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Bayer's sNDA for Stivarga Granted Priority Review in the U.S.

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Bayer AG (BAYRY - Free Report) announced that the FDA has granted priority review designation to the company’s supplemental New Drug Application (sNDA) for its cancer drug, Stivarga, for the second-line treatment of patients with unresectable hepatocellular carcinoma (uHCC).

Bayer’s share price movement in 2016 shows that the company has underperformed the Zacks classified Large Cap Pharma industry. Specifically, the stock lost 8.8% during this period, compared to the industry’s 2.9% dip.



The FDA has granted priority review to the sNDA and intends to provide an update on the approval status of Stivarga within six months (compared to 10 months under standard review).

We remind investors that the sNDA was submitted in Nov 2016 and was based on data from the phase III RESORCE (REgorafenib after SORafenib in patients with hepatoCEllular carcinoma) study on patients whose disease had progressed during treatment with Nexavar. Results demonstrated that Stivarga significantly improved overall survival (OS) compared to placebo, thereby representing a 37% reduction in the risk of death for patients who received Stivarga plus best supportive care (BSC), compared to patients who received placebo plus BSC.

Note that Stivarga is currently approved in both the U.S. and the EU for the treatment of metastatic colorectal cancer (mCRC) and metastatic gastrointestinal stromal tumors (GIST).

In the EU, Stivarga is also indicated for the treatment of adults with mCRC who have been previously treated with, or are not considered for, available therapies including fluoropyrimidine-based chemotherapy, an anti-VEGF therapy and an anti-EGFR therapy; and for the treatment of adult patients with unresectable or metastatic GIST who progressed on or are intolerant to prior treatment with imatinib and Pfizer Inc.’s (PFE - Free Report) Sutent (sunitinib).

We note that Stivarga has been witnessing sluggish sales due to intense competition in the U.S. In the first nine months of 2016, Stivarga generated sales of $198 million, down 16.1%.

However, the situation should improve with a potential label expansion of the drug. Going forward, we expect investors to focus on the approval status of the drug.

Bayer currently carries a Zacks Rank #4 (Sell).

BAYER A G -ADR Price and Consensus

 

BAYER A G -ADR Price and Consensus | BAYER A G -ADR Quote

Key Picks in the Sector

A couple of better-ranked stocks in the health care sector are Cambrex Corporation and Arbutus Biopharma Corporation (ABUS - Free Report) . Both sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cambrex’s earnings estimates increased 3.7% for 2016 and 5.2% for 2017 in the last 60 days. The company posted a positive earnings surprise in three of the four trailing quarters, with an average beat of 19.78%. Its share price was up 26.7% in the past one year.

Arbutus’ loss estimates narrowed from $2.15 to $1.71 for 2016 and from $1.96 to $1.52 for 2017 in the last 60 days. The company posted a positive surprise thrice in the four trailing quarters with an average beat of 59.31%.

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