Celgene Corporation (NASDAQ:CELG), a global pharmaceutical company based in the mid-Atlantic, recently announced that the company has discontinuedtheir Phase 3 trial for their drug, GED-0301. GED-0301 was in Phase 3 trials and being used to treat inflammatory bowel disease (NYSEARCA:IBD). Specifically, the drug was treating Crohn's disease (CD) and ulcerative colitis (UC). The unfortunate news for Celgene is a friendly reminder to Synergy (NASDAQ:SGYP) investors about the potential value of Synergy's second drug, Dolcanatide. As I will now explain.
Before getting into things, it would be good to recap what Celgene actually spent on this now discontinued drug. Back in April 2014, Celgene acquired a small drug company called Nogra. Nogra's GED-0301 recently announced positive Phase 2 results and Celgene decided to make the move. Nogra was offered $710 million as an upfront payment. Certain regulatory and payment milestones stood at over $800 million and could be as high as just over a billion dollars. Overall, Celgene was valuating this Phase 2 asset at around $1.5 billion.
As can be seen in the first paragraph, the drug had completely flopped, and this money was essentially wasted. Celgene is also evaluating whether to discontinue the Phase 2 UC trials as well, which is probably likely. Synergy Pharmaceuticals is developing their second drug, Dolcanatide, for IBD.