Categories Earnings, Other Industries

Celgene posts upbeat Q1 results on multiple myeloma drug

U.S. biotechnology company Celgene (CELG) reported better-than-expected first quarter results, as its flagship drug for multiple myeloma continued to increase in new and repeat prescriptions and longer average duration of use. Following the results, shares of Celgene advanced about 2% in the premarket.

Despite revenue climbing by 19% to $3.54 billion, the company’s earnings fell by 9% to $846 million or $1.10 per share. However, adjusted EPS increased by 23% to $2.05.

Revenue continued to be benefited from the company’s key growth driver Revlimid, which was approved for several cancer indications including multiple myeloma. Revlimid has risen 19% driven by market share gains in key markets and longer treatment duration.

Sales from Pomalyst/Imnovid, which is indicated for patients with multiple myeloma, increased 24% on higher treatment duration and market share. Sales from Otezla, which is used to treat active psoriatic arthritis, jumped 46% helped by rising demand, improved access pull-through in contracted health plans, and rising adoption in key ex-U.S. markets. Sales from Abraxane, a drug used to treat metastatic breast cancer, rose 11% on positive buying patterns impact and market share gains in Europe.

Looking ahead into the full-year 2018, the company now expects total revenue of about $14.8 billion, GAAP EPS of about $6.31, and adjusted EPS of about $8.45. This is down from previous forecast range of $14.4-$14.8 billion for revenue, $7.26-$7.66 for GAAP EPS and $8.70-$8.90 for adjusted EPS. The impact of Juno acquisition hurt adjusted EPS by about $0.50.

The company lowered its operating margin forecast to about 38% from prior estimate of $46.5% and its adjusted operating outlook to about 56% from about 60%. However, Celgene raised Revlimid product sales outlook to about $9.5 billion from about $9.4 billion and its Pomalyst/Imnovid product sales guidance to about $2 billion from about $1.9 billion. On the other hand, the company maintained its Otezla net product sales estimate of about $1.5 billion and Abraxane product sales forecast of about $1 billion.

Celgene Earnings Infographic
Celgene Corp. Q1 2018 Earnings Infographic

Revlimid is expected to keep contributing to the top line backed by continued momentum in the core indication, label expansion, and global launches. Investors will be looking on the company’s first-quarter earnings call for its performance and label expansion efforts, as well as updates on recent acquisitions and pipeline.

The company’s research and development expenses rose 121% due to the increase in asset acquisition expense relating to the acquisition of Impact Biomedicines, a rise in share-based compensation expense from June Therapeutics acquisition, and higher spending for clinical trial and other R&D activities.

In the first quarter, Celgene completed two strategic acquisitions for over $10 billion. The company bought back about 29 million shares at a total cost of about $2.7 billion. For financing portion of Juno acquisition, Celgene raised $4.5 billion in a debt offering. The New Jersey-based company ended the quarter with about $4.7 billion in cash, cash equivalents, marketable debt securities and publicly-traded equity securities.

In early April, Celgene announced that President and Operating Chief, Scott Smith, is leaving the company effective immediately. It also added that his primary responsibilities would be assumed by Chairman and Chief Executive Officer Mark Alles.

Shares of Celgene ended Thursday’s regular trading session down 1.73% at $85.40. The stock had been trading between $84.25 and $147.17 for the past 52 weeks.

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