"Wall Street analysts on Tuesday said Celgene Corp.'s developing arthritis drug apremilast has the potential to become a key competitor in a market full of blockbusters, following positive midstage study data on the experimental treatment.
Late Monday, the Summit, N.J.-based company said the oral drug candidate met study goals in a Phase II clinical trial as it relieved symptoms of psoriatic arthritis. The condition is a form of arthritis affecting psoriasis patients. Psoriasis is a chronic immune disease that causes painful, red scaly patches to develop on the skin.
The drug candidate helped relieve joint pain, stiffness, and swelling associated with the condition. Celgene plans on moving ahead to late-stage studies on the drug candidate.
Leerink Swann analyst Howard Liang reaffirmed an "Outperform" rating on the stock, citing the results, though he remained somewhat cautious on how it might fare against current blockbuster treatments in the market.
The company's results late Monday showed that 43.5 percent of the patients who took apremilast in 20-milligram doses twice per day experienced 20 percent improvement, and among patients who took a 40-milligram dose once per day, 35.8 percent reported at least that level of improvement. Celgene said 11.8 percent of placebo patients reported 20 percent improvement.
"The first readout of apremilast in arthritis shows clear activity although so far the efficacy does not look as good as the injectable TNF alpha inhibitors such as Humira," Liang said, in a note to investors. "While we believe that as an oral agent apremilast's activity need not to be the same, one would ideally like to see improvement with either a higher dose or longer duration and upcoming data may help define the compound's profile."
Hummer(Humira?) is an injectable arthritis drug made by Abbott Laboratories, with blockbuster sales. Other key arthritis drugs on the market include Amgen Inc.'s Enabler(Enbrel? lol) and Remade(let's try Remicade), which is made by Schering-Plough Corp. and Johnson & Johnson.
Thomas Weasel Partners analyst M. Ian Somalia reaffirmed a "Overweight" rating for Celgene, citing the severity of the patients involved in the study and its comparable effectiveness so far to treatments on the market.
The drug has not been tested in a head-to-head study against potential competitors and effectiveness comparisons are based on data from unrelated studies.
"Apremilast appears slightly inferior to Enabler, Hummer and Remade(hope the analyst didn't actually word it this way in the note to investors) on both an absolute and placebo adjusted basis," he said, in a note to investors. "However, this result is not surprising given the less severe treatment naive patient populations in these studies."
He said apremilast has the potential for sales of $809 million from prosaic arthritis and $1.2 billion in psoriasis by 2015, if future study results remain positive for the oral drug candidate.
Elsewhere, BMO Capital Markets analyst Jason Zhang reaffirmed an "Outperform" rating while a Morgan Joseph analyst initiated coverage on the stock with a "Buy" rating.
Shares of Celgene rose 70 cents to $42.93 in midday trading."
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