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SpringWorks Therapeutics (SWTX) is springing sharply higher after the biopharmaceutical company focusing on rare and severe diseases announced that the FDA has approved OGSIVEO, a treatment for adults suffering from desmoid tumors. The drug, which was previously granted fast track and orphan drug designations, is the first FDA-approved therapy for patients with desmoid tumors.

• For some quick background, desmoid tumors are extremely rare with an estimated incidence rate in the general population of two to four people per million. While they do not metastasize, desmoid tumors can be life-threatening and have a high recurrence rate of up to 77% following surgery. They are also difficult to live with, causing significant pain.
• Last March, results from the Phase 3 trial for OGSIVEO (then called nirogacestat) were published in the New England Journal of Medicine, setting the stage for today's approval.
  • OGSIVEO met the primary endpoint of improving progression-free survival, achieving a 71% reduction in the risk of disease progression.
  • Additionally, the drug demonstrated meaningful improvements in pain management, while exhibiting a favorable safety and tolerability profile.
• SWTX has never generated any product revenue, making this FDA-approval a landmark event for the company. Within five to ten business days, OGSIVEO will be available to purchase through specialty pharmacies.
  • According to a Reuters report, the drug will be sold in the U.S. at a staggering price of $29,000/month, which is substantially more than analysts were anticipating.
  • A marketing application is also expected to be filed in Europe soon, likely in 1H24.
• The company has another potential growth catalyst on the near-term horizon, too, with a new drug application (NDA) likely on the way in 1H24 for mirdametinib, a treatment for adult patients with NRAS mutant solid tumors that's being co-developed with BeiGene (BGNE).
  • On November 16, STWX reported data from the Phase 2 trial, disclosing that 52% of pediatric patients and 41% of adult patients taking mirdametinib had objective responses, defined as a 20% reduction in target tumor volume.

The main takeaway is that the FDA approval of OGSIVEO is a milestone event for SWTX, putting the company on track to generate its first meaningful revenue in its history. SWTX is still projected to be unprofitable in FY24 -- the company posted a net loss of ($79.4) mln over the first nine months of 2023 -- but this approval marks an important step in becoming a profitable biopharmaceutical company in the future.