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Jazz Pharmaceuticals plc – Ordinary Shares (JAZZ), Onyx Pharmaceuticals, Inc. (ONXX), Seattle Genetics, Inc. (SGEN): Betting on Blockbusters

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Jazz Pharmaceuticals plc - Ordinary Shares (NASDAQ:JAZZ)Global biotechnology industry revenue is expected to reach $262 billion this year showing growth of around 12.7% year over year. This industry has witnessed a rally in the stock price in the last year. This optimism around pharma and biotech companies will continue because of innovative drugs for unmet needs. Companies in this industry are focusing on R&D, which will help these companies create new drugs in the near future.

In this article, three biotech companies that are comparatively smaller in terms of market cap are analyzed. These companies are worth knowing about with some innovative products in the pipeline that have potential to become blockbusters. Let’s see if these products will result in the improved earnings.

Xyrem and Erwinaze growth

Jazz Pharmaceuticals plc – Ordinary Shares (NASDAQ:JAZZ) has better growth prospects supported by its major revenue contributor drug ‘Xyrem.’ Xyrem is an oral solution for the treatment of cataplexy and excessive daytime sleepiness, or EDA, in patients with narcolepsy, a serious neurological disorder. It is the only drug approved by FDA for the treatment of cataplexy and EDS in narcolepsy.

Xyrem treated 19.7% of the total patient prevalence in 2012, is expected to treat 22.4% in 2013, and 23.2% in 2014. This will result in higher sales for this drug in the future. The Xyrem sales in the U.S are expected to rise to $546.9 million this year and $613.8 million next year from $378.6 million last year.

Jazz Pharmaceuticals plc – Ordinary Shares (NASDAQ:JAZZ) started the clinical trial on ‘Erwinaze’ in 2012 for treatment of patients suffering from acute lymphoblastic leukemia, or ALL. ALL is a type of cancer of the white blood cells characterized by excess lymphoblasts. The drug is used to treat patients with hypersensitivity to Oncaspar. Oncaspar is an enzyme used as an antineoplastic agent in chemotherapy for first line treatment of patients with ALL.

Jazz Pharmaceuticals plc – Ordinary Shares (NASDAQ:JAZZ)’s team is educating physicians and nurses to recognize hypersensitivity to Oncaspar correctly. It is not easily identifiable and can limit continued use of Oncaspar. Early identification will help patients while providing 20% more patients for Erwinaze.

It is expected that a new version of Erwinaze, named Asparec, will also be introduced this year, pending FDA approval. The new version will have the advantage of lower cost and a shorter production cycle. With the increase in patients, the sales of Erwinaze will rise to $163.7 million this year and $176.1 million next year compared to $72.1 million last year.

Stivarga approval in Japan and Kyprolis sales growth

Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) receives 20% of global sales as royalties from ‘Stivarga’ in oncology under its agreement with Bayer. Stivarga is developed by Bayer and promoted jointly by Onyx and Bayer in the U.S. It received FDA approval in September for the treatment of patients with metastatic colorectal cancer, or mCRC . The company also received approval of Stivarga for treatment of gastrointestinal stromal tumor, or GIST, in February.

Additionally, Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) received approval of Stivarga in Japan for treatment of mCRC in March. Colorectal cancer is the third most common cause of cancer deaths in Japan with around 40,000 people dying every year from this disease. With its potential to become a blockbuster drug, Onyx’s 20% share will increase its revenue. Overall, this drug is expected to reach annual sales of $3 billion by 2020.

In July, the FDA granted approval of ‘Kyprolis’ for the treatment of patients with multiple myeloma. Kyprolis will remain the key driver of growth for the company.

Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) presented data at American Society of Clinical Oncology, or AGCO, on Phase 1 and 2 studies on June 5. In these phases 68 elder patients with multiple myeloma were treated with Kyprolis in combination with melphalan and prednisone. Out of the 68 patients from both phases, 91% of patients responded to treatment with 6% complete response and 50% good partial response.

The median progression free survival, or PFS, was 22 months. PFS is the length of time during and after medication which a disease, like cancer, is being treated and the person lives with the disease, but it does not get worse. It is used as a metric to determine how well a new treatment is working.

The company is working on new combinations to treat patients with multiple myeloma to drive sales of Kyprolis. It is expected that Kyprolis sales will reach $64.1 million in the fourth-quarter with year-over-year growth of 41.4%.

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