Celgene heaps pressure on MS pills as blockbuster hopeful ozanimod hits its marks

Celgene’s late-stage pill, ozanimod, could hit $2 billion in sales and add pressure to an already competitive oral MS market, analysts say.

Friday, the Big Biotech reported that its phase 3 candidate ozanimod—nabbed in Celgene’s $7.2 billion Receptos buyout—hit its targets in a phase 3 trial, beating out Biogen's interferon med, Avonex, at annualized relapse rates among patients with relapsing forms of the disease.

The med’s safety marks stayed in line with results from phase 2 trials, the New Jersey drugmaker said.

The way analysts saw it, the safety confirmation was the bigger news, as “efficacy was never really in question here,” Evercore ISI’s Mark Schoenebaum wrote to clients. But causing less toxicity in the cardiac arena than Novartis rival Gilenya—which requires first-dose monitoring thanks to its potential to slow heart rates dangerously—is “the commercial thesis on this drug,” said Schoenebaum.

Winning a safety edge and a corresponding differentiated label would be crucial for Celgene, which faces serious competitors. Aside from fellow S1P1 agonist Gilenya, Biogen’s Tecfidera and Sanofi’s Aubagio—which has been surging lately—also play in the field. Gilenya generics are slated to reach the market as early as 2019, which could really hurt branded sales for Celgene.

The focus will turn to a second phase 3 ozanimod trial—dubbed RADIANCE—whose data are expected in quarter two of this year. If those look good, Celgene could stay on track with an FDA filing in the second half of this year and a 2018 launch, Leerink Partners analyst Geoffrey Porges wrote in a research note. Mizuho Securities' Salim Syed is modeling $2 billion in peak MS sales for the prospect, though Jefferies’ Brian Abrahams was more conservative.

“We currently model out-year MS sales of ozanimod of about $1B, given the potential Gilenya genericization, increasing competition, and growing pricing pressure in the MS space,” Abrahamas wrote to clients.

But luckily for Celgene—which is working to diversify beyond its anchor blood cancer meds—ozanimod has potential beyond MS. The company is testing the up-and-comer in ulcerative colitis and Crohn’s disease, which Syed believes would represent $3 billion and $2 billion peak sales opportunities, respectively.