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This $6.7 Billion Drug Just Keeps Growing

By Brian Orelli, PhD - Jul 1, 2016 at 2:40PM

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Sales of the Celgene's cancer drug Revlimid should increase thanks to J&J's Darzalex.

Image source: Getty Images.

Celgene's (CELG) CEO Mark Alles is on the hook for a round of drinks next time he's out with Johnson & Johnson's (JNJ 1.39%) CEO Alex Gorsky.

Last month, Johnson & Johnson announced  that its cancer drug Darzalex in combination with Celgene's Revlimid and a corticosteroid called dexamethasone produced a 63% reduction in the risk of disease progression or death -- also known as progression-free survival -- compared to Revlimid and dexamethasone alone. The three-drug combination resulted in a 93% overall response rate compared with 76% for patients who received Revlimid and dexamethasone.

That's great news for Johnson & Johnson, which currently can only promote Darzalex in the U.S. as a treatment for people with multiple myeloma who have received at least three prior lines of therapy. The earlier-line therapy will result in more patients than the fourth-line indication ever would.

But it's also great for Celgene. Rather than being replaced as the go-to treatment, Revlimid and dexamethasone are being used in combination with Johnson & Johnson's Darzalex.

And not only is Revlimid not getting replaced, but the data will actually help Celgene sell more of the drug. Patients generally stop taking a cancer drug when they start progressing, so since the combination of Darzalex, Revlimid, and dexamethasone is extending progression-free survival further than Revlimid and dexamethasone (the current standard of care), Celgene should benefit from longer treatment regimens on the triple combination.

Celgene isn't counting entirely on help from Johnson & Johnson to increase the use of Revlimid. In a trial in patients with diffuse large B-cell lymphoma (DLBCL), called REMARC, Celgene is testing Revlimid as a maintenance therapy for patients who have successfully completed a treatment of Roche's Rituxan plus chemotherapy.

Data from REMARC and another trial, CONTINUUM, testing Revlimid as a maintenance therapy for patients with chronic lymphocytic leukemia, are expected this year. In addition, Celgene has quite a few other phase 3 trials testing Revlimid in various settings to expand its use further.

Paying it forward

While Celgene benefits from Johnson & Johnson's generosity, the biotech has the potential to help a peer in a clinical trial called ROBUST, testing Revlimid plus Roche's Rituxan in combination with a cocktail of chemotherapy drugs that goes by the name CHOP-21, and comparing it to Rituxan plus CHOP-21 alone, in patients who have recently been diagnosed with DLBCL.

A positive result for ROBUST will help Celgene expand into the first-line setting for DLBCL, but it would also help Roche, which will see extended sales of Rituxan as patients last longer on the combination before needing to go on to a second-line therapy.

A $6.7 billion behemoth

Celgene is shooting for Revlimid sales of $6.7 billion this year and approximately $8 billion next year. It's not every day you see a multibillion drug growing by almost 20% annually, but Celgene has been really smart about investing in additional clinical trials to increase the duration of time patients are taking Revlimid.

While having a growing powerhouse drug us good news now, investors should continue to watch Celgene's pipeline because it's going to be painful to lose those sales when Revlimid faces generic competition, with limited volume starting in March 2022 and full competition entering in late January 2026. Fortunately, Celgene has over 50 new products in its pipeline that could be approved between now and 2025. One of them might be the next Revlimid, but more likely Celgene will replace the sales with revenue from multiple drugs.

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