Otezla scores new indication as speculation over potential buyers grows

The FDA has approved a new use for Celgene’s Otezla, in adult patients with oral ulcers associated with Behçet’s disease.

The drug is the first and only approved treatment option for patients with Behçet’s disease associated oral ulcers. The disease is a rare, chronic and multisystem inflammatory disease, with limited treatment options.

The approval, announced on Friday, coincides with speculation around who will acquire the blockbuster treatment, which Bristol-Myers Squibb and Celgene have been told to sell off by the US authorities to allow their merger to gain anti-trust approval.

The US Federal Trade Commission (FTC) has demanded the sale, as it believed the BMS/Celgene merger would give the company too big a stake in the psoriasis market. The FTC pointed to Otezla and a BMS pipeline candidate in the therapy area, a tyrosine kinase 2 (TYK2) inhibitor, as the reason for these concerns.

Otezla is one of the strongest contenders in the psoriasis market, earning $1.6bn for Celgene in 2018, making it a prize asset for a buyer – at the right price.

But who is likely to buy? Analysts say Gilead is the most likely, with Brian Abrahams of RBC Capital Markets saying the firm could use the addition of Otezla to its portfolio to help build in its presence in the immunology and inflammation area.

Gilead is already working with Galapagos on oral anti-inflammation drug filgotinib, which is set for submission to regulators for rheumatoid arthritis by the end of this year.

Analysts put a value of $5-10bn on Otezla, with its specific sale price dependant on the company that buys it.

Amgen and Johnson & Johnson have also been named as potential buyers, being established players in immunology/inflammation space.

Most of Otezla’s patents won’t expire until 2023, giving any buyer to develop the drug further, with sales forecast to rise to $2.06bn by 2020.