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After bumpy 2017, Celgene CEO says taking risk is the only way forward

Mark Alles

SAN FRANCISCO — Celgene’s CEO Mark Alles kicked off JPM this morning reassuring investors that bets on newly-acquired assets will keep the company’s momentum strong — despite a rocky 2017.

Still, the company’s stock $CELG is down 2.9% following the presentation, likely due to the annual revenue forecast for 2018, which came in slightly under Wall Street’s expectations at $14.4 billion to $14.8 billion. The average estimate from analysts was $14.83 billion.

The company’s big JPM news got spilled yesterday by the Wall Street Journal, which first reported Celgene’s $7 billion buy of San Diego startup Impact Biomedicines (the deal was largely in biobucks, with $1.1 billion upfront). The deal, WSJ’s sources said, was supposed to be announced this morning.

Alles didn’t mention the Phase III flop of mongersen, the biotech’s most advanced experimental drug in its inflammation and immunology pipeline (where the company had high hopes for blockbuster breakouts). The drug failed its late-stage study in Crohn’s back in October, and now the company is focusing hard on its pipeline of hopefuls.

All eyes are on ozanimod, acquired in the buyout of Receptos back in 2015, and the new asset Celgene is picking up from Impact.

“The Receptos transaction with ozanimod is a very present event for us, and we recognize that the risk we have to take to build the company — by doing things like the Receptos transaction in 2015 — plays out over time and now we have a multibillion blockbuster on our hands,” Alles said during the presentation.

As we reported yesterday, Impact’s JAK2 myelofibrosis drug fedratinib was a Sanofi cast-off recently resurrected by John Hood, the former co-founder and CSO of San Diego’s regenerative medicine company Samumed. Hood was shooting for a quick turnaround at the FDA, looking to leverage the existing pivotal data with new safety info to set up a quick approval. Celgene will now be hustling ahead with that plan in place.

But all the emphasis on the pipeline may not ease investors’ concerns. After earning a longstanding reputation as an industry darling for its massive growth over the years, Celgene’s rough last half of 2017 spooked investors. After mongersen’s flop, Celgene also cut its guidance for 2020.

It’s possible that investors aren’t too assured with the Impact acquisition, as fedratinib is a me-too drug in a category where there’s already solid competition.


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BIO 2018

Private Equity Senior Associate
OrbiMed Advisors New York, NY
Business Development Manager
Novotech Boston, MA
Director, Cell MS&T
Adaptimmune Philadelphia, PA

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