Celgene cans phase 3 trial of $710M Crohn’s drug GED-0301

Celgene
Celgene paid Nogra $710 million upfront to license the drug in 2014.

Celgene has scrapped a phase 3 trial of inflammatory bowel disease (IBD) drug GED-0301 after it failed to clear an interim futility review. The decision leaves Celgene facing the prospect of canning a drug it paid $710 million upfront for in 2014.

Summit, New Jersey-based Celgene moved the oral antisense DNA oligonucleotide into a 1,000-patient, 52-week phase 3 late in 2015. The study made it as far as this month’s interim futility analysis, at which point it became clear GED-0301 has no future in Crohn’s disease. Celgene has stopped the phase 3 trial and canned plans to start a second late-phase trial in the indication.

The Big Biotech is holding out until it gets a look at full data from a phase 2 trial in ulcerative colitis, the other main form of IBD, before deciding whether to completely write off the Smad7 mRNA-targeting drug, which is also known as mongersen.

Celgene traded down about 6% before the market opened. That drop largely reflects the removal of GED-0301 from sales forecasts. But the readthrough for the odds of Celgene’s slew of other bets paying off may also be a factor. Celgene paid $710 million and committed to almost $2 billion more in milestones to acquire GED-0301 from Nogra Pharma, the little-known Irish identity of Italian specialty pharma company Giuliani.

RELATED: Celgene shells out $710M for a PhIII Crohn's drug with billions on the line

The amount Celgene paid for the basically unknown, first-generation oligonucleotide turned heads at the time. At that point, the only publicly available clinical data on GED-0301 came from a 15-subject phase 1 trial. The phase 2 data that caught Celgene’s attention and sparked a bidding war emerged later that year. That showed GED-0301 easily outperformed placebo in terms of clinical remission. But the design of the study made some experts question the result. 

That skepticism proved warranted. The fact that Celgene failed to spot the problems has added to doubts about its ability to make its deal-driven business model work. 

“[There is] growing negative sentiment around Celgene’s ability to do [business development] and 'good deals' since many partner/acquisition deals have not fully played out great and there's mixed views on their success at this point so could the “model” not be working,” Jefferies analyst Michael Yee wrote in a note to investors.

Setbacks are inevitable given the rate at which Celgene places bets on biotechs. But the size of the Nogra deal and number of people who questioned its wisdom before this week’s news makes it a notable data point for critics of Celgene’s business development strategy.

With GED-0301 circling the drain, Celgene’s near-term IBD hopes rest on ozanimod, the immunomodulatory drug it gained through its $7.2 billion takeover of Receptos. Phase 3 data on ozanimod in ulcerative colitis are due in the middle of next year.