Celgene Corporation (NASDAQ:CELG) provided a business update as well as its preliminary 2016 unaudited results and financial guidance for 2017 at the 35th Annual J.P. Morgan Healthcare Conference. In 2017, total revenue is expected to be approximately $13.0 billion to $13.4 billion, an 18 percent increase year-over-year, based on the mid-point of the range. The negative impact of foreign exchange on total revenue is expected to be approximately $170 million in 2017. For the full-year 2017, REVLIMID net sales are expected to be in the range of $8.0 billion to $8.3 billion.

Based on U.S. Generally Accepted Accounting Principles (GAAP), diluted earnings per share (EPS) for the full-year 2017 is expected to be in the range of $5.85 to $6.21, excluding the impact of any strategic transactions, impairments and loss contingencies that have not yet occurred. For the full-year 2017, adjusted diluted EPS is expected to be in the range of $7.10 to $7.25, a 21 percent increase year-over-year, based on the mid-point of the range.

“In 2016, we made exceptional progress strengthening and growing our franchises while accelerating and adding to our robust pipeline; our significant business momentum supports raising our 2017 guidance,” said Mark J. Alles, Chief Executive Officer of Celgene. “We are entering a pivotal two-year period with multiple catalysts increasing our confidence in our ability to achieve or exceed our 2020 targets and sustain our growth from 2020 to 2030.”

Preliminary 2016 Financial Results Year-Over-Year (Unaudited)

  • Total net product sales are expected to be approximately $11,187 million, up 22 percent year-over-year.
    • REVLIMID: $6,976 million, 20 percent year-over-year increase
    • POMALYST/IMNOVID: $1,311 million, 33 percent year-over-year increase
    • OTEZLA: $1,017 million, 116 percent year-over-year increase
    • ABRAXANE: $973 million, 1 percent year-over-year increase
  • GAAP operating margin is expected to be approximately 28 percent, an increase from 24 percent in the prior year, primarily due to increased product sales. Full-year 2016 GAAP diluted EPS is expected to be in the range of $2.43 to $2.51, a 27 percent year-over-year increase.
  • Adjusted operating margin is expected to be approximately 55 percent for the full year, an increase of 290 basis points (bps) year-over-year. Adjusted diluted EPS is expected to be approximately $5.94, a 26 percent year-over-year increase.

Certain activities involved in determining the audited results for the fiscal year ended December 31, 2016 are in-process and could result in the final reported audited results being different from the unaudited results noted in this press release. Additionally, please see the attached Use of Non-GAAP Financial Measures and Reconciliation of Estimated/Projected GAAP to Adjusted (Non-GAAP) Measures for further information relevant to the interpretation of adjusted financial measures and reconciliations of these adjusted financial measures to the most comparable GAAP measures, respectively, for each of 2016 and 2017.

Celgene Expects Strong Product Sales and Earnings Growth in 2017

  Year-over-Year

Change*

Total Revenue Approximately $13.0B to $13.4B 18%
REVLIMID Net Sales Approximately $8.0B to $8.3B 17%
POMALYST/ IMNOVID Net Sales Approximately $1.6B 22%
OTEZLA Net Sales Approximately $1.5B to $1.7B 57%
ABRAXANE Net Sales Approximately $1.0B 3%
GAAP diluted EPS $5.85 to $6.21 N/M**
Adjusted diluted EPS $7.10 to $7.25 21%
GAAP operating margin Approximately 45.5% N/M**
Adjusted operating margin 56.4% +150bps
Weighted average diluted shares ~815M +12M

*Year-over-year percentage change based on mid-point in range.

**Not meaningful as the 2017 measures exclude the impact of any strategic transactions, impairments and loss contingencies that have not yet occurred.

Reaffirming Expected 2020 Long-term financial Targets

  • 2020 Total Revenue to exceed $21 billion
  • Adjusted Diluted EPS to exceed $13.00

2017 Expected Operational Milestones

Hematology/Oncology

Regulatory Submissions/Decisions

  • Decision by the U.S. Food and Drug Administration (FDA) and European Medicines Agency (EMA) on REVLIMID as maintenance treatment for patients with multiple myeloma following autologous stem cell transplant
  • Submission of a supplemental New Drug Authorization (sNDA) to the U.S. FDA for REVLIMID in combination with bortezomib and dexamethasone (RVd) in patients with newly diagnosed multiple myeloma (NDMM)
  • Approval by the U.S. FDA for enasidenib (AG-221) for the treatment of patients with relapsed and/or refractory acute myeloid leukemia (AML) with isocitrate dehydrogenase-2 (IDH2) mutation

Clinical Data

  • Data from the phase III RELEVANCE trial with REVLIMID in combination with rituximab in patients with newly diagnosed follicular lymphoma (FL)
  • Data from the phase III AUGMENT trial with REVLIMID in combination with rituximab in patients with relapsed and/or refractory FL
  • Data from the phase III apact (PANC-003) trial with ABRAXANE as adjuvant therapy in patients with surgically resected pancreatic cancer
  • Data from the phase IV abound.70+ trial with ABRAXANE in combination with carboplatin as a first-line treatment in patients with advanced non-small cell lung cancer (NSCLC)
  • Data from the phase II abound.PS2 trial with ABRAXANE in combination with carboplatin as a first-line treatment in patients with advanced NSCLC and an Eastern Cooperative Group (ECOG) performance status of 2 (PS2)
  • Data from the phase II abound.2L+ trial with ABRAXANE alone or in combination with CC-486 or durvalumab as a second or third-line treatment in patients with advanced non-small cell lung cancer
  • Data from the phase II trial with CC-486 in combination with fulvestrant in patients with ER+, HER2 breast cancer
  • Data from phase I/II trials with CC-122 and CC-220 in patients with relapsed and/or refractory multiple myeloma
  • Data from the phase I/II FUSIONtrial evaluating durvalumab as a single agent or in combination with novel agents in patients with relapsed and/or refractory multiple myeloma (RRMM), myelodysplastic syndromes and AML in collaboration with AstraZeneca, plc.
  • Data from the phase II YOSEMITE trial with demcizumab in combination with ABRAXANE in patients with first-line metastatic pancreatic cancer in collaboration with OncoMed Pharmaceuticals, Inc.
  • Data from the phase II DENALI trial with demcizumab in patients with first-line advanced stage NSCLC in collaboration with OncoMed Pharmaceuticals, Inc.

Trial Enrollment

  • Complete enrollment in the phase III OPTIMISMM trial with POMALYST/IMNOVID in second-line RRMM
  • Complete enrollment in the phase III ROBUST trial with REVLIMID in newly diagnosed diffuse large B-cell lymphoma (DLBCL)
  • Complete enrollment in the phase III QUAZAR trial with CC-486 in post-induction AML maintenance
  • Complete enrollment in the phase III MEDALIST trial with luspatercept in patients with low and INT-1 myelodysplastic syndrome with ring sideroblasts who require red blood cell (RBC) transfusions
  • Complete enrollment in the phase III BELIEVE trial with luspatercept in patients with beta-thalassemia who have regular RBC transfusions

Trial Initiations

  • Initiate enrollment in a phase III trial with CC-122 in relapsed and/or refractory non-Hodgkin’s lymphoma (NHL)
  • Initiate enrollment in a pivotal program with marizomib in glioblastoma
  • Initiate enrollment in a phase II trial with luspatercept in myelofibrosis in collaboration with Acceleron Pharma, Inc.
  • Initiate enrollment in a phase II trial with bb2121, a B-cell maturation antigen (BCMA) chimeric antigen receptor (CAR) T cell therapy, in RRMM in collaboration with bluebird bio, Inc.
  • Initiate enrollment in a pivotal program with JCAR017 in relapsed and/or refractory non-Hodgkin’s lymphoma in collaboration with Juno Therapeutics, Inc.

Inflammation and Immunology (I&I)

Regulatory Submissions/Decisions

  • Submission of an sNDA for OTEZLA once-daily formulation
  • Submission of an NDA for ozanimod in patients with multiple sclerosis

Clinical Data

  • Data from the phase III SUNBEAM and RADIANCE trials with ozanimod in multiple sclerosis
  • Data from the phase II STEPSTONE trial with ozanimod in Crohn’s disease
  • Data from a phase II trial with GED-0301 in ulcerative colitis
  • Data from a phase II trial with OTEZLA in ulcerative colitis

Trial Enrollment

  • Complete enrollment in the phase III TRUE NORTH trial with ozanimod in ulcerative colitis
  • Complete enrollment in the phase III REVOLVE trial (CD-002) with GED-0301 in Crohn’s disease
  • Complete enrollment in the phase III RELIEF trial with OTEZLA in Behçet’s disease
  • Complete enrollment in a phase II trial (UC-001) with OTEZLA in ulcerative colitis
  • Complete enrollment in a pediatric phase II trial (PPSO-001) with OTEZLA in psoriasis

Trial Initiations

  • Initiate enrollment in a phase III trial with RPC-4046 in eosinophilic esophagitis
  • Initiate enrollment in a phase III trial with OTEZLA in scalp psoriasis
  • Initiate enrollment in a phase III trial with OTEZLA in ankylosing spondylitis
  • Initiate enrollment in a phase IIb trial with CC-220 in systemic lupus erythematosus
  • Initiate enrollment in a phase IIa trial with CC-90001 in idiopathic pulmonary fibrosis

Research and Early Development

  • File at least 8 Investigational New Drug (IND) or Clinical Trial Applications (CTA)
  • Submission of an IND for a new CELMoD compound in patients with multiple myeloma
  • Submission of an IND for EM901, a T-cell bi-specific antibody targeting BCMA in patients with multiple myeloma. (Original Source)

Shares of Celgene Corporation are currently trading at $117.86, down $1.78 or -1.50%. CELG has a 1-year high of $127 and a 1-year low of $93.05. The stock’s 50-day moving average is $117.69 and its 200-day moving average is $109.52.

On the ratings front, Celgene Corporation has been the subject of a number of recent research reports. In a report issued on January 6, Evercore ISI analyst John Scotti maintained a Buy rating on CELG, with a price target of $135, which implies an upside of 12% from current levels. Separately, on the same day, BMO’s Ian Somaiya reiterated a Buy rating on the stock and has a price target of $144.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, John Scotti and Ian Somaiya have a yearly average return of 1.7% and 12.7% respectively. Scotti has a success rate of 50% and is ranked #2755 out of 4350 analysts, while Somaiya has a success rate of 57% and is ranked #252.

Sentiment on the street is mostly bullish on CELG stock. Out of 15 analysts who cover the stock, 13 suggest a Buy rating and 2 recommend to Hold the stock. The 12-month average price target assigned to the stock is $147.00, which implies an upside of 22% from current levels.

Celgene Corp. is an integrated global biopharmaceutical company engaged primarily in the discovery, development and commercialization of therapies for the treatment of cancer and inflammatory diseases through gene and protein regulation. Its targeting areas include intracellular signaling pathways, protein homeostasis and epigenetics in cancer and immune cells, immunomodulation in cancer and autoimmune diseases and therapeutic application of cell therapies. The company’s products include Revlimid, Vidaza, Thalomid, Pomalyst/Imnovid, Abraxane, and Istodax.