Celgene's Revlimid fails lymphoma trial, and it's more than a data shortfall: analyst

Revlimid bottle
Celgene wants to build Revlimid a new opportunity in lymphoma, and the Thursday trial failure is one blow against that strategy.

On a quest to make Revlimid a go-to drug for non-Hodgkin lymphoma, Celgene paired its longtime blockbuster with Rituxan and pitted the two against Rituxan and standard chemo. It was a risky proposition. It failed. And investors aren't pleased.

The closely watched Relevance trial showed the Revlimid-plus-Rituxan combo didn't do a better job at holding off cancer growth in follicular lymphoma patients. Nor did the so-called R2 regimen deliver a complete response in more patients than the standard pairing did, the company said Thursday.

Shares went on a slide in after-hours trading after the data were released, and Leerink analyst Geoffrey Porges expected the stock to slide further Friday morning, despite some upfront skepticism that Revlimid would win the day.

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"We had previously suggested that putting Revlimid up against the proven potency of front line chemotherapy regimens was a big ask, and the standard of care proved too much for Revlimid to overcome," Porges wrote.

RELATED: The top 15 best-selling cancer drugs in 2022 - Revlimid

Mizuho Securities analysts estimate that the indication would have been worth about $500 million in annual sales by 2022.

The failure is more than just a data shortfall, too, Porges said. It puts the company itself in a bad light. The Relevance miss "adds to the questions about the rigor of Celgene’s technical and investment decision-making," Porges noted, and those questions are likely to show in the company's stock performance. Porges had previously estimated that a win in the trial could have added $5 to $6 to the company's target price.

RELATED: Celgene takes its most aggressive price hikes yet on Revlimid, Pomalyst: analyst

There's still hope for Revlimid in lymphoma, however. An ongoing trial, Augment, is testing the Rcombo against Rituxan on its own in follicular lymphoma patients who've relapsed or failed to respond to front-line therapy. That match-up, without the added threat of chemo in the control arm, has a better likelihood of success, analysts figure.

So does Celgene itself, Mizuho analyst Salim Syed wrote in a Thursday note after speaking with execs at the company. "Management believes that today's data is 'encouraging' for Augment," Syed wrote, adding that, "without chemotherapy in the comparator arm, the hurdle is not as high." 

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