To say 2017 was a tough year for Celgene Corporation (NASDAQ:CELG) and CELG stock would be a considerable understatement. Despite starting the year on the right foot and advancing 22% as of late September, bad R&D news that month sent the stock lower to the tune of 33% from that peak.
Then, just when it looked like CELG stock might start to recover, another round of disappointing news quelled the budding rally. Assuming nothing changes in the immediate future, Celgene shares are about to log a 10% loss for 2017.
The good news is, the coming year should be better, if only because things couldn’t get much worse.
A Tough 2017
A quick recap may be in order. CELG stock got the year started with a bang, largely thanks to its flagship blood cancer drug Revlimid and high hopes for its gastrointestinal drug Otezla. Multi-use cancer therapy Abraxane is also one of the core products in its portfolio, and the company continues to search for more approved uses of all three drugs.
Those new, approved uses, however, are increasingly tougher to find — as shareholders learned the hard way in October. That’s when the company announced it was ending its trial of GED-0301 as a treatment for Crohn’s disease due to lackluster results. Just a few days later, its third-quarter report showed tepid sales growth for Otezla.
It looked like investors were finally ready to put those disappointments in the past, but just a few days ago the company dropped another bomb (albeit a small one) on shareholders. That is, the combination of Revlimid with Rituxan, made by Roche Holdings AG Basel ADR (OTCMKTS:RHHBY), wasn’t all it was expected to be either.
Between the bad news and the reality that Revlimid will be facing generic competition in the foreseeable future, CELG stock looks tough to own here.
Don’t let the recent headlines be too discouraging, however. Celgene still has a lot working for it — and some of those things could serve as bullish catalysts in the coming year.
Catalysts on the Radar
Drug-development letdowns aren’t unusual in the biopharma world — even less so for a more aggressive outfit like Celgene, which is willing to experiment just for the sake of experimentation. That willingness to try new things sets up several potential catalysts for 2018 — and Revlimid is at the heart of two of them.
Though it doesn’t work all that well in conjunction with Rituxan, Revlimid is still being tested in other combinations and for different illnesses. Some of these trials are late-stage/phase 3 too, with results due in the coming year. Specifically, the phase 3 results of the ROBUST trial, which is testing the drug as a first-line treatment for ABC diffuse large B-cell lymphoma, should be announced next year, as well the results from the AUGMENT NHL-007 trial, which is testing the treatment as a therapy for refractory follicular lymphoma.
If 2018 is going to be about anything, though, it’s going to be about Abraxane.
Abraxane is a chemotherapy drug that’s proven effective at treating breast cancer, pancreatic cancer and non-small cell lung cancer. The company has only scratched the surface, though. The therapy is in four different phase 3 trials right now, as part of an effort to widen its approved uses, including as a treatment for triple-negative metastatic breast cancer. Though no firm dates have been scheduled, Celgene expect to release phase 3 data for all for trials sometime in 2018.
In that these are all late-stage updates, each could prove to more than capable of imposing significant movement in the CELG stock price.
It’s not just phase 3 trials that might grab the attention of traders, though. In November, Celgene and bluebird bio Inc (NASDAQ:BLUE) updated investors on the joint development of their chimeric antigen receptor T-cell (CAR-T) therapy bb2121, which takes aim at refractory multiple myeloma. Not only is it part of the red-hot CAR-T paradigm which holds so much untapped potential, bb2121 has been granted breakthrough therapy designation by the FDA. The label doesn’t guarantee an approval, but it is the regulator’s indirect way of saying the drug potentially fills a big hole in the market.
Celgene and bluebird will certainly offer updates of bb2121’s development over the course of the coming year.
Bottom Line for CELG Stock
There’s no guarantee that all the news tentatively slated for 2018 will be positive. In fact, the odds are good that some of it will be bad news. That’s just the nature of the beast. Broadly speaking, though, there’s likely to be more good news than bad in the pipeline this year, just by the simple law of averages — 2017 was an unusually tough year for a usually-stable Celgene.
This bodes well for CELG stock, perhaps even making it a speculative buy after traders trounced it pretty thoroughly in 2017.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.
