) fourth quarter 2012 earnings (excluding special items but
including stock-based compensation expense) of $1.18 per share
beat the year-ago earnings by 26.9%. Higher revenues drove
earnings in the reported quarter. The Zacks Consensus Estimate
was $1.18 per share.
Quarter in Details
Total revenue climbed 12.7% to $1.45 billion in the fourth
quarter of 2012. Revenues were boosted by the impressive
performance of Celgene's cancer drugs Revlimid, Abraxane and
Vidaza. Revenues were just shy of the Zacks Consensus Estimate of
$1.46 billion. Net product sales climbed 13.9% to $1.42
Net sales of Revlimid, the key growth driver at Celgene, came
in at $1 billion, reflecting an increase of 17% over the year-ago
period. The drug did well both in the US (up 18%) and
international markets (up 16%). Market share gains and increased
duration of therapy drove sales in the final quarter of 2012.
Net sales of Vidaza spiked 14% to $216 million. Sales in
international markets climbed 23% to $128 million. US sales of
Vidaza increased 3% to $88 million, despite the loss of
exclusivity in 2011.
Net sales of another cancer drug, Abraxane, climbed 3% to $106
million. The drug performed poorly in the US with sales declining
9% to $84 million. However, strong sales of Abraxane in
international markets more than offset the weak US performance.
Sales in international markets jumped 90% to $22 million.
Net sales of another cancer drug, Thalomid, continued to
decline due to the availability of better alternatives. Thalomid
sales were $73 million, down 12%.
Research and development (R&D) expenses (excluding
stock-based compensation and other special items) declined 8.9%
to $318 million in the final quarter of 2012. The year-over-year
decrease was attributable to the presence of more collaboration
milestone payments in 2011.
Selling, general and administrative expenses (excluding
stock-based compensation and other special items) in the quarter
increased 22.3% to $340 million. Costs associated with the
pre-launch activities of Abraxane in the non-small cell lung
cancer indication and Pomalyst, primarily led to the rise in
For full-year 2012, Celgene earned (excluding special items
but including stock-based compensation expense) $4.38 per share,
up 31.9%. The Zacks Consensus Estimate for 2012 is $4.44. In
2012, total revenues climbed 14% to $5.5 billion, in line with
the Zacks Consensus Estimate. Revlimid sales increased 17% to
approximately $3.77 billion.
Outlook for 2013 Backed
Apart from announcing financial results, Celgene maintained
its guidance for 2013 provided on Jan 7, 2013. Celgene continues
to expect adjusted earnings for 2013 in the range of $5.50-$5.60
per share, up 13% year over year. The Zacks Consensus Estimate
for 2013 currently stands at $5.04 per share.
Celgene continues to expect 2013 net product sales of $6
billion, up 11%. The Zacks Consensus Estimate for 2013 currently
stands at approximately $6.1 billion. Revlimid will continue
performing well with sales projected in the range of $4.1-$4.2
billion, up 10% year over year.
We are impressed by the strong oncology portfolio at Celgene.
Celgene's efforts to develop its pipeline are also encouraging.
Celgene has multiple pipeline events lined up in the coming
quarters. Positive pipeline related news would boost the
An eagerly awaited event at Celgene concerns its oncology
candidate, Pomalyst. Celgene is seeking approval of the candidate
in combination with low-dose dexamethasone for the treatment of
relapsed and refractory multiple myeloma (MM) patients, who have
received at least two prior therapies.
A final decision from the US Food and Drug Administration is
expected by Feb 10, 2013 (action date). Moreover, Celgene is
highly optimistic on the potential of apremilast, which is being
developed for multiple indications such as moderate-to-severe
psoriasis andpsoriatic arthritis among others.
Celgene carries a Zacks Rank #2 (Buy) in the short run. Pharma
stocks, which appear to be more favorably placed, include
). All three companies carry a Zacks Rank #1 (Strong Buy).
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