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Good Phase 2 News For A CELMoD From Celgene: Implications

|Includes: Celgene Corporation (CELG)

Celgene (NASDAQ:CELG), a robust developer of important new drugs, has presented data on one member of its most important class of development-stage drugs, the CELMoDs. In this case, the company presented at a rheumatology meeting in Europe, EULAR, and issued a press release regarding a small Phase 2a study in lupus.

The candidate, CC-220, works within cells to regulate protein balances that are often "off" in lupus. Doses studied ranged between 0.3 mg and 0.6 mg daily. From the mention of side effects, 0.6 mg might be a tough dose to use. CELG is likely to proceed with its planned Phase 2b study, with doses of 0.15, 0.3 and 0.45 mg daily.

CC-220 is also being studied in myeloma.

As shown in the press release, trends were positive, but that's about all we can say as outsiders right now.

This compound is important in its own right. Lupus represents a large and greatly underserved autoimmune disease. I would expect a multi-billion dollar opportunity is available if CC-220 can come to market with good efficacy and tolerability. If CC-220 can be useful in myeloma, so much the better.

Also important is that this Phase 2a study adds to certain other, limited data, suggesting that CELG may have safe and effective next-generation compounds in the CELMoDs. If so, and this is far from certain, I expect they have the potential to power CELG much higher over many years. Even if you are not a CELG shareholder, you may wish to root for them, as the CELMoDs are being targeted to treat all sorts of diseases, not just the fields in which CELG now operates.

Disclosure: I am/we are long CELG.

Additional disclosure: Not investment advice. I am not an investment adviser.