Oncology Drug Growth Fuels Celgene's Q1 Profit Higher by 22%

Despite higher expenses, key oncology growth drivers in Celgene's pipeline helped push the company's adjusted EPS higher by 22%

Apr 24, 2014 at 12:20PM

Cancer-focused biopharmaceutical behemoth Celgene (NASDAQ:CELG) today reported steady growth in many of its key products and a higher adjusted profit in the first quarter despite a clear-cut rise in expenses.

For the quarter, Celgene delivered total revenue of $1.73 billion and net product sales of $1.71 billion, an increase of 18% and 19%, respectively. The main growth driver, as usual, was mantle cell lymphoma drug Revlimid whose sales increased 14% to $1.14 billion and accounted for 67% of Celgene's total quarterly product sales.

Beyond Revlimid, Abraxane sales soared 51% to $185 million, benefiting from its fairly recent treatment indication expansion into pancreatic cancer in the U.S. and Europe. Pomalyst/Imnovid sales were also impressive, totaling $136 million during the quarter.

If there was one blemish it was the introduction of generic competition to Vidaza in the U.S. where sales of the drug decreased 83% to just $14 million. Overseas, Vidaza sales increased 14% to $134 million.

From an earnings perspective, Celgene reported a 19% increase in net income to $705 million with adjusted EPS climbing 22% to $1.67. Gains were driven by strong oncology product sales, but were also partially offset by a 58% increase in research and development costs tied to select pipeline products entering later-stage studies, as well as a 34% rise in selling, general and administrative costs related to drug launch activities in the U.S. and abroad.

Looking ahead, Celgene reaffirmed its full-year forecast which calls for revenue of $7.5 billion, including Revlimid sales of $4.9 billion-$5 billion (representing 16% year-over-year growth at the midpoint), Abraxane sales of $850 million-$900 million (35% year-over-year growth at the midpoint), and adjusted EPS of $7-$7.20. 

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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