Celgene Upbeat About 2013

Celgene Corporation (CELG - Analyst Report) recently provided an encouraging guidance for 2013. The biopharmaceutical company expects adjusted earnings for 2013 in the range of $5.50-$5.60 per share, up 12-14% over expected earnings of $4.90 per share in 2012. While the Zacks Consensus Estimate for 2012 is $4.44 per share, it is currently pegged at $4.91 per share for 2013.

Net product sales for 2013 are expected to be approximately $6.0 billion, up 11.4% year over year. Net sales of oncology drug Revlimid, the key growth driver at Celgene, is projected in the range of $4.1 - $4.2 billion, reflecting an increase of 9 - 12 % year-over-year.

Celgene maintained its view for 2015. The company continues to expect adjusted earnings for 2015 in the range of $8.00 - $9.00 per share. Net product sales for 2015 are still forecasted in the range of $8.0-9.0 billion.

Celgene also provided a rosy outlook for 2017. The company projects net product sales of $12.0 billion for 2017. Moreover, adjusted earnings per share for 2017 are forecasted in the range of $13.00 - $14.00.

Celgene expects robust sales from another oncology drug, Abraxane, over the long-term. Sales of the drug are expected in the range of $1.0 - $1.25 billion in 2015 and $1.5 - $2.0 billion in 2017. Net product sales at Celgene are expected to increase at a compounded annual growth rate of 19% from 2013 to 2017.

The company, which will announce its fourth quarter and full-year 2012 results shortly, expects net product sales for 2012 to be $5.4 billion, up 15% year over year. Celgene expects 2012 revenues of $5.5 billion, up 14% year over year, driven by strong Revlimid sales. Sales of Revlimid are expected to exceed $1.0 billion in the final quarter of 2012.

Celgene has a diversified pipeline, which upon successful development is expected to strengthen its top-line further. The company has a series of pipeline events lined up:

The decision on oncology candidate pomalidomide is an eagerly awaited event. The candidate is under review in the US; a response from the US Food and Drug Administration (FDA) should be out by February 10, 2013.

Moreover, Celgene is highly optimistic on the potential of apremilast, which is being developed for multiple indications. Recently, Celgene presented encouraging data from two phase III studies (ESTEEM 1 and 2), evaluating apremilast in patients suffering from moderate-to-severe chronic plaque psoriasis. Celgene expects to seek FDA approval for the indication on the basis of data from the two studies in the second half of 2013.

Celgene intends to seek US approval for apremilast in the psoriatic arthritis indication in the first quarter of 2013. EU approval for apremilast in the psoriasis and psoriatic arthritis indications is expected to be sought in the second half of 2013.

We have a Neutral recommendation on Celgene. The stock carries a Zacks #3 Rank (Hold) in the short run. Biopharmaceutical stocks that carry a Zacks #1 Rank (Strong Buy) include Targacept Inc. (TRGT - Snapshot Report).