Celgene gutted as mongersen heads for the scrapheap

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Bullish Celgene analysts would have investors believe that the failure of its late-stage Crohn’s disease project mongersen just clears the way for an even more promising candidate, ozanimod. Still, with the company losing around $10bn of its value this morning, shareholders had obviously had higher hopes for mongersen.

The disconnect in valuations appears to represent a rare case of restraint from the sellside: EvaluatePharma consensus 2022 forecasts for the mRNA antisense project, once expected to become a blockbuster, had come off in recent months, and most recently sat at $645m. One thing is certain, however: the pressure on ozanimod is now even greater (see table).

Celgene has not put mongersen out of its misery yet – it is still awaiting final results from a phase II trial in ulcerative colitis. But pulling the trigger looks like a foregone conclusion after a data-monitoring committee yesterday recommended discontinuing phase III trials in Crohn’s disease after an interim futility analysis.

The company said there had been no meaningful safety imbalances, suggesting that lack of efficacy was the problem. Some had suspected that the project’s days might have been numbered after Celgene’s mammoth $7.2bn purchase of ozanimod’s originator, Receptos, just over a year after it shelled out $710m for mongersen’s developer Nogra Pharma, but at the time Celgene claimed that it was not deprioritising mongersen (Celgene strikes again with Receptos acquisition, July 15, 2015). 

Now, Mizuho and Stifel analysts have completely removed mongersen from their models. The former pointed out that Crohn’s and ulcerative colitis both involve inflammation, albeit of different parts of the digestive tract, and drugs typically work in both diseases or in neither.

This leaves Celgene with two more shots on goal in gastrointestinal disorders, courtesy of ozanimod and Otezla.

Celgene's GI pipeline
Project Indicaton  Mechanism Status Trial Data  2022e sales by indication ($m)
Mongersen/GED-0301 Crohn's disease SMAD7 RNAi therapeutic Phase III Revolve, NCT02596893; Sustain, NCT02641392 Stopped for futility 573
Ulcerative colitis Phase II  NCT02601300 Completed 72
Ozanimod Ulcerative colitis S1P 1 & 5 modulator Phase III Truenorth, NCT02435992 Primary completion Sep 2018 837
Crohn's disease Phase II Stepstone, NCT02531113 Reported 38
Otezla Ulcerative colitis PDE 4 inhibitor Phase II  NCT02289417 Due end 2017 -
Source: EvaluatePharma.

Otezla is already approved for psoriasis and psoriatic arthritis, but is also in a phase II trial in ulcerative colitis that is set to yield data by the end of the year. Celgene says that, if positive, it could begin a phase III programme in this indication in 2018.

None of Otezla’s $3.8bn 2022 EvaluatePharma forecast is ascribed to ulcerative colitis, so a result here would be a bonus for Celgene.

This is not the case for ozanimod, with ulcerative colitis accounting for 57% of its forecast $1.5bn 2022 sales, according to EvaluatePharma. Most of the rest comes from multiple sclerosis, where Celgene has already reported phase III data and has said it plans to file ozanimod by the end of the year.

In ulcerative colitis, a clue about ozanimod’s chances should come next year: the phase III Truenorth study has a primary completion date of September 2018, according to Clinicaltrials.gov.

In addition, Celgene is looking at ozanimod in Crohn’s disease, where it recently reported phase II data and has said the project should move into pivotal trials in the next few months. 

Ozanimod is given orally, which could give it an edge in a market currently dominated by injectable MAbs. However, there are reasons to be cautious: Novartis’s older sphingosine-1-phosphate modulator Gilenya is linked with safety issues, including a risk of lower heart rate that means monitoring is required.

Celgene hopes that ozanimod could avoid this problem because it is more selective, targeting S1P 1 and 5, but top-line data from the Radiance and Sunbeam phase III MS studies were light on details (Ozanimod safety still a question mark for Celgene, February 20, 2017). 

Maybe more information on safety will emerge next week with various presentations at the Ectrims/Actrims meeting in Paris.

With Celgene’s top seller, Revlimid, set to face generic competition as soon as 2020, according to Stifel analysts, the company’s pipeline needs to start delivering. The $710m bet on mongersen has come to nothing – if its much bigger gamble on ozanimod also falls through Celgene’s stock will be hit even harder.

Celgene's top products in 2022
Global sales ($m)
Product Status 2016 2022e
Revlimid Marketed 6,974 14,069
Otezla Marketed 1,017 3,814
Pomalyst Marketed 1,311 2,837
Ozanimod Phase III - 1,464
Abraxane Marketed 973 1,403
Luspatercept Phase III - 703
Mongersen/GED-0301 Phase III - 645
Source: EvaluatePharma.

To contact the writer of this story email Madeleine Armstrong in London at madeleinea@epvantage.com or follow @ByMadeleineA on Twitter

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