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Celgene Corporation: A Look At Key Growth Drivers

 May 08, 2013 03:36 PM

(By Mani) Celgene Corporation (NASDAQ: CELG) is emerging as a key biotech stock in the portfolio of investors as it gained 50 percent year-to-date and 72 percent in the last one year.

Here is a look at the key growth drivers for the New Jersey-based company, which makes therapies to treat cancer and immune-inflammatory related diseases. Its primary commercial stage products include Revlimid, Vidaza, Thalomid and Abraxane.

Revlimid remains the top line driver with estimated sales of $5.9 billion to $6.1 billion of $10 billion in hematology/oncology revenues forecast for 2017.

Celgene further maintained confidence in positive updates from MM-015/020, CALGB100104, and IFM0502 to support frontline maintenance approval filings by year-end.

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

As a cornerstone therapy Revlimid has an opportunity in mantle cell lymphoma/chronic lymphocytic leukemia/non-Hodgkin lymphoma along with combination therapy with BTK inhibitor CC-292 and TORC1/2 inhibitor CC-223.

Most recently, Revlimid got positive opinion from European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) as a treatment for a form of rare blood cancer deletion 5Q myelodysplastic syndromes (MDS).

MDS is a type of cancer where the production of blood cells and platelets by the bone marrow is disrupted, which can often lead to severe anemia, infections and bleeding.

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

Meanwhile, Abraxane could be a potential $1.5 billion to $2 billion cornerstone therapy in solid tumors with label expansion from metastatic breast cancer to non-small-cell lung cancer (NSCLC), pancreatic cancer and melanoma expected and in combination with novel epigenetic priming agents.

Abraxane is differentiated from taxols and other chemotherapy, with nano-sized particles, enabling vesicle transport to interstitial space in tumors, 10x the free concentration at peak, as well as robust uptake by tumor cells.

"Pancreatic US/EU approval expected Q4:13; to double rev opportunity," RBC Capital Markets analyst Michael Yee said in a note to clients.

Separately, the company still plans on interim overall survival analysis for abraxane in melanoma. They have also initiated Phase II combination of Abraxane + Ipilumumab in metastatic melanoma.

Celgene is also pursuing Abraxane in Phase III triple-negative breast cancer (TNBC) in patients with 1st line breast cancer as they are not amendable to hormonal agents or HER2 targeted agents and only have chemotherapy (gemcitabine + carboplatin) as an option, and with a very poor prognosis.

"Phase II experience suggests Abraxane in combination with Gemcitabine (and +/- Avastin) lead to better ORR in TNBC subtype of breast cancer patients (ORR of 77% vs 44%, n=13 of 50)," Yee said.

The triple combination lead to an overall response rate (ORR) of 82 percent and complete response (CR) rate of 38 percent. Given the promising Phase II experience, Celgene is enrolling first patient in Phase III TNBC this July. Recall Abraxane is currently approved in 2nd and 3rd breast cancer but moving upstream will further expand revenue opportunity.

Separately, Celgene is also eying the neoadjuvant setting where tumor shrinkage is warranted via upfront chemotherapy prior to radiation or surgery.

Meanwhile, the company expects Apremilast as another $1.5 billion to $2 billion cornerstone therapy in autoimmune disease with approvals expected in PsA, PsO, AS, and Behcet's and additional phase 2 data in rheumatoid arthritis.

Apremilast is being developed for psoriasis & psoriatic arthritis (PsA) and is the next big bet after Revlimid. 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 (AS) patients.

Recently, Apremilast achieved statistical significance for the primary and major secondary endpoints in a late-stage study of patients with Psoriatic Arthritis.

The company believes there is room for penetration in the $50 billion inflammation and immunology market, where apremilast's safety showed reasonable efficacy and convenience, and would help realize its projected sales of $0.25 billion - $0.75 billion by 2015.



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