Celgene probably thought things could not get any worse, but they just did. Yesterday’s US refusal-to-file letter for ozanimod puts at risk the company’s brightest near-term hope, which analysts had seen as one of the biggest potential launches of 2018.
FDA knockbacks of this sort are rare, and for big, experienced players like Celgene they are practically unheard of, since they relate to a basic inability to comply with regulatory admin. Celgene recently withdrew long-term guidance, and saw its monster Revlimid franchise stumble and mongersen implode, so the ozanimod snafu looks particularly embarrassing.
There is some similarity between the ozanimod and mongersen setbacks, since both assets had come from acquisitions. Celgene bought mongersen from Nogra Pharma for $710m up front, while ozanimod came via the $7.2bn acquisition of Receptos.
Even before yesterday’s FDA knockback the Receptos purchase was starting to look dubious on clinical grounds, but refusal-to-file letters reflect a more basic failing; Celgene said the FDA had determined that its filing’s pharmacology sections were “insufficient to permit a complete review”, and there was no concern over core efficacy or safety data.
Results of clinical trials of ozanimod, a sphingosine-1-phosphate modulator for multiple sclerosis, had failed to wow at last year’s Ectrims meeting (Ectrims 2017 – Ozanimod cannot chase away Celgene’s woes, October 30, 2017). With the imminent genericisation of Novartis’s rival Gilenya, the Celgene asset was starting to look like an also-ran.
This makes a delay to US launch especially tough, and Bernstein analysts expect this to amount to up to a year, adding: “ozanimod will fall further behind the Gilenya genericisation in early 2019 and ... it may be tougher for [it] to gain formulary traction”.
True, the current filing relates only to multiple sclerosis, and development of ozanimod is still on track in ulcerative colitis and Crohn’s disease. But these are secondary indications, and EvaluatePharma’s sellside consensus shows 61% of ozanimod’s forecast 2022 sales being generated in MS.
The consensus had also shown ozanimod to be this year’s fifth-biggest potential launch by 2022 sales expectations, behind Gilead’s HIV triple, Novo Nordisk’s Ozempic, Incyte’s epacadostat and Abbvie’s Rova-T.
On an investor call Celgene admitted that the setback was “clearly a delay for ozanimod”, but insisted that it remained confident in the clinical profile of what is still a significant growth driver. A separate question is whether ozanimod’s EU registration could also be in jeopardy, for a different reason: the relocation of the EU regulator from the UK to the Netherlands.
Run of setbacks
It is cold comfort that the latter threat is out of Celgene’s control, and clearly it would be a minor consideration had the company not had a terrible run of setbacks.
Its cash cow, Revlimid, could face generic competition as soon as 2020, and just failed an important label-extension study, in first-line follicular lymphoma. The heat is on for new assets to deliver, and recent acquisitions of Impact Biomedicines and Juno show that Celgene is serious about filling the Revlimid void.
However, the mongersen and ozanimod stumbles will make investors question Celgene’s basic ability to do acquisitions. As the stock slid 6% this morning Bernstein asked: “There is a strategic question here, given the string of challenges with in-licensed programmes. Is Celgene able to provide the same level of due diligence/confidence for their in-licensed as they do with their in-house programmes?”
With two major acquisitions coming unstuck, Celgene investors must hope that Impact and Juno do not suffer a similar fate.