Celgene lifts full-year guidance as Q2 sales rise 17 percent, topping estimates

Headline results for the second quarter:

Revenue

$3.8 billion (forecasts of $3.7 billion)

+17%

Net Income

$1 billion

Versus $1.1 billion

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"We continued to deliver strong operating performance in the second quarter, leading us to update our 2018 financial guidance," commented CEO Mark Alles. He added that "our next innovation cycle is under way. We are meaningfully advancing our pipeline, while strengthening the organisation to maximise future growth opportunities."

Celgene also joined several other pharmaceutical companies in responding to pressure from the US administration to curtail growing prescription drug costs in the country. Alles pledged that as Celgene raises the price of any individual medicine, "that price increase will be limited to no more than once a year and at a level no greater than the US Centers for Medicare & Medicaid Services projected increase in national health expenditures for the year." He indicated that the rate for 2018 will be 5.3 percent. 

Other results:

  • Revlimid: $2.5 billion, up 21 percent,driven by increases in market share and extended treatment duration
  • Pomalyst/Imnovid: $507 million, up 30 percent, boosted by growth in market share and treatment duration
  • Otezla: $375 million, up 5 percent, but missing forecasts of $381.8 million, with growth driven by continued adoption in key international markets, including "significant growth acceleration" in Japan
  • Abraxane: $243 million, down 4 percent
  • Other products, including Idhifa, Thalomid, Istodax, Vidaza and an authorised generic of Vidaza: $230 million, versus $222 million

What analysts said:

RBC Capital Markets analyst Brian Abraham noted that Celgene's revenue growth was driven by higher demand rather than by price hikes, adding the trend should "mitigate a concern around growth sustainability given expected pricing pressures."

Looking ahead:

Celgene raised its full-year earnings forecast to between $8.70 per share and $8.75 per share, versus prior guidance of $8.45 per share. The drugmaker also anticipates revenue of about $15 billion for the year, compared to an earlier estimate of $14.8 billion, with Revlimid sales now projected to be approximately $9.7 billion, up from $9.5 billion previously. Analysts expect earnings of $8.53 per share on $14.9 billion in revenue.

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