Celgene Corporation (NASDAQ:CELG) shares have soared more than 46% so far in 2013. This booming biotech stock can’t go much higher, right? Surely, it’s time now to take profits. Actually, the company just announced two developments that add to the reasons to buy Celgene Corporation (NASDAQ:CELG) rather than sell.
Facing the giants
For a company known for its blood cancer drugs, Celgene Corporation (NASDAQ:CELG) has been quite excited about anti-inflammatory drug apremilast. Clinical results for apremilast have been positive, but some observers have been a little skeptical about the drug’s potential in the face of stiff competition. Celgene Corporation (NASDAQ:CELG) today announced more results from a phase 3 study of apremilast that could melt some of that skepticism.
Patients with psoriatic arthritis who took 20mg doses of apremilast for 52 weeks showed ACR 20 scores of 63%. Patients taking 30mg doses demonstrated ACR scores of 55%. These ACR scores are measurements established by the American College of Rheumatology that reflect 20% improvement in tender or swollen joint counts as well as 20 percent improvement in three other criteria. Apremilast’s 52-week results show significant improvement from earlier results.
There have been some concerns that apremilast wouldn’t be able to effectively compete against the “big boys” of rheumatology — including AbbVie Inc (NYSE:ABBV)‘s Humira, Amgen, Inc. (NASDAQ:AMGN)‘s Enbrel, and Johnson & Johnson (NYSE:JNJ)‘s Remicade. AbbVie Inc (NYSE:ABBV) raked in nearly $9.3 billion in sales for Humira last year. Enbrel made $4.2 billion for Amgen Inc. (NASDAQ:AMGN) and another $3.7 billion for its partner, Pfizer Inc. (NYSE:PFE). J&J reported $6.1 billion in 2012 revenue from Remicade. Its marketing partner, Merck & Co., Inc. (NYSE:MRK), also made a little over $2 billion from the drug. Could newcomer apremilast really make inroads against these giants?
The latest ACR scores indicate that apremilast just might be able to do so. Humira’s 52-week ACR was 57%. Enbrel’s score was 50%, while Remicade’s ACR was 58%. Apremilast compares well against these scores. Even better, apremilast is taken orally while all of the rival biologics are injected. Efficacy and convenience could catapult the drug to annual revenue of $1.5 billion to $2 billion by 2017.