Tuesday, May 17, 2005

Celgene Crisis

New research shows that Revlimid, an experimental drug used to relieve symptoms of a deadly blood disorder, has ended up treating the disease itself. It was so successful that cancer became undetectable in nearly half the people who took the drug. While this breakthrough marks the first effective treatment for people with myelodysplastic syndrome (MDS) it has also created a firestorm at Celgene Corporation, the makers of Revlimid.

"Obviously, we're extremely concerned about, and disappointed by, the results." said Brian Gill, Celgene's chief spokesman. "Our mission - and indeed our obligation to our shareholders - is to create drugs to treat the symptoms of disease. We never intend to cure them."

Wall Street reacted quickly to the news, sending Celgene shares plummeting 15% at fourteen times normal volume and causing one prominent analyst to opine "There's an old saying that goes 'There's no money in the cure.' If other pharmaceutical companies follow Celgene's example, they can kiss their profits goodbye. I'm sure that some pretty important heads are going to roll over this debacle." Investors and analysts agreed and by yesterday afternoon they were scrambling to reduce forecasts for the company's near-term earnings and sales growth.

As expected, Celgene dismissed the research and development team responsible for creating Revlimid, citing gross negligence. "Any first year research scientist should have been able to spot this side effect. We simply cannot tolerate such blatant incompetence." said Gill. Indeed, it appears that Celgene is not alone in their harsh assessment of the team's work as rumors circulated that the newly unemployed scientists have been blackballed within the industry. "I don't know how this could have happened," said one. "We thought we'd taken every precaution against accidently curing MDS. I'm so ashamed. I don't think I'll ever be able to face my colleagues again."

Celgene stock took a similar hit last November when it was reported that nearly a dozen patient deaths were recorded during the clinical trial of Revlimid, sparking concern that Revlimid's chances for U.S. approval would be delayed, or derailed, if the deaths were confirmed and attributable to the drug. At the time, there were 148 patients enrolled in the Revlimid study, which would put the death rate at just over 7% if the reports of 11 deaths were accurate. When the report broke Celgene staffers immediately leapt into action, calling a press conference and sending their spokesman out to calm the masses with the following statement: "I, Brian Gill, am not aware of any deaths. I'm not saying there are or aren't any deaths." while at the same time declining to offer a formal Celgene response.

"That was a brilliant move by the Celgene public relations department." said an industry spokesman who preferred to remain anonymous. "Keeping Gill in the dark about the deaths was crucial because it allowed him to claim ignorance while still protecting the company. In fact, they were voted '2004 Public Relations Department of the Year' for that stroke of genius. But I just can't see how they're going to pull a rabbit out of a hat this time."