|Jazz CEO Bruce Cozadd|
Five years after defibrotide was first rejected by the FDA, its new rights owner, Jazz Pharmaceuticals ($JAZZ), has finally gained the nod in the U.S. in what will likely prove a highly lucrative approval for the biotech.
The drug, named Defitelio (defibrotide sodium), is now licensed to treat patients who develop hepatic veno-occlusive disease (VOD), with additional kidney or lung abnormalities, after they receive a stem cell transplant from blood or bone marrow called hematopoietic stem cell transplantation.
This is the first FDA-approved therapy for treatment of severe hepatic VOD, a rare and life-threatening liver condition. Around 20,000 stem cell transplantation procedures are performed in the U.S. each year, with around 10% of those patients suffering from severe VOD. Analysts expect an immediate launch for the drug.
"Defitelio is a clinically significant therapeutic advance because it is a potentially curative intervention for patients with VOD, which may save lives with a single course of therapy. Before today, patients in the U.S. had no approved options," said Bruce Cozadd, chairman and CEO of Jazz Pharmaceuticals.
Dublin, Ireland-based Jazz picked up the European rights to defibrotide in its 2013 buyout of Gentium ($GENT), paying $1 billion in cash with hopes of expanding the drug's potential. The following year, Jazz paid $75 million up front and promised up to $175 million more to Italian biopharma Sigma-Tau in exchange for the U.S. rights.
It was a risky strategy, given that the FDA rejected Gentium's first pitch for approval in 2011, raising concerns about the completeness and quality of its data and asking for more details about how supporting trials were conducted and monitored. But with this approval, Jazz has clearly satisfied those requests, and its deal with Sigma-Tau has been vindicated.
The drug took in sales of $70.7 million in Europe last year, with analyst Louise Chen from Guggenheim expecting the drug to add $6.64 to Jazz's profit per share in 2016. Chen added in a recent note to clients that Defibrotide's sales could also help lower Ireland-based Jazz's tax rate. The price tag of the drug is around $140,000 per treatment course, although it costs just £33,000 (around $47,000) in the U.K., according to NHS figures.
Beyond VOD, defibrotide also has potential in graft-versus-host disease--an indication for which the treatment has orphan drug designation in the EU.