An experimental drug developed by Roche (RHHBY) , licensed from Exelixis (EXEL) - Get Report, delayed tumor progression in previously untreated patients with a genetically mutated form of melanoma, or skin cancer, according to results from a phase III study announced by the companies Monday.
Based on the new data, Roche intends to seek FDA approval for the new melanoma drug, known as cobimetinib. If approved, Exelixis will co-market the drug in the U.S. and share in revenue and profits.
Exelixis shares were up 12% to $3.72 in Monday pre-market trading.
The phase III study enrolled patients with melanoma which carried a mutation in the BRAF V600 gene. The patients were then randomized to receive Roche's currently approved melanoma drug Zelboraf plus cobimetinib or Zelboraf plus a placebo. Detailed data are being kept under wraps for presentation at a medical meeting, but Roche said the study met its primary endpoint -- a statistically significant improvement in progression-free survival favoring the Zelboraf-cobitmetinib combination.
Roche reported roughly $400 million in Zelboraf sales worldwide in 2013, including $138 million in U.S. sales. GlaxoSmithKline also sells two melanoma drugs -- Mekinist and Tafinlar -- which targets BRAF mutation-positive tumors.
If cobimetinib is approved in the U.S. Exelixis will initially receive half of the U.S. profits (or losses) under terms of the marketing deal with Roche. That share of U.S. profit decreases as sales increase. Outside the U.S., Exelixis will receive low, double-digit royalties on sales from Roche.
Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;
to send him an email.