J&J Prostate Cancer Drug Hits Goal; Hurts Dendreon, Helps Medivation

3/8/12Follow @xconomy

[Updated: 11:20 am PT] Johnson & Johnson just delivered some encouraging news for prostate cancer patients that could end up being a boon for one of its competitors (San Francisco-based Medivation), and a drag for another (Seattle-based Dendreon).

J&J, the New Brunswick, NJ-based healthcare giant (NYSE: JNJ), said today that it stopped a clinical trial of its drug, abiraterone (Zytiga), earlier than expected after the drug was found to slow the spread of tumors when compared with a placebo in a study of 1,088 patients with prostate cancer. The J&J product, a once-daily pill given in tandem with prednisone, had a “favorable” safety profile, J&J said in a statement today. Full details of the trial weren’t disclosed, but will be published in a peer-reviewed journal and presented at a scientific meeting, the company said.

[Updated company comment] A J&J spokeswoman clarified today in comments to TheStreet.com that Zytiga showed a statistically significant improvement on the study’s main goal of slowing the spread of tumors (known as progression-free survival), and on all secondary goals of the study. But the difference between the drug and placebo on overall survival time—the gold standard of success in cancer drug development—wasn’t statistically significant. Zytiga has shown a “strong trend” toward improving survival time in the study, said J&J’s Kellie McLaughlin

The news sent a ripple effect through the prostate cancer world, as it could enable J&J to expand sales by selling its drug to a broader population of prostate cancer patients. The drug was approved by the FDA last April for men whose cancer no longer responds to chemical castration, and whom have also received chemotherapy—a relatively small segment of the 30,000 men in the U.S. who die of prostate cancer each year. Today’s results were from a less sick patient population—those who haven’t yet progressed all the way to chemo—which means the J&J drug appears to be effective at the same stage of disease where Dendreon’s sipuleucel-T (Provenge) is seeking to become a new standard of care.

While the increasing competition may be bad news for Dendreon, the trial’s success could be a good sign for another rival, Medivation (NASDAQ: MDVN). Like J&J’s product, the Medivation drug, an oral pill called MDV3100, is designed to target prostate cancer cells that become resistant to standard hormone-deprivation therapies. Also like the J&J product, the Medivation drug has also been shown to extend lives of very sick patients who previously got chemo. So investors today speculated that since the J&J drug worked in the pre-chemo population, Medivation’s product with a similar profile is likely to succeed there, too.

Shares of Dendreon fell 8 percent to $9.97 at 11:08 am Eastern time, and Medivation stock climbed 17 percent to $75.83 on the news.

The J&J study result “was generally expected by most (but not all) Street observers, but the timing is perhaps 6 months ahead of expectations,” said Mark Schoenebaum, an analyst with ISI Group, in a note to clients. “Since the trial was stopped earlier than expectations, we are operating under the assumption that the data were truly spectacular.” He added that the J&J data is likely to hurt Dendreon. “Given the likely stellar overall survival data, we now believe that most physicians will use Zytiga ahead of Provenge,” he said.

The earlier-than-expected news from J&J’s trial could narrow the window of opportunity for Dendreon, after it fell short of sales expectations in 2011, amid confusion among doctors about whether they’d get reimbursed for the product. J&J said today it has its eye on entering the market soon, by filing applications for regulatory approval of Zytiga around the world in the second half of 2012. Cory Kasimov, an analyst with JP Morgan, said he expects the J&J drug to reach the market in the first half of 2013.

“As we’ve been saying for some time, Dendreon does NOT have an indefinite amount of time to make Provenge stick,” Kasimov wrote in a note to clients today. “While we expected Zytiga to work in the pre-chemo castrate-resistant prostate cancer setting, this result intensifies the pressure on Dendreon to get docs hooked on using Provenge.”

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  • Robert Rostock md

    I think the real story is that J&J is trying to get a 6 month jump on the market because mdvn is a much better drug and will compete with zytiga. Thats the real story but these articles convince investors otherwise. They actually have things backwards. So what if zytiga is used first sometimes, provenge is still indicated. It has a different mechanism of action and needs to be sequenced with these other therapies. The real problem for zytiga is that when mdvn comes out, will there be any role for zytiga? Thats why J&J is trying desperatly to move their label up to keep one step ahead of mdvn. However mdvn will eventually move up to the prechemo space and then zytiga may be history. The mechnism of action of the mdvn drug is at the receptor level so I doubt zytiga will be able to have much of a therapeutic effect after a person has failed mdvn. Zytiga’s mechanism of action is just a superior ketoconazole. Thats why I think its just a matter of time before zytiga is history. J&J needs to keep on moving up its indications further and expand into europe to stay ahead of the game. Ultimatly, I believe its a loosing battle for J&J not dndn. Thats why mdvn pps is in the 70s right now. DNDN just needs to prove they can ramp up sales. So watch the next few quarters.

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