Morningstar | Celgene's Pipeline Counters Revlimid Patent Exposure and Provides Bristol With Strong Cash Flows
Celgene's blockbuster multiple myeloma therapy Revlimid remains at the core of the firm's narrow moat, but Celgene's portfolio and pipeline are beginning to diversify. Growth prospects in multiple myeloma are strong, and we expect the global market to grow from $15 billion in 2017 to $24 billion by 2022. Revlimid's expanded approval in the first-line setting (2015) and post-transplant setting (2017) and data supporting increased duration of therapy should support future growth. Revlimid gained a foothold in lymphoma with the approval in mantle cell lymphoma in 2013, and while data in diffuse large B-cell lymphoma was disappointing, we expect approval in follicular lymphoma in 2020. However, the timing of generic Revlimid competition (currently set to start in 2022 in the United States) is still a significant uncertainty.Celgene's remaining portfolio diversifies its revenue base and reduces reliance on Revlimid as a growth driver, and the strength of the firm's pipeline contributes to its positive moat trend. In oncology, chemotherapy treatment Abraxane (acquired with Abraxis) is strong in pancreatic cancer and could see increased uptake through use with immuno-oncology therapies like Roche's Tecentriq. Celgene also saw approval of Pomalyst in multiple myeloma in 2013, and we think sales could peak around $3.5 billion as usage expands to the second-line setting. Celgene's novel CAR-T therapies JCAR017 (lymphoma) and bb2121 (multiple myeloma) are poised to launch in 2020, and we assume peak sales near $2.5 billion for each.In Celgene's newer immunology division, psoriasis/psoriatic arthritis drug Otezla is still seeing solid uptake among new patients, and we expect peak sales around $2.5 billion despite entrenched and new competitors. The Receptos deal (ozanimod) adds another oral immunology program to Celgene's pipeline, but the failure of GED-0301 in Crohn's (Nogra acquisition) and ozanimod's delays have weighed on Celgene's ability to diversify away from strong Revlimid growth before generic entrants.Celgene is a global biopharmaceutical company engaged primarily in the discovery, development and commercialization of therapies for the treatment of cancer and inflammatory diseases through solutions in protein homeostasis, immuno-oncology, epigenetics, immunology and neuro-inflammation. The company's primary commercial stage products include: REVLIMID?, an oral immunomodulatory drug; POMALYST?/IMNOVID?, a proprietary, small molecule; OTEZLA?, an oral small-molecule inhibitor of phosphodiesterase 4 for cyclic adenosine monophosphate; ABRAXANE?, a solvent-free chemotherapy product; and VIDAZA?, a pyrimidine nucleoside analog. In addition, the company provides other product sales and licensing arrangements.
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