Celgene slips as FDA refuses to review critical multiple sclerosis drug ozanimod

The FDA has refused to review a filing for approval of Celgene’s key pipeline prospect ozanimod. The agency hit the big biotech with the embarrassing refusal-to-file notice after concluding it had failed to provide the necessary preclinical and clinical pharmacology information on the multiple sclerosis drug.

Celgene sought to manage the fallout from the news without tying itself to a timeline for getting the filing back on track. Management clarified that the FDA’s action is unrelated to potential worries about S1P receptor modulators and stated it thinks it understands what the agency wants. Celgene will get confirmation of the path forward once it talks to the FDA. But at this stage it thinks it can use existing activities to address some of the agency’s points.

“We believe that we have some ongoing clinpharm programs that can be used to help address [the FDA’s feedback],” Celgene CMO Jay Backstrom said on a call with investors to discuss the news. 

The comments failed to quell investor worries, resulting in Celgene’s stock falling 6% in after-hours trading. That decline reflects the importance of ozanimod to Celgene’s future. Peak sales estimates for the drug come in around the $5 billion a year mark, making it arguably the most important asset in Celgene’s late-phase pipeline. The FDA blow delays the day Celgene starts racking up the first of those sales in the U.S. and potentially overseas, too.

RELATED: Celgene touts ozanimod MS data, but disability benefit weak

That is the tangible effect of the setback. The news may also have a more abstract but nonetheless important effect on perceptions of Celgene and confidence in its ability to prosper in the coming years.

“This just adds even more uncertainty and credibility questions, which is not helpful right now given Celgene is in a period where they need to instill confidence after the recent disappointments,” Jefferies analyst Michael Yee wrote in a note to investors.

Other well-established drugmakers have also received refusal-to-file notices in the past. Merck got one when it sought approval of cardiovascular combination Liptruzet. And the agency told Genentech to go away and fix the shortcomings of its filing for Kadcyla. Both products went on to win approval, although in Merck’s case the delay was significant.