Ballsy Celgene (CELG) Eyes $6 Billion in New Business
10/31/2016 6:14:21 AM
October 31, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Only a month ago, Sean Williams, writing for The Motley Fool, noted that Celgene (CELG), headquartered in Summit, NJ, was company whose stocks were running a little low, but was likely to explode. There are many reasons, but today Stephen Simpson, also writing for The Motley Fool, outlines how the company’s immunology and inflammation (I&I) efforts could bring in $6 billion in new revenue.
Celgene has at least three drugs in the I&I area to look at. First is Otezla. The drug has been approved for psoriasis and psoriatic arthritis. However, it’s not quite as effective as AbbVie (ABBV)’s Humira or Johnson & Johnson (JNJ)’s Stelara. On the other hand, those drugs are injected, and Otezla is a pill that doesn’t require lab tests or monitoring. It also employs a different mechanism of action than biologics or methotrexate.
Simpson says, “What makes the Otezla story particularly interesting is how Celgene has done more with this drug than analysts had expected.” Analysts projected $1 to $1.5 billion in peak sales based on lackluster efficacy in psoriasis and psoriatic arthritis and a failed Phase III trial in ankylosing spondylitis. But as of the third quarter of this year, it’s already made $1 billion and is growing 25 percent quarter-over-quarter.
And the drug probably isn’t done yet. Longer-term data from the Phase III trial indicated the drug showed a meaningful reduction in progression in ankylosing spondylitis. That could add half a billion bucks if approved, and the drug may also be effective in Behcet Syndrome, atopic dermatitis, and ulcerative colitis.
Another drug Celgene is trying to develop is Mongersen, which it acquired from Nogra for $700 million up front. It’s being developed to treat ulcerative colitis and Crohn’s disease. Simpson writes, “Mongersen is a weird little drug in that oral antisense drugs almost never work. But because this drug acts locally in the gut (blocking Smad7), this one works. This has been an exciting opportunity ever since early studies suggest that even a short course of treatment (only a couple of weeks) could produce clinical remission in a large portion of patients.”
But Phase Ib trial data has been mixed, made even less impressive because there was no placebo arm in the trial. Despite that, the company is continuing with two Phase III placebo-controlled trials. Simpson writes, “It may well be that adding the placebo arms makes a major (negative) difference, or it may be that this drug works well in a certain sub-set of patients. With that, it’s worth noting that the safety and non-systemic activity of the drug (it works and stays in the gut) could make it a potential combo therapy.”
And finally, ozanimod, which Celgene picked up when it bought Receptos. Ozanimod is an oral second-generation S1P1 modulator that seems effective in multiple sclerosis (MS) compared to other MS drugs. It also seems to have fewer side effects and toxicity issues. Simpson thinks it has the potential to bring in more than $1.5 billion in annual revenue just in MS.
But it’s also possible that ozanimod will be effective in Crohn’s and ulcerative colitis, and in UC seems roughly comparable to Humira, but has the advantage of being a pill, rather than injectable. Data from a Phase III trial is expected in 2018 in ulcerative colitis, and the company is planning on studying it in Crohn’s as well.
And Simpson writes, “Many biotechs (or pharmaceutical companies) would be happy to call it a day with three multibillion-dollar shots on goal in immunology/autoimmune. But Celgene has several more drugs in its I&I pipeline behind this ‘Big Three.’”
One is RPC-4046, which is picked up in the Receptos (RCPT) acquisition, being evaluated in eosinophilic esophagitis, and sotatercept, which it is developing with Acceleron, for renal anemia. Also, CC-220 is being evaluated in lupus, and CC-292 is being studied in B-cell-mediated autoimmune diseases.
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