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Key Factors to Look Out for in Celgene's (CELG) Q1 Results

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Earnings season for the pharma and biotech sector will start in full flow this week with several major companies scheduled to report results.

Celgene Corporation is one of the companies that will be reporting results later this week. A look at the company’s earnings track record shows that Celgene has surpassed expectations in three of the last four quarters with an average surprise of 5.08%. However, the company, which missed earnings estimates in Q4, has an Earnings ESP of -0.68% for Q1.

Here is a look at key factors that investors will be focusing on when the company reports Q1 results on Apr 27.

Revlimid, Otezla & More: Investor focus will remain on the performance of key growth drivers in Celgene’s portfolio and whether seasonality will impact results. While blood cancer drug, Revlimid (the main growth driver), should be driven by increased demand across the world with further share and duration gains in newly diagnosed multiple myeloma, Q1 sales could be affected by the impact of donut hole payments. Pomalyst, another multiple myeloma drug in Celgene’s portfolio, could also be impacted by the donut hole effect in Q1.  

As far as Otezla (psoriatic disease) is concerned, the drug crossed $1 billion in sales in 2016 and is 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. However, competition is intense given the presence of drugs like Eli Lilly and Company’s (LLY - Free Report) Taltz and Novartis AG’s (NVS - Free Report) Cosentyx.

Meanwhile, cancer drug Abraxane could be affected by seasonality as well as the presence of immune-oncology treatments in the market.

Pipeline Updates: Investors will be focused on Celgene’s progress with its mid to late-stage pipeline. The company has 40 treatments in clinical studies and 19 pivotal/phase III programs underway covering several disease areas like multiple myeloma, lymphoma, myeloid diseases and solid tumors. The company has key data readouts scheduled for this year. Late-stage candidates include 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 (AML) -- regulatory application submitted in the U.S. with a decision expected in Aug 2017) and luspatercept (myelodysplastic syndromes and beta-thalassemia) within hematology. What makes the pipeline more interesting is that quite a few of these candidates have blockbuster potential.

Update on Pomalyst Patent Challenge: Earlier this month, Celgene announced a patent challenge for its multiple myeloma treatment Pomalyst with Teva filing a Para IV challenge. Teva is looking to gain FDA approval for its generic version of the drug. An update regarding steps taken by Celgene to protect the drug should be provided along with Q1 results.

Commercialization Plans for Enasidenib: With the FDA granting priority review to enasidenib, the candidate could gain approval by Aug 30, 2017. The company’s plans for the commercialization of the treatment will be another area of focus when Q1 results are announced. Enasidenib is being developed under a collaboration agreement with Agios Pharmaceuticals, Inc. (AGIO - Free Report) .

Year-to-date, Celgene has performed better than the Zacks-categorized Medical-Biomedical/Genetics industry which is up 1.8% while the company’s shares are up 6.4%.

Celgene is a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Moreover, you can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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