For J.P. Morgan analyst Cory Kasimov, the $20 billion question Celgene Corporation (NASDAQ:CELG) presents is “how.” Specifically, how can the drug maker live up to its stated expectation of growing through 2030, while overcoming the blow of patent loss of its incomparably largest pipeline drug, Revlimid, let alone its other current commercial assets.
The second question Kasimov poses centers on how Celgene intends to find its “next leg of growth.” CELG’s goal of growing through 2030 is a lofty one leaving the firm now having to more than make up for its current commercial portfolio in entirety, while missing its critical mega blockbuster ingredient: the gaping loss of Revlimid.
Kasimov comments, “What happens once Revlimid is no more is an important but extremely difficult (and largely theoretical) question to answer at this stage. After all, the product still likely has 10 years of runway ahead of it. So while predicting what can happen with any company that far down the road is a challenge, we nonetheless believe CELG is well positioned to tackle it – with its abundance of upcoming latestage clinical catalysts, above average industry growth, an increasingly diversified pipeline, aggressive BD strategy, and significant financial flexibility.”
Despite long-term challenges, Kasimov believes the firm is well-positioned for the near-term, reiterating an Overweight rating on CELG with a $136 price target, which represents just under a 21% increase from where the stock is currently trading.
As usual, we advise taking analyst notes with a grain of salt. According to TipRanks, analyst Cory Kasimov is ranked #4,018 out of 4,124 analysts. Kasimov has a 30% success rate and faces a loss of 13.4% in his yearly returns. However, when recommending CELG, Kasimov earns 0.3% in average profits on the stock.
TipRanks analytics exhibit CELG as a Strong Buy. Based on 18 analysts polled in the last 3 months, 16 rate a Buy on CELG, while 2 maintain a Hold. The 12-month average price target stands at $143.86, marking a close to 28% upside from where the shares last closed.
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