients’ unapproved treatments, said Bret Holley, an analyst with Oppenheimer & Co. in New York. While the drug is unlikely to receive FDA approval for its third use through the German study, it may gain compendia listing by the end of 2010, he said.
While Cephalon may not promote Treanda for unapproved uses, physicians are free to prescribe the drug for so-called off- label purposes.
Reimbursement Barrier
“A compendia listing would remove many barriers to reimbursement, and we expect Treanda’s frontline NHL use to increase as a result,” Holley wrote in a Nov. 10 research note. He estimates Treanda sales will peak at $700 million from non- Hodgkin lymphoma and chronic lymphocytic leukemia uses, with about $300 million from first-line treatment of NHL.
Cephalon has started its own trial similar to the German study, Russell said. The company expects to complete it in the third quarter of 2011 and to see the data by the end of that year, according to spokeswoman Jen Antonacci.
To contact the reporter on this story: Meg Tirrell in New York at mtirrell@bloomberg.net.
Last Updated: December 7, 2009 00:00 EST
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