Celgene to Acquire Gloucester Pharma, Aims to Launch Istodax in Early 2010

U.S. biopharmaceutical company Celgene announced that it has reached a definitive merger agreement with compatriot firm Gloucester Pharmaceuticals for its acquisition of the latter, a privately held drug firm. The financial consideration of the acquisition deal is expected to be US$640 million, including US$340 million in cash and US$300 million in future payments for global regulatory milestones. Currently, the merger agreement is subject to customary closing conditions after the approval was given by the Board of Directors of Celgene and Gloucester. The companies' announcement noted that the acquisition is expected to be completed in the first quarter of 2010.

Istodax Expected to Be Rolled Out in Early 2010

Focused on advancing acquired clinical-stage candidates into commercialisation, Gloucester Pharma has harvested its first ever solid fruit by securing the U.S. FDA's nod for its first drug, novel histone deacetylase (HDAC) inhibitor Istodax (romidepsin) for the second-line treatment of cutaneous T-cell lymphoma (CTCL). Celgene and Gloucester are expecting to launch the product for this indication early next year. Meanwhile, Istodax is also under the development for additional indications including peripheral T-cell lymphoma (PTCL), haematologic and solid tumours. Furthermore, the drug has been designated orphan drug status and fast-track status in the United States for the treatment of non-Hodgkin's T-cell lymphomas and PTCL respectively. Orphan drug status has also been granted to Istodax for the treatment of CTCL and PTCL.

Outlook and Implications

By striking the acquisition deal with Gloucester, Celgene is clear in its move to beef up its existing oncology portfolio, which currently includes main products such as leukaemia treatment Vidaza (azacitidine), and multiple myeloma drugs Revlimid (lenalidomide) and Thalomid (thalidomide), by bagging the freshly-approved Istodax. In addition, the ongoing studies on Istodax's indication extension are also going to boost Celgene's R&D pipeline. Currently, Celgene is also conducting late-stage studies on Revlimid in new indications including non-Hodgkin's lymphomas (NHL), which will be joined by Istodax's pipeline projects following the acquisition. In 2008, Celgene's total product sales reached US$2.1 billion, more than 60% of which was contributed by the company's best-selling blockbuster Revlimid with revenue of US$1.3 billion increased by 71% year-on-year. However, the sustained growth of the company's top-line performance in the coming years requires new products despite the robust increase of star performer Revlimid. One income gap to be filled in has come from the termination of Celgene's licensing deal for multiple myeloma treatment Alkeran (melphalan) with GlaxoSmithKline (GSK, U.K.) in March 2009. Alkeran garnered annual sales of US$81 million for Celgene in 2008.

From the perspective of Gloucester, the deal has proved that a one-strong portfolio will also snap up favourable deals once the product has demonstrated promising prospects. It may also highlight such a trend as the global searches for new promising compounds are becoming more and more challenging. On the other hand, the imminent roll-out and ongoing indication extension development of Istodax in the U.S. market are going to present a strong threat to the market prospect of other T-cell lymphoma treatments including another new drug, Allos Therapeutics' (U.S.) Folotyn (pralatrexate). In September, Folotyn secured the FDA's nod as the U.S. drug regulator's first-ever green light for a PTCL treatment (see United States: 29 September 2009: FDA Approves First-Ever Drug for Peripheral T-Cell Lymphoma).