Stock Update (NASDAQ:CELG): Celgene Corporation Announces 2016 Financial Outlook and Preliminary 2015 Results


Celgene Corporation (NASDAQ:CELG) provided a business update as well as its preliminary 2015 results and financial outlook for 2016 at the 34th Annual J.P. Morgan Healthcare Conference. In 2016, net product sales are expected to be approximately $10.5 billion to $11.0 billion, a 17 percent increase year-over-year, based on the mid-point of the range. The negative impact of foreign exchange on net product sales is expected to be approximately $120 million in 2016. For the full-year 2016, REVLIMID® net sales are expected to be in the range of$6.6 billion to $6.7 billion. Adjusted diluted earnings per share (EPS) for the full-year 2016 is expected to be in the range of $5.50 to $5.70, a 19 percent increase year-over-year, based on the mid-point of the range. Based on U.S. Generally Accepted Accounting Principles (GAAP), diluted EPS is expected to be in the range of $4.26 to $4.64.

“In 2015, we delivered a strong year operationally and commercially with eight regulatory approvals, the acquisition of Receptos and significant acceleration of our pipeline,” said Bob Hugin, Celgene’s Chairman and Chief Executive Officer. “The momentum in our operations and the advancement of our pipeline gives us confidence in our 2020 targets and beyond.”

Preliminary 2015 Financial Results Year-Over-Year (Unaudited)

  • Total net product sales are expected to be approximately $9,160 million, up 21 percent year-over-year. Fourth quarter of 2015 net product sales are expected to be approximately $2,540 million.
    • REVLIMID®: $5,801 million, 16 percent year-over-year increase
    • ABRAXANE®: $967 million, 14 percent year-over-year increase
    • POMALYST®/IMNOVID®: $983 million, 45 percent year-over-year increase
    • OTEZLA®: $472 million in the first full year of sales
  • Adjusted operating margin is expected to be approximately 52 percent for the full year, up 140 basis points (bps) year-over-year. GAAP operating margin is expected to be approximately 24 percent, a decrease from 33 percent in the prior year, primarily due to increased upfront payments to collaboration partners in 2015
  • Adjusted diluted EPS is expected to be approximately $4.71, a 27 percent year-over-year increase, and reflects $0.14 dilution associated with the Receptos Inc. transaction. GAAP diluted EPS is expected to be in the range of $1.89 to $1.99, and reflects $0.40 dilution associated with the Receptos Inc. transaction
  • For the fourth quarter of 2015 adjusted diluted EPS is expected to be approximately $1.18, including a $0.07 impact from a $70 millionmilestone achieved by OncoMed Pharmaceuticals Inc. during the quarter. GAAP diluted EPS is expected to be in the range of $0.63 to $0.73

Certain activities involved in determining the audited results for the fiscal year ended December 31, 2015 are in process and could result in the final reported audited results being different from the unaudited results noted in this press release. Please see the attached Reconciliation of Estimated/Projected GAAP to Adjusted (Non-GAAP) Measures for further information.

Celgene Expects Strong Product Sales and Earnings Growth in 2016

  • Total net product sales of $10.5 billion to $11.0 billion, an increase of 17 percent year-over-year based on the mid-point of the range and includes a negative impact from foreign exchange of approximately $120 million
  • REVLIMID® net sales in the range of $6.6 billion to $6.7 billion, an increase of 15 percent year-over-year based on the mid-point of the range
  • Adjusted operating margin of approximately 53.5 percent after investments across the entire organization, a 150 bps improvement over 2015. GAAP operating margin is expected to be approximately 42 percent
  • Adjusted diluted EPS in the range of $5.50 to $5.70, an increase of approximately 19 percent year-over-year based on the mid-point of the range. GAAP diluted EPS is expected to be in the range of $4.26 to $4.64
  • Fully diluted share count in 2016 of approximately 825 million

Please see the attached Reconciliation of Estimated/Projected GAAP to Adjusted (Non-GAAP) Measures for further information.

Affirming Expected 2020 Long-term Financial Targets

  • 2020 total net product sales to exceed $21 billion
  • Hematology franchise to exceed $14.8 billion
  • Oncology franchise to exceed $2.2 billion
  • I&I franchise to exceed $4 billion
  • Adjusted diluted EPS to exceed $13.00
  • Fully diluted share count of approximately 830 million

2016 Expected Operational Milestones

Hematology/Oncology

Regulatory Submissions/Decisions

  • Submission for REVLIMID® as maintenance after stem-cell transplant in newly diagnosed multiple myeloma (NDMM) in the U.S. and Europe
  • Submission of renal impairment data for label update for POMALYST®/IMNOVID® in relapsed/refractory multiple myeloma (RRMM) in the U.S.and Europe
  • Submission of ABRAXANE® for early-stage breast cancer in Europe
  • Decision by the Committee for Medicinal Products for Human Use (CHMP) on the submission of REVLIMID® for relapsed/refractory mantle cell lymphoma in Europe

Clinical Data

  • Data from the phase III REMARC trial with REVLIMID® as maintenance in diffuse large B-cell lymphoma (DLBCL)
  • Data from the phase III cooperative group ETNA trial with ABRAXANE® as neoadjuvant therapy in HER2-negative high-risk breast cancer
  • Data from the CLL-002 CONTINUUM® trial with REVLIMID® as maintenance in relapsed/refractory chronic lymphocytic leukemia (CLL)
  • Data from a phase II trial with CC-122 in non-Hodgkin’s lymphoma (NHL)
  • Data from phase II trials with motolimod (VTX-2337) in squamous cell carcinoma of the head and neck and ovarian cancer in collaboration with partner VentiRx
  • Data from the phase II tnAcity® trial with ABRAXANE® in triple-negative breast cancer

Trial Enrollment

  • Complete enrollment in the phase III AUGMENT® trial with REVLIMID® in relapsed/refractory follicular lymphoma
  • Complete enrollment in the phase III apact® (PANC-003) trial with ABRAXANE® as adjuvant therapy in surgically resected pancreatic cancer
  • Complete enrollment in a phase II trial with CC-486 in combination with pembrolizumab in locally advanced or metastatic non-small cell lung cancer

Trial Initiations

  • Initiate enrollment in a phase I trial of B-cell maturation antigen (BCMA) chimeric antigen receptor (CAR) T-cell therapy in RRMM in collaboration with partner bluebird bio
  • Initiate enrollment in six trials in the FUSIONTM program with durvalumab in NDMM, RRMM, NHL, myelodysplastic syndromes and acute myeloid leukemia with partner AstraZeneca/MedImmune
  • Initiate phase II combination studies with AG-221 and AG-120 in frontline AML in collaboration with partner Agios

I&I

Regulatory Submissions/Decisions

  • Submission of OTEZLA® for psoriasis in Japan

Clinical Data

  • Long-term radiographic data from the POSTURE® (AS-001) trial with OTEZLA® in ankylosing spondylitis
  • Data from the phase III PSA-006 trial with OTEZLA® in patients with active psoriatic arthritis who are biologic-naïve
  • Data from the phase III PSOR-011 trial with OTEZLA® in Japanese patients with psoriasis
  • Data from a pharmacokinetic comparability study to support registration of the OTEZLA® once-daily formulation
  • Data from a phase II trial with OTEZLA® in atopic dermatitis
  • Data from a phase II trial with CC-220 in systemic lupus erythematosus
  • Data from a phase II trial with RPC-4046 in eosinophilic esophagitis

Trial Enrollment

  • Complete enrollment in the phase III RELIEFTM (BCT-002) trial with OTEZLA® in active Behçet’s disease
  • Complete enrollment in a phase II trial with OTEZLA® in ulcerative colitis
  • Complete enrollment in the phase II STEPSTONE trial with ozanimod in Crohn’s disease

Research and Early Development

  • File eight Investigational New Drug (IND) applications
  • Advance at least two compounds to mid-to-late stage development

Management Changes

On January 8, the Company announced changes to our Research & Early Development organizational structure, which will leverage our strong foundation and drive the rapid advancement of next generation landmark therapies. Tom Daniel, MD, President, Research and Early Development is appointed to Chairman of Celgene Research. Tom, who has been instrumental in building our broad and deep development engine, will oversee strategic initiatives and investments in our research and collaboration portfolio. Rupert Vessey, MA, BM BCh, FRCP, DPhil succeeds Tom Daniel as President, Research and Early Development. Rupert joined Celgene a year ago bringing great insight and leadership to the evolution of our discovery and development strategies in inflammation and immunology as well as in hematology and oncology. Rupert is responsible for leading the execution of discovery and development programs across our portfolio ensuring Celgene capitalizes on the potential of its internal and partnered opportunities.Rob Hershberg, MD, PhD is promoted to Chief Scientific Officer (CSO) and will lead the expansion of our scientific platforms and discovery capabilities. Rob joined Celgene in August 2014 and has led the development of our immuno-oncology efforts, helping to engineer several key collaborations and partnerships. (Original Source)

Shares of Celgene Corporation opened today at $109.55 and are currently trading down at $105.155. CELG has a 1-year high of $140.72 and a 1-year low of $92.98. The stock’s 50-day moving average is $113.56 and its 200-day moving average is $119.61.

On the ratings front, Celgene has been the subject of a number of recent research reports. In a report issued on January 7, BTIG analyst Hartaj Singh initiated coverage with a Buy rating on CELG and a price target of $140, which implies an upside of 27.8% from current levels. Separately, on January 4, Piper Jaffray’s Joshua Schimmer maintained a Buy rating on the stock and has a price target of $163.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Hartaj Singh and Joshua Schimmer have a total average return of -1.1% and -11.3% respectively. Singh has a success rate of 41.2% and is ranked #2294 out of 3610 analysts, while Schimmer has a success rate of 22.6% and is ranked #3581.

Overall, 10 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $152.00 which is 38.7% above where the stock opened today.

Celgene Corp is a biopharmaceutical company. It is engaged in the discovery, development and commercialization of therapies designed to treat cancer and immune-inflammatory related diseases.