Wednesday, May 5, 2010

Celgene Advances on Revlimid, Vidaza Sales

Celgene's Q1 2010 was one to celebrate, with revenue of $791.3 million, up 4% sequentially from $761.0 million, and up 37% from $576.2 million in the year-earlier quarter. Net income was $234.4 million, down 11% sequentially from $254.2 million, but up 44% from $162.9 million. EPS (earnings per share) were $0.50, down 7% sequentially from $0.54, but up 43% from $0.35 year-earlier.

Results were better than expected, so guidance for the full year 2010 was increased to revenues of $3.3 to $3.4 billion with non-GAAP EPS between $2.60 and $2.65.

Revlimid revenues were $530 million, up 46% from year-earlier. The drug is well accepted as a multiple myeloma therapy. As patients live longer as a result of therapy, duration of therapy is increasing.

Vidaza, which is a newer drug, is still ramping its international sales. At $120 million in revenue, sales were up 60% from year-earlier. A fly in the ointment is the British public health system's contention that Vidaza's price is too high. Probably either the decision will be reversed, or Celgene will lower the price, and British patients can get the same care that is available in the U.S and most of Europe.

The Celgene research and development effort is a rather substantial, with enough drug candidates in the pipeline to assure revenue growth for years to come. With so many therapies in trials, there are bound to be some winners and some losers.

For a more detailed report, see my Celgene Q1 2010 analyst conference summary.

I own some Celgene stock. On the whole Celgene looks undervalued to me, especially for long-term investors. Celgene is subject to the usual risks from competition, failed drug trials, and unforseen adverse reactions.

So keep diversified!

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