Celgene Corporation (CELG) Shares Slip; Here’s Why

Celgene Corporation (NASDAQ:CELG) shares are down nearly 2% this morning, after the drug giant reported mixed first-quarter results. While Celgene reported an in-line Revlimid number, Otezla missed by $100 million ($242 million vs $337 million consensus).

Overall, Celgene reported Q1 non-GAAP EPS of $1.68 on revenues of $2.96 billion, compared to consensus estimates of $1.64 on $3.06 billion respectively. Celgene also upped its 2017 EPS expectations by $0.05 .

On the pipeline front, Celgene announced that ozanimod hit in the Phase 2 trial in Crohn’s and is moving the product into Phase 3 by YE.

“Our significant first quarter operational, financial and strategic progress strengthen our confidence and outlook for 2017,” said Mark J. Alles, Celgene’s Chief Executive Officer. “Our business momentum is increasing as we continue to generate meaningful catalysts and long-term value drivers.”

Cowen analyst Eric Schmidt commented, “Q1 sales were in line with expectations but for Otezla. The shortfall in this product appears attributable to (1) seasonal weakness in the psoriasis market, and (2) higher gross-to-net discounting, which Celgene had flagged would be the case on the heels of new managed care contracting, but appears to have been underestimated in Wall Street models (including our own). Nonetheless, Celgene did highlight that Otezla continues to gain market share in psoriasis, and we expect this market to rebound in Q2. Despite the top-line miss, cost controls enabled Celgene to modestly exceed non-GAAP EPS estimates while bumping up 2017 EPS targets.”

Sentiment on the street is mostly bullish on CELG stock. Out of 10 analysts who cover the stock, 9 suggest a Buy rating and one recommends to Hold the stock. The 12-month average price target assigned to the stock is $145, which represents a potential upside of 16% from where the stock is currently trading.

Celgene 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.


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