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BACKGROUND: In Canada, treatment options are limited for patients with chronic lymphocytic leukemia (CLL) where fludarabine-based regimens are considered inappropriate. For these patients, chlorambucil monotherapy is considered a standard treatment option. Obinutuzumab is a novel recombinant humanized and glycoengineered Type II anti-CD20 monoclonal antibody of the IgG1 isotype. Clinical data demonstrate that first line therapy with obinutuzumab + chlorambucil can improve progression-free survival (PFS) compared with chlorambucil alone in CLL patients ineligible for fludarabine-based chemotherapy (29.9 vs. 11.1 months; HR 0.18 (95% CI [0.14; 0.24]), p METHODS: A Markov model was created to estimate the cost-utility of the treatment with obinutuzumab + chlorambucil versus chlorambucil monotherapy over a ten-year time horizon in previously untreated CLL patients ineligible for fludarabine-based chemotherapy. The model simulated patients moving through three health states: “progression-free”, “progression”, and “death”, with all patients beginning in the progression-free state. The progression-free state was divided into sub health states; progression-free with therapy, and progression-free without therapy. Each health state was associated with a utility value and direct medical costs. (Roche. Data on file; April 2014) Transition probabilities from the progression-free health state to the progression state were determined by PFS collected in the CLL11 trial for obinutuzumab + chlorambucil and chlorambucil monotherapy arms (Roche. Data on file; May 2014). Patients who experienced disease progression transitioned to the progression health state where they received second-line therapy and ongoing supportive care. Transition probabilities from the progression-free health state to death were determined based on the treatment specific death rates observed in CLL11. Due to the lack of mature OS data from CLL11 the transition probabilities from the progressed health state to death were determined based on data from the CLL5 trial (Eichhorst et al., 2009). Resource use and costs were estimated using Canadian sources ($CAD 2014), and both costs and outcomes were discounted at 5% annually. The stability of model results was tested using one-way and probabilistic sensitivity analyses. RESULTS: Treatment with obinutuzumab + chlorambucil produced more life years and quality adjusted life years (QALYs) than treatment with chlorambucil alone. The incremental cost was $35,330 for an incremental life years gain (LYG) of 1.038 and an incremental QALY gain of 0.975 (Table 1). These result in an incremental cost per LYG ratio of $34,028 and an incremental cost per QALY gained of $36,246. The results of one-way sensitivity analyses indicated that the model was robust to changes in model inputs, with the most impactful parameters being time horizon, assumptions regarding survival, treatment duration, and exclusion of second-line therapies. A probabilistic sensitivity analysis resulted in a mean ICER of $35,370, with obinutuzumab + chlorambucil having a 94.3% chance of being cost-effective at a willingness to pay threshold of $50,000/QALY, and a 100% chance of being cost-effective at a willingness to pay threshold of $100,000/QALY and $150,000/QALY. Abstract 1288. Table 1. Ten year cost-effectiveness results Treatment Total Costs Total LYs Total QALYs Incremental Costs Incremental LYs Incremental QALYs Cost per LYG Cost per QALY Chlorambucil $22,417 3.971 2.546 Obinutuzumab + Chlorambucil $57,747 5.009 3.521 $35,330 1.038 0.975 $34,028 $36,246 CONCLUSIONS: The results of this analysis demonstrated that improvements in PFS and OS with obinutuzumab + chlorambucil translate into longer term gains in LYs and QALYs. From a Canadian healthcare perspective, first line treatment of CLL patients ineligible for fludarabine based therapies with obinutuzumab + chlorambucil is cost-effective with a cost-utility ratio of $36,246/QALY. Disclosures Cameron: Cornerstone Research Group: Employment. Thompson:Cornerstone Research Group: Employment. Marino:2Hoffmann-La Roche Limited : Employment. Duong:2Hoffmann-La Roche Limited : Employment. Becker:Roche: Employment. Wiesner:4Genentech, Inc. A Member of the Roche Group: Employment.