It's been a busy week for biotech and healthcare conferences. Drugmakers big and small have been making the rounds, answering questions about their current status and future prospects. Celgene Corporation (CELG) is no exception.
Peter Kellogg, Celgene's CFO, fielded questions on Wednesday at the Baird Global Healthcare Conference in New York. And the discussion focused less on financial matters than on the big picture of where Celgene is and where it's headed. Here are five things you'll want to know from Celgene's latest presentation.
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1. Why Revlimid's sales will go even higher
Revlimid generated nearly $7 billion last year, roughly 62% of Celgene's total revenue. Some observers project that Revlimid will rank as the top-selling cancer drug in the world in just a few years. Kellogg gave several reasons sales should keep rising.
Kellogg noted that Revlimid is included in several clinical studies evaluating combination regimens in treating multiple myeloma. He thinks these combos should drive sales for Revlimid higher down the road. Another key factor he pointed out is the potential for extending the duration of therapy. Kellogg said the current average duration of use for Revlimid is around 23 to 24 months. Celgene's clinical research has indicated that much higher durations of use could be beneficial to patients.
Potential new indications for Revlimid could also be key. Kellogg said there are several clinical trials in progress for the drug in treating lymphoma. He particularly highlighted the potential for a combination of Revlimid and Rituxan in treating various types of lymphoma.
2. Rising excitement over cell therapy
Kellogg said he's not surprised by Gilead Sciences' recent announcement of plans to acquire Kite Pharma, one of the leaders in cell therapy. Celgene is also excited about the potential for cell therapy.
The big biotech partners with two other companies that are also leaders in cell therapy -- bluebird bio (BLUE 0.76%) and Juno Therapeutics (JUNO). Kellogg described both relationships as "phenomenal." He especially pointed out Bluebird's clinical results, calling the small biotech "the darling of ASCO" this summer, referring to Bluebird's presentation at the American Society of Clinical Oncology.
Kellogg said Juno's CD19 candidate, JCAR017, has "tremendous potential." He also pointed out that Celgene's collaboration with Juno is a long-term one that allows the company to opt in on other programs over a 10-year period. Kellogg cautioned investors, though, not to "read too much into the data right now" from clinical results for cell therapy programs. Over the long run, however, he said the promise for the approach could lead to "exciting areas."
3. Big plans for ozanimod
There have been some questions in the past about how Celgene would commercialize ozanimod in the multiple sclerosis (MS) arena. The company has no prior experience in MS. Kellogg said Celgene wanted to see the clinical data before making any decisions but that the biotech has now seen the data. And that data has persuaded Celgene to move forward with commercialization of ozanimod on its own, assuming the drug wins approval.
Kellogg cited several reasons he thinks Celgene can be successful in marketing ozanimod as a treatment for MS. He noted that a high percentage of MS patients are in 10 to 12 markets, with the top 100 U.S. providers driving prescription volume for the indication. According to Kellogg, Celgene should be able to do well in MS because it's so highly specialized.
He said Celgene doesn't expect to capture a huge percentage of the $20 billion-plus global MS market. However, he thinks the company will "hit a sweet spot" that should pay off. As for pricing, Kellogg said Celgene realizes the pricing dynamics are different in MS than they are for other indications ozanimod targets. He indicated that pricing information wouldn't be disclosed until the time of product launch.
4. No worries for Otezla
Some investors might have been concerned that sales for Otezla missed expectations in the first quarter of 2017. Kellogg said there's no reason for worry. He explained that the miss stemmed from new contracts with three large managed-care organizations (MCOs). These contracts included discounts that took effect immediately, but the increased volume from the contracts will take longer to be realized.
Kellogg stated that while Otezla sales picked up somewhat in the second quarter, the real benefits from the MCO contracts will come in the fall and winter. He also noted that the contracts extend for three years and that years two and three should be more lucrative for Celgene than year one as the volume ramps up.
5. Stay tuned for future deals
Could Celgene make other acquisitions and licensing deals in the near term? Kellogg said the company "is on the cusp of looking at different deals." He particularly called attention to the potential expansion into neurological therapeutic categories, saying Celgene has "brought in a top-notch team" to drive its focus in neuroscience. However, he stressed that expansion into neuroscience won't distract the company from other areas of focus.
Kellogg said Celgene's bias is toward emerging sciences that favor earlier-stage deals that tend to be smaller in size. He stated that there is an "active effort" in business development, adding that there's "more to come" and for investors to "stay tuned."
