It has been more than a month since the last earnings report for Celgene Corporation . Shares have added about 3.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Celgene Beats Earnings But Misses on Sales
Celgene reported mixed results in third-quarter 2017 wherein earnings beat expectations but sales failed to meet estimates.
The company reported adjusted earnings of $1.91 per share which beat the Zacks Consensus Estimate of $1.88, up from $1.58 in the year-ago quarter.
Total revenues grew 10.2% to $3.29 billion in the quarter but missed the Zacks Consensus Estimate of $3.42 billion. Revenues were boosted by consistent performance of the company’s key growth driver, Revlimid. However, sales of Otezla in the United States were weak.
Revlimid Continues to Shine
Net product sales increased 10.6% year over year to $3.28 billion. Net sales of Revlimid came in at $2.0 billion, reflecting 10% year-over-year growth. The drug performed well in the United States (up 17.9%). Growth in the reported quarter was driven by increased volume as a result of increases in duration of treatment and market share.
Net sales of another cancer drug, Abraxane increased 7.7% to $251 million as sales grew both in the United States and international markets. Sales of oncology drug, Pomalyst/Imnovid, came in at $417 million, up 22.3%. Sales were driven by increased volume from duration gains.
Otezla reported sales of $308 million in the reported quarter, up 12%. Sales in the United States were impacted by an increase in gross-to-net adjustments from contracts implemented in January and a slowing in overall category growth due to a more challenging market access environment.All other product sales (including Istodax, Thalomid, Vidaza and an authorized generic version of Vidaza in the United States) totaled $226 million in the reported quarter, down from $228 million from the year-ago quarter.
Adjusted research and development expenses increased 8.6% to $698 million due to increased spending related to drug discovery and clinical trial activity while adjusted selling, general and administrative expenses decreased 11.8% to $521 million.
Last month, Celgene announced that the FDA put a hold on several trials in the FUSION program. Partial clinical hold has been put on five trials and a full clinical hold on one trial. The trials were evaluating Imfinzi, an anti-PD-L1 antibody, in combination with immunomodulatory and chemotherapy agents in blood cancers such as multiple myeloma, chronic lymphocytic leukemia and lymphoma. Celgene entered into a strategic collaboration with AstraZeneca PLC's MedImmune in April 2015 to develop and commercialize Imfinzi for hematologic malignancies in combination with Revlimid, Pomalyst, Vidaza and others. The FDA placed a hold on these trials due to risks identified in other trials for an anti-PD-1 antibody, Keytruda, in patients with multiple myeloma in combination with immunomodulatory agents.
2017 Outlook Updated
Celgene updated its guidance for 2017. The company anticipates earnings in the range of $7.30-$7.35 compared with the previous guidance of $7.25-$7.35 per share. The Zacks Consensus Estimate for earnings is $7.34 per share.
Revenues are now projected at $13 billion compared to the earlier projection of $13-13.4 billion.
Revlimid sales are projected between $8 billion and $8.3 billion. Abraxane sales are estimated to be around $1 billion. Pomalyst’s revenues are projected around $1.6 billion. However, Otezla sales are now projected at $1.25 billion, down from the previous projection of $1.5-$1.7 billion.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. While looking back an additional 30 days, we can see even more downward momentum. There has been one move higher compared to six lower two months ago.
VGM Scores
At this time, Celgene's stock has an average Growth Score of C, though it is lagging a bit on the momentum front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
While estimates have been broadly trending downward for the stock, the magnitude of this revision has been net zero. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
Image: Bigstock
Why Is Celgene (CELG) Up 3.4% Since the Last Earnings Report?
It has been more than a month since the last earnings report for Celgene Corporation . Shares have added about 3.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Celgene Beats Earnings But Misses on Sales
Celgene reported mixed results in third-quarter 2017 wherein earnings beat expectations but sales failed to meet estimates.
The company reported adjusted earnings of $1.91 per share which beat the Zacks Consensus Estimate of $1.88, up from $1.58 in the year-ago quarter.
Total revenues grew 10.2% to $3.29 billion in the quarter but missed the Zacks Consensus Estimate of $3.42 billion. Revenues were boosted by consistent performance of the company’s key growth driver, Revlimid. However, sales of Otezla in the United States were weak.
Revlimid Continues to Shine
Net product sales increased 10.6% year over year to $3.28 billion. Net sales of Revlimid came in at $2.0 billion, reflecting 10% year-over-year growth. The drug performed well in the United States (up 17.9%). Growth in the reported quarter was driven by increased volume as a result of increases in duration of treatment and market share.
Net sales of another cancer drug, Abraxane increased 7.7% to $251 million as sales grew both in the United States and international markets. Sales of oncology drug, Pomalyst/Imnovid, came in at $417 million, up 22.3%. Sales were driven by increased volume from duration gains.
Otezla reported sales of $308 million in the reported quarter, up 12%. Sales in the United States were impacted by an increase in gross-to-net adjustments from contracts implemented in January and a slowing in overall category growth due to a more challenging market access environment.All other product sales (including Istodax, Thalomid, Vidaza and an authorized generic version of Vidaza in the United States) totaled $226 million in the reported quarter, down from $228 million from the year-ago quarter.
Adjusted research and development expenses increased 8.6% to $698 million due to increased spending related to drug discovery and clinical trial activity while adjusted selling, general and administrative expenses decreased 11.8% to $521 million.
Last month, Celgene announced that the FDA put a hold on several trials in the FUSION program. Partial clinical hold has been put on five trials and a full clinical hold on one trial. The trials were evaluating Imfinzi, an anti-PD-L1 antibody, in combination with immunomodulatory and chemotherapy agents in blood cancers such as multiple myeloma, chronic lymphocytic leukemia and lymphoma. Celgene entered into a strategic collaboration with AstraZeneca PLC's MedImmune in April 2015 to develop and commercialize Imfinzi for hematologic malignancies in combination with Revlimid, Pomalyst, Vidaza and others. The FDA placed a hold on these trials due to risks identified in other trials for an anti-PD-1 antibody, Keytruda, in patients with multiple myeloma in combination with immunomodulatory agents.
2017 Outlook Updated
Celgene updated its guidance for 2017. The company anticipates earnings in the range of $7.30-$7.35 compared with the previous guidance of $7.25-$7.35 per share. The Zacks Consensus Estimate for earnings is $7.34 per share.
Revenues are now projected at $13 billion compared to the earlier projection of $13-13.4 billion.
Revlimid sales are projected between $8 billion and $8.3 billion. Abraxane sales are estimated to be around $1 billion. Pomalyst’s revenues are projected around $1.6 billion. However, Otezla sales are now projected at $1.25 billion, down from the previous projection of $1.5-$1.7 billion.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. While looking back an additional 30 days, we can see even more downward momentum. There has been one move higher compared to six lower two months ago.
Celgene Corporation Price and Consensus
Celgene Corporation Price and Consensus | Celgene Corporation Quote
VGM Scores
At this time, Celgene's stock has an average Growth Score of C, though it is lagging a bit on the momentum front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
While estimates have been broadly trending downward for the stock, the magnitude of this revision has been net zero. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.