Celgene's EPS Contain 'Few Surprises,' Baird Says

Celgene Corporation CELGreported earnings on Thursday, and Baird analysts provided some commentary following.

For the fourth quarter of 2014, the company posted non-GAAP EPS of $1.01, (versus consensus of $0.99, and Baird’s $1.01), and adjusted EPS for the full fiscal 2014 of $3.71 (versus consensus of $3.70, and Baird’s $3.72).

The company had already pre-released these results (and other results, for key products, which were also either in line or slightly beating estimates) in early-January. Therefore, as Baird’s report says, there were few surprises in the call.

However, some additional color on key worldwide product revenue figures was provided. The research firm highlights four points:

“- Revlimid geographic breakdown. Total Q414 Revlimid revenue $1.322B consistent with pre-released number. US Revlimid revenue of $798M beat by $19M, but ROW Revlimid revenue missed by a similar amount.

- Abraxane color. FY14 Abraxane revenue was pre-released at $848M, implying ~$236M for Q414, roughly in line with pre-existing consensus $237M.

- Otezla looking good. Otezla's beat was also pre-released, with Q414 revenue ~$48M, ahead of consensus estimate $44M.

- Nice quarter for Pomalyst. Pomalyst pre-released at ~$202M for Q414, a slight beat to pre-existing consensus $200M.”

Celgene’s management also commented on its guidance for product sales and adjusted EPS for fiscal 2015. Although they remain the same, at $9.0B-$9.5B and $4.60-$4.75, respectively, management said that the revenue guidance includes $100M of negative F/X related impact (which is not a minor detail).

Baird maintains an Outperform rating and a $139 price on Celgene’s stock, which currently trades around $121. The target is explained as follows: “In that big-cap commercial biotechnology companies have recently traded on average between 20X and 30X current-year consensus EPS, we apply a multiple of 23 to our 2017 EPS estimate of $7.85, discounted back by 15%/year, to derive our 12-month price target of $139.”