Your Analyst-Vetted Guide to the Five Blockbuster Drugs the FDA May Approve This Summer

Published: May 28, 2015

Your Analyst-Vetted Guide to the Five Blockbuster Drugs the FDA May Approve This Summer
May 26, 2015
By Mark Terry and Riley McDermid, Breaking News Staff

The U.S. Food and Drug Administration (FDA) has a busy schedule for this summer, and analysts are taking a look at five potential approvals that have the possibility of launching new blockbuster drugs.

1. Xifaxan.

This gastrointestinal drug has a May 28 deadline for IBS-D approval. Salix Pharmaceuticals, Ltd. , recently acquired by Canadian firm Valeant Pharmaceuticals International, Inc. , has been marketed for travelers’ diarrhea since 2004 and since 2010 at a higher dose for hepatic encephalopathy. On April 1, 2014, Valeant acquired Salix for about $11 billion. The latest expected approval will be for the use of Xifaxan for the treatment of irritable bowel syndrome. Valeant indicates it already has ongoing discussions with the FDA over labeling. Approval could give Valeant another $1.6 billion a year to Xifaxan’s revenue, totaling $3 billion a year.

Valeant hasn't given a guidance on Xifaxan peak yet [but] Salix said $3 billion or more peak (and $1.5 billion in IBS-D alone),” said biotech analyst Umer Raffat with ISI Evercore last week. “Valeant said [those numbers will be] ‘significantly lower,’” though, warned Raffat, who pointed to remarks made by Valeant leadership on what to expect for Xifaxan.

Valeant CEO Michael Pearson told analysts, “In terms of the IBS-D size, we have seen their estimates in terms of peak sales. I think our peak sales estimates would be lower. So, I don't want to disclose what our base case peak sales are for Xifaxan. They're still sizable but significantly lower than the management projections.”

2. Eluxadoline.

Also a potential treatment for irritable bowel syndrome, Actavis plc bought this when it acquired Furiex in July 2014 for $1.1 billion. The drug contains the same working ingredient as Imodium. Theoretically, Xifaxan and Eluxadoline won’t compete for the same customers because Xifaxan is a two-week treatment of an antibiotic, while Eluxadoline is an opioid receptor agonist. Although Eluxadoline can be taken more regularly than Xifaxan, it does have the possibility of addiction. The FDA is scheduled to make a decision on June 2.

“For Valeant, Xifaxan performance in IBS-D will be a strong validation of their largest deal to date. For Actavis, eluxadoline isn't as big a lever, but will serve as a validation of their R&D approach--sourcing de-risked Phase II/Phase III assets externally,” said Raffat. “Both are expected to be blockbusters.”

3. Orkambi.

Developed by Vertex Pharmaceuticals , the FDA is scheduled to make a decision on this drug by July 5, or more likely, July 3. Orkambi is a new treatment for cystic fibrosis (CF), and combines Kalydeco, which is already on the market, with a booster, lumacaftor. On May 12 the FDA recommended the drug for approval with a 12-to-1 vote. The company’s future depends so strongly on the approval of this drug and its stock prices so sensitive to news, that share sales were temporarily halted waiting news of the FDA recommendation. Company stock is currently selling for $123.47 per share.

“The FDA's PADAC recommended VRTX's Orkambi for approval by a vote of 12 to 1,” wrote Phil Nadeau, a biotech analyst for Cowen and Company, in a May 12 note. “Though the FDA reviewers took the position that VRTX has not proven that Orkambi is more effective than Kalydeco in F508del homozygous patients, PADAC was not dissuaded, and concluded that Orkambi is sufficiently effective and safe nonetheless.”

4. Praluent.

For the treatment of cholesterol, Regeneron Pharmaceuticals, Inc. and Sanofi have a bought a priority-review voucher. The target date for approval is July 24, 2015. The drug has also been accepted for review via a Marketing Authorization Application in the European Union. The drug is a monoclonal antibody that targets proprotein convertase subtilisin/kexin type I (PCSK9) and was studied in more than 5,000 patients, including 10 Phase III ODYSSEY trials.

“In our view, the primary driver [for Regeneron] remains Praluent, for which we anticipate a positive AdCom vote on June 9 and approval by the July 24 PDUFA date,” wrote Joshua Schimmer, an analyst for , in a note May 21. “However, we anticipate launch costs will outstrip sales growth and there is risk around the Amgen patent suit. Regeneron has one of the richest pipelines in all of biotech.

5. Repatha.

Competing in the same space as Praluent, Amgen (AMGN) is expecting a ruling by the FDA on Aug. 27. The FDA’s advisory panels will be on June 9 for Praulent and June 10 for Repatha.

Michael Yee, an analyst with RBC Capital Markets, notes that there are questions whether these two drugs, which are both likely to be approved, will be approved for all patient groups. That is to say, for patients who are statin-intolerant, for patients who have specific genetic conditions that affect their cholesterol levels or for patients already taking statins for high cholesterol.

“After watching how Vertex’s panel went, and knowing the whole history of how panels go, I can see why (the FDA) would ask whether the PCSK9s should be approved in all the different indications,” Yee said in a statement. “Should they actually approve it all when they’ve got the outcomes studies (of overall cardiovascular health) coming a year and a half from now?”

Both drugs, however, if approved, could hit annual sales of $2 billion by 2020.

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