Celgene’s Revlimid Approaches FDA Decision For MCL Indication

remains just under its 52-week high of $128.52 per share as the market continues to reflect the company’s financial and developmental success halfway throughout the new year. The drug developer has a huge and highly diversified pipeline although the most prominent drug development programs are in the oncology/hematology indications.

In their Q1 2013 earnings, the company reported year over year top-line growth of 15%, fueled by a 15% growth in net product sales up to $1.43 billion. While investors were a bit less enthusiastic about the company’s recent slip in Q1 earnings which came in at $385 M versus $402 M in Q1 2012, this was caused by temporary effects which is why non-GAAP figures show earnings of $592 M in Q1 2013 versus $484 M in Q1 2012.

The company’s big sellers include Revlimid (Lenalidomide), Vidaza (Azacitidine) and Abraxane (Protein-bound paclitaxel) which both experienced double-digit growth in the last year. Revlimid, which grew sales by 16% in the last year, is particularly interesting to investors ahead of a PDUFA date of June 5th, 2013 for a Revlimid sNDA in the Mantle Cell Lymphoma (MCL) indication. Currently the drug is approved for the myelodyspalstic syndrome (MDS) indication, and has yet to fully saturate the MDS drug market.

Sales for MDS are expected to grow significantly as the drug is brought to the Eurozone after a positive CHMP opinion that was revealed in a press release on April 26th, which gives Celgene quite a bit of breathing room in terms of top-line growth for the next 1-3 years due to the huge amounts of revenues that can now be derived from EU nations. Analysts, who generally expect the company to have $7.04B in revenues in 2014, may be surprised to the upside depending on the speed of Revlimid uptake in the EU.

This will also be helped if Revlimid receives approval for the MCL indication on June 5th, which should boost US sales in Q3 and Q4 2013. Celgene has already been a very strong performer this year, but an expansion of Revlimid’s indication into the MCL space may be just enough to put CELG at another 52-week high.

Still, considering the size of Celgene, one must consider that there are other catalysts to look for too.

We will also be seeing the finalized overall survival (OS) data for the Phase III trial for ABRAXANE in metastatic melanoma at some point during the second half of 2013. ABRAXANE is Celgene’s prominent second-line breast and first-line non-small cell lung cancer drug and is combined with other agents. It is expected to sell between $600-700 M in FY 2013.

The market will also be moving CELG in reaction to the market performance of recent approved drug POMALYST (pomalidomide), which is only indicated for use in multiple myeloma patients who have received two prior therapies including Revlimid (lenalidomide) and the proteasome inhibitor bortezomib. Although the indication is restrictive, and due to the REMS that the drug was approved on, sales are expected to be slow at the start although some of the drug’s efficacy data has been very impressive.

CELG has moved nearly 55% high since the start of the year on the commercial success of its existing pipeline in already-approved indications, and the company’s progress since the 1990’s has been staggering. Although it will be harder for the company to deliver the kind of returns it has in the past, cancer drugs can expand their lives significantly through indication expansion. This is exactly what we’re seeing with Celgene’s pipeline, which allows the company’ to continue a very predictable growth pattern for the foreseeable future.