Celgene gets US patent let-off ahead of BMS merger

Shares in Celgene ticked up yesterday after a let-off in a US court case challenging the patents on its multi-billion dollar cancer drug Revlimid, a decision that could ease shareholder tensions ahead of a potential merger with Bristol-Myers Squibb.

Celgene's biggest-selling drug Revlimid (lenalidomide) is used in several multiple myeloma uses and has been on the US market since 2005.

Since then Celgene has built one of the world’s most lucrative drug franchises around Revlimid, a derivative of thalidomide, and its full year sales for 2018 were $9.7 billion, an increase of 16% year on year.

In the US alone, sales in 2018 were almost $6.5 billion, making the ageing drug one of the hottest targets for generics companies in the US when its patent expires in 2022.

For now Celgene's big earner looks safe from cheaper competition from generics, after the US patent office threw out an attempt by Alvogen for a review challenging patents on Revlimid.

The Patent Trial and Appeal Board, a court run by the US patent office, said it was denying Alvogen’s petition for an inter partes review on Revlimid’s patents.

Celgene forecast total Revlimid sales of $10.8 billion in 2019, making it the company’s biggest selling drug, generating more than half of total predicted sales of $17 billion.

Analysts said the decision could help clear the way for Bristol-Myers Squibb’s $74 billion takeover of Celgene.

A group of shareholders led by Starboard Value and Welling Management have opposed the deal.

In a letter to shareholders at the end of February, hedge fund Starboard questioned the rationale for the deal and noted Celgene’s reliance on sales from Revlimid as its period of exclusivity draws to a close.

Reuters reported that RBC Capital Markets helps avoid this issue that could unnerve investors ahead of merger votes.

Investors are due to vote on the proposed merger at a special meeting, which is due to take place on April 12.

The decision marks the end of a good week for Celgene, which has submitted a filing for potential multiple sclerosis blockbuster ozanimod with the European Medicines Agency.

Celgene is set to refile ozanimod with the FDA soon, after a bureaucratic foul-up led to the regulator rejecting a clinical dossier last February.