Update on Celgene's Product Portfolio - Analyst Blog

Celgene Corporation CELG boasts of a strong product portfolio led by oncology drugs Revlimid and Abraxane. Sales of the newly launched oncology drug Pomalyst/ Imnovid have been encouraging. The drug, approved in the U.S. and the EU in Feb 2013 and Aug 2013 respectively, contributed $305 million to Celgene's sales in 2013.

The product portfolio at Celgene was boosted further by the U.S. Food and Drug Administration's (FDA) decision to approve Otezla (apremilast) for treating adults suffering from active psoriatic arthritis. The U.S. approval for the oral therapy was gained on the basis of encouraging safety and efficacy data from three phase III studies - PALACE 1, 2 and 3. This was the first oral therapy to be approved by the FDA for the indication.

The U.S. regulatory body however, recommended that patients taking Otezla should have their body weights monitored on a regular basis and should consider discontinuing the drug in the event of significant weight loss during therapy. The addition of Otezla to Celgene's portfolio should boost the company's top line significantly as the market for psoriatic arthritis offers significant commercial potential. The positive news from the FDA could not prevent the downward slide in Celgene's shares. We believe the decline has more to do with the overall pessimism surrounding the sector, which appears to be in correction mode, rather than any shortcomings concerning Celgene.

The market for psoriatic arthritis includes Amgen's AMGN Enbrel – an injectable drug. Celgene is also seeking FDA approval for the moderate-to-severe psoriasis indication (U.S. target date: Sep 23, 2014). We expect Otezla to be approved for the psoriasis indication as well. Recently, the company presented encouraging data from two phase III studies (ESTEEM 1 and 2) on Otezla in adults suffering from moderate-to-severe plaque psoriasis at the annual meeting of the American academy of dermatology.

Moreover, Celgene is also seeking EU approval for Otezla in the combined psoriasis and psoriatic arthritis indication, with an opinion from the European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) expected by Dec 31, 2014.

Otezla is also undergoing phase III studies in the ankylosing spondylitis indication (top line data expected by June 30, 2014). The candidate is also being evaluated for treating patients suffering from Behçet's disease (encouraging results from a phase II study were presented in Oct 2013).

We expect investor focus to remain on Otezla's commercialization for the psoriatic arthritis indication and Celgene's efforts to expand the drug's label going forward.

Celgene, a biopharmaceutical company, carries a Zacks Rank #3 (Hold). Better-ranked biopharma stocks include Alexion Pharmaceuticals, Inc. ALXN and Gilead Sciences Inc. GILD. Both stocks carry a Zacks Rank #1 (Strong Buy).