UPDATE: Morgan Stanley Reiterates On Celgene On AG-221 Potential

In a report published Monday, Morgan Stanley analyst Matthew Harrison reiterated an Equal-Weight rating on Celgene CELG, but removed the $150.00 price target. In the report, Morgan Stanley noted, “Agios' AG-221 is a targeted therapy for AML (IDH2m or ~15% of all AML) which Celgene recently exercised its option for global commercial rights (owes Agios a low double digit royalty). EHA data incl. 35 pts up from 10 at AACR. EHA responses (ORR) were 44% (14/32, 19% CR with 3 pts not yet at day 28) down from 60% (6/10, 30% CR) at AACR. Pts with CRs achieved 2.5+ mos of duration. "Our conclusions: (1) AG-221 is clearly active. Hwr, given that IDH2m is a favorable marker that confers longer PFS, we believe the larger sample size at EHA more closely represents its true activity than the data at AACR; (2) The path to market appears clear and we would not be surprised to see break-through therapy designation given the target and responses; (3) Commercially, this is a small indication with ~2,500-5,000 US pts. AG-221's potential value to Celgene comes from expanding into other cancers with IDH2m (MDS, NHL) where we expect 2H cohorts.” Celgene closed on Friday at $159.99.