2012 Review: Celgene

Singing joyful songs during the holiday season will likely come easier for investors in Celgene (NASDAQ: CELG  ) . Shares in the biopharmaceutical company are up 26% year-to-date. 2012 wasn't totally gleeful, though. Here's a look at Celgene's past year.

High notes
Celgene started 2012 on a high note. The company announced a positive revenue and earnings outlook for the year on Jan. 9. The stock responded with a nice 17% run over the next three months.

The new year also brought forth an acquisition. Celgene bought privately held Avila Therapeutics in January. Avila's Bruton's tyrosine kinase inhibitor program was the big pick-up with the deal.

Much of Celgene's good news in 2012 centered around Abraxane. The Food and Drug Administration approved the drug for first-line treatment of advanced non-small-cell lung cancer in October. Abraxane was previously approved in 2005 by the FDA as a second-line treatment of metastatic breast cancer.

Celgene also announced positive results for Abraxane in studies related to other types of cancer. Probably the most eagerly anticipated results stemmed from a phase 3 trial of the drug in treating pancreatic cancer, which has one of the lowest survival rates among the various types of cancer. Celgene didn't disappoint. In November, the company stated that patients taking Abraxane in the study experienced significant improvement in overall survival rates.

There was good news for pomalidomide as well. Celgene submitted a Marketing Authorization Application to the European Medicines Agency in May for treatment of multiple myeloma. The company also announced in May that the FDA would review its submission of the NDA for pomalidomide by February 2013.  

While no regulatory submissions were filed for apremilast in 2012, the drug continued to show promise. One of three phase 3 studies found that patients with psoriatic arthritis who took apremilast experienced significant improvement in ACR20 scores, a composite measurement of several criteria established by the American College of Rheumatology. 

Meanwhile, sales growth continued at a solid clip throughout the year for Celgene's Revlimid and Vidaza. Sales for both drugs in the first nine months of 2012 were up more than 17% over the same period in 2011. 

Off-key
Some notes sung by Celgene in 2012 were a bit off-key, though. The company disappointed investors with its first-quarter results. Earnings excluding special items came in at $1.08 per share, lower than analyst expectations of $1.13 per share. Revenue missed estimates also, with Celgene reporting $1.27 billion for the quarter compared to analyst projections of $1.32 billion.

The market didn't respond to the misses well. Shares sank 19% over the next few months. Just as the stock seemed to start a rebound, more discordant news came.

Celgene announced on June 21 that it withdrew the submission of Revlimid as a maintenance treatment for multiple myeloma from the European Committee for Medicinal Products for Human Use. The decision stemmed from CHMP's request for more data.

Shares dropped more than 11% on the negative surprise. However, in retrospect, that point also marked the beginning of a real comeback for Celgene's stock. 

Next verse
2013 could add another verse to the happy tune for Celgene investors. Several key events have the potential to add to the company's momentum.

The FDA decides in February on approval for pomalidomide. Celgene hopes to submit an NDA for apremilast in treating psoriatic arthritis in the first half of 2013, and an sNDA for psoriasis later in the year.Regulatory submissions for Abraxane in treating pancreatic cancer are forthcoming as well.

Celgene's efforts to expand indications for Revlimid might finally pay off next year. Clinical studies for other drugs in the pipeline could serve as catalysts.   

Of course, the potential also exists that Celgene's winning streak could come to an end. Failure to obtain approval for any of the late-stage drugs would likely send shares spiraling downward. Competitors -- including Abbott (NYSE: ABT  ) , Bristol-Myers Squibb (NYSE: BMY  ) , and Onyx (UNKNOWN: ONXX.DL  )  -- all have blood cancer drugs that could ultimately challenge Celgene.

There are always risks. I suspect, however, that sustained strength for Revlimid combined with increasing sales for other drugs will keep investors singing Celgene's praises for a while to come.

With Celgene's broad portfolio of drugs and a strong pipeline to boot, many investors see it as a smarter way to play the biotech investing game. While Celgene might be a safer stock than its small biotech brethren, investors need to know about the key opportunities and risks facing the company. We run through them all in The Motley Fool's brand new premium report on Celgene. To claim your copy today, simply click here now.


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