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Your Daily Pharma Scoop: Celgene Setback, Valeant Results, Synergy Sells Rights


  • Celgene suffers another setback as FDA issues Refusal to File letter for Ozanimod NDA.
  • Valeant reports results.
  • Synergy sells Canadian rights to Trulance.

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Analysis of top Seeking Alpha coverage: Celgene

Today we will discuss Celgene (CELG) after the company suffered an embarrassing setback as the FDA issued a Refusal to File letter to the company regarding its New Drug Application (NDA) for multiple sclerosis (MS) drug Ozainimod.

Following preliminary review, the agency determined that the nonclinical and clinical pharmacology sections in the NDA are not sufficient to permit a complete review. While the company plans to seek immediate guidance, this is a major lapse on its part. Not surprisingly, Celgene shares, which saw a huge sell-off in the second half of 2017, are down more than 7% in early trading today as investors react to what is a major disappointment.

After the sell-off last year, we had noted that Celgene was attractive from a valuation standpoint. However, our thesis depended a great deal on Ozanimod succeeding. This is not to say that we expect Ozanimod to fail at regulatory stage. We continue to believe that the drug’s safety and efficacy profile means that it will get an eventual approval. But this lapse by Celgene messes up the timeline for commercializing Ozanimod, which in turn hurts Celgene’s long-term revenue projections.

As a result, we expect Celgene shares to remain stagnated until there is more clarity on the regulatory path for Ozanimod. It will be also interesting to see how this impacts 2020 revenue projections for Celgene. Remember that Ozanimod would have been a major contributor if the regulatory process remained on track. The Refusal to File means a delay of at least

This article was written by

Avisol Capital Partners profile picture

Avisol Capital Partners is made up of a team of medical experts, finance professionals and techies, all of whom invest their own money in the picks they share. They aim to help readers find the middle ground between value and growth investing, as they demystify the biopharma industry.

They lead the investing group Total Pharma Tracker where they offer a monthly updated catalyst database, an investability scoring system for quick reference ideas, and direct access in chat for dialogue and questions. Learn more.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (8)

going in at 7
its in freefall
farmersgroup profile picture
Wait for VRX to come down to $15 before buying.
I would wait for $11.50, eh?!
kingRIG2.0 profile picture
$11.50? At least it’s not your usual $7 or bankruptcy talk you normally predict
petektf profile picture
Wait some more years before buying VRX, looks like it's in a rough phase right now.
MTSkyInvesting profile picture
$25 price target on VRX, 50% upside. https://goo.gl/r7KNUh
petektf profile picture
$18.39 combined consensus. Only 1 firm gave it the $25 rating the rest had different sell ratings and lower targets.
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