Biotech company, Celgene Corporation , has had a good run over the last 12 months with the company’s shares gaining 24.8%, outperforming the S&P 500 as well as the Zacks-categorized Medical-Biomedical/Genetics industry which declined 3.6% during this period.
Moreover, Celgene’s revenue chart over the last 5 years looks impressive with revenues rising at a steady pace during this period. But will the company be able to keep up this impressive performance over the next few years? Going by consensus estimates and the company’s guidance, 2017 revenues are expected to grow 18% while consensus numbers indicate top-line growth of 14.8% in 2018.
Key Growth Drivers
Celgene has three drugs in its portfolio that are key to its success -- Revlimid, Otezla and Pomalyst.
Blood cancer drug, Revlimid, is the main growth driver accounting for 62.1% of total revenues in 2016. Revlimid, initially approved in 2005 by the FDA for the targeted treatment of transfusion-dependent patients with low- and intermediate-risk myelodysplastic syndromes (MDS) with deletion 5q chromosomal abnormality, has subsequently been approved for additional indications.
Despite being on the market for so many years, Revlimid continues to deliver impressive growth. Revlimid revenues grew 20.2% in 2016 with 17% growth forecasted for 2017. Revlimid’s growth should be driven by increased demand across the world with further share and duration gains in newly diagnosed multiple myeloma. Moreover, the recent approval of Revlimid for maintenance treatment in transplant-eligible multiple myeloma patients will be a significant driver of sales. Celgene is also working on expanding the use of Revlimid-based triplets. Revlimid is being studied for additional indications which bode well for long term growth.
Pomalyst/Imnovid, another multiple myeloma treatment in Celgene’s portfolio, achieved blockbuster status last year with sales growing 33.3% to $1.3 billion. Despite the growing presence of new therapies and later lines of treatment, Pomalyst has managed to maintain its leadership position in the third and fourth-line plus patient segment in major markets. FDA approval for the use of Pomalyst in combination with Darzalex (daratumumab) for relapsed refractory myeloma by Jun 2017 would boost revenues further. Pomalyst is being evaluated for use in combination with other treatments as well and is expected to grow 22% in 2017.
Beyond oncology, Celgene has a blockbuster in the form of psoriatic disease drug, Otezla. Otezla, a part of Celgene’s inflammation and immunology portfolio, brought in sales of $1 billion in 2016 with sales expected to grow 57% in 2017. Otezla has immense potential with sales being driven by demand, an expanded U.S. footprint, growing market share and launch in new markets.
Further growth should be driven by the company’s rich and promising pipeline which represents upside potential. Late-stage candidates including ozanimod (ulcerative colitis and relapsing multiple sclerosis with regulatory filing expected by year end) and GED-0301 (Crohn’s disease and ulcerative colitis) in the inflammation and immunology therapeutic area and CC-486 (myelodysplastic syndromes and acute myeloid leukemia), enasidenib (acute myeloid leukemia -- regulatory application submitted in the U.S. with a decision expected in the second half of 2017) and luspatercept (myelodysplastic syndromes and beta-thalassemia) within hematology. What makes the pipeline more attractive is that quite a few of these candidates have blockbuster potential.
With Revlimid going strong, Pomalyst and Otezla picking pace and potential blockbuster candidates in the pipeline, Celgene looks well-positioned to maintain its growth trajectory and achieve its 2020 target of revenues in excess of $21 billion. Celgene is a Zacks Rank #3 (Hold) stock -- you can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Will These Three Drugs Continue Driving Celgene's Top-Line Growth?
Biotech company, Celgene Corporation , has had a good run over the last 12 months with the company’s shares gaining 24.8%, outperforming the S&P 500 as well as the Zacks-categorized Medical-Biomedical/Genetics industry which declined 3.6% during this period.
Moreover, Celgene’s revenue chart over the last 5 years looks impressive with revenues rising at a steady pace during this period. But will the company be able to keep up this impressive performance over the next few years? Going by consensus estimates and the company’s guidance, 2017 revenues are expected to grow 18% while consensus numbers indicate top-line growth of 14.8% in 2018.
Key Growth Drivers
Celgene has three drugs in its portfolio that are key to its success -- Revlimid, Otezla and Pomalyst.
Blood cancer drug, Revlimid, is the main growth driver accounting for 62.1% of total revenues in 2016. Revlimid, initially approved in 2005 by the FDA for the targeted treatment of transfusion-dependent patients with low- and intermediate-risk myelodysplastic syndromes (MDS) with deletion 5q chromosomal abnormality, has subsequently been approved for additional indications.
Despite being on the market for so many years, Revlimid continues to deliver impressive growth. Revlimid revenues grew 20.2% in 2016 with 17% growth forecasted for 2017. Revlimid’s growth should be driven by increased demand across the world with further share and duration gains in newly diagnosed multiple myeloma. Moreover, the recent approval of Revlimid for maintenance treatment in transplant-eligible multiple myeloma patients will be a significant driver of sales. Celgene is also working on expanding the use of Revlimid-based triplets. Revlimid is being studied for additional indications which bode well for long term growth.
Pomalyst/Imnovid, another multiple myeloma treatment in Celgene’s portfolio, achieved blockbuster status last year with sales growing 33.3% to $1.3 billion. Despite the growing presence of new therapies and later lines of treatment, Pomalyst has managed to maintain its leadership position in the third and fourth-line plus patient segment in major markets. FDA approval for the use of Pomalyst in combination with Darzalex (daratumumab) for relapsed refractory myeloma by Jun 2017 would boost revenues further. Pomalyst is being evaluated for use in combination with other treatments as well and is expected to grow 22% in 2017.
Beyond oncology, Celgene has a blockbuster in the form of psoriatic disease drug, Otezla. Otezla, a part of Celgene’s inflammation and immunology portfolio, brought in sales of $1 billion in 2016 with sales expected to grow 57% in 2017. Otezla has immense potential with sales being driven by demand, an expanded U.S. footprint, growing market share and launch in new markets.
Further growth should be driven by the company’s rich and promising pipeline which represents upside potential. Late-stage candidates including ozanimod (ulcerative colitis and relapsing multiple sclerosis with regulatory filing expected by year end) and GED-0301 (Crohn’s disease and ulcerative colitis) in the inflammation and immunology therapeutic area and CC-486 (myelodysplastic syndromes and acute myeloid leukemia), enasidenib (acute myeloid leukemia -- regulatory application submitted in the U.S. with a decision expected in the second half of 2017) and luspatercept (myelodysplastic syndromes and beta-thalassemia) within hematology. What makes the pipeline more attractive is that quite a few of these candidates have blockbuster potential.
With Revlimid going strong, Pomalyst and Otezla picking pace and potential blockbuster candidates in the pipeline, Celgene looks well-positioned to maintain its growth trajectory and achieve its 2020 target of revenues in excess of $21 billion. Celgene is a Zacks Rank #3 (Hold) stock -- you can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>