Exelixis can add a new regulatory approval for its product with Health Canada’s approval of Cabometyx, a treatment for a kidney cancer.
The approval comes through Exelixis’ partner, Ipsen Biopharmaceuticals (EPA:IPN). Under the terms of an agreement between the two companies, Exelixis will receive US$5 million from Ipsen for the approval within the next 70 days.
The application received priority review, which has a target of 180 days compared to 300 days. The approval is for the treatment of adults with advanced renal cell carcinoma (RCC), a kidney cancer, that have previously been treated by vascular endothelial growth factor targeted therapy.
“The approval of CABOMETYX in Canada helps address a significant unmet need for patients with advanced kidney cancer whose disease has progressed on first-line therapy and who have limited treatments available,” Exelixis CEO Michael Morrissey said in a press release.
The approval was based off of a Phase 3 Meteor trial for the drug, which also served as the basis for US Food and Drug Administration approval back in December 2017. The results showed that patients on Exelixis’ drug had a nearly doubled progression-free survival rate of 7.4 months compared to 3.8 months with the other drug.
Aside from this approval in Canada, global biopharmaceutical company Ipsen has exclusive rights to commercialize and develop Cabometyx outside of the US and Japan. Also under the agreement, Exelixis will receive tiered royalty payments of 22 to 26 percent of annual net sales of the drug.
In both the US and Canada, RCC is estimated as one of the 10 most common forms of cancer. In 2017, over 6,000 Canadians were diagnosed with kidney cancer, while close to 2,000 died, according to the Canadian Cancer Society. Over 30,000 patients in the US require treatment for the cancer, and close to 70,000 globally.
A key problem with kidney tumors is the overexpression of some proteins, which leads to tumors that metastasize and are more difficult to treat, among other problems. Cabometyx differs from other treatments by focusing on these proteins.
Exelixis is an oncology-focused biotech company developing next-generation treatments such as Cabometyx.
Aside from that, the company has two other commercially available products, Cometriq and Cotellic, to treat types of thyroid cancer and melanoma, respectively. These drugs are in partnerships for global commercialization, which brings back revenue for the company to work on its pipeline.
In addition to this Health Canada approval, Ipsen reported reimbursement in five European countries for Cabometyx. The company had a successful launch with the drug in Europe, averaging 20 percent revenue growth in the first half of 2018.
Ipsen is headquartered in France, but develops and markets therapies worldwide for oncology, endocrinology and neuromuscular disorders.
Over the trading period on Wednesday (September 19), Exelixis’ share price dipped close to 2 percent to US$16.44 as of market close.
Oppenheimer analyst Leah Cann released a note to investors the same day, reiterating a “buy” rating for the company with a US$40 price target. According to TipRanks, this is the highest price target in the past year from other analysts.
For Ipsen, the company’s share price dipped 0.65 percent to 145 euros for the same time period.
Investors interested in this approval can look forward to the coming months as the companies work toward the product launch in Canada. Ipsen will also be looking at additional global regulatory approvals for the drug, while both companies are expected to share updates.
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Securities Disclosure: I, Gabrielle Lakusta, hold no direct investment interest in any company mentioned in this article.