Celgene's Lymphoma Strategy Is Its Biggest Positive, Analyst Says

Amid the proceedings at the American Society of Hematology's, or ASH, 59th annual meeting, Morgan Stanley highlighted what it views as the biggest potential positive for Celgene Corporation CELG.

The Analyst

Morgan Stanley's Matthew Harrison maintained his Equal-weight rating and $97 price target for the shares of Celgene.

The Thesis

At the ASH, Celgene's management outlined key aspects of the company's oncology pipeline, focusing on BCMA CAR-T bb2121, its strategy in lymphoma, and development plans for the anti-PD-1 antibody BGB-A317, analyst Harrison said in a Monday note. (See Harrison's track record here.) 

The BCMA CAR-T program is the biggest positive for Celgene, and it's pursuing a broad development strategy with strong data.

Morgan Stanley outlined the following key details on BCMA: 

• An investigational new drug application, or IND, targeting bi-specific antibody CC-93269 is expected to be filed by the end of 2017. Another IND for BCMA targeting ADC is due to be filed in 2018.
• The initial pivotal study will not have a BCMA cut-off, with development going forward and into commercialization to target all levels of BCMA expression.
• An incidence of Gr4 neurotoxicity was observed in the ongoing bb2121 study CRB-401 in a patient having the highest tumor burden in the trial. The neurotoxicity reversed on treatment with steroids and tocilizumab.
• The overall response rate, or ORR was 94 percent in CRB-401, with 56 percent achieving CR at active doses.
• The global pivotal study of bb2121 is open for enrollment and will evaluate 150-300 million dose range in 80 patients.
• A Phase III study evaluating bb2121 vs PDd in RRMM is expected to begin in 2018.

Detailing its lymphoma strategy, Celgene said a pivotal study of CELMoD CC-122 is due to begin in 2018, and that the company believes it could have multiple assets by 2022, including Revlimid, CC-122, CC-486 and JCAR07, Harrison said. 

Celgene plans to focus on BGB-A317, which it licensed for solid tumors from Beigene Ltd (ADR) BGNE earlier this year, first in NSCLC, followed gastric cancer, esophageal cancer and HCC, the analyst said. The company will lead two of the three studies planned for NSCLC, along with one study for 2L gastric cancer, according to Morgan Stanley. 

The Price Action

Celgene shares are down about 6 percent for the year-to-date period.

Celegene is up 2.36 percent to $108.59 at the time of publication.

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