Celgene hikes price of Revlimid to mask poor Q3 results
pharmafile | October 27, 2017 | News story | Medical Communications, Sales and Marketing | Celgene, Revlimid, biotech, drugs, pharma, pharmaceutical
Celgene posted its Q3 results and investors did not react well – shares plunged 16% immediately, after the biotech cut its guidance through to 2020.
The bad press is unlikely to stop there, as the immediate drama dies down from the poor performance, eyes will likely turn to how Celgene attempted to mask its failures: by aggressively hiking its lead drug, Revlimid.
The biotech snuck in a recent price hike behind the news that a drug it had paid $710 million upfront for looks likely to be an expensive failure; the price of Revlimid has, cumulatively, soared by 19.8% this year.
Mongersen had been intended to make the company less dependent on Revlimid to generate revenue for the company. With a failure Phase 3 treatment for Crohn’s disease, the company was forced to admit that the drug would be unlikely to take much of the pressure off Revlimid – a drug that generated $2.08 billion in Q3.
In its Q3 announcement, Celgene pointed to one bright spot in haematology as an area that it predicted would see stronger sales than originally forecast through to 2020. Its prediction rose from $14.8 billion in sales to between $15.4 billion on $16.1 billion – the area propped up by Revlimid.
Since 2010, the price of the drug has nearly doubled – rising from $9,853 to $18,546 after the latest price increase. Up until this year, price increases averaged around 7%, however, as sales struggled, this rocketed to 19.8%.
Sales, for example, of Otezla, a pill for severe plaque psoriasis, performed far below expectations. Forecast for this treatment fell by a whopping $1 billion, to $2 billion in sales by 2020. The drug is suffering from a crowded marketplace, with a raft of new treatments coming onto the market, such as Novartis’ Cosentyx and Lilly’s Taltz. The company also suggested that “sales in the US were impacted by an increase in gross-to-net adjustments from contracts implemented in January”.
“In consideration of certain market dynamics and recent pipeline events, we are updating our 2020 outlook, and remain confident in our ability to deliver industry leading growth,” said Mark J. Alles, Chief Executive Officer of Celgene Corporation. “Over the coming months, we look forward to sharing data supporting our innovative, next generation pipeline products and significant growth drivers.”
It remains to be seen, in the current pricing climate, whether the market, and the public, will be keen on the way in which Celgene has decided to drive growth.
As competitors follow suit with Allergan to show that they are limiting price increases to below double digit figures, it remains to be seen whether there might be a backlash in the pipeline.
Ben Hargreaves
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