Celgene hits speed bump for Otezla in U.K. with NICE rejection

Celgene ($CELG) has high hopes for its anti-inflammatory drug Otezla, shooting for blockbuster sales of the med with the help of new indications for psoriatic arthritis and psoriasis. But the company is off to a rough start with the drug in the U.K., as the country's cost gatekeeper, the National Institute for Health and Care Excellence (NICE), decided not to recommend Otezla to treat psoriatic arthritis.

As PharmaTimes reports, the cost watchdog in draft guidelines rejected the drug for use alone or in combination with disease-modifying antirheumatic drug (DMARD therapy) for treating adults with active psoriatic arthritis who have not responded to therapy. The way NICE sees it, Otezla's costs don't justify its benefit for patients. The drug's cost effectiveness ratios were "substantially over £30,000 per QALY gained" and therefore outside the price range normally considered for National Health Service (NHS) funding, according to the PharmaTimes story.

NICE's decision comes on the heels of more bad news for Celgene, as earlier this month the cost watchdog turned down Otezla in draft guidelines to treat chronic plaque psoriasis. The company in May also hit a speed bump with the drug in Germany, as the country's notoriously difficult cost gatekeeper IQWiG said it didn't see added benefits for the drug compared with other treatments already on the market. Celgene's Otezla competes with AbbVie's ($ABBV) Humira, Amgen's ($AMGN) Enbrel, and Pfizer ($PFE) and Johnson & Johnson's ($JNJ) Remicade, the three best-selling drugs in the world.

But Celgene's drug is a pill while the other companies' meds are injected therapies, something the biotech is quick to point out when discussing Otezla's potential advantages. And Celgene brought Otezla to market at a discount to its competitors, with a wholesale price of $22,500 in the U.S.--about a 30% discount to Humira and Enbrel, analysts said at the time.

Still, Celgene could have a tough road ahead as it chases blockbuster sales for its drug. Otezla is expected to reach blockbuster territory by 2019, with analysts envisioning $1.3 billion in sales. Celgene is setting its prospects for the drug even higher, projecting peak sales of up to $2 billion. But the company could face increased competition from drugmakers such as Eli Lilly ($LLY), Novartis ($NVS), AstraZeneca ($AZN), Merck ($MRK), Amgen and J&J, which are developing new psoriasis treatments.

In the meantime, Celgene continues to push for additional indications for Otezla, including for rheumatoid arthritis--a market that could give the company the boost it needs to take its med to the next level.

- read the PharmaTimes story

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