At the end of last week, the FDA announced its approval of multiple myeloma drug Ixazomib. The drug, marketed as Ninlaro by Takeda Pharmaceutical Company Limited (OTCMKTS:TKPYY), is the latest in a wave of quick FDA approvals in a cancer indication, and could be a real blockbuster for Takeda if the company executes an effective marketing strategy. There is a misconception in biotech that the only way to draw benefit from the drug development process is to get in ahead of an FDA decision. While there is merit in this approach, for a company like Takeda, which already has numerous marketed products, picking up an exposure post approval ahead of commercialization can offer just as much upside potential. With this in mind, here’s a look at the science behind the drug in question, alongside an analysis of its market potential assuming a well strategized marketing approach.

So, the science. Multiple myeloma is a type of blood cancer that affects white blood cells – specifically a type of white blood cell called plasma cells. In a healthy system, plasma cells produce the antibodies that protect us as part of our immune system. In multiple myeloma, these plasma cells become cancerous, and their ability to produce antibodies compromised. In all eukaryotic cells (eukaryotic cells have membranes and contain organelles, as opposed to bacterial cells which are prokaryotic) there are protein structures called proteasomes. These proteasomes perform a range of different tasks, bit their primary function is the regulation of the cell life cycle – i.e. replication, proliferation and – eventually, apoptosis. Ninlaro is a proteasome inhibitor; it selectively inhibits the ability of a proteasome called proteasome subunit beta type-5 (PSMB5). It stops this proteasome from producing certain enzymes that aid cell growth and replication, and in doing so, reduces the proliferation of multiple myeloma cells. This reduction stops the build up of cancerous cells in bone marrow, and in turn, reduces the side effects associated with the disease.

In the phase III that formed the basis of the NDA for which Ninlaro received approval, Takeda demonstrated a prolonged survival rate in patients taking Ninlaro in combination with lenalidomide and dexamethasone (two current SOC cancer treatments) than patients receiving placebo and one of the two aforementioned combos. The figures came in at 20.6 months for the former, versus 14.7 for the latter.

So what’s the market potential for the drug? Well, the FDA has given the green light for administration in patients who have received at least one other type of therapy. More than 11,000 people die in the US of multiple myeloma each year, and it is reasonable to assume that each of these has received treatment and – in turn – would be eligible for Ninlaro administration. Official pricing hasn’t been reported yet, but w can assume it will be in the same ballpark as Takeda’s other blood cancer drug, bortezomib. Bortezomib comes in at between $4,000 and $8,000 a month. Using the low end and averaging out across a full year, this comes in at just shy of $50,000 annually per patient. At $50,000 a year, across 11,000 patients, we get a very conservative estimate of $550 million revenue potential annually. An optimistic forecast could easily put these numbers in the $1 billion range. Takeda generates circa $16 billion a year, meaning Ninlaro (assuming the company can successfully commercialize the drug) will account for between 3-6% of the company’s annual revenues.

So what are we looking for going forward? Well, wed love to see Takeda report some insight into its saturation expectations, as well as a price point. If the company prices Ninlaro competitively (at the low end of the bortezomib range), physicians will likely be eager to administer it as part of a standard response to inefficacy of a previous treatment, and it is this kind of willingness to administer as standard that drives a drug’s success. Keep an eye on updates from Takeda, and look to Q1 2016 financials to get an idea of Ninlaro’s impact on the company’s bottom line.