Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of biopharmaceutical company Celgene
So what: Celgene is being hit on two fronts today. First, Revlimid, which is a cancer therapy used to treat multiple myeloma, a bone-marrow cancer, and accounted for $861 million of Celgene's $1.25 billion in sales in the first quarter, won't be expanding its reach nearly as quickly as the company and shareholders had hoped. Celgene withdrew its application in the European Union for newly diagnosed cases of multiple myeloma and pushed back its plans to gain additional marketing therapies approved in the U.S. until 2013.
In addition, Onyx Pharmaceuticals'
Now what: Although Celgene's growth plans for its largest drug have been halted, today could be an attractive buying opportunity. Celgene did confirm its earnings guidance despite the new drug application delays and still expects sales to rise to $8 billion-$9 billion by 2015 with EPS ranging from $8-$9. I know we're looking way down the tunnel here, but that'd be a forward P/E of about seven with sales growth of at least 60% from fiscal 2011 to fiscal 2015. I can't say I like Celgene's reliance on one drug for the majority of its sales, but further indications will extend its patent protection and ease investor worries.
Craving more input? Start by adding Celgene to your free and personalized watchlist so you can keep up on the latest news with the company.