Update: A third clinical trial of long-term Revlimid treatment in multiple myeloma patients yielded yet more evidence of an increase in secondary cancers. More details below, with updated stock price information.

SUMMIT, N.J. ( TheStreet) --Does Celgene's ( CELG - Get Report) best-selling cancer drug Revlimid cause cancer?

Celgene's Revlimid is one of the most successful blood cancer drugs on the market, with 2010 sales expected to reach $2.45 billion. But a small amount of new data presented this weekend --not conclusive by any means -- suggests that multiple myeloma patients treated with Revlimid for extended periods of time are being diagnosed with secondary cancers at a rate higher than patients not treated with Revlimid.

In other words, Revlimid, while keeping multiple myeloma in remission for years, may also be putting these same patients at higher risk for developing other forms of cancer.

Celgene shares closed Monday down $4.95, or 8%, to $55.64 on worries that the "secondary malignancy risk" attributable to Revlimid could pinch the drug's long-term growth prospects. Central to the Celgene growth story is more and longer use of Revlimid to maintain remissions in patients with multiple myeloma.

Celgene shares dropped another 3% to $52 in Monday's after-hours session after more worrisome Revlimid secondary cancer data were revealed.

Updated data presented over the weekend at the American Society of Hematology annual meeting from a study of Revlimid long-term maintenance therapy in multiple myeloma reported 15 cases of secondary malignancies in Revlimid patients compared to six cases of secondary cancer in placebo patients. Another 4 cases of secondary cancer were reported in patients enrolled in the study but who had not yet been randomized to receive either Revlimid or placebo.

The number of secondary cancer cases is very small and might have been explained away as a simple statistical anomaly except for the fact that the worrisome trend showed up twice again Monday during presentations of data from two other trials investigating long-term use of Revlimid.

Across three separate studies totaling about 1,060 patients, long-term Revlimid treatment was associated with 32 secondary cancers, or 5.9%, compared to 9 secondary cancers, or 1.7%, in patients treated with a placebo, according to pooled data compiled by ISI Group biotech analyst Mark Schoenebaum.

In an email to clients earlier Monday, before the data from the third Revlimid study was presented, Schoenebaum said the new cancer data will "very likely create a new overhang on Celgene shares" although he also notes that the studies demonstrating a definitive benefit favoring maintenance use of Revlimid and that the imbalance in secondary cancers reported might be due to the simple fact that Revlimid patients are being followed for adverse events much longer than placebo patients.

Commenting on the Revlimid data presented over the weekend, UBS biotech analyst Matt Roden told clients that, "a key opinion leader noted it's possible that increasing duration of Revlimid may increase risk of new malignancies. However, the study reported a strong trend toward improved survival (13 deaths on Revlimid vs. 24 on placebo) which prompted widespread endorsement among physiciams at the poster session."

Citi biotech analyst Yaron Werber warns against drawing conclusion about Revlimid's secondary cancer risk is premature but says Revlimid, by stimulating B cells, may be causing B-cell cancers to appear more often. But even if doctors ultimately decide to cap the number of years that Revlimid is used to treat multiple myeloma patients, the overall trend is still in Celgene's favor and the Revlimid sales growth story is still intact, he says.

--Written by Adam Feuerstein in Boston.

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