Celgene's Long Journey Through Regulatory Filings For Ozanimod Might Finally Pay Off

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About: Celgene Corporation (CELG)
by: Terry Chrisomalis
Summary

Celgene finally gets the FDA on board with its regulatory application for potential approval of ozanimod to treat relapsing forms of multiple sclerosis; PDUFA date set for March 25, 2020.

The European Medicines Agency has also accepted the application for review of ozanimod for the European Union with a decision expected by the 1st half of 2020.

It is believed that ozanimod could pull in peak annual sales between $4 to $6 billion.

A major risk for ozanimod would be a patent dispute, because Novartis owns a patent for S1P modulators in dose titration and that could be a major challenge for Celgene.

Celgene (CELG) is in good shape in terms of its multiple sclerosis (MS) drug ozanimod. That's because it announced that regulatory applications for the drug was accepted by both the FDA and EMA. This gives the company the potential to obtain approval for both territories. Getting this product filed with regulatory agencies has been a tough road for Celgene, because its first application to file for regulatory approval was refused by the FDA. The company is on the right track now.

Regulatory Applications Finally Accepted For Review

The FDA accepted the application for review of ozanimod to treat patients with relapsing forms of multiple sclerosis (RMS), with a PDUFA date set for March 25, 2020. The European Union has also accepted a review of the drug for relapse-remitting multiple sclerosis, with a decision expected by the 1st half of 2020. Typically, a regulatory filing being accepted for review isn't a groundbreaking event. However, in this case, it definitely is. There is a major reason why.

This is because of the hardship Celgene had to go through initially to get its application accepted for review by the FDA. Believe it or not, but it took about 1 year to get things rolling again. The FDA gave Celgene a refusal-to-file letter regarding the NDA for ozanimod back in 2018. This was a huge blow to the company, because the drug is expected to bring in a lot of revenue. Management believes that the drug could pull in peak annual sales of revenue between $4 to $6 billion. In either case, approval of this drug will be very good news after a long battle to get the application up for review by regulators.

High Chance For Approval Upon Review

The most important question to pose is what are the chances that ozanimod will be approved? I have to say that the chances are high. That's because there are several factors to look at to determine this. The first item to note is the refusal-to-file letter I mentioned above. That's because the only reason the FDA rejected the application for ozanimod was because of non-clinical and clinical pharmacology issues noted. Specifically, the FDA noted that this section of the application was insufficient.

I believe that this time around this shouldn't be a big issue. The second item to look at would be the data itself. There were two studies where it was shown that the primary endpoint was met for those who were treated with ozanimod. These Phase 3 studies are SUNBEAM and RADIANCE. For the SUNBEAM study it was shown that both doses of ozanimod, 1 mg and 0.5 mg, achieved a statistically significant reduction in the annualized relapse rate (ARR). Statistical significance was achieved with p-values of p<0.0001 and p=0.0013 respectively. This treatment effect was observed over a 12-month treatment period. The other Phase 3 study, known as RADIANCE had also met the primary endpoint of AAR. For the RADIANCE study, it was shown that ozanimod achieved statistical significance in ARR compared to Avonex over a 24-month period.

Conclusion

The ability for Celgene to finally gets its drug reviewed by the FDA is good news. The added bonus would be potential approval from the European approval as well. However, there are still several risk factors. The first being that even though the applications were accepted for review, there is no guarantee that both regulatory agencies will approve ozanimod for RMS. Another risk to keep in mind is a potential patent issue. That's because Novartis owns a patent for S1P modulators.

Further than that, such a patent covers dose titration which is a component of ozanimod for all 3 indications it is being used for. I said potential issue because it all depends upon what happens in the courts. If the patent is upheld, that could be a major risk for Celgene. On the other hand, it may not be upheld. Still, for the time being both regulatory applications for ozanimod are moving forward and that's a good thing.

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.