The biotechnology industry has been a huge growth engine for the stock market in recent years, and Celgene (CELG +0.00%) stands as one of the biggest players in the biotech industry. The company behind treatments such as blood-cancer drug Revlimid and psoriasis fighter Otezla has seen impressive gains in revenue and profit over the years, and Celgene also has a pipeline of promising drug candidates to drive future growth. Given how well its stock has performed, some believe that it might be ready to split its stock, even though its most recent stock split wasn't all that long ago. Let's look more closely at Celgene's stock split history to see if a future split is imminent.
Image source: Celgene.
Celgene stock splits
Here are the dates and split ratios for the stock splits that Celgene has done in the past:
|
Date of Split |
Split Ratio |
|---|---|
|
April 17, 2000 |
3 for 1 |
|
Oct. 25, 2004 |
2 for 1* |
|
Feb. 27, 2006 |
2 for 1 |
|
June 26, 2014 |
2 for 1 |
Data source: Celgene investor relations. *Structured as a 100% stock dividend, which has the same effect as a 2-for-1 split.
When Celgene has tended to split in the past
Celgene has a nice history of doing stock splits. In 1999, the biotech went through a huge growth spurt that sent its stock up by 1,000% in the course of a single year's time, sending the stock price as high as $187 in early 2000. The company responded with a 3-for-1 stock split, a move that it probably later thought twice about as the bear market of 2000 to 2002 sent the stock down as low as $15 per share. Yet Celgene's prospects were too good to hold the shares down for long, and by mid-2004, the biotech's stock was back in the $60s, prompting a 100% stock dividend that had the same net impact as a 2-for-1 split would have.
Celgene's impressive growth continued, and it took barely another year before the share price was once again in the $60s. Celgene's next 2-for-1 split happened with shares in the mid-$70s, and the stock redoubled once more before the 2008 recession and financial crisis knocked the stock for another loop.
Following the crisis, the stock market rebounded, but Celgene took a bit longer to bounce back from its declines. The stock's rate of share-price appreciation slowed, and it took until 2012 for the stock price to get back into the $70s. At that point, some investors started looking for another split to come soon.
A change in Celgene's split strategy
However, Celgene changed its playbook in the 2010s. Rather than splitting at the same levels it had in the past, Celgene instead let its share price creep into the triple digits. In fact, it wasn't until Celgene stock had hit $175 that the company decided to move forward with a 2-for-1 split, and that only kept the share price below $100 for a few months following the June 2014 move.
Since then, Celgene shares have traded as high as $140, but they've also traded back below $100 for periods of time. At its current level of around $120, Celgene is about in the middle of its recent range.
Will Celgene split again soon?
Celgene hasn't mentioned any intent to split its stock in the immediate future, and that's consistent with its change in strategy. Many companies have chosen not to do stock splits in recent years even when their stocks have climbed into the triple digits. Share prices above $100 instead stand as a symbol of successful business victories. Already, Celgene stands out from its large-cap biotech peers, many of which haven't made stock split moves at all in over a decade.
Still, there are reasons to be excited about Celgene's future. Some early positive results in clinical studies for Celgene have shown promise for treatments like GED-0301 for Crohn's disease and ozanimod for ulcerative colitis. Moreover, with cancer-fighter Pomalyst winning market share, Celgene could have another blockbuster on its hands.
Celgene isn't likely to split its stock so soon after its most recent move unless the share price climbs dramatically from here, approaching the $200 per share level. That wouldn't be unprecedented, however, and given Celgene's strong history, investors shouldn't count out an eventual future split.
