- Celgene Corp. disappointed investors Tuesday night when the big biotech unexpectedly disclosed a Refusal to File letter from the Food and Drug Administration for its New Drug Application (NDA) for the multiple sclerosis drug ozanimod.
- The FDA said the clinical and non-clinical pharmacology sections of the application were not sufficient to complete a review. Celgene intends to request a type A meeting with the agency to better understand what is required for filing.
- While the company did not give exact guidance, analysts expect this could push back launch timelines of ozanimod by as much as a year, shifting the drug launch from 2018 to 2019.
Ozanimod, an oral, selective sphingosine 1-phosphate 1 (S1PR1) and 5 (S1PR5) receptor modulator being studied in multiple sclerosis, ulcerative colitis and Crohn's disease, was meant to be a key driver for Celgene in the post-2020 time period. Some analysts had previously projected peak sales above $2.75 billion for the drug, but Mizuho analyst Salem Syed speculates this could jeopardize as much as $1 billion in sales.
The big biotech has been struggling to diversify its pipeline and has been in desperate need of a win. It already reported an expensive failure in October 2017 for the Crohn's disease drug that it acquired for $710 million in 2014. And the patent situation around its blockbuster Revlimid (lenalidomide) has been shaky at best, threatening nearly $8.1 billion in revenues. Celgene made two major acquisitions in the first weeks of the year, picking up Impact Biomedicines for $7 billion and then Juno Therapeutics Inc. for $9 billion — but neither acquisition seems enough to stop the bleeding.
Investors were not pleased with the news, with the stock dropping nearly 8% in morning trading on Wednesday to about $89 per share. When Mark Alles took over as CEO in January 2016, the stock was trading above $100 apiece.
"This is yet another blow to investor (and analyst) confidence in this management team and their stewardship of the company’s key operational activities," wrote Leerink Partners Geoffrey Porges in a note to clients.
Alles said on a Tuesday evening call with analysts said the recent acquisition and near-term catalysts from Juno's lead drug JCAR17 would give the company the buffer it needs through 2020, and that Celgene is reaffirming its sales guidance for the 2020 time period.
Yet, the company wasn't able to give much clarity on how this will impact the ozanimod filing in MS and said it will likely create delays with its European filing as well. Analysts worried that the filings of ozanimod for ulcerative colitis and Crohn's could be delayed — although Alles noted the ulcerative colitis program would not be affected at this time.
"We certainly appreciate the events of the last eight months have caused investors a lot of concern and that is reflected in the value of the company," said Alles on the call. "The complexity and some of the disappointments make it difficult to be predicting our future," he added, but emphasized the company would bring in $19–20 billion in topline revenues in 2020.
Refusal to File letters were not a commonly used tool by the FDA, but the new administration under Scott Gottlieb seems to be tapping the tool more often of late.
Several other companies have gotten a no-go on applications recently as well, including Acorda Therapeutics for its Parkinson's disease drug, Allergan for schizophrenia drug Vraylar (cariprazine), and SteadyMed Ltd. for a blood pressure medication. While the letters are not considered a rejection, they often delay applications and have derailed other drugs in the past.