Finger-Pointing At Celgene

| About: Celgene Corporation (CELG)

Just what is going on at Celgene (NASDAQ:CELG)? They've had some odd recent setbacks (such as the failure of Mongersen), and another such acquisition, Ozanimod, had its filing recently rejected by the FDA. Several things about that incident were eyebrow-raisers - for one, it's rare for a large, established company to get an outright refusal-to-file notice. That's one reason why you have a regulatory affairs group, to keep that sort of thing from happening - and if you're really working with the agency during development, it doesn't. (A refusal-to-file, for those outside the business, means that the FDA isn't even going to bother reviewing your application for a new drug approval because an initial inspection determined that the NDA package you submitted was obviously lacking. In other words, it's a "Don't waste our time" response).

Then it came out (during a recent American Academy of Neurology meeting) that most (maybe all?) of the drug's activity is due to a metabolite. Now that certainly happens. The liver chain-saws most of the drugs that people take, and some of those chopped-down versions of the original structure are also active on the drug's target. (Unfortunately, some of them might be active on other targets, too, which is another thing you'd like to discover as early as possible). And that's just what was odd about this: how come the company didn't know about this active metabolite earlier? And why wasn't this issue fully addressed for the FDA?

It appears that the new compound is produced far more in humans than in other animal species, but that happens, too. You can try to get warning of this sort of thing by testing the compound against human liver microsomes or in human plasma (or whole blood), but those don't recapitulate everything that can happen in vivo, of course. OK, so you find about it in Phase I, during first-in-man. Analyzing blood levels of the parent compound and metabolites are one of the biggest points of Phase I, actually, so it's not like this could have been overlooked. If you find out that what you thought was your drug is apparently just a prodrug for what's really working in vivo, well, you have more work to do. But it appears that lack of data about the metabolite could have been one of the main reasons the FDA found the NDA unworkable, which just makes no sense.

As a side note, I haven't seen any discussion yet of what that metabolite is. You'd guess some sort of hydroxylation on the aryl rings, or removal of the O-isopropyl, perhaps, but those are the sorts of things that you might well have seen in liver microsomes, thus giving you more warning. I'll guess that it's trouble over at the aminoindane or the nitrile, via some oxidase that isn't picked up well in the in vitro screens, but what do I know?

This is all bad enough. But yesterday, the Financial Times reported a statement from Celgene's Nadim Ahmed that surprised everyone some more. He basically blamed the fiasco on the company (Receptos) that Celgene acquired to get Ozanimod. Quoth he: "I think that 99 percent of folk at Celgene wouldn't have submitted, but we had Receptos out on the West Coast and, for whatever reason, the decision was made to submit... We learned a lesson of humility and that when you do an acquisition it's better to be more integrated rather than be completely away from the mothership."

Nope. This is the the-dog-ate-my-homework school of regulatory affairs (OK, maybe the cat), and a company with twenty employees would get razzed for an excuse like that. Much less a Celgene. As one might expect, the ex-CEO of Receptos, Faheem Hasnain, isn't having it. He says that Celgene had on-site control for over two years before that filing took place, and it's hard to see how he isn't right about that. Those crazy dudes out on the coast didn't just whip up an NDA out in the garage and mail it off to the FDA while the managers in New Jersey weren't watching. Right?

After Biogen's (NASDAQ:BIIB) compound for the same target (the sphingosine 1-phosphate receptor) dropped out in 2016, that left ozanimod as the main competitor to fingolimod, which has been on the market since 2011. But that's going to take longer than expected - Celgene now says that they're going to re-file next year. It looks now like that didn't have to happen, and maybe that phrase applies to many of Celgene's lost billions during their acquisition era.

Disclosure: None.