The FDA accepted the New Drug Application (:NDA) for AstraZeneca’s (AZN) oncology product Iressa. A final decision from the FDA on the approval of the drug is expected by the third quarter of 2015.

The company is looking to get Iressa approved in the U.S. for the first line treatment of patients suffering from advanced or metastatic epidermal growth factor receptor mutation positive (EGFRm) non-small cell lung cancer (:NSCLC), as identified through a companion diagnostic test.

We note that the drug is already approved in 90 countries for the treatment of adults suffering from locally advanced or metastatic NSCLC with activating mutations of the EGFR tyrosine kinase. AstraZeneca recorded Iressa sales of $473 million for the first nine months of 2014, a decline of 1% from the year-ago period.

In Sep 2014, the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) gave a positive opinion on a type-II variation update to Iressa’s label in the EU. The updated label will allow the use of circulating tumor DNA obtained from a blood sample to be used to assess EGFR mutation status in patients where a tumor sample is not an option.

Our Take

The successful label expansion of the drug will help to improve the drug’s sales. We note that the immune-oncology market offers significant commercial potential. Companies like Bristol-Myers Squibb Company (BMY) and Roche (RHHBY) are also eyeing the lucrative space.

AstraZeneca carries a Zacks Rank #3 (Hold). Allergan Inc. (AGN) is a better-ranked stock in the health care sector carrying a Zacks Rank #1 (Strong Buy).

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