Jefferies Raises Estimates on Celgene Corp. (CELG, ABII)

Jefferies and Company is out with a research report this morning, where it reiterates its Buy rating on shares of Celgene Corp.

; it has a $63.00 price target on the stock. The Jefferies analysts said, “Expansion of Celgene's hematology footprint into solid tumors makes sense, but the success of Abraxane hinges on commercial uptake in new indications, particularly lung cancer, with pancreatic cancer representing significant potential for upside. Our Buy rating reflects confidence in the growth potential of Revlimid.” They noted, “CELG announced the $2.9b acquisition of Abraxis Bioscience

, maker of Abraxane, an injectable form of protein-bound paclitaxel indicated for second-line use in metastatic breast cancer. Abraxane is in late stage development for first-line non small cell lung cancer (NSCLC) and first-line pancreatic cancer.” The analysts added, “In June, ABII presented data from a 1,050-patient pivotal trial in first-line NSCLC, in which Abraxane demonstrated a superior overall response rate (ORR) to paclitaxel (33% v. 25%), driven entirely by the increase in ORR for patients with squamous cell NSCLC (41% v. 24%). It is unclear though if this subgroup will be sufficient to drive a progression free survival (

) benefit when final data are released in 2H10/1H11. Safety benefits were mixed with Abraxane demonstrating lower rates of peripheral neuropathy and neutropenia than paclitaxel, but higher rates of moderate-to-severe thrombocytopenia and anemia.” “While we believe these data will support use in the more difficult-to-treat squamous NSCLC patients, we believe the majority of NSCLC patients with non-squamous (70%) will continue to be treated with generic paclitaxel. We estimate that label expansion and use in squamous NSCLC could drive sales to over $1b in 2015.”