The old adage “better late than never” may be overused, but for Celgene, it certainly applies to England’s cost watchdogs and their stance toward the company's multiple myeloma flagship drug Revlimid.
On Friday—a full four years after the European Commission approved Revlimid for the first-line treatment of some adults with multiple myeloma—the National Institute for Health and Care Excellence (NICE) recommended that the drug be covered by England’s National Health Service (NHS) in that setting. The agency sanctioned its use in combination with the steroid dexamethasone for patients who are not eligible for stem cell transplants and who cannot take the drug thalidomide.
Revlimid costs up to £4,368 per package, depending on the dose, but Celgene struck a deal with the NHS to offer it at a discount, the details of which are confidential, according to NICE’s guidance document (PDF). That discount does make it cost effective, but only in patients who can’t take thalidomide, the agency said.
“Not only will [Revlimid] improve the length of time people live, but it will also have fewer side effects compared with current treatments,” Meindert Boysen, director of the Centre for Health Technology Evaluation at NICE, said in a statement.
The spotlight has been shining on Revlimid of late because it was a centerpiece of Bristol-Myers Squibb’s $74 billion acquisition of Celgene. The drug brought in nearly $10 billion in sales last year, but looming patent losses remain a concern for BMS investors who are counting on the continued growth of the drug to prop up the top line of the combined companies.
In February, investors were caught off guard when Alvogen introduced a Revlimid generic in Romania, Croatia and Bulgaria. Celgene had said its European patents on the drug would be protected until 2022. Celgene executives did their best to calm jittery investors, telling Jefferies analyst Michael Yee that Alvogen wouldn’t be able to pull off a broad enough European launch to materially affect Revlimid sales.
Maybe not, but Revlimid is likely to remain on investors’ list of worries about the BMS merger. Celgene has faced nonstop challenges to Revlimid’s patent protection, raising the specter of an earlier-than-expected generics entry in key markets. It did notch one important win in February—dismissal of a Dr. Reddy’s attempt to invalidate three Revlimid patents by the U.S. Patent and Trademark Office—but developments like the Alvogen generic introduction will likely resurrect concerns.
BMS has consistently argued that Revlimid is only a small part of the Celgene story. BMS executives won over investors by predicting that six near-term projects in the pipeline could bring in a combined $15 billion in revenues. Those assets include luspatercept to treat beta thalassemia, ozanimod for multiple sclerosis and a CAR-T treatment for multiple myeloma.
Dissenting investors, including Starboard Value, tried to persuade other shareholders that BMS shouldn’t buy Celgene because the new products wouldn’t be enough to replace the lost revenues from Revlimid’s patent cliff. But shareholders ultimately voted in favor of the deal on April 12.
NICE’s latest endorsement of Revlimid will make a small contribution toward Celgene’s ongoing effort to expand the market for the drug. The company has also been testing the drug in combination regimens, and Thursday, the European Commission approved Revlimid plus bortezomib and dexamethasone in some multiple myeloma patients. Revlimid combined with Roche’s Rituxan has also shown promise in the second-line treatment of follicular lymphoma, though the combo stumbled in previously untreated patients.