- One year and one month after the Food and Drug Administration handed Celgene a stinging rejection of its application for the multiple sclerosis medicine ozanimod, the biotech has returned to the regulator for a second attempt at securing approval of the key drug.
- On Monday, Celgene announced the re-submission of its New Drug Application for ozanimod to the FDA, on schedule with its previously stated timeline of filing during the first quarter. Celgene hopes to win a regulatory OK in 2020.
- Ozanimod, which is aimed first at the relapsing form of multiple sclerosis, has become particularly important as Bristol-Myers Squibb works to sell shareholders on its potentially $74 billion takeover of Celgene. That Celgene filed ozanimod on time is a good sign, although the FDA still needs to officially accept the biotech's submission.
The FDA's refusal to accept Celgene's first application for ozanimod proved a final domino in a stock slide that wiped nearly $30 billion from the biotech's market value between October 2017 and March 2018.
That same stock slide, however, made a deal to buy Celgene more palatable to Bristol-Myers, which had previously discussed a "merger of equals" in early 2017 — when Celgene would've commanded a considerably steeper price.
With Celgene made cheaper, Bristol-Myers re-engaged in the fall of 2018, eventually negotiating a deal that would rank among the industry's largest ever if shareholders approve the plan.
Resistance from Bristol-Myers' shareholders has put the deal in some doubt. Central to objections from activist investor Starboard Value are questions of whether Bristol-Myers is overpaying for Celgene's pipeline of experimental drugs.
Ozanimod is a large part of that pipeline, ranking as one of five drugs the companies expect to launch in the next few years. Celgene executives have forecast ozanimod to earn the most of that set, predicting before the Bristol-Myers deal was announced potential peak annual sales of between $4 billion to $6 billion.
The drug, which is also being tested in irritable bowel syndrome and Crohn's disease, also plays a direct role in the price Bristol-Myers would ultimately end up paying for Celgene.
In inking a deal, Bristol-Myers agreed to pay an additional $9.00 in cash for each Celgene share, provided three of Celgene's drugs — ozanimod, a CAR-T therapy called JCAR017 and a multiple myeloma treatment known as bb2121 — win U.S. approval by certain dates in 2020 and 2021.
For ozanimod, the critical deadline is Dec. 31, 2020. If the FDA accepts Celgene's most recent filing, that timeline looks attainable with a standard 10-month review.
Celgene's announcement appears to have boosted investor confidence somewhat, sending shares in the company up nearly 2% in Tuesday morning trading.
Yet new wrinkles hindering the deal could still emerge. Indeed, also on Monday, Celgene and Bristol-Myers disclosed receipt of a request from the Federal Trade Commission for additional information on the planned takeover.
Per regulatory filings, the FTC is particularly interested in "marketed and pipeline products for the treatment of psoriasis." As a result, the legal waiting period before the companies can complete their deal will now extend to 30 days after both companies have complied with the FTC's request.
Celgene sells Otezla (apremilast) to treat psoriasis, posting $1.6 billion in net product sales for the drug last year. Bristol-Myers is developing a TYK2 inhibitor that it believes can deliver the efficacy of a biologic drug, but in pill form.
In a note to clients, Credit Suisse analyst Vamil Divan said he doesn't see this new FTC scrutiny as a major barrier.
"[W]e would be surprised if the overlap between [Bristol-Myers'] and [Celgene's] portfolios is too much for the FTC to get comfortable with," Divan wrote.
Shareholders in both companies will vote on the proposed deal in meetings scheduled for April 12.