Celgene lifts annual revenue guidance as first-quarter product sales climb 20 percent

Celgene reported Friday that first-quarter product sales jumped 20 percent year-over-year to $3.5 billion, with double-digit growth for Revlimid, Pomalyst/Imnovid, Otezla and Abraxane. The company's overall revenue climbed 19 percent in the three-month period to $3.5 billion, broadly in line with estimates, as net income reached $846 million, down from $932 million in the prior-year quarter. 

CEO Mark Alles remarked "strong global demand and excellent commercial execution drove our exceptional first-quarter results, leading to improvement in our 2018 financial guidance." For the current year, Celgene said it now expects sales of around $14.8 billion, revised from an earlier forecast of between $14.4 billion and $14.8 billion. 

In addition, the drugmaker said it expects annual Revlimid sales of about $9.5 billion, up from a previous estimate of around $9.4 billion, with combined Pomalyst/Imnovid revenue of approximately $2 billion, lifted from an earlier forecast of about $1.9 billion. Celgene also raised its full-year earnings guidance to $8.95 per share, versus a prior range of $8.70 per share to $8.90 per share. The company added that when including the impact of its $9-billion acquisition of Juno Therapeutics, earnings are expected to be around $8.45 per share, with analysts anticipating $8.46 per share.

In the quarter, Celgene reported that sales of Revlimid increased 19 percent to $2.2 billion, in line with expectations, with revenue from Pomalyst/Imnovid up 24 percent year-over-year to $453 million. Meanwhile, sales of Otezla surged 46 percent to $353 million, with Abraxane revenue growing 11 percent to $262 million. Revenue from Vidaza reached $157 million, largely unchanged versus the year-ago quarter. 

Commenting on the results, RBC Capital Markets analyst Brian Abrahams said "in the face of poor quarters across large-cap biotech, we believe this guidance raise, particularly with the emphasis on volume driving sales, should be reasonably well-received, though perhaps less impactful to big-picture concerns" because of patent expirations.

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Alles added "with multiple catalysts for growth expected over the next 12 to 18 months, we are reaffirming our 2020 outlook." Celgene last year cut its product sales guidance for 2020 from an estimate of over $21 billion, to a range of $19 billion to $20 billion.

Celgene also indicated that it expects to resubmit an application to the FDA seeking approval of ozanimod in relapsing multiple sclerosis in the first quarter of 2019. In February, the agency issued a refusal-to-file letter regarding the submission, determining that the nonclinical and clinical pharmacology sections of the application were not sufficient to allow a complete review. "We are very confident the regulatory path for ozanimod is understood and back on track," Alles noted.

Analysts have identified ozanimod, which Celgene obtained via its $7.2-billion purchase of Receptos, as a key drug for reducing the company's reliance on Revlimid. These efforts also include Celgene's acquisition of Impact Biomedicines earlier this year for as much as $7 billion.

Commenting on the news, Jefferies analyst Michael Yee described the timing of the re-submission for ozanimod as "good enough," given concerns that the second application would not be submitted until 2020. For related analysis, see ViewPoints: Sloppiness not safety a big relief for Celgene’s ozanimod.

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