Celgene's task: Turn its shiny new toys into growth drivers
- Celgene Corp. saw double-digit growth across its three top-selling brands in 2017. The big biotech is banking, however, on a slate of recently acquired drugs to drive future revenue — and spent much of a Thursday call with investors explaining how it will deliver on that plan.
- Last year, net product sales for Celgene totaled nearly $13 billion. Cancer meds Revlimid and Pomalyst experienced 17% and 23% increases year-over-year, respectively, while psoriasis treatment Otezla upticked 26%. Notably, Otezla sales hit $371 million from October through December, beating consensus and likely quelling some concerns that arose when the drug had relatively flat U.S. sales during the third quarter.
- About 85% of Celgene's revenue comes from Pomalyst, Otezla and (particularly) Revlimid, a fact that has pushed shareholders to call for a more diversified portfolio. Earlier this month, Celgene bought Impact Biomedicines for $1.1 billion upfront and Juno Therapeutics Inc. for $9 billion altogether, filling its pipeline with what executives believe are multiple blockbuster opportunities.
Celgene investors got their wish — sort of — with the Impact and Juno acquisitions.
From the former, Celgene snagged a late-stage myelofibrosis drug, fedratinib, that the biotech predicts could earn more than $1 billion a year. A janus kinase 2 (JAK2) inhibitor, fedratinib has already been tested in treatment-naive patients and those who are resistant or intolerant to Incyte Corp.'s Jakafi (ruxolitinib). Celgene intends to file the drug for approval in mid-2018.
Interestingly, Celgene is partnered with Acceleron Pharma Inc. on another myelofibrosis treatment, luspatercept, and anticipates a Phase 3 readout in myelodysplastic syndrome and beta-thalassemia before year's end.
Juno, meanwhile, provides the big biotech with a medley of CAR-T candidates. While Juno's drugs are several steps behind those from Novartis AG and Gilead Sciences Inc., Celgene estimates the target's lead drug, JCAR017, will gain Food and Drug Administration approval in 2019 and ultimately fetch peak global sales of around $3 billion.
"JCAR017 is an anchor asset, which will allow us to develop a global leadership position in lymphoma, with a potential best-in-class profile," Nadim Ahmed, president of Celgene's hematology & oncology business, said on the Jan. 25 call.
Celgene has work to do to ensure JCAR017, or any of the recent pipeline additions for that matter, become the revenue-boosters the biotech is hoping for. On the call with company leadership, analysts questioned how Celgene would juggle its ongoing partnership with bluebird bio Inc. on bb2121 and the Juno acquisition.
Both bb2121, a cell therapy, and a treatment in Juno's pipeline are under investigation as therapies that target the B-cell maturation antigen in multiple myeloma patients.
"There have been, just from the investments we've made in New Jersey manufacturing facilities, we've dosed now over 40 patients with product here made in New Jersey for bb2121," Scott Smith, Celgene's chief operating officer, said. "Specific to the relationship and syngery, nothing really changes. There was a partnership that existed before this deal with Juno and with bluebird. The partnership has changed in its structure, but there were firewalls in place, and the fundamental synergies that existed in areas that we couldn't discuss still remain the same post-acquisition."
Jefferies also hypothesized in a Jan. 25 note that Celgene will want to show it can generate $10 billion from its growth drivers beyond 2022. "We think they have at least $6-7B and [are] working their way towards $10B," analyst Michael Yee wrote.
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