First, Onyx Pharmaceuticals (NASDAQ:ONXX) received an unanimous recommendation for approval of Kyprolis™ (proposed brand name for carfilzomib) by the FDA’s Oncologic Drugs Advisory Committee (ODAC) by a vote of 11-0 [with 1 abstention]. This indication will be for patients with relapsed and refractory multiple myeloma who have received at least 2 prior lines of therapy which includes a proteasome inhibitor and an immunomodulatory agent (IMiD).
This was an odd briefing panel for the following reason: the apparent change in tone between the FDA briefing documents and their tone during the panel hearing. Admittedly, I and many others read the briefing documents as a net-negative for the panel and on FDA approval. However, the advisory panel was quite tame with respect to the panel member’s comment, but the FDA’s presence was even tamer. Dr. Richard Pazdur, head of the FDA’s oncology review branch, even defended Onyx at several points. The presentation the FDA gave had some shocking omissions from data presented in the briefing documents. Given this vote and the FDA’s position at the panel, we think there is a high likelihood FDA follows the ODAC’s recommendation and approves Kyprolis on July 27th. A 3-month delay is possible, but we suspect most investors would buy any dip this news would bring.
With this news, we also see the possibility of Onyx M&A rumors coming true get somewhat closer to reality. Carfilzomib has activity similar to Velcade but lacks the debilitating peripheral neuropathy. Velcade had 2011 sales of $692 million, which continue to grow (2011/2010 sales ~ +19%). The approval of Carfilzomib will likely put pressure on sales of Velcade and Celgene’s Revlimid.
Second, we have Celgene’s (NASDAQ:CELG) withdrawal of their MAA application for Revlimid label expansion into front-line and maintenance therapies of multiple myeloma. This is somewhat standard procedure when applicants expect a negative decision. The oddity was that in the the past several months Celgene had been guiding for approval, whether full or partial. We suspect the EMA/CHMP was cautious on Celgene’s data for this indication because of the secondary-primary malignancy(SPM) issue and the OS data they presented, although the EMA originally was on board with PFS as an acceptable endpoint. The SPM issue continues to haunt Celgene and their investors until there is data to the contrary; see Myeloma Beacon for more on this topic[link]. Celgene plans to “re-submit with more mature data, which allows CHMP to conclude a clear benefit/risk ratio.”
They also noted that they’re re-evaluating their US approval of strategy for Revlimid in front-line multiple myeloma, but tentatively plan a filing next year. We think they may be waiting for the outcome of MM-020, which is evaluating Revlimid plus Dexamethasone versus combination therapy of Melphalan, Prednisone, and Thalomid. Data is expected in the later part of this year.
Pomalidomide (plus low-dose dexamethasone) for patients with relapsed and refractory multiple myeloma was accepted for standard review by the FDA and given a PDUFA date of Feb. 10, 2013. Additionally, they have submitted Pomalidomide’s MAA to the EMA for the same indication. They reiterated REVLIMID net product sales to be between $3.75 and $3.85 billion. Investors are now left hoping Apremilast data in arthritis hits or Abraxane works in pancreatic cancer.
CEO Robert J. Hugin’s could come under serious pressure for this gross mis-guidance and missing EPS guidance 3 quarters in a row. We wouldn’t be surprised if calls for him to step down grew louder. We are cautious on their revenue guidance going forward given the number of EPS misses and the recurring SPM issues. The potential approval of Onyx’s Carfilzomib also won’t help things.
Eventually, both companies(Celgene more so) could see more potential competition as data emerges from Bristol’s (BMY)/ Abbott’s (ABT) Elotuzumab, Takeda’s MLN9708, and even Pharmacyclic’s(PCYC) Ibrutinib. But in the meantime, expect Onyx to be quite hot and Celgene to be quite not. The past 2 days have brought traders like myself a hard lesson in humility: I was off on both accounts, but they will serve as reminders to manage risk and weigh all the possible outcomes. In biotech, there are no free lunches.
