Celgene wins FDA approval for its blockbuster arthritis contender apremilast

Celgene ($CELG) picked up the FDA's blessing for the much-debated apremilast, winning approval to market the oral drug as a treatment for psoriatic arthritis in step one of its blockbuster plan.

The drug, to be marketed as Otezla, works by blocking the enzyme phosphodiesterase 4 to reduce swelling in joints and improve physical function in a form of arthritis that afflicts psoriasis sufferers. In its 1,493-patient clinical program, the treatment notched efficacy numbers in the same ball park as on-the-market injectables, and, with a list of most common side effects limited to weight loss, diarrhea, nausea and headache, Celgene's drug will not carry a boxed warning.

And therein lies the bull case for Otezla. The psoriatic arthritis market is largely dominated by injected anti-TNF therapies like AbbVie's ($ABBV) Humira, but such biologics can have nasty side effects that lead some patients to shy away. Celgene believes its oral, small-molecule treatment can provide an attractive alternative.

But the drug's potential is largely tied to whether it can win approval for the broader psoriasis population, and Celgene expects the FDA to weigh in on that indication by September. If regulators give their blessing, the biotech figures Otezla will peak at around $2 billion by 2017. Analysts estimates vary widely on the issue, but the consensus hovers closer to $1.2 billion, according to EvaluatePharma.

"Patients and physicians have expressed their desire for a safe and effective therapy for psoriatic arthritis that has the potential to simplify patient management," Celgene inflammation head Scott Smith said in a statement. "Celgene is excited to be expanding our transformational science into the therapeutic realm of Inflammation and Immunology, with a new approach for patients with psoriatic arthritis."

As part of its approval, the FDA is recommending physicians keep an eye on patients' weight while they take Otezla, and the agency has asked Celgene to amass post-marketing data to ensure the drug is safe for pregnant women.

- read the FDA release
- here's Celgene's release

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