AstraZeneca (AZN) recently announced that Caprelsa, currently under European review for the treatment of aggressive and symptomatic medullary thyroid cancer (MTC) in patients with unresectable locally advanced or metastatic disease, has received a positive opinion from the Committee for Medicinal Products for Human Use (CHMP).
Caprelsa will now be reviewed by the European Commission, the regulatory authority which approves medicines for use in the EU. Caprelsa is already approved in the US where it was launched in April 2011. The candidate is under regulatory review in Canada and Switzerland.
Caprelsa’s proposed indication also states that a lower benefit should be considered for patients in whom Rearranged during Transfection (RET) mutation is not known or is negative. Although currently available trial data shows that patients benefit from treatment with Caprelsa regardless of their RET status, as per the CHMP’s requirement, AstraZeneca will conduct an additional study to evaluate the benefits in RET negative patients.
The CHMP’s positive opinion was based on data from AstraZeneca’s phase III program for Caprelsa, including the ZETA study. Data from the ZETA study showed that Caprelsa led to a 54% reduction in the risk for disease progression compared to placebo.
Our Recommendation
We currently have a Neutral recommendation on AstraZeneca. The stock carries a Zacks #3 Rank (hold rating) in the short run. Even though we are encouraged by the strong cardiovascular franchise at AstraZeneca and the company’s focus on the high-potential emerging markets, we remain concerned about the generic competition faced by AstraZeneca’s key products. The company is looking to lessen the impact of genericization by reducing its cost structure. Meanwhile, the weak late-stage pipeline at AstraZeneca also bothers us.
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