celgene - WSJ.com - Celgene to Price Cancer Medicine At...

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Unformatted text preview: WSJ.com - Celgene to Price Cancer Medicine At $6,195 a Month file:///C:/WSJ/drug _price122805jiles/revlimid _price_070106.l Eleni: (tar-l; Leia-i. July 1, 2006 DOW JONES REPRINTS a; This copy is for your personal, Celgene to Price Cancer MBdiCine non-commercial use only. To order presentation-ready copies for A q“ 1 0: 0 1‘ Arr-4'11 distribution to your Colleagues, ‘ ‘1: “’V9‘/ ‘1 a “4"” V" clients or customers, use the Order Reprints tool at the bottom of any By GEETA ANAND article or visit: July 1, 2006; Page A4 :=,w-.== In another example of an aggressive pricing strategy for cancer drugs, Celgene Corp. said it will sell Revlimid for $6,195 a month, more than $74,000 annually, for patients with multiple myeloma. Wall. Street. analy the price was widely expected in the current atmosphere in which companies bring new cancer treatments to market at premiums over existing treatments. "Every time a drug is priced, its higher," said Sapna Srivastava, a biotechnology analyst at Morgan Stanley who covers the company. "Right now it’s sustainable, but it's not sustainable in the future," The Summit, N.J., company's shares, which had risen in recent days in anticipation of aggressive pricing, rose 20 cents to $47.43 in 4 pm. composite trading Friday on the Nasdaq Stock Market. The Food and Drug Administration approved the drug late Thursday for use in combination with dexamethasene in patients with multiple myeloma, a cancer of the bone marrow. The drug was already on the market for a rare blood disorder called myelodysplastic syndrome at a monthly price of $4,600, or about $5 5 ,000 if used for a year. The recommended dose for multiple myeloma is 25 milligrams, 2V2 times the 10-milligram capsule typically prescribed for patients with the blood disorder. The price for the 25-milligram version, which the company announced in a conference call Friday, is about 30% higher than the 10-milligram dose. Morgan Stanley estimates Celgene stands to make a 97% gross margin —- the profit excluding marketing and corporate costs -— on Revlimid, Ms. Srivastava said. Unlike some expensive cancer drugs, which are injectable proteins and expensive to manufacture, Revlimid is a pill taken orally and relatively inexpensive to produce, she said. A Celgene spokesman said Morgan Stanley's estimate was inaccurate, but he declined to provide the company's gross-profit margin on the drug, citing competitive reasons. Celgene said it has established free drug programs and made contributions to independent charities to try to make sure patients could get treatment regardless of their ability to pay or their insurance coverage. 1 of2 1/22/2007 12:10 AM WSJ.com - Celgene to Price Cancer Medicine At $6,195 a Month file:///C:/WSJ/drug”price122805_files/revlimid_price~070106.htrr Ms. Srivastava said Celgene‘s strategy of pricing aggressively and establishing a safety net for the underinsured and uninsured would maximize profit in the short run. But as cancer drugs are increasingly used in combination and on bigger patient populations at higher doses, the pressure on the Medicare and Medicaid budgets will eventually lead to Congressional scrutiny, she predicted. She said ReVlimid is already being tested in combination with another cancer drug, Velcade, marketed by Millennium Pharmaceuticals Inc.2 and when used in combination? the annual treatment cost would be. about $100,000. Write to Geeta Anand at 3, .iLéL‘:§‘2tl URL for this article; httsil’fonline. . a;comiarticieiSBt15% Hyperlinks in this Article: (1) maiite:geeia.anand@\ags§com Copyright 2006 Dow Jones & Company, Inc. All Rights Reserved This copy is for your personal! non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at r 1-800-843-0008 or visit www.c‘;§reprinte.cem. 2 of‘Z 1/22/2007 12:10 AM ...
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celgene - WSJ.com - Celgene to Price Cancer Medicine At...

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