BMO: Celgene Still A Buy On This 'Important Future Driver'

In a report published Thursday, BMO Capital analyst Jim Birchenough maintained his Outperform rating on Celgene Corporation (NASDAQ: CELG), with a price target of $163.

"An early online publication by Celgene (CELG) for pleiotropic modulator CC- 122 in Blood suggests that while sharing a common mechanism of action with other IMiDs, CC-122 has unique biology that is relevant for diffuse large B cell lymphoma (DLBCL)," Birchenough stated.

The company has demonstrated that CC-122 acts on a broad range of DLBCL cell lines. CC-122 was able to induce a more significant decrease in the Ailios and Ikaros levels in the DLBCL cell lines than Revlimid.

According to the BMO Capital report, "CELG also notes that CC-122 has striking activity against "double-hit" lymphoma cell lines, which are characterized by c-myc elevation, in combination with BCL2/6, which is considered highly treatment resistant."

Given the broader spectrum of activity in the DLBCL, the analyst believes that CC-122 is likely to offer a treatment option that is not limited only to the cell of origin. About 30-40 percent of all BHL diagnoses are due to DLBCL.

"RITUXAN immunochemotherapy is an effective front-line treatment; however, treatment for relapsed refractory disease remains sub-optimal with a five-year OS of about 50%, and the prognosis for particular molecular sub-types including double hit and ABC lymphomas remains poor," Birchenough added.