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Celgene (CELG) is scheduled to update investors about how its second quarter went on Thursday morning. Here are three things investors should be watching, in addition to revenue and earnings growth.

Expanding Revlimid treatment duration

During the second quarter, Johnson & Johnson (JNJ -0.65%) announced data from a trial testing its cancer drug Darzalex with Celgene's Revlimid and a corticosteroid called dexamethasone that showed the combination helped multiple myeloma patients better than Revlimid and dexamethasone alone. The 93% overall response rate seen with the three-drug combination was substantially better than the 76% of patients that responded to Revlimid and dexamethasone.

That's great for Johnson & Johnson, which can use the data to apply for approval to treat patients earlier in their disease progression, but it's also great for Celgene because patients will be alive longer, continuing to use Revlimid, resulting in longer treatment durations.

The data were presented in June, so it's not likely to have had much, if any, impact on Revlimid's second-quarter sales, but it'll still be interesting to hear management's take on Johnson & Johnson's data and whether they expect sales to ramp up now -- through off-label use -- or whether doctors will wait for an FDA approval for Darzalex's expanded indication before starting to prescribe the combination.


On Monday, Celgene disclosed top-line data from its clinical trial, dubbed REMARC, which tested using Revlimid as a maintenance therapy after patients with diffuse large B-cell lymphoma successfully completed a treatment of Roche's Rituxan plus chemotherapy.

Revlimid delayed progression of the disease longer than a placebo, but an interim look at overall survival showed no benefit for patients taking Revlimid, so Celgene said it "does not currently plan to seek approval for this indication."

Some more commentary from management is clearly needed here, especially with the "currently" thrown into that remark. Is it possible that Celgene might apply later, or was the overall survival data so bad that it's an unlikely scenario?

Revlimid sales for diffuse large B-cell lymphoma are factored into Celgene's 2020 guidance, but that guidance adds up all the potential new sales on a risk-adjusted basis. The disappointing results for REMARC aren't likely to affect the 2020 guidance at this point, though there is pressure on the remaining clinical trials to be successful.

Otezla growth

Revlimid remains Celgene's most important drug, and beyond REMARC, Celgene is running other clinical trials that could expand sales of the drug further. But long-term investors should be focused on Celgene's pipeline and its newest drug on the market, Otezla. Revlimid is going to see generic competition starting in March 2022, and something -- or more likely, multiple things -- will be needed to replace the $6.7 billion sales of Revlimid that Celgene is expecting this year.

In the U.S., Otezla, which is approved for psoriasis and psoriatic arthritis, has been taking market share from older biologic drugs. To reach its goal of more than $1 billion in Otezla sales this year, Celgene needs to continue that trend and have a strong launch in Canada and Europe, where the drug has recently gained reimbursement status.