Celgene (NASDAQ:CELG) has good news -- and it has bad news. The company announced phase 3 results for apremilast in treating psoriasis at the American Academy of Dermatology meeting this weekend in Miami. Here are both sides of the apremilast news.
The phase 3 results were a considerable letdown when compared to phase 2 results. Back in December 2009, Celgene announced phase 2 results of apremilast in treating psoriasis. In that mid-stage trial, 41% of patients taking the drug achieved the targeted 75% reduction in symptoms, which is known as PASI-75, after 16 weeks. The phase 3 results just announced, however, showed only 33.1% of patients achieving PASI-75.
This represents a steep drop-off in efficacy. The worse news is that these lower levels could impact the the frequency that physicians prescribe apremilast, assuming the drug is ultimately approved. By comparison, 80% of patients taking AbbVie's (NYSE:ABBV) blockbuster drug, Humira, achieved PASI-75 after 16 weeks. Clinical studies of Enbrel, which is marketed by Amgen (NASDAQ:AMGN) and Pfizer (NYSE:PFE), found that 46% of patients taking a 50 mg dosage of the drug achieved PASI-75 after 12 weeks.
Celgene shares traded around 2% lower on Monday morning as a result of the apremilast phase 3 results. Some investors now question whether the company will be able to hit its goal of $1.5 in annual sales for the drug.
Despite the disappointment, there is some good news. Apremilast still met its primary endpoint. Nothing has changed with Celgene's plans regarding submitting for regulatory approval. It will submit a New Drug Application in the next few weeks for treating psoriatic arthritis and will follow up in the second half of the year for psoriasis. Celgene also intends to file for European approval for apremilast in treating both indications in the second half of 2013.
Another good sign is that the safety profile for apremilast continues to look very good. More than 96% of patients reported no adverse events or only mild-to-moderate adverse events. The most frequent of these reactions were diarrhea, nausea, and headache.
Apremilast won't have the efficacy of biologics already on the market like Humira and Enbrel. However, it will have some advantages. The good safety profile is one. Also, apremilast is taken in pill form instead of through injection. This convenience should sway some prescribers and patients. Then there's the cost factor. Observers anticipate that apremilast will be considerably less expensive than its biologic rivals.
I didn't see anything with the phase 3 study that should impede the prospects for apremilast gaining approval. The lower efficacy could have some impact on sales, but the advantages of the drug -- safety, convenience, and price -- are still intact. My view is that apremilast should still be a blockbuster for Celgene, although sales will likely be on the lower end of the company's forecasts.
My overall outlook on the company remains very positive. Apremilast is just one of several drugs that should contribute to Celgene's growth over the next several years. There will always be good news and bad news with any drug company, but the best news for investors will be found in companies like Celgene that have the product depth to roll with the punches.