On July 7, 2009, Celgene International Sàrl, the Swiss unit of biopharmaceutical company Celgene Corp. (CELG) filed  a New Drug Application (NDA) with the Japanese Ministry of Health, Labor and Welfare (MHLW) for Revlimid in combination with dexamethasone for the treatment of multiple myeloma (MM) patients with at least one prior therapy.

The filing was based on the safety and efficacy results of two late-stage trials – the North American trial MM-009 and the International trial MM-010 which evaluated Revlimid plus dexamethasone in MM patients with at least one prior therapy. The studies were published in the New England Journal of Medicine in November 2007.

The Revlimid–dexamethasone combination for the treatment of MM patients with at least one prior therapy is already approved in nearly 50 countries worldwide. Revlimid was granted orphan drug status in Japan in February 2008 for deletion 5q myelodysplastic syndromes (MDS) as well as previously treated MM.

We feel that this NDA filing is a positive step towards fulfilling Celgene’s mission of delivering Revlimid to MM patients in Japan.

Celgene is also trying to fit Revlimid into several other indications like acute myeloid leukemia (AML), chronic lymphocytic leukemia (CLL) and non-Hodgkin’s lymphoma (NHL) to make the drug a billion-dollar plus blockbuster. We believe that Revlimid has a potential similar to Rituxan (manufactured by Genentech, now owned by Roche) in hematological cancers such as MM, CLL, NHL, and AML.

All of these should greatly benefit Revlimid sales. The drug should provide significant profitability and generate cash for Celgene. However, we remain concerned about the tough competition Revlimid may face from Velcade of Millennium Pharmaceuticals Inc. (now part of Takeda of Japan) in the treatment of MM.

The current economic recession has taken a toll on Celgene’s top and bottom lines, at least in the short run, though we remain optimistic about the long run. We believe the fundamentals of the company remain strong and it is a still key player in the biotech industry. We maintain our Hold rating on CELG shares.
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