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Celgene: Multiple Levers Of Growth Emerging In 2013

 December 12, 2012 03:09 PM

(By Mani) Celgene Corp. (NASDAQ: CELG) appears on the cusp of a pivotal year in 2013 with several opportunities to expand Revlimid frontline labeling in Europe, introduce new indications for the product and launch new product opportunities to diversify away from Revlimid.

The company currently markets Revlimid, and Thalomid for the treatment of various forms of multiple myeloma, and VIDAZA for the treatment of myelodysplastic syndromes.

Revlimid in multiple myeloma is expected to remain the company's largest, single revenue generator through patent expiration in 2027, yielding an additional $1 billion in revenue growth by 2015 through expansion geographically and expansion in current and new myeloma settings.

[Related -Celgene Corporation (NASDAQ:CELG): Why Should You Invest In Celgene In 2014?]

Within the hematology franchise, there is upside potential from Revlimid in various types of cancer including Chronic lymphocytic leukemia (CLL), Mantle Cell Lymphoma (MCL), non-Hodgkin's lymphoma (NHL) has been under-estimated as has the potential for a salvage agent like pomalidomide to increase willingness to dose Revlimid to progression.

"With multiple levers of growth in 2013, we believe CELG remains an attractive investment at current levels," BMO Capital Markets analyst Jim Birchenough wrote in a note to clients..

Celgene recently hosted an investor briefing at the American Society of Hematology (ASH) annual meeting to review key data presentations and ongoing initiatives for its hematology franchise.

[Related -Celgene Corporation (CELG): How Q3 Earnings Will Fare?]

With the primary focus on lead product Revlimid in myeloma, timelines were affirmed for a second half of 2013 re-filing for frontline use in Europe assuming overall survival (OS) trends continue to improve on mature data from pivotal study MM-015 in the first quarter of 2013.

Additional front-line data from study MM-020 comparing Revlimid versus melphalan and prednisone should report in the first quarter providing additional opportunity for EU filing in the second half of 2013.

Additional expansion opportunities for Revlimid, including CLL, on optimal dose identification in CLL-009, MCL on recent sNDA filing, Follicular NHL on continuing enrollment of RELEVANCE phase 3 study. Pipeline development is also underway with progression free survival and overall survival benefit for pomalidomide in MM-003 study of relapsed/refractory myeloma and multiple combination studies under consideration.

Revlimid, an oral immunomodulatory drug for the treatment of patients with multiple myeloma and myelodysplastic syndromes has a strong growth outlook, and analysts estimate a 14 percent sales growth over the next three years. Recently, Celgene announced that its Abraxane showed a statistically significant survival benefit in pancreatic cancer patients in Phase III trial.

Moreover, the company's Apremilast product for psoriatic arthritis is targeting markets totaling about 7 million patients in the US and EU across multiple indications. According to Celgene, these markets are comprised of 1 million PsA patients, 2.5 million moderate-to-severe psoriasis patients, and 2.5 million ankylosing spondylitis patients.

There is significant interest among patients and physicians in new therapies, especially safe and efficacious oral drugs like Apremilast as the available treatments includes only nonsteroidal anti-inflammatory drugs (NSAIDs), corticosteroids, disease-modifying antirheumatic drugs (DMARDs) and Tumor necrosis factor (TNFs).

If successful Apremilast may eventually become a blockbuster drug. However, the existing therapies set a high bar for any new oral drug, and the key commercial question is how will doctors view Apremilast given its efficacy and safety profile.

Given Apremilast's good safety profile, it has a high probability of approval, and it is also anticipated by an advisory committee for Apremilast since it is a novel compound for chronic use.

As a result, Celgene is set to begin 2013 with multiple catalysts for investors.



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