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Pipeline Bomb: Analysts Review Celgene's Crohn's Diseases Failure

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Pipeline Bomb: Analysts Review Celgene's Crohn's Diseases Failure

Celgene Corporation (NASDAQ: CELG) stock plummeted 10 percent Friday after the company reported that its testing of GED-0301 for treatment of Crohn’s disease has failed to meet its efficacy targets.

A handful of Wall Street analysts weighed in on Celgene stock following the news. Here’s a rundown of what they had to say.

Voices From The Street

  • Baird: Analyst Brian Skorney said Celgene now has a troubling amount of its eggs in one basket. “In light of the yesterday's announcement on failure of GED-0301 in Crohn's disease, we've removed the drug from our model, and lowered our prospects for long-term growth, as pressure to succeed in I&I is now almost exclusively on ozanimod,” he wrote.
  • Canaccord Genuity: Analyst John Newman said investors now need to shift their attention to upcoming multiple sclerosis data at the ECTRIMS conference starting Oct. 25. “We continue to expect positive data from the Phase 3 RADIANCE study in MS for ozanimod at ECTRIMS, which should bolster ozanimod’s approval prospect (NDA submission for RMS expected by YE17),” Newman wrote.
  • Credit Suisse: Analyst Alethia Young said the GED-301 setback is manageable given Celgene’s diversified drug pipeline. “GED-301 was the program where skepticism was the highest and we think removing this from the equation makes the 2018 Phase 3 pipeline story cleaner,” Young wrote.
  • Morgan Stanley: Analyst Matthew Harrison said the Crohn’s disease failure is a major negative for Celgene. “While we acknowledge that consensus knew GED-0301 was one of the more risky assets in Celgene's pipeline, we also believe that investors thought it was a significant potential upside driver,” Harrison wrote.
  • UBS: Analyst Carter Gould said he still likes Celgene’s new product cycle. “Looking forward, we are still encouraged by the prospects for this next product cycle (ozanimod and luspatercept) for Celgene,” Gould wrote. “While there is more priced in there (we model peak sales of $4.2B and $2.5B, respectively), there are defined paths to upside (Crohn's, myelofibrosis, broader MDS) with some clinical data in hand.”
  • William Blair: Analyst Andy Hsieh said the failure was just a bump in the road for Celgene’s growth story. “The high growth profile of Celgene remains intact as we continue to model a bottom-line compounded annual growth rate of roughly 20% until 2020,” Hsieh wrote.
  • Ratings And Price Targets

    Following the bad news, Wall Street analysts are mixed about where Celgene stock is headed from here:

    • Baird has a Neutral rating and $136 target.
    • Canaccord has a Buy rating and $154 target.
    • Credit Suisse has an Outperform rating and $145 target.
    • Morgan Stanley has an Underweight rating and $120 target.
    • UBS has a Buy rating and $146 target.
    • William Blair has an Outperform rating.

    Related Link: What Wall Street Thinks Of IBM's Big Q3 Earnings Beat

    Latest Ratings for CELG

    DateFirmActionFromTo
    Nov 2019DowngradesBuyHold
    Nov 2019DowngradesOutperformNeutral
    May 2019DowngradesOverweightEqual-Weight

    View More Analyst Ratings for CELG
    View the Latest Analyst Ratings

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