Celgene's Vidaza Disappoints in Phase III Study - Analyst Blog

Celgene Corporation CELG has suffered a setback in its efforts to expand the label of its oncology therapy, Vidaza, with the drug performing disappointingly in a phase III study (AML-001). The study evaluated the safety and efficacy of Vidaza versus conventional care regimens (CCRs) in newly diagnosed, acute myeloid leukemia, elderly patients (aged at least 65 years). Celgene presented the results at the annual conference of the European Hematology Association.

Data from the global, multi-center, randomized, open-label study revealed a median overall survival (the primary endpoint) of 10.4 months for patients treated with Vidaza as against 6.5 months for patients in the CCR arm. The improvement was not statistically significant. Data from the pivotal study also revealed one-year survival of 47% in patients treated with Vidaza. The comparable figure was found to be 34% in the CCR arm.

We note that Vidaza went generic in the U.S. in May 2011 for the myelodysplastic syndrome indication. Dr. Reddy's Laboratories Ltd. RDY launched its generic version of Vidaza in Sep 2013. Vidaza sales have been on the decline in the U.S. due to generic competition. In the first quarter of 2014, Vidaza sales in the U.S. plummeted 83% year over year to $14.6 million. Global sales of the drug were down 27% during the quarter due to weakness in the U.S.

With Vidaza recording declining sales, we believe that the failure of the drug in this phase III study for an additional indication has thrown its future into further uncertainty.

Celgene, a biopharmaceutical company, carries a Zacks Rank #2 (Buy). Better-ranked stocks in the healthcare sector include Regeneron Pharmaceuticals REGN and Gilead Sciences GILD. Both stocks carry a Zacks Rank #1 (Strong Buy).

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