When Celgene (CELG) reports third-quarter earnings on Thursday, flagship drug Revlimid will likely drive growth. With sales now north of $1 billion per quarter, the drug has reached megablockbuster status and makes up about two-thirds of Celgene's revenue.
But investors should keep an eye on the company's newer drugs as well. They're shrinking Revlimid's impact on the company.
Abraxane is close to being a blockbuster, with expected sales of $850 million to $900 million this year. In the second quarter, sales were up 39% year over year thanks to the drug's expanded approval into pancreatic cancer in the U.S. and Europe. With $400 million in sales in the first half of the year, Celgene needs $450 million in the second half to reach the low end of its goal.
Source: Celgene
Also keep an eye on Pomalyst, Celgene's multiple myeloma drug that was approved for sale in 2013. Sales were up 143% year over year, but that's comparing it to the first full quarter on the U.S. market without sales in Europe, where it wasn't approved until August 2013. Quarter-over-quarter growth was 19%, which isn't too shabby. If it can keep up that growth rate, sales would top $700 million for the year.
Finally, there's Otezla, which isn't going to move the revenue needle considering that it just launched in April after being approved for psoriatic arthritis by the Food and Drug Administration. In late September, the agency approved Otezla for plaque psoriasis as well. Sales for the expanded indication aren't going to have much impact on the third-quarter numbers, but management might give more color during the conference call about how the plaque psoriasis launch is going with a month of sales under its belt.
Psoriatic arthritis and plaque psoriasis are substantial markets, and Celgene is also going after other inflammation diseases, such as rheumatoid arthritis, ulcerative colitis, and Behcet's disease. Otezla has a big advantage over anti-inflammatory drugs -- AbbVie's (ABBV -1.03%) Humira, Johnson & Johnson's (JNJ -0.69%) Remicade, and Amgen's (AMGN -0.19%) Enbrel -- because it can be taken orally while the biologics have to be injected or infused.
Source: Celgene.
It's not hard to see Otezla as a blockbuster based on its competitors' sales, but it will take a few years to get there. Unless a patient can't tolerate the needle pricks, doctors aren't likely to switch patients to Otezla if the biologic is working. Celgene's best hope is to grab new patients them before they start one of the biologics. At the end of the second quarter, Otezla shared the market share lead for new patient starts in psoriatic arthritis, so it's off to a good start.
Boosted by this week's data on Crohn's disease drug GED-0301, Celgene is trading near its 52-week high -- which is also its all-time high -- so don't be surprised if the biotech has a little sell-off even if earnings are solid.
