• 3/14/2007
  • New York, NY
  • Matthew Perrone
  • Forbes.com

Wall Street sees limited short-term potential for an innovative breast cancer treatment from GlaxoSmithKline PLC that gained U.S. regulatory approval Tuesday. Longer term, however, some analysts say the drug could reach blockbuster status.

The Food and Drug Administration approved British drug maker’s Tykerb, for use alongside Roche’s chemotherapy Xeloda, in patients with advanced breast cancer who fail to respond to other treatments.

The drug is part of an emerging group of therapies that target cancerous cells. The therapies differ from chemotherapy, which indiscriminately attacks both healthy and cancerous cells.

A study published last year showed that once-a-day pill Tykerb, in combination with Xeloda, slowed tumor growth among patients who didn’t respond to the premier targeted breast cancer drug now on the market, Genentech Inc.’s Herceptin.

Because Glaxo’s drug will initially be aimed at a relatively small population that includes just 28,000 patients annually, analysts are not expecting substantial revenues in 2007.

Goldman Sachs analyst Mick Readey said in an interview that approval of the drug will offer more “positive sentiment than commercial opportunity” for Glaxo in the short term. Goldman Sachs did not include profits from the drug in a valuation of the company published last week, and downgraded the stock, telling investors it would be a good time to sell after any stock gains triggered by the approval of Tykerb.

Goldman and other investment houses are leery of the large number of Glaxo patents expected to expire in the near future, including depression blockbuster Wellbutrin XR this year, and bipolar disorder drug Lamictal and migraine medication Imitrex in 2008.

Nevertheless, analysts who track cancer drugs say Tykerb sales could expand enormously in coming years as Glaxo studies new uses for the drug.

Mary Argent-Katwala, an analyst with drug research firm Decision Resources, points out that sales of Herceptin did not skyrocket until the drug was approved for use against early stage breast cancer.

“These experimental drugs tend to be used first on patients who have exhausted all other options, but over time the companies expand the indication to capture the larger pool of patients in the earlier stages,” Argent-Katwala said. “If Tykerb can replicate that model, which many other cancer therapies have done successfully, it would see a major boost.”

Glaxo is now studying Tykerb in patients with head and neck cancer. And there is also speculation that Tykerb could eventually be used alongside first-line treatment Herceptin, since preliminary data suggest the Glaxo drug may be better at stopping breast cancer from spreading to the brain, a frequent complication of the disease.