Ariad Pharmaceuticals, Inc. (ARIA), Pfizer Inc. (PFE), Novartis AG (ADR) (NVS): Does This Orphan Leukemia Treatment Have Blockbuster Potential?

Will the EPIC study yield epic results?
Many Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) investors are now paying attention to its phase 3 EPIC study (standing for Evaluation of Ponatinib versus Imatinib in Chronic myeloid leukemia), which recently completed a 50% enrollment rate. The EPIC study compares the efficacy of Iclusig against Gleevec in newly diagnosed CML patients. The study is expected to reach a full enrollment of 500 patients by the end of 2013.

Iclusig is currently only approved for two treatments in Europe — the treatment of patients who cannot tolerate or do not respond to Sprycel and Tasigna, and for those which Gleevec is not clinically appropriate. If the EPIC study is successful, Iclusig could become a primary treatment on par with Gleevec, Sprycel, and Tasigna — and that lofty $1.44 billion peak sales target could actually be too modest.

The Foolish bottom line
Ariad is not a stock for the faint of heart. However, companies with a single orphan drug in their portfolio like Ariad are attractive takeover targets and hold up well when left alone — simply look the recent interest around Alexion Pharmaceuticals, the maker of the most expensive orphan drug in the world, for a point of reference.

Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) may have a promising treatment on its hands, but there are some hurdles it must overcome first. First and foremost, it must find ways to prove that it is a more effective treatment than the other CML treatments that have saturated the market — something that the EPIC phase 3 study could accomplish. Secondly, the market can be very unkind to biotechs that put a single egg in a basket — a simple misstep could snap this stock in half.

The article Does This Orphan Leukemia Treatment Have Blockbuster Potential? originally appeared on Fool.com and is written by Leo Sun.

Leo Sun has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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