The Franchise That Could Bring in Another $20 Billion for Celgene

Published: Nov 23, 2016

The Franchise That Could Bring in Another $20 Billion for Celgene November 22, 2016
By Mark Terry, Breaking News Staff

Summit, N.J. – Celgene has been wowing investors for some time now. In March, the company was cited by several analysts for having the fastest growing biotech stock.

In 2015, Celgene reported sales of $9.2 billion, and is projecting a compound annual growth rate of 17 percent through 2020. Stephen Simpson, writing for The Motley Fool, takes a look at why this growth may be just the beginning for the oncology powerhouse.

Celgene’s Revlimid has brought in about $6 billion. But Simpson and other analysts believe the company’s pipeline of blood cancer drugs can bring in $20 billion more.

The company’s biggest strength is in immunomodulatory (IMiD) drugs. These work by stimulating the body’s immune system. An early success was Thalomid, approved in 2006 for multiple myeloma. It is a variation on the controversial drug Thalidomide, which was banned worldwide in the 1970s for thousands of birth defects it caused in the children of women who took it during pregnancy.

Another IMid is Revlimid, which is now the top drug for multiple myeloma. Revlimid will lose patent protection in 2022. The company is studying Revlimid in lymphoma and leukemia, although so far the results have been inconsistent. The results in diffuse large B-cell lymphoma didn’t pan out, but the company is still evaluating it in follicular lymphoma, relapsed/refractory indolent lymphoma, and second-line chronic lymphocytic leukemia.

And Celgene has other IMiDs, either on the market or in studies. Pomalyst is bringing in more than $1.2 billion in annual revenue as a second-line treatment for multiple myeloma, and analysts project $2 billion in peak annual revenue is a possibility. Celgene also has CC-122 in Phase I trials for leukemia and lymphoma.

Outside the IMiD mechanism, Celgene is developing CC-486, an oral version of azacitidine. The company is working to build on Vidaza, a drug approved for myelodysplastic syndrome (MDS) and some types of acute myeloid leukemia. Because it is an oral version, and if the efficacy and safety data holds up, potential sales of $1 billion could be possible.

Celgene also has numerous partnerships, not all that unusual in the field of immuno-oncology, where combination treatments appear to be the most effective. The company acquired AG-221 from Agios , and is expected to file for approval in acute myeloid leukemia (AML) soon. The company has also partnered with Agios on two other drugs, AG-120 and AG-881 in AML and solid tumors. In addition, Celgene has partnered with Acceleron for luspatercept in MDS.

Celgene has also partnered with AstraZeneca , Juno Therapeutics and bluebird bio . AstraZeneca’s PDL-1 antibody durvalumab is being evaluated in combination with Revlimid, and Juno and bluebird provide access to CAR-T therapies.

Simpson writes, “Between Revlimid, Pomalyst, Vidaza, and experimental compounds such as CC-122, AG-221, and durvalumab combos, as well as new approaches such as CAR-T, Celgene has a credible path forward to grabbing at least 50 percent of this market and seeing $20 billion in hematology revenue by 2020. While the need to make royalty payments if drugs like durvalumab prove successful will put some pressure on Celgene’s margins, the 50-percent-plus adjusted operating margins that Celgene currently enjoys gives the company a lot of room to maneuver in search of more revenue growth.”

Celgene’s are currently trading for $123.29.

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