ALTH Allos Therapeutics, Inc. (MM)

Celgene Corporation (CELG) recently presented data on its lead cancer drug Revlimid at the international myeloma workshop in France. Data were presented from an intergroup late-stage study (CALGB 100104) which evaluated Revlimid as a maintenance therapy following a stem cell transplant in patients suffering from multiple myeloma (MM).

Results from the double-blind, multi-center study suggested that Revlimid treatment caused a significant improvement in overall survival compared to placebo. However, there was some concerning news as well.

Data from the study suggested an increase in secondary primary malignancy in patients treated with Revlimid compared to those treated with placebo. This news had a negative impact on Celgene’s shares.

We note that Revlimid is currently approved for myelodysplastic syndrome (MDS) and second-line MM and the company is expanding its label into other indications. Celgene is currently seeking approval from the European Medicines Agency (EMA) for the use of Revlimid as a front-line maintenance treatment for MM in Europe. US approval is expected to be sought later in the year.

We remind investors that in March 2011, the US Food and Drug Administration (FDA) informed Celgene that it will review the supplemental New Drug Application (sNDA) for cancer drug Istodax (romidepsin) on a priority basis.

Istodax is already approved for treating patients suffering from T-cell lymphoma who have received at least one systemic therapy.  Celgene is now looking to get the drug approved for treating patients suffering from peripheral T-cell lymphoma (PTCL), who have received at least one prior therapy.  A response from the FDA is expected to be out by June 17, 2011 (target date).

We note that if Istodax is approved for the PTCL indication, then it would compete with Allos Therapeutics’ (ALTH) injectable treatment for PTCL − Folotyn − which was launched in 2009. Istodax was added to Celgene’s already established cancer portfolio through the acquisition of privately-held Gloucester Pharmaceuticals early last year.

Apart from the Gloucester acquisition, Celgene also took over Abraxis BioScience last year. The Abraxis acquisition further bolstered Celgene’s cancer portfolio by adding cancer injection Abraxane. Abraxane is already available in the US and European markets as a second-line therapy for metastatic breast cancer. The drug is being developed for other indications such as skin, lung and pancreatic cancer.

Our Recommendation

We have a Neutral stance on Celgene which is supported by the Zacks #3 Rank (Hold rating) carried by the stock in the short run.

 
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