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Celgene (CELG) Q2 Earnings: Disappointment in Store?
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Celgene Corporation is scheduled to report second-quarter 2018 results on Jul 26, before the opening bell. Last quarter, the company reported a positive earnings surprise of 2.50%.
Celgene’s track record has been excellent with the company beating earnings estimates in all of the trailing four quarters. Overall, the company has delivered an average positive surprise of 2.37%.
Let's see how things are shaping up at the company, ahead of this announcement.
Factors in Play
The company updated the outlook for 2018 concurrent with the first-quarter results. Celgene now anticipates earnings per share of $8.45 in 2018 compared to the earlier estimate of $8.70-$8.90. Net revenues are now estimated around $14.8 billion, at the high end of the previously projected range of $14.4-$14.8 billion. The numbers include the impact of dilution from the Juno acquisition.
Revlimid sales are now projected at $9.5 billion, up from $9.4 billion estimated earlier. Abraxane sales are estimated to be around $1 billion. Pomalyst’s revenues are now projected at around $2.0 billion (previous projection: $1.9 billion). Otezla sales continued to be projected at $1.5 billion.
Celgene’s key product, Revlimid, should continue to act as the main growth driver in the second quarter. Revlimid, an oral immunomodulatory drug, is currently approved for several indications, including newly diagnosed multiple myeloma (MM), myelodysplastic syndromes (MDS) and mantle cell lymphoma (MCL). Market share gains in key markets and longer treatment duration are contributing to the drug’s growth.
Meanwhile, Celgene is working on expanding Revlimid’s label further. Revlimid received the FDA approval for use as a maintenance treatment in NDMM patients after they receive an autologous stem-cell transplant. The drug was also approved in the EU for the same. NDMM market share continues to grow outside the United States, with a positive uptake both in the EU and Japan.
Currently, a broad phase III program evaluating Revlimid in non-Hodgkin lymphoma (NHL) is underway. The current Zacks Consensus Estimate for the second quarter for Revlimid is $2.3 billion.
Celgene is also currently working on label expansion of drugs like Pomalyst/Imnovid, Abraxane and Otezla among others, which is encouraging. Pomalyst/Imnovid is being evaluated in multiple combination studies in relapsed/refractory MM. The drug’s label was updated in the United States and the EU to include data from a pooled pharmacokinetics analysis of patients with relapsed and/or refractory MM and impaired renal function.
Pomalyst, in combination with Darzalex and dexamethasone for relapsed/refractory myeloma was recently approved by the FDA and should propel sales further. These should act as growth drivers leading to share and duration gains in the future. Moreover, Abraxane is currently in various stages of evaluation for breast, pancreatic and non-small cell lung cancers (NSCLC).
The company recently reported positive results from a phase III study, which is evaluating the efficacy, safety and pharmacokinetics of Roche’s (RHHBY - Free Report) immune-oncology drug, Tecentriq, in combination with Abraxane compared to placebo in combination with Abraxane, in patients suffering from locally advanced or metastatic triple negative breast cancer (TNBC).
We also expect the company to throw more light on its promising candidates in the pipeline. Celgene and partner Acceleron Pharma recently reported positive results from two phase III studies on luspatercept — BELIEVE and MEDALIST. Data from both the studies will be submitted to a future medical meeting in 2018. Both the companies intend to submit regulatory applications for luspatercept in the United States and Europe, in the first half of 2019.
On the second-quarter call, investors are expected to gain more visibility on the company’s performance and label-expansion efforts, along with updates on the pipeline front.
Share Price Performance
Celgene’s stock lost 18.4% in the year so far compared to the industry’s 2.0% decline. The recent pipeline setbacks continue to weigh on shares.
Earnings Whispers
Our proven model does not conclusively show that Celgene is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as elaborated below.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is pegged at 0.0%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate is $2.10. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Celgene currently carries a Zacks Rank #4 (Sell). As it is, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stock That Warrants a Look
Here is one health care stock that you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter.
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Celgene (CELG) Q2 Earnings: Disappointment in Store?
Celgene Corporation is scheduled to report second-quarter 2018 results on Jul 26, before the opening bell. Last quarter, the company reported a positive earnings surprise of 2.50%.
Celgene’s track record has been excellent with the company beating earnings estimates in all of the trailing four quarters. Overall, the company has delivered an average positive surprise of 2.37%.
Let's see how things are shaping up at the company, ahead of this announcement.
Factors in Play
The company updated the outlook for 2018 concurrent with the first-quarter results. Celgene now anticipates earnings per share of $8.45 in 2018 compared to the earlier estimate of $8.70-$8.90. Net revenues are now estimated around $14.8 billion, at the high end of the previously projected range of $14.4-$14.8 billion. The numbers include the impact of dilution from the Juno acquisition.
Revlimid sales are now projected at $9.5 billion, up from $9.4 billion estimated earlier. Abraxane sales are estimated to be around $1 billion. Pomalyst’s revenues are now projected at around $2.0 billion (previous projection: $1.9 billion). Otezla sales continued to be projected at $1.5 billion.
Celgene’s key product, Revlimid, should continue to act as the main growth driver in the second quarter. Revlimid, an oral immunomodulatory drug, is currently approved for several indications, including newly diagnosed multiple myeloma (MM), myelodysplastic syndromes (MDS) and mantle cell lymphoma (MCL). Market share gains in key markets and longer treatment duration are contributing to the drug’s growth.
Meanwhile, Celgene is working on expanding Revlimid’s label further. Revlimid received the FDA approval for use as a maintenance treatment in NDMM patients after they receive an autologous stem-cell transplant. The drug was also approved in the EU for the same. NDMM market share continues to grow outside the United States, with a positive uptake both in the EU and Japan.
Currently, a broad phase III program evaluating Revlimid in non-Hodgkin lymphoma (NHL) is underway. The current Zacks Consensus Estimate for the second quarter for Revlimid is $2.3 billion.
Celgene is also currently working on label expansion of drugs like Pomalyst/Imnovid, Abraxane and Otezla among others, which is encouraging. Pomalyst/Imnovid is being evaluated in multiple combination studies in relapsed/refractory MM. The drug’s label was updated in the United States and the EU to include data from a pooled pharmacokinetics analysis of patients with relapsed and/or refractory MM and impaired renal function.
Pomalyst, in combination with Darzalex and dexamethasone for relapsed/refractory myeloma was recently approved by the FDA and should propel sales further. These should act as growth drivers leading to share and duration gains in the future. Moreover, Abraxane is currently in various stages of evaluation for breast, pancreatic and non-small cell lung cancers (NSCLC).
The company recently reported positive results from a phase III study, which is evaluating the efficacy, safety and pharmacokinetics of Roche’s (RHHBY - Free Report) immune-oncology drug, Tecentriq, in combination with Abraxane compared to placebo in combination with Abraxane, in patients suffering from locally advanced or metastatic triple negative breast cancer (TNBC).
We also expect the company to throw more light on its promising candidates in the pipeline. Celgene and partner Acceleron Pharma recently reported positive results from two phase III studies on luspatercept — BELIEVE and MEDALIST. Data from both the studies will be submitted to a future medical meeting in 2018. Both the companies intend to submit regulatory applications for luspatercept in the United States and Europe, in the first half of 2019.
On the second-quarter call, investors are expected to gain more visibility on the company’s performance and label-expansion efforts, along with updates on the pipeline front.
Share Price Performance
Celgene’s stock lost 18.4% in the year so far compared to the industry’s 2.0% decline. The recent pipeline setbacks continue to weigh on shares.
Earnings Whispers
Our proven model does not conclusively show that Celgene is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as elaborated below.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is pegged at 0.0%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate is $2.10. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Celgene currently carries a Zacks Rank #4 (Sell). As it is, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stock That Warrants a Look
Here is one health care stock that you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter.
Intercept Pharmaceuticals is expected to report second-quarter results on Jul 30. The company has an Earnings ESP of +4.25% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>