Aspire Data A Big Plus For Amgen And Celgene

| About: Celgene Corporation (CELG)


Progression free survival figures could result in Kyprolis/Revlimid/dexamethasone becoming standard of care for advanced multiple myeloma.

Lack of adverse events alleviates cardiovascular event fears.

Celgene also stands to gain from increased duration of Revlimid use.

Strong interim data
Yesterday, Amgen (NASDAQ:AMGN) released data from a planned interim analysis of the Aspire study that could lead to a significant sales boost. The late-stage multiple myeloma trial blew the doors off its primary endpoint of progression-free survival, or PFS. Patients receiving Kyprolis in combination with Celgene's (NASDAQ:CELG) Revlimid and low-dose dexamethasone -- abbreviated KRd -- reached a median 26.3 months without their disease worsening. That's 8.7 months longer than patients receiving Revlimid and dexamethasone without Kyprolis. Despite the fantastic results, the trial will continue as the positive trend toward overall survival hasn't reached statistical significance.

Fulfilling expectations
This is great news for Amgen as it jostles for a spot in the blossoming oncology space. It picked up the proteasome inhibitor just under a year ago, along with the rest of Onyx Pharmaceuticals, for about $10.4 billion. While second quarter sales reached a healthy $78 million, it's still a far cry from the blockbuster Amgen expected.

Currently, Kyprolis is limited to multiple myeloma patients that have relapsed following treatment with two prior therapies, one of which must be Velcade from partners Takeda's (OTCPK:TKPYY) and Johnson & Johnson (NYSE:JNJ). With about 24,000 new cases each year in the US, the multiple myeloma market is large enough to make the Onyx acquisition highly profitable, but label expansion is a must. The overall survival data isn't in yet, but I would be shocked if the Aspire trial doesn't lead to that expansion.

A less restrictive advanced multiple myeloma indication alone could be the push that puts Kyprolis over the $1 billion mark, but the significance of the recent data goes even further. In a recent study with Velcade, Revlimid, and dexamethasone, median progression-free survival was a paltry 10 months. At 26.3 months for the KRd combination, it seems Velcade's position as standard of care for multiple myeloma is in danger.

Proxy win
While Amgen would certainly stand to gain from having a component in a new standard treatment for multiple myeloma, Celgene investors ought to be pleased with the data as well. With second quarter sales of more than $1.2 billion Revlimid has already exceeded expectations, and it looks like they're headed even higher.

While I would like to see the company reduce reliance on its biggest seller, maximizing Revlimid profits leading up to a loss of exclusivity -- US composition of matter patents expire in 2019 -- is also key to its future. If the KRd combination becomes standard for advanced multiple myeloma patients, it should significantly lengthen average duration of treatment and provide a bump to Revlimid sales in the process.

Looking ahead
As encouraging as the progression-free survival data was, knocking Velcade off its perch will require significantly better overall survival and response data. Also likely to weaken Velcade's position in Kyprolis' favor is a head-to-head Phase 3 trial that pits the two against each other -- both in combination with dexamethasone. The trial has finished recruiting, but topline results aren't expected until early 2016.

Additional Sources:

Aspire Data Press Release

Amgen Q2 2014 earnings call transcript

Amgen Q2 2014 10-Q

Amgen 2013 10-K

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