Celgene drops $710m drug, shares nosedive 7%
pharmafile | October 20, 2017 | News story | Medical Communications, Research and Development | Celgene, biotech, drugs, pharma, pharmaceutical
Celgene took a gamble when it spent $710 million up-front on an inflammatory disorder treatment, but it now looks likely to have been an expensive failure after Phase 3 results failed to impress.
Most companies tend to lock in larger payments to certain developmental and commercial milestones rather than offer big fees up-front. Celgene may well have learned its lesson on this, after its multi-million decision to acquire Nogra, and its drug candidate, mongersen, backfired spectacularly.
Shares fell by 7% on the release of the news, sending its share price spiralling from $135.96 before the release of the news to their position afterwards of $127.30.
The decision to halt the Phase 3 trial into Crohn’s disease was based on a decision by the Data Monitoring Committee, with Celgene only releasing that there were no issues with safety discovered – this points towards a treatment that simply wasn’t effective enough.
A further Phase 3 trial in Crohn’s disease has been cancelled and Celgene announced that it would review the data from a Phase 2 trial looking into mongersen as a treatment for ulcerative colitis before determining whether to continue developing the treatment.
If the latter trial fails to show sufficient promise, it could mean dropping entirely the program that had been predicted to become the biotech’s latest blockbuster. Analysts predicted that peak sales could reach $2 billion.
Celgene had certainly placed big hopes on the treatment, as it had committed to a total deal worth up to $2.6 billion with Nogra.
“We thank the patients and the investigators involved in the REVOLVE trial,” said Scott Smith, President and Chief Operating Officer for Celgene. “Crohn’s disease is a debilitating condition with few effective long-term treatment options. While we are disappointed with the results of REVOLVE, we remain committed to advancing our portfolio of novel medicines for patients suffering from this disease and other inflammatory bowel disorders.”
Mongersen had been the biotech’s leading candidate in its inflammatory pipeline and its failure dents its prospects significantly. Celgene did points towards the promise of ozanimod, another inflammatory bowel disease treatment, as being able to carry its hopes beyond mongersen, but it won’t take away the sting of this failure just yet.
Ben Hargreaves
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