Celgene's Multiple Myeloma Powerhouse

Earlier this month, biotech powerhouse Celgene (NASDAQ: CELG  ) announced that the European Commission approved the combinational therapy of pomalidomide, known in the United States as Pomalyst, and dexamethasone for treating patients with relapsed and refractory multiple myeloma who have received at least two prior therapies. The regulatory nod may be a big deal on its own, but when combined with the two other multiple myeloma drugs developed by Celgene, the magnitude of the decision can be truly appreciated. The company now offers treatment options for all stages of the disease. Just how big of a deal is that for investors?

Multiple multiple myeloma treatments
What is multiple myeloma? The disease is a rare blood cancer that affects white blood cells -- integral to the body's immune system -- and severely affects a patient's ability to fight infection. Kidney problems and bone lesions can also occur. So how does Celgene help patients? Take a look at the following table that highlights each of the company's three drugs approved for the disease, all in combination with the steroid dexamethasone.

Drug

Approved indication

Treatment group

Thalomid (thalidomide)

Newly diagnosed cases (U.S. and EU)

New patients

Revlimid (lenalidomide)

Relapsed + refractory (U.S.)

Patients who have been treated with one prior drug

Pomalyst (pomalidomide)

Relapsed + refractory (U.S. and EU)

Patients who have been treated with two prior drugs

Source: Celgene product websites.

The powerful thing about the table above is that Celgene can treat the entire spectrum, from newly diagnosed cases all the way up to late-stage cases that have not responded to or relapsed on multiple prior therapies. If that wasn't enough, consider that Revlimid is awaiting two regulatory approvals for newly diagnosed and maintenance cases. That's scary. Consider that Revlimid sales grew 17%, or $558 million, in 2012 compared to 2011 mostly on the heels of multiple myeloma treatments. The drug is approved for multiple indications, but its growth made up 81% of Celgene's total year-over-year revenue growth!  

You should now see the importance of multiple myeloma. This portfolio of products could allow Celgene to build a valuable rapport with doctors. Theoretically, a patient could treat his or her multiple myeloma for years using solely drugs developed by the company. That focus on patients could reward shareholders for years to come. Can Celgene keep up with the competition?

Celgene or the field?
Regulatory agencies have approved relatively few drugs to treat multiple myeloma in the last decade. Aside from Celgene's lineup, Onyx Pharmaceuticals (UNKNOWN: ONXX.DL  ) had its proteasome inhibitor Kyprolis approved in 2012. Similar to Pomalyst, Kyprolis is approved for patients who have received at least two prior therapies. However, Kyprolis got the regulatory nod based on response rate, not clinical benefit. Pomalyst and dexamethasone improved median progression-free survival by 7.7 weeks over dexamethasone alone. Nonetheless, Kyprolis can still take sales away from Celgene's arsenal.  

Another worthy competitor is Velcade from Takeda and Johnson & Johnson (NYSE: JNJ  ) , which will lose patent exclusivity in 2017 in the United States and in 2019 in Europe. The multibillion-dollar drug is a proteasome inhibitor like Kyprolis, but it has treated more than 350,000 patients in its lengthy time on the market. Getting on the Velcade train was a smart move for Johnson & Johnson -- which markets its own multiple myeloma drug called Doxil -- for two reasons. First, the company was hit with shortages of Doxil in 2011 and 2012 due to contract manufacturing issues. Second, the drug loses exclusivity in May 2014, which will welcome a flurry of generic competition. Velcade generates more than $2 billion per year for the pair.  

And as it turns out, the pipeline competition throughout the industry may not be competition at all. Both Takeda and Cephalon have ongoing trials for multiple myeloma combination therapies that include Celgene's Revlimid. Takeda's MLN9708 hit its endpoints in a small phase 1/2 trial that concluded in late 2012 and is now being evaluated in a late-stage trial. Meanwhile, Cephalon's CEP-18770 is currently being evaluated in a phase 1/2 trial in the United States. If you can't beat 'em, join 'em.  

Foolish bottom line
Celgene has invested heavily in its multiple myeloma products and is now beginning to reap the benefits. Investors have plenty of pipeline candidates to look forward to for long-term growth, but they should also realize how important the success of Revlimid and Pomalyst will be to the company's immediate and short-term future. Do you think new approvals for Revlimid and Pomalyst can continue to drive Celgene's stock higher? I do, but let me know your thoughts in the comments section below.

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