Celgene rose to prominence by turning derivatives of thalidomide into hugely successful cancer drugs. Today, the Summit, NJ-based company got the green light to move into immunology with FDA approval of a pill for psoriatic arthritis. Now, the question is just how big of a seller Celgene has on its hands.
The FDA said today that it has cleared apremilast (Otezla) for patients with psoriatic arthritis. Celgene (NASDAQ: CELG) plans to primarily target patients who don’t respond to disease-modifying anti-rheumatic drugs such as methotrexate, before they’re put on injectable biologic drugs like adalimumab (Humira), etanercept (Enbrel), or infliximab (Remicade). About 30 percent of the 125 million people worldwide with psoriasis, a skin condition characterized by red, itchy patches, develop psoriatic arthritis, which is when the haywire immune system attacks that led to those patches spread to the joints. Celgene’s drug works by inhibiting the enzyme phosphodiesterase 4.
The most common side effects attributed to apremilast in clinical trials were diarrhea, nausea, and headache. The FDA is requiring a pregnancy exposure registry so as a post-marketing requirement to assess the risks of pregnant women taking the drug. The agency also said that doctors should watch out for patients’ weight loss on the drug, noting that clinicians should consider discontinuing treatment if “clinically significant” weight loss occurs.
The approval is based on a roughly 1,500 patient Phase 3 program, in which psoriatic arthritis patients were either given a low (20 milligram) or high dose (30 milligram) of the Celgene drug or a placebo twice a day for 52 weeks. The goal was to show a 20 percent reduction in patients’ symptoms, a common measure known as ACR20. Celgene succeeded: in one arm of the trial, for instance, 63 percent of patients taking the low dose of apremilast and 55 percent of those taking the high dose saw a 20 percent reduction in the signs and symptoms of their disease over the course of the study.
While those results are enough to get apremilast approved, the question is what the drug’s uptake will be like. Apremilast hasn’t proved to be quite as effective as injectable biologics like adalimumab and infliximab, but Celgene isn’t necessarily trying to compete with those drugs—just offer patients an additional option after methotrexates don’t work rather than dealing with the consistent injections or infusions people get on biologics, and the potentially significant side effects that can go with them. Celgene has also said that it plans to make apremilast cheaper than biologics. A Celgene spokesman confirmed that the drug will be priced at $22,500 for a year of treatment. Biologics for psoriatic arthritis cost upwards of $30,000 per year.
“We believe this is a good pricing strategy to target the much bigger, but likely more price-sensitive pre-biologic patient population and because payers will be keen to better adopt a ‘cheaper’ drug,” RBC Capital Markets analyst Michael Yee wrote in a note to investors Friday.
Still, questions about the drug’s market and ramp-up have led to a big discrepancy about the drug’s sales potential between Celgene and investors and analysts. Celgene has said it expects the drug to bring in between $1.5 billion and $2 billion in sales in 2017. By comparison, in a recent report, EP Vantage estimated about $1.2 billion in sales in 2018. Consensus analyst estimates have the drug bringing in $130 million this year.
Celgene, for its part, is trying to turn apremilast into a franchise. It’s also developing the drug as a treatment for various other inflammatory diseases, like ankylosing spondylitis (a form of arthritis that mostly affects the spine) and psoriasis.