This Analyst Is Disappointed With Performance Of Celgene's Mongersen, Ozanimod

BTIG said in a note on Friday it is disappointed with the performance of Celgene Corporation CELG's mongersen and ozanimod.

Mongersen is Celgene's an anti-inflammatory, anti-sense oligonucleotide, which is being studied to treat Crohn's disease, which is a chronic inflammatory bowel disease that affects the lining of the digestive tract.

Meanwhile, Ozanimoid is an immunomodulatory drug being investigated in phase III clinical trials for treating relapsing multiple sclerosis and ulcerative colitis.

Notably Below-Consensus On Mongersen

Analyst Dane Leone indicated that his mongersen revenue forecast for 2020 is $80 million compared to his previous estimate of $468 million and the consensus forecast of $432 million. The analyst clarified that the reduction follows his comprehensive review of next-generation oral drugs for the treatment of Crohn's disease, ulcerative colitis and rheumatoid arthritis.

Summarizing the findings of the review, the analyst said the current mongersen data-set is inferior to filgotinib and that, the next generation of JAK inhibitors may be more effective broadly. The analyst noted that pivotal read-outs for mongersen in Crohn's disease is due in 2018.

Over Optimism On Ozanimod Trimmed

The firm also lowered its 22020 revenue estimate for ozanimod from $1.4 billion to $1 billion, while the consensus estimate is at $965 million. The reduction made following discussions at the American Academy of Neurology meeting, is due to the firm's belief that it would take longer than expected for ozanimod to differentiate from the rest of the S1P class within multiple sclerosis, specifically siponimod.

BTIG suggested that ozanimod will have an equivalent efficacy to fingolimod, although having a cleaner safety profile.

"Overall, we think ozanimod will be a leading S1P drug within MS, but we were previously overly optimistic," the firm added.

Upside Could Come From Bb2121

Meanwhile, BTIG sees upside to its current model from the inclusion of bb2121, the CAR T anti-BCMA effort for treating multiple myeloma. While noting that the initial datasets have been impressive, the firm said it expects further updates during the ASH in December and the announcement of a pivotal study in the second half of 2017.

The firm estimates global bb2121 sales of $287 million by 2021.

Downgrading To Neutral

As such, BTIG downgraded shares of Celgene from Buy to Neutral, with the downgrade premised on reduced outlook for mongersen and ozanimod and its belief that it is too early to factor in the strong outlook for CC-122.

At the time of writing, shares of Celgene were down 1.34 percent at $129.94.

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