Celgene provides a double dose of growth potential: further growth of its currently approved therapies and a rich pipeline with some therapies closing in on FDA approval and commercialization. Since I last wrote about Celgene on August 2, its stock price has risen from $57.29 to today's close of $64.29. Celgene's 52 week high is $68.25 reached on October 24th.
Consider Celgene's Q3 earnings reported last week. Revenue was $1.22 billion, up 3% sequentially from $1.18 billion and up 41% from $886 million in the year-earlier quarter. GAAP net income was $373.0 million, up 34% sequentially from $279.2 million and up 33% from $281.2 million year-earlier. GAAP EPS were $0.81, 37% sequentially from $0.59 and up 35% from $0.60 year-earlier. Non-GAAP EPS was EPS $1.02.
Most of this rapid growth was based on a single therapy, Revlimid for multiple myeloma (MM) and myelodysplastic syndromes (MDS). Revlimid revenues grew 28% from a year earlier. Expansion is largely international now, with Russia, China and Brazil still ahead. In addition various clinical trials have indicated Revlimid will be beneficial in other types of cancer. Revlimid is in Phase III trials for CLL (chronic lymphocytic leukemia), NHL (non-Hodgkin lymphoma) and prostate cancer.
Thalomid is ancient and had revenues $83 million, down 12% y/y.
VIDAZA for multiple myeloma revenues were $191 million, up 35% y/y. This is despite losing exclusivity in the United States.
The bit new revenue generator is ABRAXANE for breast cancer. Abraxane is also in clinical trials for treating lung, pancreatic, bladder, skin, and ovarian cancers. ABRAXANE revenues were $114 million, up 20% sequentially, that is quarter over quarter; Celgene did not market it a year ago. A Phase III trial comparing it to decarbazine for metastatic melanoma is expecting to read out data in mid 2012. Phase III Pancreatic cancer trial should complete enrollment in Q1 2012. International revenue continues to ramp. For instance, in the quarter Celgene received reimbursement permission for Abraxane in in Greece and the Czech Republic.
Earlier in the pipeline Celgene displays depth-of-field. Of course most pre-clinical drugs don't make it through all the clinical phases and FDA approval; there are likely to be some losers. Celgene's pipeline is so broad and important you could write a book about it.
In Oncology/Hematology we have pomalidomide in Phase III trials for myelofibrosis and nearing the end of Phase II for multiple myeloma. There is Amrubicin, in Phase III for small cell lung cancer. In Phase II we also have ACE-011 for CIA and ABI-008 for prostate cancer. In Phase I we have Tork Inhibitor and ABI-009, both for solid tumors. There are two additional pre-clinical ABI variants for solid tumors.
Apremilast completed enrollment of patients in Phase III trials for psoriasis and psoriatic arthritis, with three more Phase III trials to complete enrollment by year-end. Phase II trial data for ankylosing spondylitis will be presented in November. In inflammation and immunology we also have JNK CC-930, CC-11050 and PDA-001 in Phase II.
Pomalidomide Phase II data for relapsed and refractory myeloma will be presented at ASH in December. The company is conducting a broad clinical program to support global registrations for pomalidomide.
Beyond that Celgene lists over a dozen agents in discovery and pre-clinical phases.
Of course, what will affect Celgene's stock price soonest are the late stage candidates. The first big movers is likely to be expanding the label for Revlimid to first-line (initial) treatment of multiple myeloma. The second would be Abraxane for non-small cell lung cancer, with FDA submission in second half of 2011 and a decision likely in the first half of 2012.
In general it is a very good time to invest in biotechnology, even given the known risks. Celgene is a cash cow that also has unrealized value in its pipeline. Small, risky biotechs aren't commanding the high premiums they used to, which is good because many of their drug candidates don't work out. With the larger biotechs like Celgene if a drug candidate fails it is disappointing and the stock can lose some momentum, but cash flow can be used to buy and develop more candidates. Celgene's cash and equivalents balance ended at $2.58 billion. Cash flow from operations was $602 million. $885 million was spent on share repurchases in the quarter.
Hopefully some time soon Celgene will start paying out a dividend, which is the true gold standard for today's investors.
Keep diversified!
Disclaimer: I am long Celgene. I have no plans to buy or sell Celgene in the next two weeks.
Showing posts with label Vidaza. Show all posts
Showing posts with label Vidaza. Show all posts
Monday, November 7, 2011
Tuesday, August 2, 2011
Celgene Pipeline Value
My nomination for most undervalued stock in the biotechnology segment: Celgene (CELG). Celgene provides a double dose of growth potential: further growth of its currently approved therapies and a rich pipeline with some therapies closing in on FDA approval and commercialization.
Consider Celgene's Q2 earnings reported last week. Revenue was $1.18 billion, up 4% sequentially from $1.13 billion, and up 38% from $852.7 million in the year-earlier quarter. GAAP Net income was $279.2 million, up 9% sequentially from $255.6 million and up 80% from $155.4 million year-earlier. GAAP EPS (earnings per share) were $0.59, up 9% sequentially from $0.54 and up 79% from $0.33 year-earlier. Non-GAAP EPS was $0.89 per share.
Most of this rapid growth was based on a single therapy, Revlimid for multiple myeloma (MM) and myelodysplastic syndromes (MDS). The rate of growth fluctuates, but expansion is largely international now, with Russia, China and Brazil still ahead. In addition various clinical trials have indicated Revlimid will be beneficial in other types of cancer. Revlimid is in Phase III trials for CLL (chronic lymphocytic leukemia), NHL (non-Hodgkin lymphoma) and prostate cancer.
Based on that alone, one might expect Celgene's stock price to be 30 to 50 times earnings per share. As I write you can buy Celgene for $58.12 per share. Even using the lower, GAAP number ($0.59 x 4 quarters = $2.36 per year), the PE ratio right now is under 25 times earnings. Non-GAAP EPS ($0.89 x 4 = $3.56) reads out at a 16.3 ratio.
But Revlimid, and other already-approved therapies Vidaza, Abraxane, and Thalomid, are just part of the story. Thalomid is ancient and has declining revenues, but Abraxane for breast cancer is ramping. Abraxane is also in clinical trials for treating lung, pancreatic, bladder, skin, and ovarian cancers. Vidaza for multiple myeloma grew revenues 23% y/y, and has a lot of room to grow with global launches.
Earlier in the pipeline Celgene displays depth-of-field. Of course most pre-clinical drugs don't make it through all the clinical phases and FDA approval; there will be some losers. Celgene's pipeline is so broad and important you could write a book about it.
In Oncology/Hematology we have pomalidomide in Phase III trials for myelofibrosis and nearing the end of Phase II for multiple myeloma. There is Amrubicin, in Phase III for small cell lung cancer. In Phase II we also have ACE-011 for CIA and ABI-008 for prostate cancer. In Phase I we have Tork Inhibitor and ABI-009, both for solid tumors. There are two additional pre-clinical ABI variants for solid tumors.
In inflammation and immunology we have Apremilast in Phase III and JNK CC-930, CC-11050 and PDA-001, as well as more Apremilast indications, in Phase II.
Beyond that Celgene lists over a dozen agents in discovery and pre-clinical phases.
Of course, what will affect Celgene's stock price soonest are the late stage candidates. The first big movers is likely to be expanding the label for Revlimid to first-line (initial) treatment of multiple myeloma. The second would be Abraxane for non-small cell lung cancer, with FDA submission in second half of 2011 and a decision likely in the first half of 2012.
In general it is a very good time to invest in biotechnology, even given the known risks. Gilead, Celgene, and Biogen Idec are cash cows that also have unrealized value in their pipelines. Small, risky biotechs aren't commanding the high premiums they used to, which is good because many of their drug candidates don't work out. With the larger biotechs when a drug candidate fails, it is disappointing and the stock can lose some momentum, but cash flow can be used to buy and develop more candidates, or buy back stock, or even (hopefully some time soon) start paying out a dividend, which is the true gold standard for value-conscious investors.
See also www.celgene.com
Keep diversified!
Consider Celgene's Q2 earnings reported last week. Revenue was $1.18 billion, up 4% sequentially from $1.13 billion, and up 38% from $852.7 million in the year-earlier quarter. GAAP Net income was $279.2 million, up 9% sequentially from $255.6 million and up 80% from $155.4 million year-earlier. GAAP EPS (earnings per share) were $0.59, up 9% sequentially from $0.54 and up 79% from $0.33 year-earlier. Non-GAAP EPS was $0.89 per share.
Most of this rapid growth was based on a single therapy, Revlimid for multiple myeloma (MM) and myelodysplastic syndromes (MDS). The rate of growth fluctuates, but expansion is largely international now, with Russia, China and Brazil still ahead. In addition various clinical trials have indicated Revlimid will be beneficial in other types of cancer. Revlimid is in Phase III trials for CLL (chronic lymphocytic leukemia), NHL (non-Hodgkin lymphoma) and prostate cancer.
Based on that alone, one might expect Celgene's stock price to be 30 to 50 times earnings per share. As I write you can buy Celgene for $58.12 per share. Even using the lower, GAAP number ($0.59 x 4 quarters = $2.36 per year), the PE ratio right now is under 25 times earnings. Non-GAAP EPS ($0.89 x 4 = $3.56) reads out at a 16.3 ratio.
But Revlimid, and other already-approved therapies Vidaza, Abraxane, and Thalomid, are just part of the story. Thalomid is ancient and has declining revenues, but Abraxane for breast cancer is ramping. Abraxane is also in clinical trials for treating lung, pancreatic, bladder, skin, and ovarian cancers. Vidaza for multiple myeloma grew revenues 23% y/y, and has a lot of room to grow with global launches.
Earlier in the pipeline Celgene displays depth-of-field. Of course most pre-clinical drugs don't make it through all the clinical phases and FDA approval; there will be some losers. Celgene's pipeline is so broad and important you could write a book about it.
In Oncology/Hematology we have pomalidomide in Phase III trials for myelofibrosis and nearing the end of Phase II for multiple myeloma. There is Amrubicin, in Phase III for small cell lung cancer. In Phase II we also have ACE-011 for CIA and ABI-008 for prostate cancer. In Phase I we have Tork Inhibitor and ABI-009, both for solid tumors. There are two additional pre-clinical ABI variants for solid tumors.
In inflammation and immunology we have Apremilast in Phase III and JNK CC-930, CC-11050 and PDA-001, as well as more Apremilast indications, in Phase II.
Beyond that Celgene lists over a dozen agents in discovery and pre-clinical phases.
Of course, what will affect Celgene's stock price soonest are the late stage candidates. The first big movers is likely to be expanding the label for Revlimid to first-line (initial) treatment of multiple myeloma. The second would be Abraxane for non-small cell lung cancer, with FDA submission in second half of 2011 and a decision likely in the first half of 2012.
In general it is a very good time to invest in biotechnology, even given the known risks. Gilead, Celgene, and Biogen Idec are cash cows that also have unrealized value in their pipelines. Small, risky biotechs aren't commanding the high premiums they used to, which is good because many of their drug candidates don't work out. With the larger biotechs when a drug candidate fails, it is disappointing and the stock can lose some momentum, but cash flow can be used to buy and develop more candidates, or buy back stock, or even (hopefully some time soon) start paying out a dividend, which is the true gold standard for value-conscious investors.
See also www.celgene.com
Keep diversified!
Monday, November 1, 2010
Celgene (CELG) Gathers Momentum
Celgene reported third quarter (Q3) 2010 results on October 28th that showed impressive strength in sales of its current drugs, Revlimid and Vidaza. Just as important to future profit growth are a variety of new therapies in the pipeline at various stages of clinical trials.
Revenue was $910 million, up 7% sequentially from $852.7 million and up 31% from $695.1 in the year-earlier quarter.
GAAP Net income was $281.2 million, up 81% sequentially from $155.4 and up 30% from $216.8 million year-earlier. That equates to EPS (earnings per share) of $0.60, up 82% sequentially from $0.33 and up 30% from $0.46 year-earlier.
Revlimid, used to treat MDS (myelodysplastic syndrome) and multiple myeloma, saw revenues increase 44% from Q3 2009. Vidaza, also used to treat MDS, had revenue up 37% y/y. Thalidomid and ritalin revenues continued to decline.
What is exciting about Celgene, besides its stock price being very reasonable in this risk-averse environment, is that Revlimid and Vidaza are both likely to be approved by the FDA (and international equivalents) for more indications. Throw in known sales of Abraxane for breast cancer, obtained from the recent purchase of Abraxis Bioscience, with good Phase III data for non-small cell lung cancer and Phase II data for other cancers. Otherwise in oncology (cancer) besides Revlimid there is Amrubicin, Tork Inhibitor, ACE-011, and a whole series of ABI compounds. In hematology there are istodax and pomalidomide.
In Immunology Celgene has apremilast, JNK-930, CC-11050, pomalidomide, and PDA-001.
There are also a 15 compounds that have not made it to Phase I trials yet.
To see diseases targetted and how far each therapy is along in the clinical process, see the Celgene product pipeline.
Celgene, at the close today at $61.90, was selling at 23 times trailing non-GAAP earnings. That is very cautious investing, typical of the climate we are in today. Of course many compounds never get FDA approval, and so their R&D dollars go down the drain. There will be some of that with Celgene. With the very solid Revlimid and Vidaza profits, Celgene has undertaken an expensive but well-targetted research and development effort. In the biotechnology industry you can't stand still: you need to keep discovering better medicines. Celgene is doing just that, and that is what, as a long-term investor, I like to see.
See also:
http://www.celgene.com/
My Celgene Analyst Conference Call summary for Q3 2011
Revenue was $910 million, up 7% sequentially from $852.7 million and up 31% from $695.1 in the year-earlier quarter.
GAAP Net income was $281.2 million, up 81% sequentially from $155.4 and up 30% from $216.8 million year-earlier. That equates to EPS (earnings per share) of $0.60, up 82% sequentially from $0.33 and up 30% from $0.46 year-earlier.
Revlimid, used to treat MDS (myelodysplastic syndrome) and multiple myeloma, saw revenues increase 44% from Q3 2009. Vidaza, also used to treat MDS, had revenue up 37% y/y. Thalidomid and ritalin revenues continued to decline.
What is exciting about Celgene, besides its stock price being very reasonable in this risk-averse environment, is that Revlimid and Vidaza are both likely to be approved by the FDA (and international equivalents) for more indications. Throw in known sales of Abraxane for breast cancer, obtained from the recent purchase of Abraxis Bioscience, with good Phase III data for non-small cell lung cancer and Phase II data for other cancers. Otherwise in oncology (cancer) besides Revlimid there is Amrubicin, Tork Inhibitor, ACE-011, and a whole series of ABI compounds. In hematology there are istodax and pomalidomide.
In Immunology Celgene has apremilast, JNK-930, CC-11050, pomalidomide, and PDA-001.
There are also a 15 compounds that have not made it to Phase I trials yet.
To see diseases targetted and how far each therapy is along in the clinical process, see the Celgene product pipeline.
Celgene, at the close today at $61.90, was selling at 23 times trailing non-GAAP earnings. That is very cautious investing, typical of the climate we are in today. Of course many compounds never get FDA approval, and so their R&D dollars go down the drain. There will be some of that with Celgene. With the very solid Revlimid and Vidaza profits, Celgene has undertaken an expensive but well-targetted research and development effort. In the biotechnology industry you can't stand still: you need to keep discovering better medicines. Celgene is doing just that, and that is what, as a long-term investor, I like to see.
See also:
http://www.celgene.com/
My Celgene Analyst Conference Call summary for Q3 2011
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!
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!
Friday, October 23, 2009
Celgene Third Quarter 2009 Results and Analyst Conference
This is just to let you know that I have posted my Celgene (CELG) Third Quarter 2009 analyst conference summary.
Celgene is doing well marketing its current drugs Revlimid, Thalomid and Vidaza. Since Revlimid and Vidaza are still in their global launch period, revenues are almost certain to continue to ramp. Celgene also has a variety of therapies in various stages of development. While some may not make it to market, there are enough good candidates to make it likely growth will continue well into the coming decade.
See also www.celgene.com and my main Celgene page with links to summaries of prior analyst conferences.
Celgene is doing well marketing its current drugs Revlimid, Thalomid and Vidaza. Since Revlimid and Vidaza are still in their global launch period, revenues are almost certain to continue to ramp. Celgene also has a variety of therapies in various stages of development. While some may not make it to market, there are enough good candidates to make it likely growth will continue well into the coming decade.
See also www.celgene.com and my main Celgene page with links to summaries of prior analyst conferences.
Thursday, May 28, 2009
Celgene Growth Outlook
2008 and 2009 look like good years for speculators willing to try to sift babes from bathwater. One of the babies, in my opinion, is Celgene, a biotechnology stock.
Celgene (CELG) is one of the few stocks whose price has held up relatively well during the recent meltdown. At the beginning of 2008 it was selling at roughly $47 per share. Today it well over $41 per share. In between it hit a low of $36.90 and a high last August near $77 per share.
Once Celgene was a high-multiple stock, and today it is trading at a P/E of 25.5 excluding special items. Two years ago that was not a high multiple, but in today's market it is. You can argue for buying stocks with lower multiples if they are growing revenue and profits; there are lots of choices out there today. So why buy Celgene at this price?
Celgene's latest quarter reported, the first quarter of 2009, showed revenues of $605 million, up 31% from the year-earlier quarter. Net income was $163 million, compared to a loss year-earlier.
Can that growth be sustained? Q1 2009 did show a 4% sequential revenue decline from Q4 2008. That might be the beginning of the end, but management attributes it to inventory management by pharmacies and a negative currency exchange rate impact.
Stepping back, the curve looks to continue to trend strongly upward. Right now Celgene stands on three legs: Revlimid, Thalomid, and Vidaza. Thalomid for multiple myeloma has some short term growth potential since it is launching in Europe. Revlimid, a newer analog, is approved for treatment of multiple myeloma and some kinds of myelodysplastic sysndrome. It is relatively new on the market, and new clinical data of a positive nature continues to be released. So it is gaining market share and being introduced in new countries.
Vidaza is also for myelosyplastic syndromes, or MDS. Management claims it is the only MDS therapy to show an actual survival advantage. If that claim holds up, Vidaza sales should ramp rather nicely.
For now the currently approved drugs should keep Celgene growing at a good clip. The big potential future value of the company is in its pipeline. Of course, many promising pipeline drugs end up not getting FDA approval, or failing in the market even if approved. Celgene has a variety of therapies undergoing clinical trial.
Apremilast for psoriatic arthritis completed its Phase II study. Results are expected soon. It is also in a Phase II study for psoriasis and is being tested for other inflammatory diseases.
CC-930 for serious fibrotic diseases completed Phase Ib dosing study. Azacitidine for hematologic malignancies initiated Phase I/II study. PDA001 Phase I study for Crohn's Disease is now enrolling. Amrubicin for SCLC is enrolling both Phase I and Phase II trials.
In addition several Revlimid for CLL (chronic lymphocytic leukemia) trials continue.
The worst case scenario would be if all the new therapies fail to get approval and if the current drugs get knocked out of the market by some competitor. I don't think that is very likely, but it is a good idea to consider worst cases before you invest. I already own some Celgene stock, and have no plans to buy or sell at this time.
For a higher level of detail, see my Summary of the Celgene April 30, 2009 analyst conference.
And keep diversified!
Celgene (CELG) is one of the few stocks whose price has held up relatively well during the recent meltdown. At the beginning of 2008 it was selling at roughly $47 per share. Today it well over $41 per share. In between it hit a low of $36.90 and a high last August near $77 per share.
Once Celgene was a high-multiple stock, and today it is trading at a P/E of 25.5 excluding special items. Two years ago that was not a high multiple, but in today's market it is. You can argue for buying stocks with lower multiples if they are growing revenue and profits; there are lots of choices out there today. So why buy Celgene at this price?
Celgene's latest quarter reported, the first quarter of 2009, showed revenues of $605 million, up 31% from the year-earlier quarter. Net income was $163 million, compared to a loss year-earlier.
Can that growth be sustained? Q1 2009 did show a 4% sequential revenue decline from Q4 2008. That might be the beginning of the end, but management attributes it to inventory management by pharmacies and a negative currency exchange rate impact.
Stepping back, the curve looks to continue to trend strongly upward. Right now Celgene stands on three legs: Revlimid, Thalomid, and Vidaza. Thalomid for multiple myeloma has some short term growth potential since it is launching in Europe. Revlimid, a newer analog, is approved for treatment of multiple myeloma and some kinds of myelodysplastic sysndrome. It is relatively new on the market, and new clinical data of a positive nature continues to be released. So it is gaining market share and being introduced in new countries.
Vidaza is also for myelosyplastic syndromes, or MDS. Management claims it is the only MDS therapy to show an actual survival advantage. If that claim holds up, Vidaza sales should ramp rather nicely.
For now the currently approved drugs should keep Celgene growing at a good clip. The big potential future value of the company is in its pipeline. Of course, many promising pipeline drugs end up not getting FDA approval, or failing in the market even if approved. Celgene has a variety of therapies undergoing clinical trial.
Apremilast for psoriatic arthritis completed its Phase II study. Results are expected soon. It is also in a Phase II study for psoriasis and is being tested for other inflammatory diseases.
CC-930 for serious fibrotic diseases completed Phase Ib dosing study. Azacitidine for hematologic malignancies initiated Phase I/II study. PDA001 Phase I study for Crohn's Disease is now enrolling. Amrubicin for SCLC is enrolling both Phase I and Phase II trials.
In addition several Revlimid for CLL (chronic lymphocytic leukemia) trials continue.
The worst case scenario would be if all the new therapies fail to get approval and if the current drugs get knocked out of the market by some competitor. I don't think that is very likely, but it is a good idea to consider worst cases before you invest. I already own some Celgene stock, and have no plans to buy or sell at this time.
For a higher level of detail, see my Summary of the Celgene April 30, 2009 analyst conference.
And keep diversified!
Wednesday, January 14, 2009
Celgene Projects Continued Growth
Celgene (CELG), a biotechnology company specializing in drugs for blood cancers such as multiple myeloma, on January 12, 2009 updated investors on its progress and guidance for 2009. In 2008 revenues grew 58% to $2.23 billion, and are expected to grow another 20% in 2009. Profits (net income) for 2008 was about $1.55 per share.
The key to growth in 2008 and 2009 is the drug Revlimid, which grew revenues 71% from the prior year to $1.32 billion. Revlimid is still being introduced on a global scale, so it has room for more growth. Celgene is also hoping that Revlimid, which is primarily for multiple myeloma, will be approved for more indications, such as solid tumors, as trial data comes in.
It also expects VIDAZA sales to double in 2009 to about $400 million.
Some investors were disappointed that revenue growth is expected to slow to 20% in 2009, up from the astounding 58% of 2008. However, it should be noted that sales increases in new drugs come in waves after indications get FDA (or foreign) approval. Also Celgene's base of sales is much larger, so 20% is still quite impressive.
As with all drugs, Celgene's pharmaceuticals carry some risks for investors as well as patients. Each drug is subject to competition, including pricing pressures. Each drug may turn out to have previously undetected adverse affects on patients. Governments may change the rates of reimbursement that are allowed.
Still, given those risks, Celgene has turned out to be a relatively stable bet in this years remarkably declining stock market. Its 52 week high was $77.39, and it is selling right now at $48.70. But in the mean time a lot of the risk has been taken out because of increased earnings causing its price-to-earnings ratio to decline (NASDAQ gives it a PE of 34 and a forward PE of 17).
We will know more after the analyst conference and report of Q4 results later in January. As usual I will be writing a summary of the results and conference that you can find at my main Celgene page.
I own some Celgene stock.
Keep diversified!
Celgene January 12, 2009 press release
www.celgene.com
Q3 2008 Celgene analyst conference summary
The key to growth in 2008 and 2009 is the drug Revlimid, which grew revenues 71% from the prior year to $1.32 billion. Revlimid is still being introduced on a global scale, so it has room for more growth. Celgene is also hoping that Revlimid, which is primarily for multiple myeloma, will be approved for more indications, such as solid tumors, as trial data comes in.
It also expects VIDAZA sales to double in 2009 to about $400 million.
Some investors were disappointed that revenue growth is expected to slow to 20% in 2009, up from the astounding 58% of 2008. However, it should be noted that sales increases in new drugs come in waves after indications get FDA (or foreign) approval. Also Celgene's base of sales is much larger, so 20% is still quite impressive.
As with all drugs, Celgene's pharmaceuticals carry some risks for investors as well as patients. Each drug is subject to competition, including pricing pressures. Each drug may turn out to have previously undetected adverse affects on patients. Governments may change the rates of reimbursement that are allowed.
Still, given those risks, Celgene has turned out to be a relatively stable bet in this years remarkably declining stock market. Its 52 week high was $77.39, and it is selling right now at $48.70. But in the mean time a lot of the risk has been taken out because of increased earnings causing its price-to-earnings ratio to decline (NASDAQ gives it a PE of 34 and a forward PE of 17).
We will know more after the analyst conference and report of Q4 results later in January. As usual I will be writing a summary of the results and conference that you can find at my main Celgene page.
I own some Celgene stock.
Keep diversified!
Celgene January 12, 2009 press release
www.celgene.com
Q3 2008 Celgene analyst conference summary
Sunday, September 7, 2008
Celgene to Grow Rapidly
Celgene (CELG) is a pharmaceutical company, usually seen as a biotechnology company, known for selling Revlimid, a derivative of thalidomide for the treatment of multiple myeloma. Earlier this year Celgene completed the acquisition of Pharmion, which sold thalidomide in Europe for the treatment of multiple myeloma. Celgene also markets Alkeran, which has been used to treat multiple myeloma since 1962, and Vidiza for MDS (myelodisplastic syndrome). It no longer markets Focalin and Ritalin, having sold the rights to Novartis.
Celgene has a very high price to earnings ratio, listed at almost 50 at the close of trade Friday, September 5, 2008. Very few companies have PE's like that in this market. But Celgene's Q2 revenues were up 34% from Q1 and up 64% from year-earlier. Part of that increase was due to the acquisition of Pharmion, but Pharmion itself was growing revenue rapidly before it was acquired.
The excitement is due partly to continuing good clinical results both for currently approved drugs in new (or at least varying) indications and for Celgene's extensive pipeline. Before getting carried away, keep in mind the usual risks for drug companies. The discovery of previously unknown side effect (or adverse reaction) can cause a drug to be pulled from the market or restricted in its use. Even approved drugs will not sell well if insurance companies refuse to reimburse for them. And anything in the pipeline can fail to become profitable due to a failure in the market or expenses exceeding revenues, or competitive pressures.
Ambrucin is leading the list for new future profit generation at Celgene. According to Celgene, "Ambrucin has demonstrated substantial clinical efficacy in the treatment of small cell lung cancer. Amrubicin is a potent topoisomerase II inhibitor and is being studied as a single agent and in combination with anti-cancer therapies for a variety of solid tumors, including lung cancer." Ambrucin was given Fast Track status by the FDA last week. While many experimental drugs get Fast Track status, Ambrucin is already being used to treat lung cancer in Japan, so marketing it in the United States should happen relatively soon.
On August 21, 2008, Celgene announced "VIDAZA (azacitidine) received expanded U.S. Food and Drug Administration (FDA) approval to reflect new overall survival achieved in the AZA-001 survival study of patients with higher-risk myelodysplastic syndromes (MDS). This expanded indication supplements the 2004 FDA authorization of VIDAZA as the first therapy approved in the U.S." Vidaza is also being launched in Europe, which should add substantially to Celgene revenues once it ramps up.
Revlimid has shown good results in trials for CLL (Chronic Lymphocytic Leukemia) and NHL (non-Hodgkin Lymphoma), but approval from the FDA probably won't be possible until late 2009 or 2010.
All of this is on top of the continued expansion of Revlimid for multiple myeloma into more national markets, in particular into Asia.
Revenue growth tends to come in spurts in companies introducing new drugs because each nation has to approve the drug and then approve national health care reimbursement. So you can't just draw a straight line from a prior quarter or a prior year's quarter and say how fast revenues will grow. Stock prices tend to overreact to accelerations and decelerations.
So Celgene is probably best for investors with a good long investment horizon.
I own some Celgene stock.
Keep in mind that there is always risk (as Fannie Mae and Freddie Mac investors just learned), so keep diversified!
More data:
My Celgene page
Summary of Q2 2008 Celgene Analyst Conference
www.celgene.com
Celgene has a very high price to earnings ratio, listed at almost 50 at the close of trade Friday, September 5, 2008. Very few companies have PE's like that in this market. But Celgene's Q2 revenues were up 34% from Q1 and up 64% from year-earlier. Part of that increase was due to the acquisition of Pharmion, but Pharmion itself was growing revenue rapidly before it was acquired.
The excitement is due partly to continuing good clinical results both for currently approved drugs in new (or at least varying) indications and for Celgene's extensive pipeline. Before getting carried away, keep in mind the usual risks for drug companies. The discovery of previously unknown side effect (or adverse reaction) can cause a drug to be pulled from the market or restricted in its use. Even approved drugs will not sell well if insurance companies refuse to reimburse for them. And anything in the pipeline can fail to become profitable due to a failure in the market or expenses exceeding revenues, or competitive pressures.
Ambrucin is leading the list for new future profit generation at Celgene. According to Celgene, "Ambrucin has demonstrated substantial clinical efficacy in the treatment of small cell lung cancer. Amrubicin is a potent topoisomerase II inhibitor and is being studied as a single agent and in combination with anti-cancer therapies for a variety of solid tumors, including lung cancer." Ambrucin was given Fast Track status by the FDA last week. While many experimental drugs get Fast Track status, Ambrucin is already being used to treat lung cancer in Japan, so marketing it in the United States should happen relatively soon.
On August 21, 2008, Celgene announced "VIDAZA (azacitidine) received expanded U.S. Food and Drug Administration (FDA) approval to reflect new overall survival achieved in the AZA-001 survival study of patients with higher-risk myelodysplastic syndromes (MDS). This expanded indication supplements the 2004 FDA authorization of VIDAZA as the first therapy approved in the U.S." Vidaza is also being launched in Europe, which should add substantially to Celgene revenues once it ramps up.
Revlimid has shown good results in trials for CLL (Chronic Lymphocytic Leukemia) and NHL (non-Hodgkin Lymphoma), but approval from the FDA probably won't be possible until late 2009 or 2010.
All of this is on top of the continued expansion of Revlimid for multiple myeloma into more national markets, in particular into Asia.
Revenue growth tends to come in spurts in companies introducing new drugs because each nation has to approve the drug and then approve national health care reimbursement. So you can't just draw a straight line from a prior quarter or a prior year's quarter and say how fast revenues will grow. Stock prices tend to overreact to accelerations and decelerations.
So Celgene is probably best for investors with a good long investment horizon.
I own some Celgene stock.
Keep in mind that there is always risk (as Fannie Mae and Freddie Mac investors just learned), so keep diversified!
More data:
My Celgene page
Summary of Q2 2008 Celgene Analyst Conference
www.celgene.com
Sunday, June 15, 2008
Celgene Trial Data: REVLIMID, VIDAZA, Amrubicin
There has been a fair amount of new data analysis coming from Celgene (CELG) in the past two weeks. All of it reinforces the case for the continued growth of Celgene revenues. Before looking at the results, a review of Celgene's financials are in order.
At the latest quarter results and analyst conference (See my Summary of the May 8, 2008 Celgene analyst conference and Q1 2008 results), Celgene reported revenue was $462.6 million, up 12% sequentially from $414.6 million and up 58% from $293.4 million year-earlier.
GAAP net income was negative $1.64 billion, down sequentially from positive $75.3 million and down from positive $57 million year-earlier. However, the GAAP loss was due to Celgene's acquisition of Pharmion. Non-GAAP net income was $159.3 million; EPS was $0.36.
Even if Celgene pauses in revenue and earnings growth, Q1 results annualize to $637 million of non-GAAP net income. At market close on Friday (6/13/2008) Celgene's market capitalization was $22.6 billion. Using those numbers for forward Price to earnings, you get a PE ratio of 35.5. That sounds pretty pricey in today's illiquid stock market.
The case for the stock valuation is one of proven rapid revenue growth and its likely continuation. Since the global market of Celgene's major products, Revlimid and Thalomid, are still expanding on a country by country basis, and since Revlimid's revenues almost doubled between Q1 2007 and Q1 2008, this is not an unwarranted assumption. But at some point there will be market saturation. To grow beyond that either one or more of the currently approved therapies has to by approved for treating another disease (or variation of a disease) or new drugs will have to be brought to market. Celgene already is reporting revenue of Alkeran, Focalin, Ritalin, and Vidaza in addition to the blockbuster drugs. Vidaza, which was picked up in the Pharmion acquisition, is believed to have potential revenues of over $200 million this year.
In that context the three recent data announcements are go-go indicators for investors.
Vidaza (azacitidine) was reported to provide "a significant overall survival benefit for patients with higher-risk myelodysplastic syndromes (MDS) regardless of whether patients were treated with low-dose Ara-C or best supportive care in the control arm. In aggregate, the survival benefit for VIDAZA across all countries was 24.4 months versus 15.3 months (hazard ratio 0.36) (95% Cl: 0.20-0.65) (p=0.0006)) compared to the other treatment arms." Vidaza is already approved in the U.S. for treating MDS. This is the kind of data that convinces doctors to use it rather than, or in addition to, other therapies. If you look at the Celgene product pipeline page, you will see that Vidaza is also in trials for treatment of solid tumors and AML (Acute Myeloid Leukemia).
The Amrubicin announcement was probably the most exciting. Two different Phase II clinical studies of amrubicin in patients with extensive-disease small-cell lung cancer (SCLC) either sensitive to platinum-based first-line therapy or refractory (non-responsive) to platinum-based first-line therapy. Results of the studies demonstrated improved overall response rates that compare favorably with topotecan, as well as no evidence of anthracycline-induced cardiotoxicity.
In the first study, the primary endpoint was response rate, and secondary endpoints were time to disease progression, progression-free survival, overall survival and safety. This was met with patients receiving amrubicin demonstrating an overall response rate of 34 percent, compared to 3.8 percent of patients receiving topotecan and the median progression-free survival time for amrubicin patients is 138 days compared to 106 days for topotecan. In the second multi-center international study, patients with SCLC who were refractory to first-line platinum based chemotherapy were treated with IV amrubicin . The primary endpoint was response rate, and secondary endpoints were time to disease progression, progression-free survival, overall survival and safety. The overall response rate for the study was 17.4 percent with one complete response, which compares favorably with those seen historically with topotecan. Additionally, median progression-free survival is 97 days. Amrubicin is generally well tolerated in both studies.
Of course, this is only Phase II data; Amrubicin is already in a Phase III trial, and often drugs that do well in Phase II fail in Phase III. With that warning in mind, the announced results are bullish, but actual approval and revenues from the drug are out in the post 2010 domain.
Finally, more proof came in of the efficacy of Revlimid came in. A pooled study presented at the 13th European Hematology Association (EHA) congress showed "multiple myeloma patients taking REVLIMID(R) (lenalidomide) plus dexamethasone significantly increased their survival rates. A lifetime simulation yielded an estimated mean survival of 5.6 life-years with REVLIMID in combination with dexamethasone (2.2 life-years with dexamethasone alone) for patients with one prior therapy, and 4.2 life-years (1.5 life-years for dexamethasone alone) for patients with multiple prior therapies."
Again, this just pushes doctors to get Revlimid going as a therapy earlier, rather than trying it only as a second or third line defense.
It takes time for knowledge to spread among the medical community, and of course it sometimes seems to take forever to get a new drug approved. Celgene is in the enviable position of having several approved drugs in the marketplace, a couple growing revenues very rapidly, as well as a variety of promising drugs in its pipeline. As biotechnology companies go, it is a relatively safe bet on growth.
I own a bit of Celgene stock.
Keep diversified.
More data: www.celgene.com
At the latest quarter results and analyst conference (See my Summary of the May 8, 2008 Celgene analyst conference and Q1 2008 results), Celgene reported revenue was $462.6 million, up 12% sequentially from $414.6 million and up 58% from $293.4 million year-earlier.
GAAP net income was negative $1.64 billion, down sequentially from positive $75.3 million and down from positive $57 million year-earlier. However, the GAAP loss was due to Celgene's acquisition of Pharmion. Non-GAAP net income was $159.3 million; EPS was $0.36.
Even if Celgene pauses in revenue and earnings growth, Q1 results annualize to $637 million of non-GAAP net income. At market close on Friday (6/13/2008) Celgene's market capitalization was $22.6 billion. Using those numbers for forward Price to earnings, you get a PE ratio of 35.5. That sounds pretty pricey in today's illiquid stock market.
The case for the stock valuation is one of proven rapid revenue growth and its likely continuation. Since the global market of Celgene's major products, Revlimid and Thalomid, are still expanding on a country by country basis, and since Revlimid's revenues almost doubled between Q1 2007 and Q1 2008, this is not an unwarranted assumption. But at some point there will be market saturation. To grow beyond that either one or more of the currently approved therapies has to by approved for treating another disease (or variation of a disease) or new drugs will have to be brought to market. Celgene already is reporting revenue of Alkeran, Focalin, Ritalin, and Vidaza in addition to the blockbuster drugs. Vidaza, which was picked up in the Pharmion acquisition, is believed to have potential revenues of over $200 million this year.
In that context the three recent data announcements are go-go indicators for investors.
Vidaza (azacitidine) was reported to provide "a significant overall survival benefit for patients with higher-risk myelodysplastic syndromes (MDS) regardless of whether patients were treated with low-dose Ara-C or best supportive care in the control arm. In aggregate, the survival benefit for VIDAZA across all countries was 24.4 months versus 15.3 months (hazard ratio 0.36) (95% Cl: 0.20-0.65) (p=0.0006)) compared to the other treatment arms." Vidaza is already approved in the U.S. for treating MDS. This is the kind of data that convinces doctors to use it rather than, or in addition to, other therapies. If you look at the Celgene product pipeline page, you will see that Vidaza is also in trials for treatment of solid tumors and AML (Acute Myeloid Leukemia).
The Amrubicin announcement was probably the most exciting. Two different Phase II clinical studies of amrubicin in patients with extensive-disease small-cell lung cancer (SCLC) either sensitive to platinum-based first-line therapy or refractory (non-responsive) to platinum-based first-line therapy. Results of the studies demonstrated improved overall response rates that compare favorably with topotecan, as well as no evidence of anthracycline-induced cardiotoxicity.
In the first study, the primary endpoint was response rate, and secondary endpoints were time to disease progression, progression-free survival, overall survival and safety. This was met with patients receiving amrubicin demonstrating an overall response rate of 34 percent, compared to 3.8 percent of patients receiving topotecan and the median progression-free survival time for amrubicin patients is 138 days compared to 106 days for topotecan. In the second multi-center international study, patients with SCLC who were refractory to first-line platinum based chemotherapy were treated with IV amrubicin . The primary endpoint was response rate, and secondary endpoints were time to disease progression, progression-free survival, overall survival and safety. The overall response rate for the study was 17.4 percent with one complete response, which compares favorably with those seen historically with topotecan. Additionally, median progression-free survival is 97 days. Amrubicin is generally well tolerated in both studies.
Of course, this is only Phase II data; Amrubicin is already in a Phase III trial, and often drugs that do well in Phase II fail in Phase III. With that warning in mind, the announced results are bullish, but actual approval and revenues from the drug are out in the post 2010 domain.
Finally, more proof came in of the efficacy of Revlimid came in. A pooled study presented at the 13th European Hematology Association (EHA) congress showed "multiple myeloma patients taking REVLIMID(R) (lenalidomide) plus dexamethasone significantly increased their survival rates. A lifetime simulation yielded an estimated mean survival of 5.6 life-years with REVLIMID in combination with dexamethasone (2.2 life-years with dexamethasone alone) for patients with one prior therapy, and 4.2 life-years (1.5 life-years for dexamethasone alone) for patients with multiple prior therapies."
Again, this just pushes doctors to get Revlimid going as a therapy earlier, rather than trying it only as a second or third line defense.
It takes time for knowledge to spread among the medical community, and of course it sometimes seems to take forever to get a new drug approved. Celgene is in the enviable position of having several approved drugs in the marketplace, a couple growing revenues very rapidly, as well as a variety of promising drugs in its pipeline. As biotechnology companies go, it is a relatively safe bet on growth.
I own a bit of Celgene stock.
Keep diversified.
More data: www.celgene.com
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