March 24, 2016
By Mark Terry, BioSpace.com Breaking News Staff
For Summit, N.J.-based Celgene Corporation it should be smooth sailing, but there are storms brewing on the horizon, although it’s hard to tell yet whether they are squalls or hurricanes.
The company was recently cited as being the fastest growing biotech stock by several analysts. It hasn’t always been a calm ride. traded on July 23, 2015 for $139.01, dipped to $104.79 on Sept. 28, climbed on Nov. 2 to $127.20, and dropped again to $107.49 on Nov. 24. The shares rose on Dec. 24 back to $122.14. On Feb. 2, 2016 they dropped again to $96.85. Shares are currently trading for $99.92.
Despite that volatility, the company’s shares are up by more than 250 percent over the last five-year period, notes Sean Williams with The Motley Fool.
Celgene has less than 10 drugs in its portfolio, mostly oncology drugs, which also make up the majority of company revenue. The rest are for inflammatory diseases. Revlimid is the company’s superstar, accounting for 60 percent of company revenues. It is used to treat several blood cancers and conditions. It was approved in 2005 and generated $5.8 billion in sales in 2015. Although key patents expire in 2019, its latest patent doesn’t expire until 2027.
Williams notes that Celgene is expecting to have four blockbuster drugs, defined at earning more than $1 billion annually, in its portfolio this year. They are Revlimid and Pomalyst, both for multiple myeloma, and Abraxane, which is used to treat lung, breast, and pancreatic cancers. And finally, Otezla, an oral anti-inflammatory used to treat psoriatic arthritis and plaque psoriasis.
The company’s pipeline has about 30 drugs in it. “We are excited about the progress within our pipeline,” said Peter Kellogg, Celgene’s chief financial officer and executive vice president, to Bidnessetc earlier this month, “both internal programs that are advancing and the new programs that we added to business development, which together strengthen our future beyond 2020. We are building upon this solid foundation of operational performance by making strategic investments in critical areas of research and further strengthening our internal pipeline through business development.”
But about those forecasted storms. Just this week, Janssen Pharmaceuticals, a Johnson & Johnson company, announced a clinical trial collaboration with Genentech , a part of the Roche Group (RHHBY), to evaluate Darzalex (daratumumab) in combination with atezolizumab in multiple myeloma and sold tumors. Janssen licensed the drug from Denmark-based Genmab A/S (GEN). They are also looking at other combinations, including Revlimid or Pomalyst in relapsed and refractory multiple myeloma.
As upcoming storms go, a lot will depend on the results of that trial. If the combination of Darzalex, Roche’s atezolizumab and one of Celgene’s multiple myeloma drugs turns out to be more effective than current therapies, Revlimid could lose market share. And, as Williams writes, “If used as a trio treatment, Revlimid could be forced to share revenue with J&J and Roche.”
That’s something of a moderate storm. A bigger, more problematic storm is a Phase Ib study that’s going to evaluate Darzalex and atezolizumab. Williams thinks its too early to know, but if J&J and Roche’s combinations prove to be better than Celgene’s drugs alone or their own drugs in combination with Celgene’s, Celgene could lose out big. But there are a lot of “ifs” in that statement.
In trials to date, Darzalex has shown pretty good clinical response in certain multiple myeloma patients. “Its late-stage study,” writes Williams, “which examined patients that had progressed on a median of five prior therapies, showed a response rate of 29%. While that may not sound like a lot, I’ll remind you that these patients had progressed on a median of five prior therapies. This study was a clear indication of Darzalex’s potential.”
But that isn’t really an indication that Celgene investors should start packing their bags. Revlimid is, for now, the top multiple myeloma drug, and the company has a promising pipeline. Williams suggests investors pay close attention to ongoing studies, but no answers are likely to be seen for 12 to 18 months.
