Johnson & Johnson (JNJ) recently gained EU approval for its prostate cancer therapy, Zytiga (abiraterone acetate). The European Medicines Agency (EMA) granted approval to Zytiga, an oral, once-daily medication, for use in combination with prednisone (or prednisolone) for the treatment of metastatic castration-resistant prostate cancer (mCRPC) in adult men whose disease has progressed on or after a docetaxel-based chemotherapy regimen.
EU approval was expected as in July 2011, Zytiga had received a positive recommendation from the Committee for Medical Products for Human Use (CHMP) of the European Medicines Agency (EMA).
Phase III data (pre-specified interim analysis) on Zytiga showed an increase in median survival in patients treated with Zytiga plus prednisone or prednisolone compared to patients treated with placebo plus prednisone or prednisolone. A 35.4% reduction in the risk of death and a 3.9 month improvement in median survival was observed in patients treated with Zytiga plus prednisone or prednisolone compared to patients on placebo plus prednisone or prednisolone.
Being an oral, once-daily treatment, Zytiga could gain share rapidly. Prostate cancer is the third most common cause of cancer deaths in Europe. According to Johnson & Johnson’s press release, it is estimated that about 370,000 new cases of prostate cancer were diagnosed in Europe in 2008 – almost 90,000 men die from the disease.
Zytiga became a part of Johnson and Johnson’s portfolio with its July 2009 acquisition of Cougar Biotechnology. Zytiga is already available in the US where it gained Food and Drug Administration (FDA) approval in April 2011. Other players in the prostate cancer market include Sanofi-Aventis’ (SNY) Jevtana.
Neutral on Johnson & Johnson
We currently have a Neutral recommendation on Johnson & Johnson. This is supported by the Zacks #3 Rank (short-term Hold rating). Even though Johnson & Johnson has been facing challenges in the form of OTC product recalls, pricing austerity in the EU and generic competition, we believe that the company’s diversified business model, lack of cyclicality and strong financial position will help it in tough situations.
JOHNSON & JOHNS (JNJ): Free Stock Analysis Report
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