SUMMIT, NJ (

TheStreet

) --

Celgene

(CELG) - Get Report

shares are up 7% Tuesday on investor speculation that an important European safety review of the company's top-selling cancer drug Revlimid may be nearing a conclusion.

Celgene CEO Bob Hugin, speaking Monday at an investor conference, said the company was "optimistic in the very, very near term we will have a resolution of the article 20 process that we have had in Europe in terms of Revlimid…"

Celgene shares were up $4.09, or 7%, to $65.28 in Tuesday trading.

Earlier this year, European regulators launched an Article 20 review -- essentially an examination of a drug's safety -- based on data showing that long-term use of Revlimid in multiple myeloma patients may increase the number of secondary cancers even as the drug prolongs patient survival.

Revlimid is approved in multiple myeloma for patients who no longer respond to prior treatments, but Celgene is hoping to expand Revlimid's approval so that the drug will be used longer and in earlier stages of the bone marrow cancer.

Celgene relies on Revlimid as the most important growth driver in its cancer drug franchise. Revlimid sales in the second quarter increased 35% to $795 million, handily beating expectations and spurring Celgene to raise its 2011 Revlimid sales forecast to a range of $3.15 billion to $3.25 billion.

Resolution of the Article 20 review is important because it will clear the way for European regulators to act on expanding Revlimid into earlier stages of multiple myeloma. Celgene plans to seek U.S. approval for expanded Revlimid use later this year.

Investor speculation that the Article 20 review may be nearing resolution was triggered not only by Hugin's comments yesterday but by the regularly scheduled September meeting of European health regulators which is taking place this week.

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--Written by Adam Feuerstein in Boston.

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