(Reuters) - Celgene Corp (CELG.O) said on Wednesday it authorized the additional repurchase of up to $2.5 billion in common stock, effective immediately.
In April, the biotechnology company said it repurchased about 2.35 million shares during the first quarter of 2012 for about $169 million. As of March 31, it had $1.218 billion remaining under its existing stock repurchase program.
The company’s shares rose 2.3 percent to $64.51 in morning trading on Nasdaq.
“Celgene has kept a recent practice of opportunistically repurchasing shares when they appear depressed,” said Brian Abrahams, an analyst at Wells Fargo Securities, in a research note.
Celgene’s shares have fallen roughly 20 percent from their year high of $80.42 in April.
The company posted disappointing first-quarter earnings results as sales of Revlimid, its drug for multiple myeloma and most important growth driver, missed expectations.
Revlimid is approved as a treatment for patients who have failed other therapies, and is often used in the United States in newly diagnosed patients.
European physicians are not allowed to prescribe drugs “off label” for unapproved uses. Celgene has filed for European approval to market the drug for newly diagnosed patients. A decision is expected within weeks.
“This could potentially signal some confidence going into the upcoming Revlimid decision on label expansion in Europe, though it will be informative to see when management implements the buybacks,” Abrahams said.
Greg Geissman, a spokesman for Celgene, said the decision to increase share repurchases took place at a company board meeting as part of the normal course of business.
Reporting By Toni Clarke; editing by Jeffrey Benkoe