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Celgene’s Competitive Edge in Multiple Myeloma

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The Multiple Myeloma market

According to a report by Visiongain, a business intelligence provider based in London, the global MM (multiple myeloma) market should reach about $9.9 billion in 2015, and about $11.5 billion by 2017. Celgene Corporation (CELG) is expected to benefit from this strong growth momentum, as the company earns about 84% of its total revenues from the MM market.

WebMd describes MM as a “cancer that affects plasma cells, a kind of white blood cell found in the soft insides of your bones, called marrow.” Celgene has a variety of MM drugs, targeted at patients across all stages of the disease. While the company markets Thalomid as the drug for newly diagnosed MM patients, Revlimid and Pomalyst also target patients with relapsed MM who have been already treated with MM drugs.

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Celgene’s leading drug

Celgene’s Thalomid, Revlimid, and Pomalyst belong to the cancer immunotherapy category. According to WebMd, immunotherapy, also called biological therapy, is “a type of treatment that uses the body’s own immune system to fight cancer,” by “stimulating the immune system to help it do its job more effectively.”

Revlimid, with sales of about $3 billion in the first half of 2015, is the leading second-line therapy for MM. In February 2015, the FDA (Food and Drug Administration) approved the drug further, as a first-line MM therapy for newly diagnosed patients. Revlimid is also being studied as an ongoing maintenance therapy for MM patients—an indication that, if approved, could lead to further increases in Celgene’s MM market share.

Revlimid has also been approved for other types of cancers such as MCL (mantle cell lymphoma) and MDL (myelodysplastic syndrome). Belonging to the class of Non-Hodgkin Lymphoma, these cancers affect the lymphatic system, which is responsible for immunity in patients.

According to Celgene, there are 11,000 patients suffering from MCL in the US. The National Cancer Institute estimates 10,000 MDL patients in the US. While the gains from these expanded indications are expected to be moderate, they are expected to strengthen the drug’s overall position in the market against tough competitors such as Amgen’s (AMGN) Kyprolis, Novartis’s (NVS) Farydak, and Takeda Pharmaceutical Company’s and Johnson & Johnson’s (JNJ) Velcade.

Other Drugs

Thalomid was approved as MM therapy in 2006. However, as the drug can lead to birth-related defects in pregnant women, patients have been switching from this drug to the improved Revlimid, as well as to the recently introduced Pomalyst. Pomalyst, launched in 2013, managed to reach blockbuster status in 1Q15, after it surpassed $1 billion in total revenues.

Vidaza, an MDL drug, lost its patent protection in 2011 and has since faced a decrease in revenues, due to generic competition.

Investors can get diversified exposure to Celgene’s strong MM and related portfolio while avoiding unique company risks by investing in the iShares NASDAQ Biotechnology ETF (IBB). Celgene makes up 8.66% of IBB’s total holdings.

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