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Celgene Corporation : Celgene's Profits Fall, But Focus Remains on Pipeline

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01/24/2013 | 07:47pm CEST

--Celgene's Q4 net falls, while revenues rise

--FDA approval decision for multiple myeloma drug Pomalyst expected in February

--Celgene shares down 2.4% to $97.64 so far this week as investors take profits

(Updates throughout adding details and analyst comment.)

   By Joseph Walker and Melodie Warner 

Celgene Corp.'s (CELG) fourth-quarter earnings fell 36% as restructuring costs and other special items hurt the drug maker's margins and masked its increased revenue.

The results had been expected since the Summit, N.J., company pre-announced full-year results for 2012 and 2013 guidance at an investor meeting earlier this month.

Celgene's revenues jumped 13% to $1.45 billion in the quarter, largely on the strength of its core blood-cancer drug franchise, which includes the blockbuster Revlimid treatment.

However, investor attention has been focused on the company's late-stage product pipeline, which includes what Celgene says are three "potential blockbusters" that would expand the company's portfolio into new disease areas.

The first of those drugs likely to reach the market is Pomalyst, a treatment for the patients with relapsed multiple myeloma, a bone marrow cancer. The U.S. Food and Drug Administration is scheduled to make an approval decision by Feb. 10. Celgene said it would launch the drug shortly after approval.

"Our commercial and medical affairs teams are ready to launch and support the thousands of patients who have exhausted all existing myeloma therapies," Celgene Executive Vice President Mark Alles said. "Successfully launching Pomalyst is a major corporate objective and we are ready."

Celgene shares fell 0.6% to $97.64, and are down 2.4% so far this week as investors take profits. Even with the recent slide, the stock has soared 24% in 2013, as investors have placed a high premium on the company's pipeline.

Celgene also plans to seek FDA approval for apremilast, a treatment for the skin disease Psoriasis, and its cancer drug Abraxane for patients with pancreatic cancer this year. Both drugs are projected to be generate billions of dollars annually for Celgene.

The new drugs are part of Celgene's strategy to expand beyond its core hematology franchise and build out new product lines in cancer to achieve $12 billion in product sales by 2017.

Celgene reported a profit of $263.1 million, or 61 cents a share, down from $410.2 million, or 91 cents, a year earlier. Excluding items such as stock-based compensation, acquisition and restructuring costs, adjusted per-share earnings rose to $1.32 from $1.05 a year ago.

Analysts polled by Thomson Reuters had forecast earnings of $1.31 a share on revenue of $1.46 billion.

Revlimid sales jumped 17% to $1 billion, while Vidaza sales climbed 14% to $216 million.

Gross margin fell to 22.2% from 31.5% as costs rose because of preparations for the launches of Abraxane for non-small-cell lung cancer and Pomalyst. Abraxane received FDA approval for that indication in October.

Write to Joseph Walker at joseph.walker@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

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Financials ($)
Sales 2017 13 259 M
EBIT 2017 7 526 M
Net income 2017 4 419 M
Debt 2017 2 800 M
Yield 2017 -
P/E ratio 2017 22,60
P/E ratio 2018 17,46
EV / Sales 2017 7,74x
EV / Sales 2018 6,37x
Capitalization 99 867 M
Duration : Period :
Celgene Corporation Technical Analysis Chart | CELG | US1510201049 | 4-Traders
Technical analysis trends CELGENE CORPORATION
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 27
Average target price 150 $
Spread / Average Target 18%
EPS Revisions
Mark J. Alles Chief Executive Officer & Director
Scott Andrew Smith President & Chief Operating Officer
Robert J. Hugin Executive Chairman
Peter N. Kellogg Chief Financial Officer & Executive Vice President
Joseph S. Camardo Senior Vice President-Global Medical Affairs
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1st jan.Capitalization (M$)
AMGEN14.42%122 067
ACTELION22.00%30 302