On Monday, Pfizer reported positive results for its late-stage study in advanced lung cancer. The drug performed a lot better in a clinical trial compared to AstraZeneca’s drug. These positive results help improve the chances for obtaining market share.

Phase 3 Results

The late-stage study recruited up to 452 patients with advanced non-small cell lung cancer — NSCLC. One thing to note is that these patients had what is known as an EGFR positive mutation version of the cancer.

Pfizer’s drug, dacomitinib, had achieved better progression–free survival — PFS –compared to other treatments. Dacomitinib was able to increase PFS by 14.7 months. To understand this data, one must know what PFS means.

PFS measures how long a patient goes during a treatment period without their cancer worsening. These results were positive, however there is a concern. That concern stems from the adverse events reported in the trial. Patients that took dacomitinib suffered from diarrhea and skin related problems. These adverse events are not too bad though. That is because Doctors worked around this issue by modifying the dose of the drug.

Major Competitor

The positive results from Pfizer’s phase 3 lung cancer trial were presented at the American Society of Clinical Oncology — ASCO. These results were not only positive, but they were shown to be better compared to a big competitor.

That competitor would be AstraZeneca with its own advanced lung cancer drug known as Iressa. That is because AstraZeneca’s Iressa was only able to improve PFS by 9.2 months. That is a huge difference of about 5 months or more in PFS in the dacomitinib arm. That is just about a reduction in the progression of death by 41%. That is a huge problem for AstraZeneca.

That is because Iressa is the first-line therapy treatment for patients with EGFR positive NSCLC. Now that Pfizer has seen positive results with its drug, it will seek FDA approval. That means that dacomitinib could end up becoming the first-line therapy for treatment.

Market Opportunity

The major push for Pfizer to get this drug to market would be the fact that it targets a large population. For example, there are 140,000 patients diagnosed worldwide each year with the EGFR cancer mutation.

Dacomitinib is estimated to reach up to $417 million in sales by 2022. That is just an estimate given by analysts. If Pfizer’s drug can beat out competitors it can take a larger chunk of the market share.

In that case, the earnings potential for Pfizer in the advanced lung cancer space could be much higher. Analysts expect that the EGFR positive lung cancer market could end up becoming a $3 billion market over time.

What Binary Options Traders Should Watch For

There are a few things that traders should watch. The first of which would be the phase 3 results themselves. More specifically, it would be important to see how the FDA responds to the side effects observed in the clinical trial. Considering that the side effects were manageable by lowering the dose, it shouldn’t be an uphill battle.

The second item would be AstraZeneca’s drug. It is set to report its results in the same indication by the end of this year. Better efficacy and improved safety over dacomitinib would spell disaster for Pfizer. If that were to happen then AstraZeneca’s drug Iressa would remain as the first-line therapy.

The final item that traders should keep an eye on would be to see how dacomitinib performs on the market if it is ultimately approved. That will be important to watch, because that could add billions of dollars to Pfizer’s revenue stream. That could help Pfizer stay on top in the cancer treatment space.