Celgene's Revlimid Faces a Tough Sell

When it comes to drug pricing, European regulators are a tough sell. Just ask Johnson & Johnson . The U.K.'s National Institute for Health and Care Excellence, or NICE, took a pass on paying for Velcade in November, despite the drug winning EU approval as a first-line treatment for multiple myeloma in August.

The agencies pushback against J&J may mean a tough sell for Celgene when it tries to convince NICE to pay for Revlimid as a first-line treatment too.

More data, more data, and more data
It's not uncommon for NICE to balk at high priced drugs. When J&J's Velcade went before it as a second-line treatment, NICE held out until J&J agreed to a money-back guarantee for patients. NICE may be holding out for a similar deal. However, it's clear it also wants more data from Johnson & Johnson on how Velcade, when used with corticosteroid dexamethasone, or dexa, compares to current treatments.

Hopefully, Celgene is paying attention because it will likely need to share similar comparative data when it pitches Revlimid to the agency.

The argument for approval
Celgene announced in November it will present data on Revlimid as a first-line treatment next month at the influential American Society of Hematology annual conference, which runs from Dec. 7 through Dec. 10. Celgene had previously reported that this trial met its primary endpoint in July, and indicated its plans to discuss with regulators in the U.S. and Europe a potential filing for an expanded label.

In the phase 3 trial, the company evaluated a combination of Revlimid and dexa, in newly diagnosed multiple myeloma patients who aren't eligible for stem-cell transplant -- a go-to first line treatment.

The study's control arm was treated with a commonly prescribed cocktail of thalidomide, prednisone, and the chemotherapy drug melphalan. Those patients in the Revlimid and dexa cohort saw a 28% improvement in disease progression. Overall survival also improved by 22%; however, it didn't meet the prespecified boundary for significance.

If regulators find the data compelling enough to expand the label, it would mark a significant step for Revlimid given the drug isn't approved in any country for newly diagnosed patients. Instead, it's only approved for use with dexa in patients who have failed on at least one prior therapy.

Another interesting abstract
In a separate abstract to be presented at the December conference, a small trial compared Revlimid and dexa alone versus Revlimid and dexa, followed by transplantation. The goal was to see whether Revlimid was as good as or potentially better than the current standard of care.

While the trial size was small and remains open to interpretation, it appears Revlimid patients, without transplantation, faired a bit worse in response rates than the Revlimid plus transplant group. However, Revlimid alone patients did have an edge in progression-free survival and overall survival. That additional abstract is one of just 160 related to Celgene that will also be presented at the conference, suggesting investors will have plenty of material to digest following the meeting.

Of course, it won't be just Celgene presenting positive multiple-myeloma data. Amgen's Onyx oncology team will present findings from nearly 40 studies of its Kyprolis and early stage oprozomib drugs. Amgen has an active program of Kyprolis studies combining the drug with existing therapies, such as Revlimid.  And the company hopes those studies will advance Kyprolis from a third-line treatment to second line, and someday first-line treatment too.

The market opportunity for Revlimid is big and growing
If the take-away from all those presentations is positive, then it could set the stage for a substantially larger pool of patients eligible for Revlimid. That could significantly boost sales beyond the company's $4.2 billion to $4.3 billion forecast for this year.

Multiple myeloma is the second most common blood cancer in the United States and most patients relapse and require second line treatment. Sadly, that population is growing in the U.S. climbing to 6.36 cases per 100,000 people in 2010 from 5.6 cases per 100,000 in 1993.

Over in the U.K., more than 4,600 new cases are diagnosed annually, or 5.4 people per 100,000 are diagnosed countrywide.  And across Europe the incidence rate is 3.8 cases per 100,000. Given the disease is primarily diagnosed in older patients, with a median age of diagnosis around 70 years, a longer living global population suggests the need for effective treatments is growing, not shrinking.

The Foolish final thought
The global need for new first-line treatments is there, but that doesn't guarantee all countries will embrace new first-line therapies in the face of ever-higher drug costs. As a result, companies like Celgene, Johnson & Johnson, and Amgen will need to demonstrate both efficacy against placebo and against cheaper existing therapies.

If they can provide compelling comparative data, it's more likely agencies like NICE will give Revlimid, Velcade, and Kyprolis the nod. As a result, pay close attention to next month's meeting because it may give you important clues as to whether Celgene, Johnson & Johnson, and Amgen could enjoy sales to a much larger patient population.

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The article Celgene's Revlimid Faces a Tough Sell originally appeared on Fool.com.

Todd Campbell has no position in any stocks mentioned.  Todd owns institutional research firm E.B. Capital Markets, LLC.  E.B. Capital's clients may or may not have positions in the companies mentioned.  Todd also owns Gundalow Advisors, LLC.  Gundalow's clients do not have positions in the companies mentioned.  The Motley Fool recommends Celgene and Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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