Ozanimod belongs to a class of drugs called S1P modulators. If approved, the drug’s dose will be adjusted over time in a process called “dose titration.” Titration aims to pinpoint the maximum benefit of a drug without causing side effects.
Credit Suisse analyst Vamil Divan notes competitor Novartis owns the dose-titration patent for S1P modulators. This could hurt Bristol-Myers Squibb‘s (BMY) looming acquisition of Celgene. Bristol is betting $74 billion on Celgene’s approved products and experimental drugs.
This is a “critical component of ozanimod’s product profile as all three proposed indications (uses) currently require dose titration,” he said in a report to clients. “We think this issue has been under investors’ radar, and we highlight it as a potential concern for the deal.”
Questioning Multiple Sclerosis Treatment
Bristol, on the other hand, says it’s aware of the patent issue, Divan said. The pharma “believes they will be able to manage through this hurdle and are not overly concerned about it,” he said.
This is not the first issue facing ozanimod, however. Last year, the Food and Drug Administration refused to review Celgene’s application for approval of ozanimod. The FDA cited issues in the “nonclinical and clinical pharmacology sections” of its application.
On Monday, Celgene said it submitted an application for approval of ozanimod in Europe. The biotech expects to ask the FDA to approve ozanimod as a multiple sclerosis treatment by the end of March.
“Celgene believes ozanimod could be a best-in-class, oral option for use early in the treatment of relapsing forms of multiple sclerosis,” Chief Medical Officer Jay Backstrom said in a written statement.
Could Be A Boon For Another Biotech
The patent troubles for ozanimod could be a boon for Arena Pharmaceuticals (ARNA), Credit Suisse’s Divan said. Arena is also developing an S1P modulator called etrasimod. But etrasimod doesn’t require dose titration, meaning it won’t have to go up against Novartis’ patent.
“While it’s unclear what impact this patent may have on the potential launch ability for ozanimod, we continue to see etrasimod as potentially best in class in what Arena management describes as a $4 billion opportunity for the asset,” he said.
Divan has an outperform rating and 63 price target on Arena stock. He has a neutral rating and 59 price target on Bristol stock. In morning action on today’s stock market, Bristol stock dipped a fraction, near 50.70. Celgene stock was flat, near 85.30.
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