Celgene Corporation (NASDAQ:CELG) has impending pipeline data on its way in 2H16, with the next few years anticipated to overflow with readouts of Phase 3 trial data. Piper Jaffray analyst Joshua Schimmer asserts, “CELG remains a solid large cap biotech pick in our view, but with near-term volatility around GED0301,” an oral antisense therapy with capabilities to alter the treatment landscape of Crohn’s disease.
The analyst considers the biotech giant a “strong earnings growth” tale, one where lymphoma-targeting Revlimid and multiple myeoma-treating Pomalyst have lead the story with almost 70% of product sales and consistent growth generated from volume increases. With an affirmed bullish stance on the Celgene pipeline, Schimmer reiterates an Overweight rating with a $145 price target.
The analyst points to Celgene’s prominent pipeline expansion, which Schimmer praises as “aggressive” in its efforts. Schimmer comments, “CELG has vigorously invested in its early, mid and late stage pipelines and now boasts one of the more impressive collection of development programs amongst large cap biotech stocks.” Even with anticipated volatility, Schimmer expects, “We believe chances are that enough will go right to drive CELG shares higher over time.”
For Schimmer, the GED0301 trial hangs in the balance, waiting on results from the endoscopy study. Schimmer assesses, “While the trial may be instructive based on rates of mucosal healing, we suspect results may just lead to a new debate over its clinical relevance.” With the firm projecting a 25% guided reduction in mucosal inflammation, Schimmer explains, “We haven’t been able to reproduce that estimate from other trials and if anything it looks somewhat low to us. The trial is evaluating 3 different induction durations of GED0301 and as such lacks a typical placebo arm.”
However, Schimmer still sees a fire sparking with successful possibilities, adding, “The company’s other late-stage IBD program, ozanimod, is in Phase 3 trials for ulcerative colitis.” The analyst concludes, “The company has multiple other shots on goal that can help create ‘life after imids’, and the next 2-3 years will be quite interesting as a seemingly endless stream of Phase 3 trials readout.”
As usual, we advise taking analyst notes with a grain of salt. According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Joshua Schimmer is ranked #3,982 out of 4,120 analysts. Schimmer has a 38% success rate and loses 7.4% in his yearly returns. When recommending CELG, Schimmer loses 1.2% in average profits on the stock.
TipRanks analytics exhibits CELG as a Strong Buy. Based on 18 analysts polled in the last 3 months by TipRanks, 16 rate a Buy on Celgene, while 2 maintain a Hold. The consensus price target is $143.86, marking a close to 26% upside from where the shares last closed.
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