March 3, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Several analysts have cited Summit, N.J.-based Celgene Corporation as the fastest growing biotech stock.
Investors in Celgene have had a bumpy ride. Shares traded on July 23, 2015 for $139.01, dropped on Sept. 28 to $104.79, rose back to $127.20 on Nov. 2, dropped again to $107.49 on Nov. 13. On Dec. 24 shares rose back to $122.14, and on Feb. 2, 2016 dropped to $96.85. Shares are currently trading for $103.51.
Out of 26 analysts, 21 maintained a “buy” rating. Four gave it a “hold” rating. Twenty-two analysts gave a consensus 12-month price target of $138.95, an upside potential of 32.33 percent.
However, in 2015 Celgene reported sales of $9.2 billion, and are projecting a compounded annual rate of 17 percent through 2020. Analysts projected revenues for 2016 as $11.2 billion, higher than the company’s own guidance of $10.5 to $11 billion.
Part of the analysts’ evaluation has to do with the company’s portfolio. It has less than 10 drugs in its portfolio, mostly cancer drugs, which make up the majority of company revenue. The rest are for inflammatory diseases. Revlimid, used to treat several blood cancers and conditions, is responsible for 60 percent of company revenues. Revlimid was approved in 2005 and created $5.8 billion in sales last year. Key patents expire in 2019, but its latest patent doesn’t expire until 2027.
Other drugs in its portfolio include Pomalyst, for multiple myeloma, Abraxane, for lung, breast and pancreatic cancer, and Otzela, an anti-inflammatory for psoriatic arthritis and plaque psoriasis.
Analysts are also interested in the company’s development pipeline, which has about 30 drugs in it. “We are excited about the progress within our pipeline, both internal programs that are advancing and the new programs that we added to business development, which together strengthen our future beyond 2020,” said Peter Kellogg, Celgene’s chief financial officer and executive vice president, to Bidnessetc. “We are building upon this solid foundation of operational performance by making strategic investments in critical areas of research and further strengthening our internal pipeline through business development.”
The company has had some changeover recently. On Jan. 12, Celgene announced that Mark Alles was stepping up to be chief executive officer, and Bob Hugin was taking on the role as executive chairman and staying to lead the board of directors. Hugin ran the company for 17 years. Alles has been with the company since 2004, most recently as president and chief operating officer.
Also, Jackie Fouse, former chief financial officer and president of the company’s Hematology & Oncology franchise, stepped up to become president and chief operating officer. Scott Smith, president of Celgene’s Immunology and Inflammation franchise, was appointed to chair the company’s Global Management Committee.
And finally, Tom Daniel, previously president of Research and Early Development, was appointed to head research and early development, a new position.
In late December 2015, Celgene announced it had settled a patent dispute with Natco Pharma Ltd. over Revlimid. Starting in March 2022, Natco will begin selling generic Revlimid in the U.S., with some volume restrictions in place. In 2026, it will be allowed to sell the generic version without limitations.
