Celgene Provides Rosy Long-term Projection - Analyst Blog


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Celgene Corporation ( CELG ) provided encouraging forecasts for 2015 and 2017 at the 32nd annual JPMorgan healthcare conference. The biopharmaceutical company upped its previously provided forecasts for 2015 and 2017 driven by the strong product portfolio.

Celgene now expects adjusted earnings for 2015 in the range of $900-$950 per share. Net product sales for 2015 are now projected in the range of $8.5-$9.5 billion (old guidance $8.0-9.0 billion).

Celgene also provided a rosy outlook for 2017. The company now projects net product sales in the range of $13.0-$14.0 billion (old guidance: in excess of $12.0 billion) for 2017. Moreover, adjusted earnings per share for 2017 are now expected to be approximately $15.0 per share (old guidance: $13.00-$14.00 per share).

Celgene believes that its oncology drug will continue to be the key growth driver in 2017.  Based on the drug's performance in 2013, the company expects 2017 Revlimid sales estimate to be $7.0 billion (compounded annual growth rate or CAGR of 13%) from $6.0 billion (CAGR 9%).

On the basis of strong initial sales of another oncology drug Pomalyst (EU trade name: Imnovid), Celgene raised its 2017 sales estimate for the treatment by $500 million to $1.5 billion (CAGR increased from 35% to 49%). Celgene still expects 2017 sales from another oncology drug Abraxane in the range of $1.5-$2.0 billion.

Management at Celgene is highly bullish on the prospects of its pipeline candidate apremilast (proposed brand name: Otezla). Apremilast is under review in the U.S. for the psoriatic arthritis indication (target date: Mar 21, 2014). The candidate is also expected to be approved in the U.S. for psoriasis in 2014. The company expects regulatory actions on the candidate in Europe and Canada by Mar 31, 2015.

Celgene will announce its fourth quarter and full year 2013 results on Jan 3. As per the preliminary results announced, the biopharmaceutical major expects adjusted earnings per share for the fourth quarter to come in at $1.51 per share, which is inclusive of a $0.10 per share negative impact from payments related to collaborations. The Zacks Consensus Estimate for the final quarter of 2013 currently stands at $1.37 per share.

Net product sales for 2013 are expected to be approximately $6.4 billion, up 18% year over year. Net sales of Revlimid are projected at $4.28 billion, reflecting an increase of 14%. Sales of Abraxane in 2013 are projected to grow at 52% to $649 million. Pomalyst/ Imnovid sales are expected to contribute $305 million to Celgene's 2013 total revenues, projected at $6.5 billion.

Adjusted earnings for 2013 are expected to grow 21% over 2012 levels to $5.96 per share, which is inclusive of a $0.13 per share negative impact from payments related to collaborations. The Zacks Consensus Estimate for 2013 hints at earnings of $5.39 per share on revenues of $6.4 billion.

Celgene expects 2014 to be dominated with news related to its pipeline and label expansion efforts. Total revenues in 2014 are projected to increase 15% year over year to $7.5 billion driven by strong product sales. The Zacks Consensus Estimate for 2014 revenues currently stands at $7.4 billion.

Net product sales are expected to grow 16% in 2014 to $7.3-$7.4 million. Revlimid is expected to be the major contributor with 2014 sales expected in the range of $4.9-$5.0 billion, up 16%. Celgene expects 2014 adjusted earnings per share in the range of $7.0-$7.20. The Zacks Consensus Estimate currently stands at $6.5 per share.

We expect Celgene to easily achieve its forecasts driven by its strong product portfolio. Investor focus is likely to remain on Celgene's pipeline in addition to its label expansion efforts.

Celgene, a biopharmaceutical company, carries a Zacks Rank #2 (Buy). Some better-ranked stocks in the biopharma space include Actelion Ltd. ( ALIOF ), Jazz Pharmaceuticals ( JAZZ ) and Medivation, Inc. ( MDVN ). All three stocks carry a Zacks Rank #1 (Strong Buy).


CELGENE CORP (CELG): Free Stock Analysis Report

JAZZ PHARMACEUT (JAZZ): Free Stock Analysis Report

MEDIVATION INC (MDVN): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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