Drug developers like Celgene (NASDAQ: CELG) are constantly innovating new medicine to offset the risk of sliding sales tied to expiring patents and that means investors should always be paying attention to when patents are set to end on key, top-selling therapies, such as Celgene's Revlimid.
Read on to learn more about Celgene's top selling drugs and the expiration dates that could impact Celgene's future sales.
No. 1: Revlimid
Revlimid, Celgene's best selling drug, is the leading therapy used to treat relapsing multiple myeloma patients, and in February the FDA approved Revlimid's use as a front-line therapy.
The FDA's go-ahead for Revlimid as a first line treatment should boost the drug's sales beyond its already lofty $4.98 billion annual clip. In 2015, Celgene expects Revlimid sales will grow to between $5.6 billion-$5.7 billion and in 2017, Revlimid's sales are expected to eclipse $7 billion.
As a result, Revlimid is likely to remain Celgene's best selling drug for years to come, especially since it's covered by patent protection in the U.S. until 2027 and in Europe until 2024.
No. 2: Abraxane
Celgene acquired Abraxane it its $2.9 billion deal to buy Abraxis in 2010 and thanks to growing use as a therapy for pancreatic cancer, non-small cell lung cancer, and breast cancer, Abraxane's sales grew 31% to $848 million in 2014.
Celgene believes that Abraxane will eclipse the billion dollar blockbuster level this year and that Abraxane's sales could hit $1.5 billion by 2017.
If so, then Celgene should be able to count on Abraxane contributing to its top and bottom line well into the coming decade given that Abraxane's patent doesn't expire in the U.S. until 2026 and in the EU until 2022.
No. 3 Pomalyst
Since its launch as a third line treatment for multiple myeloma in 2013, Pomalyst has become one of the indications top selling drugs. Last year, Pomalyst's sales grew 122.6% to $680 million and that momentum is expected to continue.
In January, Celgene issued guidance for Pomalyst sales of $1.5 billion in 2017. If Celgene can deliver on that forecast, then it will have a third billion dollar blockbuster drug to count on into the 2020s.
That's because Pomalyst's patents protect it until 2024 in the U.S. and 2023 in the EU. Additionally, Celgene has filed for a patent extension that, if awarded, could stretch patent protection through 2025 in the United States and beyond 2023 in Europe.
No. 4: Otezla
Otezla is the most recently launched drug in Celgene's line-up. In March 2014, The FDA approved Otezla for use in psoriatic arthritis and last September, the agency gave Celgene the go ahead to begin marketing it in the much larger psoriasis indication.
In the fourth quarter, Otezla's sales totaled just $47.6 million, but the post launch pace of Otezla prescriptions rivals that of existing multibillion dollar blockbuster autoimmune drugs at the same point following their launch.
As a result, Celgene expects that Otezla will be a blockbuster drug by 2017, too.
That's good news, because it would mean that Otezla becomes Celgene's fourth billion dollar per year drug. If it does, a patent expiration date of 2024 in the U.S. and 2028 in the EU suggest that Celgene will have plenty of time to profit from it. Also, Celgene has filed for a patent extension that could extend patent protection in the U.S. through 2028.
Since Celgene's patents stretch into the 2020s, it arguably has one of the best product line-ups in the industry. Thanks to these drugs, Celgene has issued guidance that suggests it could post sales of $20 billion and earnings of at least $12.50 per share in 2020.
That would be a marked increase from the $7.67 billion in sales and $3.71 in EPS reported in 2014. Of course, generic drug makers have filed lawsuits in an attempt to move up their own timelines to compete, but barring any changes, this company's long-lived patent portfolio could mean that it should be a staple in long-haul portfolios.
This $19 trillion industry could destroy the Internet
One bleeding-edge technology is about to put the World Wide Web to bed. And if you act right away, it could make you wildly rich. Experts are calling it the single largest business opportunity in the history of capitalism... The Economist is calling it "transformative"... But you'll probably just call it "how I made my millions." Don't be too late to the party -- click here for one stock to own when the Web goes dark.
Todd Campbell is long Celgene. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not have positions in the companies mentioned.