Tesaro Nets Surprise Early Approval

Tesaro's (NASDAQ: TSRO)ovarian cancer drug, niraparib, will begin competing for prescriptions earlier than expected. Niraparib, which will be sold under the brand name Zejula, notched FDA approval on Monday, more than three months ahead of its June 30 decision date. The early approval setsTesaro up for a fierce battle for market share withAstraZeneca (NYSE: AZN)and Clovis Oncology (NASDAQ: CLVS), both of which market drugs that work similarly to Zejula.

Delivering on development

Tesaro's already selling the chemotherapy-induced nausea and vomiting drug Varubi, and the FDA's quick decision on Zejula means the company will have two drugs on the market in the second quarter.

IMAGE SOURCE: GETTY IMAGES.

Zejula is apoly (ADP-ribose) polymerase (PARP) inhibitor that helps prevent cancer cells from using the body's natural system to repair cell damage caused by cancer treatment. PARP inhibitors are especially effective in ovarian cancer patients, and they're being studied in other cancer indications, too.

The FDA based its approval of Zejula on trials that showed that giving patients three 100 mg pills daily can significantly delay disease progression, following platinum-containing chemotherapy. Delaying disease progression in ovarian cancer patients is particularly important because about 85% of ovarian cancer patients see their disease return following chemotherapy.

When Zejula launches, it will have to elbow away market share from AstraZeneca's Lynparza and Clovis Oncology's Rubraca, two PARP inhibitors that are already available. Lynparza has been on the market since 2014, and Rubraca got the regulatory green light this past December.

Although these other drugs have a head start, Zejula could become the the most prescribed PARP-inhibitor relatively quickly because Lynparza and Rubraca have more restrictive prescribing labels.

Currently, Lynparza and Rubraca are only approved for use in the 15% to 20% of ovarian cancer patients who have mutations to the BRCA gene. Lynparza can be used following three prior platinum-based chemotherapies, and Rubraca can be used following two prior platinum-based chemotherapies.

Unlike Lynparza and Rubraca,Zejula can be used in all ovarian cancer patients following platinum-based chemotherapy, regardless of BRCA mutation.

Zejula's broad label is a big advantage, but in BRCA-positive patients the competition is likely to get more intense in the coming year.AstraZeneca's already finished up a study that shows Lynparza can be used as a maintenance therapy following platinum-based chemotherapy in BRCA-positive patients, and yesterday, the FDA agreed to a priority review of AstraZeneca's application. A decision should come no later than the end of the third quarter.

Studies evaluating the use of all three of these drugs as first line treatment are also under way, and depending on their outcome, these studies could significantly alter market share in the BRCA-positive population. Eventually, these drugs could displace traditional chemotherapy in some patients.

Looking forward

Doctors tend to favor drugs they've had success with in the past, and they already have two years of experience prescribing Lynparza. Because of that experience, an approval of Lynparza in the maintenance setting could make it the favorite used in BRCA-positive patients. Lynparza could also win prescriptions because it's taken as two pills daily, rather than three pills daily like Zejula.

The market for PARP-inhibitors could also change in the future because studies are ongoing that are evaluating their use as a first-line treatment for ovarian cancer. The drugs are also being studied in other cancers, such as breast cancer, prostate cancer, and soon, non-small-cell lung cancer.

Overall, the market for PARP-inhibitors is already worth hundreds of millions of dollars per year, and eventually, it could grow to be worth billions of dollars if these expansion studies pan out. Which of these companies will capture the lion's share of that revenue isn't clear (yet), but it appears to me that Tesaro's the one to beat.

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