Celgene Corporation (CELG) recently announced that it will purchase the privately held Gloucester Pharmaceuticals for $340 million in cash coupled with $300 million in future milestone payments. The deal is aimed at bolstering Celgene’s portfolio of cancer drugs. The transaction, which has been approved by the Board of Directors of both companies, is expected to be completed in the first quarter of 2010. The deal is expected to be neutral to Celgene’s earnings in 2010 and accretive in 2011.

Gloucester, founded in 2003, focuses on developing new therapies aimed at fulfilling unmet medical needs for cancer treatment. The private entity focuses on developing therapies for cutaneous T-cell lymphoma (CTCL), peripheral T-cell lymphoma (PTCL) and other hematological malignancies. The company’s lead drug Istodax (romidepsin) got U.S. Food and Drug Administration (FDA) approval Nov 2009 for treating CTCL patients who have received at least one prior systemic therapy.

Additionally, Istodax has been granted orphan drug designation for the treatment of non-Hodgkin’s T-cell lymphomas and Fast Track status in PTCL by the U.S. regulatory agency. The drug has received orphan status designation from the European Agency for the Evaluation of Medicinal Products for treating both CTCL and PTCL patients. We believe that the inclusion of Istodax in the cancer portfolio of a large company like Celgene would boost its sales and allow it a competitive edge over its rival drugs like Allos Therapeutics’ (ALTH) injectable treatment for relapsed or refractory PTCL – Folotyn, which hit the market approximately two months ago.

The acquisition should strengthen Celgene’s cancer portfolio further. It already boasts of Revlimid, currently approved for myelodysplastic syndrome (MDS) and second-line multiple myeloma (MM) and the company is expanding its label into other indications. Furthermore, its product portfolio includes Vidaza for MDS, which should also drive growth.

However, sales of Celgene’s Thalomid, have been declining. We feel this decline will continue since more safe and effective drugs are available for multiple myeloma in the form of Revlimid and Takeda’s Velcade.

We believe that the addition of Istodax is aimed to make up for the disappointing performance of Thalomid.

Currently, we are Neutral on Celgene.

Zacks Investment Research

1. (ALTH) Allos Therapeutics Reports Earnings in LineAllos Therapeutics’ (ALTH) third quarter loss per share came in at 21 cents, in line...
2. (ONXX) Onyx Pharmaceuticals to Acquire Cancer Drugmaker ProteolixRecently, Onyx Pharmaceuticals (ONXX) announced that it will purchase privately held cancer drugmaker Proteolix for...
3. (ALTH) Allos Therapeutics Earns Accelerated Drug ApprovalIn a major breakthrough, Allos Therapeutics (ALTH) received FDA-accelerated approval for Folotyn (pralatrexate injection) last...
4. (ALTH) Allos TherapeuticsAwaits FDA Report on FolotynWe are awaiting the US Food and Drug Administration’s (FDA) decision regarding Allos Therapeutics’ (ALTH)...
5. (ALTH) FDA Panel Gives Favorable Recommendation for Allos Therapeutics’ DrugYesterday, the US Food and Drug Administration’s (FDA) panel came out with a favorable recommendation...
6. (ALTH) Crucial Time for Allos TherapeuticsWe are awaiting the decision of the US Food and Drug Administration’s (FDA) cancer advisory...

Search Posts by Tag: Allos Therapeutics | ALTH | CELG | Celgene Corporation | Biotechnology | Healthcare

RSS Feeds by Tag: Allos Therapeutics | ALTH | CELG | Celgene Corporation | Biotechnology | Healthcare |

Other Posts by: vitalstocks | RSS Feed for this author