In the next few days, the FDA is expected to announce whether or not Spectrum Pharmaceuticals’ (NASDAQ: SPPI) Zevalin should still require a pre-treatment screen, termed the “bioscan”, possibly removing what management believes is the last hurdle to a dramatic increase in Zevalin prescriptions. Zevalin is an antibody attached to Yttrium-90, a radioactive isotope that delivers a cytotoxic dose of radiation to the CD20+ cells Zevalin binds as well as cells in their immediate vicinity. This allows the therapeutic effects to penetrate into tumors and affect cells beyond just those on the surface. Zevalin is approved for relapsed or refractory non-Hodgkin’s lymphoma (NHL) and first-line consolidation therapy for NHL. Consolidation therapy is “clean-up” therapy used to scavenge tumor remnants after first-line treatments. Prior to Zevalin treatment, a form of the drug bound to the imaging isotope Indium-111 instead of Yttrium-90 is injected and tracked in the body. If the patient shows a normal imaging profile, Y-90 Zevalin treatment commences. Only one dose is required for therapeutic benefit, and clinical data from Zevalin is impressive. The PDUFA date for the bioscan removal is this Sunday, November 20th, so investors may hear from the FDA today or Monday.
Sales of Zevalin have been lackluster so far with slow growth for the past several quarters. Spectrum began selling Zevalin in 2009 with sales of $15MM. In 2010, Spectrum saw sales of Zevalin nearly double to $29MM, but sales for 2011 are expected to be relatively flat compared to 2010 with management projecting $29-30MM for this year, as well. This is disappointing considering Spectrum’s past guidance that Zevalin should be a $100MM/year therapy. Management believes that sales of Zevalin have been low in the past due to a number of hurdles: an inadequate sales force, a non-uniform reimbursement system for the drug, and the bioscan, which is believed to be viewed as a hassle by doctors. Two of these three issues have been resolved, but the FDA still technically requires a bioscan prior to Zevalin Y-90 treatment. In Europe, no bioscan has ever been required, and management decided to investigate if patients in the US who had abnormal bioscans were still receiving Zevalin Y-90. The company discovered that only 1% of patients have abnormal bioscans, but some of these patients have still been receiving the drug. Fortunately, there is no increase in adverse events, so the bioscan may truly be unnecessary. Management believes the FDA will approve the removal of the bioscan requirement, and the final hurdle to an increase in Zevalin sales will be gone.
In order to further bolster sales of Zevalin beyond NHL, Spectrum is planning to initiate a trial in diffuse large B-cell lymphoma (DLBCL) in 2012. Management has stated in the past that the company plans to expand Zevalin into many CD20+ malignancies. This is good news for patients and shareholders, though results for DLBCL and other cancers could take years. In any event, the upcoming PDUFA for Spectrum’s Zevalin could be a major value driver for the company if prescription rate truly does increase once the bioscan is gone.
Disclosure: No position
