Competitive Heat Melts Celgene

Celgene(CELG Quote) shares were getting hammered Monday as new worries about competition have reinvigorated old concerns that the company isn't growing fast enough to justify its rich valuation.

Call it a double-whammy Monday for Celgene that has the stock down nearly 14% to $49.35 in recent trading.

The problem for Celgene is the emerging competition from Millennium Pharmaceuticals(MLNM Quote) and its multiple myeloma drug Velcade. At this weekend's American Society of Hematology (ASH) meeting, Velcade put on an impressive show, with clinical data showing the drug to be a very effective treatment for newly diagnosed multiple myeloma patients.

Shares of Millennium were recently up more than 8% to $16.34.

This puts Celgene's most important drug, Revlimid, under pressure, since investors had largely expected it to become the pre-eminent and market-leading therapy for front-line multiple myeloma. Revlimid had its share of positive data at the ASH meeting, too, but now the market for multiple myeloma drugs seems to be in flux.

Velcade over Revlimid? Revlimid over Velcade? Both drugs can now make a case for which should be used first. Revlimid is a pill, while Velcade must be given intravenously, so that could be an advantage for Celgene. But Velcade might be less toxic and work better in older patients.