What Will Drive AbbVie's Valuations in 2016?
Peak sales
AbbVie (ABBV) expects investigational drug Rova-T (rovalpituzumab tesirine) to generate $5 billion in peak sales if it’s approved by regulatory authorities.
Peak sales is an estimate of the maximum annual revenue that an investigational drug can earn in its complete life cycle. If Rova-T manages to realize its peak sales projections, it could boost AbbVie’s share price as well as the price of the iShares S&P 500 Growth ETF (IVW). AbbVie makes up about 0.59% of IVW’s total portfolio holdings.
Multiple indications
The above table shows the various types of solid tumors that may be treated with Rova-T due to the high percentage of cancer patients displaying DLL3 expression. According to an AbbVie investor presentation, Rova-T is a “targeted antibody drug conjugate [ADC] directed to a novel cancer antigen, DLL3, expressed in numerous solid tumor types.”
Medscape explains functioning of ADCs as “a broad class of molecules comprising a potent cytotoxic agent conjugated with a monoclonal antibody using a chemically stable linker. By selecting a monoclonal antibody directed against a tumor-specific or tumor-associated antigen, ADCs allow the targeted delivery of highly potent cytotoxic agents that result in unacceptable toxicity when administered as free agents.”
To know more about the various types of oncology therapies, you can refer to Key Therapies for Cancer Will Determine Biotechnology’s Profits.
Rova-T is expected to be very effective for the treatment of SCLC (small cell lung cancer), as 80% of patients display DLL3 expression. In addition to tumor cells, Rova-T can also effectively target cancer stem cells. According to the Comprehensive Cancer Center at the University of Michigan, cancer stem cells are described as “those specific cells which cause cancer tumors to grow.”
Rova-T is currently being explored as a third-line therapy for SCLC, and it’s expected to launch in 2018. Its strong clinical profile is expected to enable AbbVie to give tough competition to other oncology players such as Celgene (CELG), Amgen (AMGN), and Merck & Co. (MRK).
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