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Celgene Corporation (CELG): How The Pipeline Is Faring?

 July 28, 2013 10:53 AM

Celgene Corporation (NASDAQ:CELG) delivered better-than-expected results for its second quarter, driven by cancer drugs Revlimid, Abraxane and the newly launched Pomalyst. The biotech company also raised its fiscal 2013 earnings and revenue forecast.

In this scenario, let's take a look at Celgene's pipeline to give us an indication of what's in store for upcoming quarters. Revlimid is key with estimated sales of $5.9 billion to $6.1 billion of $10 billion in hematology/oncology revenues for 2017.

The regulatory strategy for Revlimid in newly diagnosed multiple myeloma (NDMM) has solidified with news that the MM-020's trial achieved the primary endpoint. Specifically at least a 25 percent improvement in progression free survival (PFS) was observed to favor the combination of Revlimid and low dose dexamethasone compared to melphalan, prednisone, and thalidomide.

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

In the fourth quarter of 2013, Celgene will make US and European regulatory filings for Revlimid as a treatment for NDMM in patients who are not eligible for a stem cell transplant.

Meanwhile, Revlimid received US approval for mantel cell lymphoma during the second quarter of 2013, but the biggest opportunities in the Non-Hodgkin's Lymphoma (NHL) market lie in the treatment of indolent and aggressive, specifically diffuse large B cell lymphoma.

New Jersey-based Celgene is focused on the combination of Revlimid with Rituxan, R2, which the company believes may offer a chemotherapy free option for indolent NHL.

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

"With a primary endpoint of CR rate, we expect initial data from this trial in 2015," BMO Capital Markets analyst Jim Birchenough wrote in a note to clients.

In diffuse large B-cell lymphoma (DLBCL), Celgene would complete the enrollment in GELA trial of Revlimid maintenance in DLBCL by year-end 2013.

"With 400 relapsed refractory DLBCL patients enrolled, we think this trial could support approval of Revlimid if significant activity is shown in the ABC subset of patients," Birchenough said.

Moreover, Celgene is building on the successful commercial launch of Pomalyst, which generated $66 million sales in the second quarter. Inevitably there have been and continue to be concerns about potential cannibalization of Revlimid sales, which appear unfounded to date.

An early strategy to help differentiate Pomalyst from Revlimid was the development of Pomalyst in exclusive indications such as systemic sclerosis, whose trial data are not expected until year-end 2014.

"Ahead of the SSC-001 trial data will be data from ongoing trials combining Pomalyst with Kyprolis in the relapsed refractory setting, which may establish KPD as the regimen of choice for the third line plus relapsed refractory setting," Birchenough noted.

Another key drug to focus would be Abraxane in pancreatic cancer for which the PDUFA date is September 21. Beyond pancreatic cancer, Celgene is awaiting the maturation of overall survival (OS) data from the melanoma trial, which is expected in the fourth quarter of 2013, and also expects data in metastatic bladder cancer later this year.

The company has increased its investment in Abraxane in recent months; with 790-patient tnAcity trial of Abraxane in metastatic triple negative breast cancer (TNBC) and 336-patient neoadjuvant ADAPT trial also in TNBC. Abraxane could be a potential $1.5 billion to $2 billion cornerstone therapy.

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.

"With more than 4,000 subjects enrolled and six positive phase 3 trials in psoriasis and psoriatic arthritis and a positive phase 2 trial in Bechet's disease, the apremilast development program has been an unparalleled success," Birchenough said.

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

Celgene has a PDUFA data for the PsA filing of March 21 and remains on-track to submit a supplementary new drug application (sNDA) for psoriasis (PsO) in the US in the second half of 2013, as well as a PsA/PsO marketing authorization application (MAA) in the same period. The company is also discussing the Bechet's data with regulators to see if these data could be considered for label expansion.

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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