gs:MLNM (IL/N): Incremental data on Velcade
and competition suggest gradual erosion in
sales in 2006.
52-Week Range US$12-8
YTD Price Change -17.13%
Market Cap US$3.1bn
At the American Society of Hematology meeting, incremental positive data were
presented on Millennium?s Velcade and its competitors, Thalomid and Revlimid
(Celgene) for multiple myeloma (MM). We believe combination of these agents will
eventually become standard of care. While Revlimid may negatively impact Velcade sales,
the cannibalization may be offset by some off label use of Velcade in 1st-line therapy,
potentially positive data from the retreatment study (EVEREST) in H2/06, increased
number of cycles of therapy (only 25% of physicians use Velcade for >6 cycles, whereas
in P3 trials pts received Velcade for up to 8 cycles), and combinations with new agents.
We expect Velcade sales of $194MM (+36% y/y) $242MM (+24% y/y) and $272MM
(+12% y/y) in 2005-07, respectively. We maintain our IL rating and neutral coverage
view. Risks are slower sales, development failures & higher expenses.
Though we expect launch of Celgene?s Revlimid for myelodysplastic syndrome (MDS) in
2006, off label use of Revlimid in MM may not be rapid due to the higher (~3x) price for
the MM dosing vs that for MDS. Celgene expects to file for MM once the MDS indication
is approved, presumably by 1/7/06. In view of the recent delays in FDA review of
applications, it is not clear whether approval will be obtained in 6 months as some investors expect.
I, Maykin Ho, PhD, hereby certify ... |
