UPDATE 3-Celgene raises 2013 forecast as profit beats estimates
By Bill Berkrot
Oct 24 (Reuters) - Celgene Corp raised its earnings forecast for 2013 on Thursday after reporting slightly higher-than-expected quarterly profit on robust sales of its flagship blood cancer drug Revlimid and rapid growth in newer cancer treatments.
While Revlimid remains the backbone of the company, Celgene's newer products are off to an impressive start.
Pomalyst, a multiple myeloma drug for patients who have received treatment with at least two prior therapies, had sales of $90 million in its second full quarter on the market, up 35 percent from the prior quarter.
That included $77 million in the United States, outpacing Amgen Inc's new rival drug Kyprolis, which had sales of $65 million in the third quarter.
Celgene officials told analysts on a conference call that Pomalyst was rapidly gaining market share.
"Folks need to rethink their expectations going forward for that drug," Cowen and Co analyst Eric Schmidt said. "It's just easily besting our expectations."
Helped by its recent approval for pancreatic cancer in addition to growing use in lung and breast cancer, sales of Abraxane jumped 60 percent to $170 million, above expectations of about $167 million.
Celgene is likely to add another potentially lucrative new product to its portfolio early next year. U.S. regulators are expected to make an approval decision in March on apremilast for psoriatic arthritis.
Excluding special items such as collaboration costs, Celgene earned $1.56 per share in the third quarter, beating analysts' average expectation by 2 cents, according to Thomson Reuters I/B/E/S.
The results prompted Celgene to boost its 2013 earnings forecast for a third time this year. It now expects to earn an adjusted $5.90 to $5.95 a share, up from a previous forecast of $5.80 to $5.90 a share.
The company sees total product sales in 2013 exceeding its previous outlook of $6.2 billion, with Revlimid sales coming in at the mid to upper end of a $4.2 billion to $4.3 billion range.
The quarterly results, which exceeded analysts' estimates, may have fallen short of lofty investor expectations. Celgene shares, which have doubled this year, were off 1.7 percent in morning trade on Nasdaq.
"While this was a good quarter and a nice little beat and raise, people expected at least as much, if not a little more," said Cowen's Schmidt. "So everything is great, but high expectations may have the stock down."
Net profit for the quarter fell due to higher expenses for product launches and clinical trials. Net profit declined to $372 million, or 87 cents a share, from $424 million, or 97 cents per share, a year earlier.
Revenue rose 17.6 percent to $1.67 billion, slightly exceeding Wall Street estimates of $1.64 billion.
Revlimid sales increased 12 percent from a year ago to $1.09 billion, in line with estimates. Revlimid sales were fueled by market share gains and by patients using the drug for longer periods, the company said.
Its sales could grow significantly if it wins expanded approval for use in newly diagnosed patients based on upcoming results of a large, late-stage study.
Sales of Vidaza for the blood disorder myelodysplastic syndrome were flat at $220 million and down 6 percent in the United States, where it began facing competition from a cheaper generic version last month. The decline will accelerate rapidly as multiple generics come onto the market.
Selling, general and administrative costs rose to $405 million from $323 million a year ago, while research and development expenses increased to $372 million from $328 million.
Chief Financial Officer Jacqualyn Fouse said SG&A expenses should trend downward in the fourth quarter but that R&D costs may go up.
Celgene shares were down $2.73, or 1.7 percent, at $157.27 on Nasdaq.
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