Celgene announced back in October that it was discontinuing its GED-0301 program for Crohn’s disease and now that decision is costing the company $411M.
Celgene announced back in October that it was discontinuing its GED-0301 (mongersen) program for Crohn’s disease. Now Celgene has worked out how much that decision is costing the company—$411 million.
On Oct. 19, Celgene reported that it was discontinuing its Phase III REVOLVE trial for Crohn’s disease and the SUSTAIN extension trial. This move followed an October recommendation of the Data Monitoring Committee after it evaluated the overall benefit and risk of the trial’s interim data. This also meant that the Phase III DEFINE trial wouldn’t begin and the company expected to review the full data from the Phase II trial with its drug in ulcerative colitis.
“We thank the patients and the investigators involved in the REVOLVE trial,” said Scott Smith, Celgene’s president and chief operating officer, in a statement. “Crohn’s disease is a debilitating condition with few effective long-term treatment options. While we are disappointed with the results of REVOLVE, we remain committed to advancing our portfolio of novel medicines for patients suffering from this disease and other inflammatory bowel disorders.”
The company is still continuing work in inflammatory bowel diseases with Ozanimod and Otezla.
It was reported today that Celgene had filed an 8-K with the U.S. Securities and Exchange Commission (SEC) regarding charges related to shuttering the program. When originally posted, the company expected net pre-tax charges to earnings to range from $300 million to $500 million. Now the company cites a net pre-tax charge to earnings of approximately $411 million for the quarter ending December 31, 2017.
The net pre-tax charge is made up of, “other one-time charges of approximately $188 million that will require cash payments primarily related to wind-down costs associated with discontinuing the trials and certain development activities; and a reduction in contingent consideration liabilities of approximately $1,397 million related to GED-0301.”
Celgene shares took a beating in 2017. It started out strong, but dropped 33 percent over news related to its research-and-development programs. Overall, barring something unexpected today, the company shares are expected to be down about 10 percent for the year.
InvestorPlace noted, “Celgene stock got the year started with a bang, largely thanks to its flagship blood cancer drug Revlimid and high hopes for its gastrointestinal drug Otezla. Multi-use cancer therapy Abraxane is also one of the core products in its portfolio, and the company continues to search for more approved uses of all three drugs.”
Then Celgene announced it was killing the GED-0301 program and only a couple days later, reported mediocre sales growth for Otezla during its third-quarter financials. Investors still seemed to support the company until a short time later it reported that its combination of Revlimid with Rituxan, a cancer combo being evaluated with Roche, had disappointing results.
But InvestorPlace noted that although Celgene may be down, it’s not likely to be down for long. Revlimid is being evaluated in other combination trials as well as for other diseases. “Some of these trials are late-stage/Phase III, too, with results due in the coming year. Specifically, the Phase III results of the ROBUST trial, which is testing the drug as a first-line treatment for ABC diffuse large B-cell lymphoma, should be announced next year, as well as the results from the AUGMENT NHL-007 trial, which is testing the treatment as a therapy for refractory follicular lymphoma,” InvestorPlace wrote.
