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The rearview mirror looks pretty good for Celgene Corporation (NASDAQ: CELG). Blockbuster blood cancer drug Revlimid has powered the biotech to tremendous success. Celgene's stock is up 340% over the past 10 years.
Unfortunately, the present isn't looking as great, and Celgene's stock is in a slump. But don't despair: Here are two reasons why Celgene's future just got brighter.
Celgene announced preliminary results on Oct. 16 from a phase 1b study of GED-0301 in treating patients with Crohn's disease. Those results were highly encouraging.
After two weeks, patients receiving GED-0301 experienced some level of clinical improvement. In the group receiving treatment for 12 weeks, 67% experienced clinical response (defined as at least a 100-point decrease in the Crohn's disease activity index score). Nearly half (48%) of patients in this group went into remission.
Of the 52 patients who had endoscopies after 12 weeks, 37% experienced a decrease in endoscopic score for Crohn's disease (SES-CD) of 25% of more, indicating significant improvement. Of the 16 patients with the worst cases of Crohn's disease at the beginning of the study, 63% experienced a reduction of at least 25% in their SES-CD scores. Thirty-one percent had a reduction of 50% or more.
Celgene said there were no new safety issues reported in the study. Rates of adverse events and serious adverse events were low across all treatment groups.
Why get excited over phase 1b clinical results? For one thing, those results were outstanding -- especially when you consider that nearly half of the patients had taken other biologics for Crohn's disease. More importantly, though, GED-0301 isn't just in early stage testing. The drug is also in a phase 3 study for Crohn's disease and a phase 2 study for ulcerative colitis. These phase 1b results could bode well for GED-0301's performance in the late-stage study.
One day later, Celgene announced good news from an open-label extension of its Touchstone phase 2 clinical study of ozanimod in patients with moderate to severe ulcerative colitis. The biotech previously reported positive initial results from the Touchstone study in March.
The extension study followed patients through 44 weeks of treatment with ozanimod. Patients taking a dose of 1 mg of the drug daily during the initial study who continued at the same dosage experienced a decrease of 1.4 in the mean partial Mayo Score (pMS), signifying higher disease remission. Patients who started out taking ozanimod 0.5 mg then switched to the 1 mg dose in the extension experienced a mean pMS reduction of 2.8. The best results were experienced by patients initially treated with placebo then moved to ozanimod 1 mg. These patients had a mean pMS decrease of 2.9.
Celgene also evaluated the safety profile of ozanimod in the extension phase, which ranged from 44 weeks to over two years. The most common adverse events reported were ulcerative colitis flare, upper respiratory tract infection, anemia, nasopharyngitis, transaminase elevation, back pain, arthralgia, and headache. Serious adverse events occurred in 16 patients, who experienced the highest occurrence of ulcerative colitis flare and anemia.
None of these efficacy and safety results were a surprise. The Touchstone study results announced in March also showed promising efficacy for ozanimod with an acceptable safety profile. However, Celgene's latest results confirm the significant potential for ozanimod in treating ulcerative colitis.
What it all means
Positive clinical results are announced nearly every week by one biotech or another. What do the latest results from GED-0301 and ozanimod really mean for Celgene?
Investors should feel at least a little more confident that both of these drugs can eventually win approval. Celgene hopes to be able to submit GED-0301 for regulatory approval in 2018 and take it to market in 2019. Ozanimod could be on its way for regulatory approval for another indication -- relapsing multiple sclerosis -- in 2018.
Assuming GED-0301 ultimately wins approval, its financial success will probably depend highly on results from other Crohn's disease drugs in development. Gilead Sciences (NASDAQ: GILD) and partner Galapagos (NASDAQ: GLPG) have filgotinib in phase 3 testing as a potential treatment for the indication.
Analysts seem to think that Celgene's drug and the Gilead/Galapagos partnership's drug could do very well. Analysts peg GED-0301 peak annual sales at $2 billion to $3 billion. Peak annual sales projections for filgotinib are in the exact same range.
What about ozanimod? If the drug wins approval for all of the indications it is targeting, peak annual sales could reach $4 billion to $6 billion. Ozanimod could go head-to-head against Gilead's and Galapagos' filgotinib and even clash to some extent with GED-0301. The road ahead looks bright enough, though, that Celgene doesn't have a problem with a little internal rivalry.
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