Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Celgene Corporation’s (CELG - Analyst Report) fourth quarter 2012 earnings (excluding special items but including stock-based compensation expense) of $1.18 per share beat the year-ago earnings by 26.9%. Higher revenues drove earnings in the reported quarter. The Zacks Consensus Estimate was $1.18 per share.

Quarter in Details

Total revenue climbed 12.7% to $1.45 billion in the fourth quarter of 2012. Revenues were boosted by the impressive performance of Celgene’s cancer drugs Revlimid, Abraxane and Vidaza. Revenues were just shy of the Zacks Consensus Estimate of $1.46 billion. Net product sales climbed 13.9% to $1.42 billion.

Net sales of Revlimid, the key growth driver at Celgene, came in at $1 billion, reflecting an increase of 17% over the year-ago period. The drug did well both in the US (up 18%) and international markets (up 16%). Market share gains and increased duration of therapy drove sales in the final quarter of 2012.

Net sales of Vidaza spiked 14% to $216 million. Sales in international markets climbed 23% to $128 million. US sales of Vidaza increased 3% to $88 million, despite the loss of exclusivity in 2011.

Net sales of another cancer drug, Abraxane, climbed 3% to $106 million. The drug performed poorly in the US with sales declining 9% to $84 million. However, strong sales of Abraxane in international markets more than offset the weak US performance. Sales in international markets jumped 90% to $22 million.

Net sales of another cancer drug, Thalomid, continued to decline due to the availability of better alternatives. Thalomid sales were $73 million, down 12%.

Research and development (R&D) expenses (excluding stock-based compensation and other special items) declined 8.9% to $318 million in the final quarter of 2012. The year-over-year decrease was attributable to the presence of more collaboration milestone payments in 2011.

Selling, general and administrative expenses (excluding stock-based compensation and other special items) in the quarter increased 22.3% to $340 million. Costs associated with the pre-launch activities of Abraxane in the non-small cell lung cancer indication and Pomalyst, primarily led to the rise in SG&A expenses.

Annual Results

For full-year 2012, Celgene earned (excluding special items but including stock-based compensation expense) $4.38 per share, up 31.9%. The Zacks Consensus Estimate for 2012 is $4.44. In 2012, total revenues climbed 14% to $5.5 billion, in line with the Zacks Consensus Estimate. Revlimid sales increased 17% to approximately $3.77 billion.

Outlook for 2013 Backed

Apart from announcing financial results, Celgene maintained its guidance for 2013 provided on Jan 7, 2013. Celgene continues to expect adjusted earnings for 2013 in the range of $5.50-$5.60 per share, up 13% year over year. The Zacks Consensus Estimate for 2013 currently stands at $5.04 per share.

Celgene continues to expect 2013 net product sales of $6 billion, up 11%. The Zacks Consensus Estimate for 2013 currently stands at approximately $6.1 billion. Revlimid will continue performing well with sales projected in the range of $4.1-$4.2 billion, up 10% year over year.

Our View

We are impressed by the strong oncology portfolio at Celgene. Celgene’s efforts to develop its pipeline are also encouraging. Celgene has multiple pipeline events lined up in the coming quarters. Positive pipeline related news would boost the stock.

An eagerly awaited event at Celgene concerns its oncology candidate, Pomalyst. Celgene is seeking approval of the candidate in combination with low-dose dexamethasone for the treatment of relapsed and refractory multiple myeloma (MM) patients, who have received at least two prior therapies.

A final decision from the US Food and Drug Administration is expected by Feb 10, 2013 (action date). Moreover, Celgene is highly optimistic on the potential of apremilast, which is being developed for multiple indications such as moderate-to-severe psoriasis andpsoriatic arthritis among others.

Celgene carries a Zacks Rank #2 (Buy) in the short run. Pharma stocks, which appear to be more favorably placed, include Targacept Inc. (TRGT - Snapshot Report), Valeant Pharma (VRX - Snapshot Report) and Medivation, Inc. (MDVN - Analyst Report). All three companies carry a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%