Celgene Corporation : Celgene 1Q Profit Rose 57% On Sales Growth; Plans Venture With Epizyme
04/26/2012| 07:55am US/Eastern
Celgene Corp.'s (CELG) first-quarter earnings rose 57% as the biopharmaceutical company posted broad sales growth and stronger margins.
Shares of Celgene, which affirmed its 2012 guidance, were down 2.5% at $76 in premarket trading as the results missed expectations. Through Wednesday's close, the stock is up 35% in the past year.
The company also announced that its international unit agreed to a strategic partnership with Epizyme to develop and commercialize personalized therapies for patients with genetically defined cancers. Epizyme will receive $90 million upfront. For each treatment licensed by Celgene, Epizyme is eligible to receive more than $160 million in milestone payments and up to double-digit royalties on sales outside the U.S.
The agreement gives Celgene the exclusive option to license rights outside the U.S. to Epizyme's programs during an initial three-year period and the right to extend this option period for one year with additional funding.
Celgene has seen its results improve as market-share gains drove sales of its flagship blood-cancer treatment Revlimid. Though Vidaza, another blood-cancer treatment, lost patent exclusivity in May, the drug's sales have continued to rise in the face of generic competition.
In the latest quarter, Sales of Revlimid jumped 17% to $861 million, while Vidaza climbed 14% to $186 million.
"We ended the first quarter with positive momentum across our product portfolio despite a slower-than-expected January," Chairman and Chief Executive Bob Hugin said.
The company also has a strong pipeline of treatments in later phase trials and has been aiming to expand beyond blood-cancer treatments to increase its international sales. Last month, Celgene completed its acquisition of private biotechnology company Avila Therapeutics Inc., adding to a series of recent pharmaceutical industry deals.
Celgene reported a profit of $401.5 million, or 90 cents a share, up from $255.9 million, or 54 cents a share, a year earlier. Excluding acquisition and restructuring related charges and other items, earnings were up at $1.08 from 83 cents. Revenue increased 13% to $1.27 billion.
Analysts polled by Thomson Reuters most recently projected earnings of $1.13 on revenue of $1.32 billion.
Gross margins rose to 94.3% from 88.7% as costs fell sharply.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com