Celgene: Color on FDA refusal to file (RTF) letter on ozanimod for relapsing forms of multiple sclerosis (95.78)
- SunTrust downgrades to HOld, tgt to $106 from $139. While mgmt. stated that (1) the refusal to file (RTF; see draft guidance HERE) has "nothing to do with [ozanimod's] core efficacy or safety profile" and (2) there is no indication for another pivotal study (particularly as ozanimod's Phase III SUNBEAM and RADIANCE trials were both conducted under a SPA), they believe CELG may need to run additional or complete ongoing nonclinical and clinical pharmacology studies to ensure the drug achieves target exposure in all relevant populations. While they continue to view ozanimod's efficacy and safety profile as favorable for an eventual approval, the RTF could result in a 24-month or longer delay for ozanimod's RMS launch. Hence, they are conservatively moving the U.S. launch of ozanimod to 2021 (vs. prior 4Q18). Also, given that generics for competitor Novartis' (NVS, NR) Gilenya (a SP1R modulator) are expected to be on the market by the time ozanimod is launched, which is likely to increase competition, they are reducing ozanimod's peak sales potential in RMS to $1.3B (from $2.1B). Their overall peak sales for the drug in UC/RMS goes to ~$3.5B (from ~$5B).
- Mizuho: Given the lack of detail provided on last night's call in terms of what the FDA needs to see for a resubmission and subsequent approval, the implied move in POS / stock price may be warranted, but until the company can meet with the FDA and then provide a clear roadmap to approval, the odds of success (primarily in MS) will likely be debated in their view, and also presents another opportunity for value investors who have been sidelined on the stock to take a look at the name. Recall, S1P1 (mechanism of action) is already a validated mechanism by the way of NVS's Gilenya, and the data thus far has shown CELG's Ozanimod to be essentially a safer Gilenya. They think resubmission could occur mid-2018, with approval in mid-2019, assuming a standard review. CELG also reffirmed 2020 guidance.
- Stifel lowers their CELG tgt to $128 from $130 Celgene provided an Ozanimod regulatory update that it received a Refusal-To-File letter from the FDA. The agency determined that certain pharmacology sections in the NDA filing were unsatisfactorily completed to currently permit review. From the initial feedback the company has received, Celgene believes it does not need to conduct a pivotal study and noted that supplemental clinical pharmacology data generation was already under way. While they acknowledge yesterday's news adds uncertainty to the timelines, they still believe Ozanimod's pivotal safety/efficacy data is sufficient for approval (discussed herein). They expect the end result in yesterday's news will be a few months' delay in ozanimod's approval and launch into an increasingly competitive relapsing MS market (Gilenya goes generic February 2019). As a result, they are pushing out Ozanimod revenues by ~six months and reducing 2019/2020 estimates slightly.
- CELG -6% just above Feb 9/3+ year lows premarke