Tomahawk, WI 12/23/2013 (BasicsMedia) – Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) was troubled last month when Food and Drug Administration called for the sale stop of its leukemia drug in the U.S. This was a hurting move considering that the company had already adjusted its operations and hired more staff to support the production and sale of the drug which is called Iclusig.

The withdrawal of the drug from the market also soparked outcry from patients. However, FDA insisted that there were risk issues concerning the drug that needed to be looked into.

New terms

After about seven weeks now, FDA has issued a new directly that effectively allows Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) to sell the drug to U.S. patients. And everyone celebrated from patients to investors. But are these celebrations warranted?

The drug is coming to the U.S. markets under new usage terms and also, the market isn’t as big as it was earlier thought to be. Looking at these factors can portray the image of a brand that will be struggling for sales and identity in the market.

Well is allowing Iclusig only for usage in places where alternative medications have failed. But even in such cases, doctors must assess the patients for preexisting conditions like stroke and heart attack. It is only when it is ascertained that benefits outweigh the risk of blood clod that the doctor can administer the drug.

This directly means that the drug is up to a slow restart in the U.S. market. Furthermore, the new directive on the drug’s label could also drive a chill down the spines of some would be users. Basically, not a lot of patients are readily willing to take the risk on their health, especially where an oversight agency like FDA has reservations on a drug.

However, Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) can count on the good press and reputation that the drug is having with leukemia patients to drive up sales. Even when FDA called for the stoppage in sales of the drug in U.S., several patients who had already been started on the drug were allowed to continue using it, that number of patients is put at around 640. And when FDA changed position and said yes to Iclusig, even more patients celebrated.

The opportunity in U.S. market

Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) had projected the U.S. market for Iclusig to be around 2,500. However, it looks like the market is to be about 1,300 patients. This is slightly over half of the projection, but significantly lower than the patient projection.

Considering that Iclusig is priced above $115,000 a year for every patient, this can still lead to massive revenue and thus profits for the company.

Coupled with the European market for the drug, Ariad Pharmaceuticals is in a better position to rake in higher revenue and profits in the upcoming quarters. The European regulatory agencies had earlier on cleared the leukemia drug, sparking speculation that FDA had no option but to do the same, and indeed, it happened.

Estimated revenue from Iclusig sales in the U.S. alone could hit above $200 million, this is possible if we consider that Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA)’s sales for the drug at the end of the third quarter was about $67 million.

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