Celgene (CELG) toppled to a four-year low Thursday after it appeared on a list from the Food and Drug Administration that tried to "shame" drugmakers working to block generic competition.
XSome pharmaceutical and biotech companies are "gaming" the system by limiting access to their drugs for generic rivals needing to do equivalence studies, the FDA said. Analysts, though, expect the so-called "shame list" to have little more than a headline impact on these companies.
In total, Celgene received 31 inquiries for samples of drugs Revlimid, Pomalyst and Thalomid. All three have Risk Evaluation and Mitigation Strategies, or REMS, programs to ensure the benefits of the drugs outweigh the risks. These drugs have certain distribution requirements.
Celgene reportedly said any biotech companies wanting to access these drugs would need to follow specific rules. The biotech said it already has provided samples to companies that fulfilled these requirements, RBC analyst Brian Abrahams said.
"As such, while Celgene might be putting up an understandably high barrier, we believe generic companies willing to put in the appropriate safeguards have already been able to obtain Revlimid to conduct bioequivalence studies," he said in a note to clients.
Unlikely To Speed Competition
The inclusion of Celgene on the list is unlikely to speed along generic competition for Revlimid, Williams said. As of now, the drug is "gated more by (intellectual property) than regulatory questions," he said.
Mizuho analyst Salim Syed agreed. Celgene is already working through generic litigation regarding Revlimid. Analysts expect copycat drugs in 2022.
"We believe this is more modest headline risk than actual business risk," he said in his report.
On the stock market today, Celgene shares dipped 1.7%, to close at 79.98. They earlier slipped to a low last seen in June 2014. Meanwhile, collective shares of biotech and pharmaceutical companies each lifted a fraction.
Biogen, Gilead, BioMarin Also Listed
Other key drugs listed include Biogen's (BIIB) multiple sclerosis medicine Tecfidera, as well as Gilead Sciences' Letairis and Truvada. Letairis treats pulmonary arterial hypertension and Truvada treats HIV.
RBC analyst Kennen MacKay notes the FDA also included BioMarin Pharmaceutical's (BMRN) Kuvan. Kuvan treats a condition associated with an elevated amino acid. BioMarin shares dipped 1.4%, near 88.30.
Still, BioMarin has already settled with several general pharmaceutical companies for generic entry after the patent expires in 2020.
"Further, while the FDA's (list) publicizes efforts to prevent generic entry, no actual policy has been put in place to deter or diminish the strategies branded manufacturers employ to limit access to branded drugs," he said.
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