Celgene reports 14-percent increase in Q3 profits

Celgene on Thursday announced that third-quarter net profit rose 14 percent to $424.2 million, buoyed by an 18-percent increase in sales of Revlimid to $970 million. Overall revenue for the three-month period climbed 14 percent to $1.4 billion, which was in line with analysts estimates.

Vidaza sales jumped 15 percent to $220 million, despite losing patients exclusivity in May 2011. In addition, sales of Abraxane fell 6 percent to $106 million, which the company said reflected a surge in US demand for the drug in 2011 due to shortages of paclitaxel. The drug, which was acquired as part of Celgene’s $2.9-billion purchase of Abraxis BioScience, is currently approved in the US for the treatment of metastatic breast cancer after failure of combination chemotherapy and recently garnered expanded approval for use as a first-line treatment of locally advanced or metastatic non-small-cell lung cancer in select patients. Cantor Fitzgerald analyst Mara Goldstein said she expected peak annual Abraxane sales of between $750 million to $800 million with its currently approved uses, and possibly well over $1 billion if it proves effective in the other cancers Celgene is currently testing the drug for.

Looking ahead, the biopharmaceutical company raised its full-year earnings estimate to $4.85 to $4.90, from a previous estimate of $4.80 to $4.85 and narrowed its revenue view to $5.5 billion to $5.6 billion. However, Celgene lowered the higher end of its prior forecast for Revlimid sales by $50 million and now expects $3.75 billion to $3.8 billion. Sanford Bernstein analyst Geoffrey Porges commented that "overall, we are pleased to see the company continuing to deliver operating leverage and bottom-line beats with increases in earnings guidance."

Meanwhile, Celgene CEO Bob Hugin said the company’s roster of experimental drugs has the potential to drive future growth, noting that "positive results from late-stage studies for Abraxane, apremilast and pomalidomide create a solid path toward significant expansion of our portfolio." In particular, Hugin noted that "apremilast has the potential to transform Celgene," adding that the company expects to pursue FDA approval of the therapy for psoriatic arthritis in the first quarter of 2013 and in the second-half of that year for moderate-to-severe psoriasis. Goldstein remarked that "that's the most bullish I've heard the company on apremilast." Further, she suggested that Wall Street is underestimating the potential of the company's experimental drugs to propel earnings growth as Revlimid matures and posts weaker sales gains.

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