Celgene opens door for early launch of Revlimid generics

Just in time for the holidays, Celgene ($CELG) settled the score with Natco Pharma over patents for its cancer blockbuster Revlimid. The company is allowing the Indian generics maker to start selling copycat versions of its best-selling drug before Revlimid goes completely off patent in 2027, but with a few strings attached.

Under the settlement, Celgene will give Natco a "volume-limited license" to sell generic Revlimid (lenalidomide) in the U.S. starting in March 2022. The company is keeping quiet about the exact volume limit, but said that, at first, it "is expected to be a mid-single digit percentage" of total Revlimid capsules doled out in the U.S. Celgene expects the volume limit to increase over time until March 2025, but that the generics won't exceed one-third of total volume, the company said in a statement.

Celgene will then let Natco sell an unlimited quantity of generic Revlimid starting on Jan. 31, 2026, about a year and a half before Celgene's last patent for the drug expires.

"This settlement provides clarity around the future of Revlimid, and we will continue to focus on developing our many important pipeline assets, which provide great potential promise to patients with unmet medical needs," Celgene CEO Bob Hugin said in a statement.

Celgene CEO Bob Hugin

Even though it's still unclear how the settlement will affect Revlimid's sales, the "biggest benefit to Celgene is probably the clarity surrounding" the $5 billion drug's future, Evercore ISI analyst Mark Schoenebaum said in a note to clients. "The uncertainty surrounding this litigation represented an overhang which this settlement removed," Schoenebaum said, allowing Celgene to proceed with business as usual with one less patent dispute to contend with.

Still, Celgene could face more Revlimid patent battles. Mylan ($MYL) is trying to launch a Revlimid generic, Evercore ISI analyst Umer Raffat pointed out in a note to investors. And Indian generics makers Dr. Reddy's ($RDY) and Reliance might have their own Revlimid generics in the works, Raffat added, setting the stage for a showdown if and when those companies get a greenlight for their copycat versions of the med.

That's not to mention the pushback from pharma patent challenger Kyle Bass. In October, Bass' hedge fund convinced the U.S. Patent and Trademark Office (PTO) to review Celgene's IP shields for Revlimid. The move marked a win for Bass, who is trying to invalidate the company's patents for the drugs to bring down sky-high prices (and reap returns from bets on a patent strikedown).

But Celgene doesn't seem too worried about those fights--at least for now. "We remain confident in the strength of our patents, and we will continue to vigorously defend them," Hugin said in a statement.

- here's Celgene's statement

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