When Bristol Myers Squibb laid out $74 billion to snatch up Celgene last year, it pointed to the promise of a few of Celgene’s late-stage pipeline hopefuls, including multiple sclerosis treatment ozanimod. Now, after a two-year roller coaster that included an initial FDA rejection, ozanimod has finally reached the finish line—well, almost.
The FDA approved ozanimod, which will carry the brand name Zeposia, for the treatment of relapsing MS, Bristol Myers announced Thursday. The approval comes two years after the FDA rejected Celgene’s original application, citing the company’s failure to provide adequate pharmacology data. Now the launch of the product is being delayed again, this time by COVID-19.
BMS said it decided to delay rolling out the drug during the pandemic "based on what’s in the best health interest of our patients, customers and employees." The company "will continue to monitor the environment and will partner with the neurology community to inform launch timing." It did not disclose Zeposia's price.
Despite the delay, the expectations for Zeposia are high all around. EvaluatePharma analysts have predicted the product will hit $1.6 billion in sales in 2024, and BMS management is expecting it to peak at $5 billion in annual sales.
In fact, Zeposia was one of three assets upon which the Celgene acquisition hinged. In late 2018, when BMS was sealing up the deal offer, its executives changed it: Instead of $57 per share in cash and a one-to-one share trade, they offered $50 in cash and one contingent value right (CVR) per Celgene share. The CVR will be worth nothing unless all three of Celgene’s pipeline assets make it to market by March 2021.
It may take a while for that CVR to pay off—the other two pipeline drugs are CAR-T treatments—but BMS has its work cut out for it in the meantime. That’s because Zeposia is facing plenty of competition.
Zeposia is in a class of MS drugs known as S1P receptor modulators, which work by blocking the ability of immune cells to enter the central nervous system, thus tamping down inflammation. BMS’ rivals in this class include Novartis, which markets the $3.3 billion-per-year Gilenya and newer entry Mayzent. Johnson & Johnson and Mitsubishi Tanabe are also working on S1P agonists.
BMS pointed out in its statement that Zeposia, a once-daily pill, is the only S1P receptor modulator that doesn't require patients to get a genetic test before starting the drug or to be observed after getting their first dose.
Still, Zeposia will also be competing against older MS pills, such as Biogen’s Tecfidera and its recently approved follow-up, Vumerity. Even some of the infused MS drugs could prove to be tough rivals, not the least of which is Ocrevus, an antibody from Roche that only has to be given by infusion twice a year. Sales of Ocrevus grew 57% last year, and Roche estimated it now has 20% market share in the U.S.
Another challenge for BMS could come from the insurance industry. Novartis’ Mayzent has been slow to catch on in the MS market—a problem the company has attributed to a 90-day process patients have to endure before they can get access to the drug.
As for that CVR, its value shot up 11% in premarket trading on Thursday to $3.25. It will be worth $9 if all three Celgene products make it to market. One of them is well on its way: liso-cel, a CAR-T to treat large B-cell lymphoma. In February, the FDA granted the product priority review, setting it up for a potential approval this August.
That will leave bb2121, a CAR-T to treat multiple myeloma. The cell therapy, which BMS is developing with Bluebird Bio, turned in promising results from a phase 2 trial late last year. BMS said at the time it was “actively preparing for submission” of the trial data for potential approval.