Celgene's Q1 profit falls as sales miss analyst estimates

Celgene announced Thursday that first-quarter net income reached $280 million, down from $385 million in the year-ago period as the company reported increased R&D costs and higher expenses associated with various drug launches. Product sales in the quarter climbed 19 percent to $1.7 billion, with overall revenue rising 18 percent to the same figure, falling short of analyst expectations of around $1.8 billion.

The drugmaker said Revlimid sales in the three-month period increased 14 percent year-over-year to $1.1 billion, in line with analyst forecasts. Revenue from Abraxane jumped 51 percent to $185 million, boosted by the product's "ongoing US launch in pancreatic cancer and early launch success for pancreatic cancer in Europe," but still came in below analyst expectations of about $212 million. Additionally, the company recorded Pomalyst/Imnovid revenue of $136 million, driven by market share gains and increasing treatment duration in the US, as well as the commercial launch in Europe. Meanwhile, Vidaza sales declined 27 percent to $148 million due to generic competition in the US.

Celgene reported that its R&D expenses climbed from $330 million in the year-ago quarter to $358 million in the period ended March 31, principally due to an increase in clinical trial activity for pipeline assets. The company noted that its expenses rose to $418 million in the quarter, up from $333 million in the year-ago period, to support the launch of Abraxane in pancreatic cancer, the ongoing launch of Pomalyst/Imnovid in the US and Europe and the US launch of Otelza, which was cleared by the FDA for the treatment of psoriatic arthritis last month (for related analysis, see ViewPoints: Pricing strategy seen as integral to uptake of Celgene's latest new drug approval).

The drugmaker said it continues to forecast full-year earnings of $7 per share to $7.20 per share, on revenue of $7.5 billion and product sales in the range of $7.3 billion to $7.4 billion. Analysts predict per-share earnings of $7.29 for 2014 on about $7.6 billion in revenue. Celgene added that it anticipates full-year revenue for Revlimid to be between $4.9 billion and $5 billion, with Abraxane sales expected to total $850 million to $900 million. CEO Bob Hugin remarked that the results "reflected the continued strength of our product portfolio," adding that "our growth has us firmly on track to deliver on our 2014 guidance."

Also on Thursday, Celgene announced a global licensing deal potentially worth more than $2.5 billion to develop and market Nogra Pharma's experimental drug GED-0301 for the treatment of moderate-to-severe Crohn's disease and other indications, with Phase III trials of the therapy anticipated to begin this year.

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