A little good news can sometimes go a long way. 

On Monday, Bristol-Myers Squibb (BMY -0.27%) and AbbVie (ABBV -1.03%) announced that the U.S. Food and Drug Administration granted Breakthrough Therapy Designation for multiple myeloma drug elotuzumab. This news bodes well for both companies -- and for big biotech Celgene (CELG) as well. Here's how.

Multiple myeloma stain. Source: Wikimedia Commons

Time is on their side
The FDA's Breakthrough Therapy Designation only went into effect a couple of years ago as part of the Food and Drug Administration Safety and Innovation Act, or FDASIA. This new designation is available only for drugs that treat serious or life threatening conditions and demonstrate clinical evidence of substantial improvement over existing therapies.

Elotuzumab checks off both boxes. The drug, developed jointly by Bristol and AbbVie, targets treatment of multiple myeloma. This blood cancer results in the death of an estimated 11,000 Americans annually. Phase 2 clinical trials for elotuzumab showed promise, with median progression-free survival of 33 months for one arm of the study.

Gaining Breakthrough Therapy Designation essentially gives the two drugmakers the advantage of time. The FDA expedites its review process for drugs with the designation. Any way to potentially hit the market sooner could translate to a faster added revenue stream for Bristol and AbbVie, and more sales for Celgene. 

A welcome development
Revlimid, Celgene's biggest moneymaker, currently stands as one of the top drugs in the multiple myeloma market. In 2013, the drug generated sales of $4.28 billion. Elotuzumab isn't a threat to Celgene at this point, though, because the drug is given along with Revlimid.

AbbVie and Bristol could see peak annual sales for elotuzumab of over $300 million if analysts' projections are on target. That, of course, assumes the drug will gain regulatory approval. The outcome of two phase 3 clinical trials currently underway will determine if elotuzumab makes its way to market. 

As for Celgene, the biotech predicts that 2014 sales for Revlimid will experience solid year-over-year growth of 16%. Approval for elotuzumab as a co-therapy with Revlimid could help next year's sales grow even more. Celgene should also count Pomalyst/Imnovid as another blockbuster multiple myeloma franchise beginning in 2014.

Multiple choice
With all three companies potentially benefiting from the success of elotuzumab, which one is most appealing to investors? In this multiple choice question, I'd go with answer "C" -- for Celgene.

This nod isn't because of elotuzumab, however. Instead, my view is that Celgene's overall growth potential exceeds that of AbbVie and Bristol-Myers Squibb. AbbVie faces Humira's patent expiration in the not-too-distant future. Bristol is already dealing with the effects of losing patent protection for Plavix, and confronts the same prospect with Abilify soon.

Celgene, meanwhile, claims several up-and-comers that will augment its multiple myeloma drugs. Cancer drug Abraxane made $649 million last year. Celgene expects that figure to jump to as high as $2 billion annually within the next three years. Otezla, which treats inflammatory diseases including psoriasis and psoriatic arthritis, could reach similar sales levels.

AbbVie and Bristol will get the most mileage out of continued good news from elotuzumab. Celgene, though, looks to be the best answer for this "A-B-C" investing question.