Healthcare Celgene Corporation (CELG): Leerink Raises PT On Crohn's Drug Data, Delays Launch

Celgene Corporation (CELG): Leerink Raises PT On Crohn's Drug Data, Delays Launch

Published By Blake Audett at October 19, 2016 11:14 am

Celgene Corporation (NASDAQ:CELG) presented interim Phase 1b data for its Crohn’s disease treatment GED-0301 at the United European Gastroenterology Week in Vienna, Austria last weekend. Based on the results, Leerink Partners analysts Geoffrey Porges and Bradley Canino raised their price target on Celgene stock from $135 to $136, while maintaining a Market Perform rating. They also increased their revenue estimates from the drug but delayed its launch expectations.

GED-0301 is closely followed by market experts because the oral treatment has significant potential of breaking a disease market dominated by blockbuster injectable, biologic drugs like Humira and Remicade. The drug reported impressive Phase 2 data in 2014, in which more than 60% of Crohn’s patients reached remission at the highest dose. However, the study only measured GED-0301’s impact by the reduction in the signs and symptoms of the disease rather than examining its effect on ulcers through endoscopy.

The ongoing 63-patient study of GED-0301 not only measured gut health but also enrolled a more severe patient population. Around 37% of the patients were found to have an improvement of 25% or more within 12 weeks of treatment in a score called SES-CD that measures gut health.

However, most analysts remained largely unimpressed with Celgene’s latest GED-0301 data due to the smaller trial size, trial design, no dose-dependent improvement on patients’ endoscopies and absence of complete details. Leerink analysts wrote: “We have always been cautious regarding the opportunity of GED-0301 in Crohn’s disease, despite the initial impressive phase II data published at the end of 2014, and these data are consistent with that view.”

Moreover, they believe GED-0301 will likely gain some use as a first-line agent and the first alternative to biologics for the disease. They compared the drug program with Celgene’s development strategy for Otezla in psoriasis, which also provided modest benefit that saw rapid uptake due to its ease of administration (oral) and minor safety risk compared to available treatments.

GED-0301's launch has been delayed from the third quarter of 2018 to the third quarter of 2019. The analysts have raised GED-0301’s chances of success from 35% to 65%. They now expect sales of $21 million from the drug in 2019 and up to $1.6 billion in 2024.