SUMMIT, NJ ( TheStreet) --European regulators have rejected Celgene's (CELG - Get Report) request for an expanded approval of its multiple myeloma drug Revlimid to treat newly diagnosed patients, a stunning setback that slams the brakes on the company's growth.
Celgene shares were down $8, or 12%, to $59.15 in early Thursday trading.
Investors were widely expecting Celgene to announce expanded European regulatory approval of Revlimid as a treatment for newly diagnosed multiple myeloma patients and as maintenance therapy following stem cell transplant. But in a surprise move, the company disclosed Thursday that it was withdrawing the Revlimid submission, and at the request of European regulators, will re-submit at a later date with more mature data.
Onyx Pharmaceuticals (ONXX), another multiple myeloma drug company, is faring much better after an FDA advisory panel voted unanimously to recommend the approval of Kyprolis for patients with late-stage disease. Onyx shares were up 36% to $60.94 in early trading.Revlimid is Celgene's largest and most important cancer drug, already approved in Europe and the U.S. for more advanced, or late-stage multiple myeloma therapy. Revlimid sales in 2011 totaled $3.2 billion or 66% of the Celgene's total revenue of $4.8 billion last year. Celgene management and investors have cited the expansion of Revlimid's use into newly diagnosed patients as the company's most crucial catalyst and growth driver. Now, however, that growth driver has hit a wall. The last time a major biotech company suffered a similar, devastating setback was when Biogen Idec (BIIB - Get Report) was forced to pull its multiple sclerosis drug Tysabri from the market. Celgene reaffirmed its 2012 earnings forecast but it's lagging profits in 2013 and beyond that will be worrying investors Thursday. Currently, Celgene is expected to earn $5.61 per share on total revenue of $6.17 billion in 2013. With Revlimid's expansion on hold, Celgene will be hard pressed to produce 17% earnings growth next year. Further adding to Celgene's woes, the company also said it was "re-evaluating" a submission to the U.S. Food and Drug Administration to similarly expand Revlimid's use here. The company now anticipated submitting an FDA application in 2013. --Written by Adam Feuerstein in Boston.
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