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Celgene's Q2 Earnings Call: Highlights & Analyst Commentary

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Celgene Corporation (NASDAQ: CELG) reported its second quarter financial results before the market opened. Earnings came in at $1.23 per share on revenue of $2.278 billion, ahead of the Street’s consensus of $1.17 per share and $2.271 billion.

Following the earnings call, Evercore ISI Biotech & Pharmaceuticals Analyst Mark Schoenebaum, provided a few highlights.

  • Ozanimod: The expected $4 billion to $6 billion in peak sales are not probability adjusted (it includes revenues from MS and UC indications, but not from Crohn's and SLE). The company’s base case is “a class label for ozanimod.” However, management believes “ozanimod is differentiated from Gilenya on safety and most important is that label will include the ozanimod data.”
  • GED-0301: The ongoing endoscopy study should be finished enrolling by end of the summer. Results are expected 48 weeks after enrollment (mid-year 2016). However, Celgene did not comment on the actual timing. The Phase 3 programs will start by the end of the year. The company is “not waiting for any gating event, including data from endoscopy,” Schoenebaum said.
  • Expenses/margins going forward: Research & Development expenses and interest are expected to surge going forward, mainly due to the Receptos Inc (NASDAQ: RCPT) acquisition and other collaborations -- like those with Juno Therapeutics Inc (NASDAQ: JUNO) and AstraZeneca plc (ADR) (NYSE: AZN). SG&A will also rise in the third and fourth quarter. However, the rate will be slower, and revenue will grow faster in future years, Evercore ISI states. Management reiterated its guide for operating margins to surge to the high 50’s by 2020.
  • RELEVANCE (Phase 3 Revlimid in follicular lymphoma): With five phase 3 trials up and running, the relevance trial should be read out in 30 months, in the first half of 2017.

Latest Ratings for CELG

DateFirmActionFromTo
Nov 2019Standpoint ResearchDowngradesBuyHold
Nov 2019BairdDowngradesOutperformNeutral
May 2019BarclaysDowngradesOverweightEqual-Weight

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Posted-In: Evercore ISI Mark SchoenebaumAnalyst Color Biotech Health Care Analyst Ratings General

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