(Updates shares in first and fifth paragraphs.)
Dec. 20 (Bloomberg) -- Ariad Pharmaceuticals Inc., the cancer-drug maker that had lost about 70 percent of its value this year, will return its only product to the U.S. market after regulators approved a new prescribing and risk management plan. The shares jumped 16 percent.
Iclusig, cleared last year for certain types of leukemia, will now be approved for a smaller patient population and have post-marketing requirements including increased oversight for safety concerns and a trial testing other doses, Cambridge, Massachusetts-based Ariad said today in a statement. The company plans to start selling Iclusig again by mid-January.
Sales of the drug were halted in the U.S. in October after regulators saw an increased risk of blood clots, erasing more than $2.6 billion in Ariad’s market value. The company also stopped testing the drug in patients with newly diagnosed chronic myeloid leukemia, a broader indication that would have brought more revenue, and fired 40 percent of its workers in a restructuring to lower expenses.
“We are back on track,” Ariad Chief Executive Officer Harvey Berger said in a telephone interview. “We’ll enter 2014 largely where we were as we started off the fall in September.”
Ariad rose to $6.43 at the close of trading in New York, after touching $7.75 in intraday trading. The shares have declined 66 percent this year.
The company plans to hire a small sales force, including some employees it let go, Berger said, noting revenue anticipated in the U.S. will offset the cost of hiring. The company won’t “grow back anywhere as close to the 160 people that we laid off,” he said, and declined to comment further on the size of the commercial team.
Iclusig will now be indicated for adult patients with a mutation called T315I and for patients for whom no other drugs in the class, called tyrosine-kinase inhibitors, are indicated. Its previous label was for adult patients for whom prior therapy didn’t work or was intolerable.
About 1,300 patients in the U.S. will be eligible for the drug in 2014, compared with a previous estimate of 2,500, Martin Duvall, Ariad’s chief commercial officer, said today on a conference call.
“It’s really leaving the decision-making to the physician to determine whether other therapies are indicated,” Berger said. “It doesn’t require that a patient has failed each and every other therapy; it really leaves that decision to the doctor.”
The revised label is trying to relegate Iclusig to patients with few therapeutic options, according to the Food and Drug Administration.
“Our impression here is that they really should have received all the tyrosine-kinase inhibitors,” Richard Pazdur, director of hematology and oncology products at the agency’s Center for Drug Evaluation and Research, said in a telephone interview. Because the order in which patients receive those drugs isn’t the same for each person, the agency sought to give physicians more flexibility in making treatment decisions.
The drug label’s boxed warning will be revised to point out a risk of blocked blood vessels and heart failure, Ariad said. The company also will start a risk management program within three weeks including letters to physicians and information included in professional journals and at scientific meetings.
About 350 applications to take Iclusig were approved by the FDA on a case-by-case basis while sales of the drug were ordered halted, the company said. About 640 patients were taking the drug before it was pulled from the U.S. market.
Ariad will consider additional studies of Iclusig as a first option for patients, potentially with a lower dose, Berger said. He declined to comment further on those prospects, saying the company hadn’t yet made those decisions.
Iclusig was approved in December 2012 three months ahead of schedule under an accelerated process by the FDA. Pazdur said the process worked just as it should.
“Obviously we have to make a decision at a particular time regarding the risk/benefit of a drug, and at the time we approved it in December it appeared the drug had favorable benefit/risk,” Pazdur said. In looking at the medicine over the past year, it became clear “the risk/benefit for the population that was originally approved is no longer favorable.”
The revised label is broader than Joel Sendek, an analyst with Stifel Nicolaus, said he anticipated. He increased his 2014 sales estimates to $125 million, from $120 million, and boosted his price target for Ariad shares to $10.
“For us patients, this was the best possible gift we could receive as we enter the holiday season,” Hans Loland, who has been taking Iclusig since he participated in a clinical trial in 2009, wrote in an e-mail. He is part of a patient group that advocated for the drug’s return to market.
“Although the outcome is positive as a result of the patients, doctors, drug company and the FDA working together, we wished this could have been done better without the massive disruption it caused,” Loland wrote. “Hopefully there are some lessons learned on how these things can be handled differently in the future when issues such as these arise.”
--With assistance from Matthew Campbell in London. Editors: Bruce Rule, Andrew Pollack