Don't let it get away!
Keep track of the stocks that matter to you.
Help yourself with the Fool's FREE and easy new watchlist service today.
Don’t let the headlines fool you, Celgene’s (Nasdaq: CELG ) application to market Revlimid, as a maintenance treatment for newl- diagnosed multiple myeloma patients, was rejected by the EU's Committee for Medicinal Products for Human Use, or CHMP.
Technically, the biotech withdrew its application, but that's just standard operating procedure in the EU when a company figures out that its drug is going to be rejected if it doesn't pull the application. Recently, Novartis (NYSE: NVS ) withdrew its application to expand the indication for Exelon and Prometax. Ditto for GlaxoSmithKline's (NYSE: GSK ) Tyverb and Pfizer's (NYSE: PFE ) Macugen.
Companies withdraw their applications because, when a negative opinion by CHMP is handed down, the European Medicines Agency publishes a summary of the negative opinion, which might help rivals. By withdrawing the application, Celgene avoided having that information made public.
In the U.S., the Food and Drug Administration doesn’t publish information on drugs that aren't approved, so there's no need to withdraw an application, except in rare situations, like when Cell Therapeutics (Nasdaq: CTIC ) withdrew its application for pixantrone because it needed more time to prepare for an advisory committee meeting.
The problem for Revlimid seems to trace back to its potential to cause cancer. Ironic, isn't it? A cancer drug increasing a cancer risk, but that's what Celgene saw in its trials: patients taking Revlimid had a higher incidence of secondary cancers than those that got placebo. It isn't clear, however, whether the drug is causing cancer, or if it's just that the patients are living longer, giving them more opportunity to acquire a secondary cancer.
CHMP wants more data supporting the idea that Revlimid helps patients live longer by delaying the reoccurrence of multiple myeloma, despite the fact that some patients get secondary cancers. Celgene has three clinical trials from which to derive long-term data, and plans to look every three months to see if there's enough data to reapply.
In the U.S., Celgene plans to delay submitting its marketing application to use Revlimid as a maintenance therapy until next year. The U.S. delay isn't as big a deal as the EU one, because stateside doctors can, and do, currently use the drug off label as a maintenance therapy. In the EU, there's virtually no off-label use, making it an important opportunity for Celgene to increase sales.
Unfortunately, that growth driver has been withdrawn for now.