Market Overview

Celgene May Have Lost Positive Sentiment, But Its Growth Thesis Hasn't Gone Anywhere

Celgene May Have Lost Positive Sentiment, But Its Growth Thesis Hasn't Gone Anywhere

William Blair said in a note the double hit on Celgene Corporation (NASDAQ: CELG)'s Inflammation and Immunology franchise may have reversed positive sentiment, but the company's growth thesis and pipeline optionality remains intact.

The firm reiterated its Outperform rating on the shares of the company, as it believes the sell-off in the shares in reaction to the results is overdone.

After declining 16.37 percent to $99.99 on Thursday in reaction to the company's quarterly results, Celgene stock was seen trading down an incremental 0.44 percent at $99.55 in pre-market trading.

Analyst Andy Hsieh noted that the company reported third-quarter results, which revealed revenues of $3.29 billion, below the consensus estimate of $3.42 billion, with the shortfall attributable to weak U.S. Oetzla sales. However, Hsieh noted that adjusted earnings per share of $1.91 trumped estimates, helped by lower-than-expected operating expenses.

See also: Upside And Downside Scenarios For Celgene; Is The Selloff Overdone?

Giving its key takeaways, William Blair said, against the backdrop of mongersen's clinical setback in Crohn's disease, it is particularly disappointed with the Otezla miss. This miss, according to the firm, will intensify investor anxiety concerning the health of the company's I&I franchise.

While noting that the magnitude of downward 2020 guidance revision is only moderate, the firm said the implied over-reliance on the hematology franchise left investors more worried.

Notwithstanding the downward spiral in the stock, the firm continues to estimate a 19.5 percent CAGR for earnings per share until 2020. Additionally, the firm said the management's 2020 guidance may not fully reflect the potential of highly differentiated pipeline compounds, as the wave of new product cycles will begin to play out starting in 2019.

"In the near term, data set from the positive phase III SUNBEAM and RADIANCE studies could provide some reprieve to investor sentiment," the firm said.

Latest Ratings for CELG

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

View More Analyst Ratings for CELG
View the Latest Analyst Ratings


Related Articles (CELG)

View Comments and Join the Discussion!

Posted-In: Analyst Color Biotech Earnings Long Ideas News Reiteration Analyst Ratings Trading Ideas Best of Benzinga

Latest Ratings

UBERRBC CapitalMaintains50.0
WIXJMP SecuritiesMaintains363.0
CVIJP MorganInitiates Coverage On22.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at