By Bill Berkrot
Jan 13 U.S. biotech company Celgene Corp
raised sales and profit forecasts for 2015 and 2017 on
Monday, saying its improved long-term outlook was based on
current momentum for its blood cancer medicines.
The relatively conservative increases, however, and a 2014
forecast that was slightly lower than current Wall Street
estimates, dampened shareholder enthusiasm and Celgene shares
fell more than 3 percent.
"While Celgene tends to be conservative with its guidance,
we believe heightened expectations had set a high bar for the
stock (prior) to today's release," Cowen and Co analyst Eric
Celgene shares had been rising over the past few weeks,
touching a new all-time high prior to Monday's announcement.
"The numbers for 2014 are a little light of expectations and
the stock has been very strong heading into this announcement,
so some sell off was probably inevitable," said Geoffrey Porges,
analyst with Sanford Bernstein.
Celgene raised the 2017 forecast for its flagship drug
Revlimid by $1 billion to $7 billion, and now expects 2017 sales
of $1.5 billion for its newer blood cancer drug Pomalyst, up
from a prior view of $1 billion.
Celgene Chief Executive Robert Hugin told analysts and
investors that the early sale performance of Pomalyst "certainly
exceeded our expectations in the U.S. and Europe."
Celgene Chief Financial Officer Jacqualyn Fourse, in a
breakout session following the formal presentation, appeared to
leave room for future forecast increases, saying that the
numbers "can evolve."
She called the forecasts "a new base case" and said the
outlook was "based on conservative estimates of worldwide
pricing." Fourse also said further upside could be driven by
positive results from ongoing late-stage clinical trials.
In addition, the long-term forecasts were based on expected
growth only from Celgene's blood cancer drugs, which does not
take into account potential sales strides by Abraxane, its drug
for breast cancer and other solid tumor cancers.
"Abraxane continues to have very meaningful growth," JP
Morgan analyst Geoff Meacham said in a research note.
The forecasts were issued during Celgene's presentation at
the annual JP Morgan Healthcare conference in San Francisco.
For 2014, Celgene expects sales of $7.3 billion to $7.4
billion and adjusted earnings, excluding one-time items, of $7
to $7.20 per share. Analysts, on average, are looking for sales
of $7.43 billion and earnings of $7.29 per share, according to
Thomson Reuters I/B/E/S.
"The 2014 guidance looks solid and potentially conservative,
given strong commercial momentum," Meacham said.
For 2015, Celgene now expects sales of $8.5 billion to $9.5
billion and adjusted earnings of $9 to $9.50 per share, up from
its prior view of sales of $8 billion to $9 billion and EPS of
$8 to $9.
For 2017, Celgene sees sales growing to $13 billion to $14
billion, up from its prior view of at least $12 billion, and
adjusted earnings of a about $15 per share versus its earlier
forecast of $13 to $14 per share.
"While positive, we think the magnitude of this guidance
raise is generally in-line with buy-side expectations," ISI
Group analyst Mark Schoenebaum said.
The company also provided preliminary results for the fourth
quarter of 2013, saying it expects to report adjusted earnings
of $1.51 per share, including a 10 cent per share impact from
That would be about 4 cents shy of average analysts'
expectations of $1.55 per share.
Celgene shares were down $5.67, or 3.3 percent, at $164.14
in afternoon trading on Nasdaq.