FDA rejects Celgene’s application for ozanimod

Celgene receives Refusal to File letter from FDA regarding ozanimod NDA

Celgene tumbles
FDA rejects Celgene’s application for ozanimod

Celgene Corporation (CELG) announced that it has received a Refusal to File letter from the United States Food and Drug Administration regarding its New Drug Application for ozanimod in development for the treatment of patients with relapsing forms of multiple sclerosis.

Ozanimod is a novel, oral, selective sphingosine 1-phosphate 1 and 5 receptor modulator. Upon its preliminary review, the FDA determined that the nonclinical and clinical pharmacology sections in the NDA were insufficient to permit a complete review.

Celgene intends to seek immediate guidance, including requesting a Type A meeting with the FDA, to ascertain what additional information will be required to resubmit the NDA.

ANALYSTS  REACTION

UBS analyst Carter Gould noted Celgene disclosed the FDA issued a Refusal to File regarding the NDA for ozanimod in multiple sclerosis.

He believes this will likely delay its approval until at least 2019 and raise another round of questions on Celgene’s execution as the last six months have brought clinical, regulatory, and commercial setbacks. Gould maintained his Buy rating, but lowered his price target to $106 from $120.

SunTrust analyst Yatin Suneja downgraded Celgene to Hold from Buy and lowered his price target to $106 from $139. Suneja cites the FDA refusal letter on ozanimod for relapsing forms of multiple sclerosis after its determination that the nonclinical and clinical pharmacology sections in the NDA were “insufficient” to permit a complete review.

The analyst says ozanimod was “central to our bull thesis to re-accelerate growth in the I&I franchise”, lowering his projected peak sales estimate for the treatment to $3.5B from $5.0B following this latest setback.

Piper Jaffray analyst Christopher Raymond says Celgene’s diversification story “takes another hit” following receipt of a refusal to file letter from FDA for ozanimod’s multiple sclerosis new drug application submission.

 

Investors may now have to contemplate a multiple sclerosis launch that potentially coincides with Gilenya’s loss of exclusivity “unless a more aggressive timetable can somehow be salvaged,” Raymond tells investors in a research note. The analyst cut his estimates for ozanimod “dramatically” and prefers to remain on the sidelines with respect to Celgene shares. He keeps a Neutral rating on the name with a $95 price target.

PRICE  ACTION

CELG is  down over 6.5% to $89.50 in pre-market trading.

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.


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