Morgan Stanley Chimes in on Celgene Corporation (CELG) Ahead of GED-0301 Topline Data

Morgan Stanley analyst Matthew Harrison provides commentary on Celgene Corporation (NASDAQ:CELG) ahead of topline data due for its pipeline oral Crohn’s drug GED-0301 anticipated in early fall at United European Gastroenterology Week. Harrison remains sidelined noting “sentiment remains mixed heading into data.” As such, the analyst reiterates an Equal Weight rating on CELG with a price target of $120, which represents just under an 11% increase from where the shares last closed.

Harrison raised his concern, explaining that without a placebo arm for a point of comparison, it remains difficult to truly understand the data, particularly keeping in mind that “Crohn’s is a cyclic disease with periods of low disease activity. Thus, one would expect a placebo response even on endoscopy.”

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“Investors are not aligned on expectations for GED’s endoscopy study. Importantly, bulls suggest that modest activity is enough given that GED is oral, while bears point to the need to replicate high-efficacy data from PhII. Given uncertainty around how much disclosure will occur in the top-line press release, we see the greatest focus on the full data presentation. Importantly, we believe consensus will view biologic-like activity as a good result, a result in between biologics and placebo as enough to keep hope alive for PhIII and little activity as negative,” Harrison concludes.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Matthew Harrison is ranked #901 out of 4,127 analysts. Harrison has a 60% success rate and yields 4.1% in his annual returns.

TipRanks shows CELG as a Strong Buy. Based on 18 analysts polled in the last 3 months, 15 rate a Buy on CELG, while 3 maintain a Hold. The 12-month average price target stands at $140.36, marking just under a 30% upside from where the stock is currently trading.

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