I haven't been bashful in explaining how I feel about Celgene Corporation (CELG) stock. Earlier this year, I wrote an article asking if Celgene was simply the best biotech stock on the planet. (The answer was yes.) More recently, I wrote about the one stock I'd buy right now -- and it was Celgene. 

So when the opportunity arose to write about the bear case from a bull on Celgene, I clearly fit the description of a bull. Here's my best stab at making an argument against the biotech stock.

Charging Bull of Wall Street statue

Image source: Getty Images.

It's too dependent on one drug

Nearly 64% of Celgene's total revenue in the first quarter came from sales of Revlimid. That's a high level of dependence on just one drug. Even though Celgene has several other blockbuster drugs, Revlimid actually provides a greater percentage of revenue now than it did a year ago.

The reality is that Celgene still has too many eggs in one basket. That's not a problem as long as the basket doesn't fall, causing the eggs to break. The bearish case against Celgene is that Revlimid's market position might not be as safe as it seems.

Last year, the European Patent Office (EPO) declared a key patent for Revlimid invalid. Two years earlier, the EPO ruled that another patent for the blood cancer drug was invalid. Multiple companies are pushing hard to win approval to market a generic version of Revlimid. If Celgene loses in its defense of intellectual property rights for the drug, the stock could be in big trouble.

And while there isn't a tremendous amount of competition for Revlimid now, that could change down the road. Johnson & Johnson's (JNJ 0.66%) Darzalex has already been approved as a second-line treatment for multiple myeloma in combination with Revlimid and dexamethasone, or with Velcade and dexamethasone. Several phase 2 clinical studies are underway evaluating Darzalex as a stand-alone treatment for the same indications for which Revlimid is approved. It's not inconceivable that J&J could mount a serious threat to Celgene in a few years.

Plenty of risks remain for its pipeline

Celgene likes to point out that it has 10 pipeline candidates with the potential for peak sales of $1 billion or more that could be approved by 2022. You can't blame the biotech for highlighting its pipeline potential. But, for now at least, it's just potential. Plenty of risks remain.

One of those experimental drugs that Celgene thinks could be a blockbuster is JCAR017. Celgene partnered with Juno Therapeutics (JUNO) on the CD19 CAR-T drug. JCAR017 holds significant potential in treating aggressive large B-cell lymphoma.

It's worth noting, though, that JCAR017 is only in phase 1 clinical development right now. It's still really early for the drug. Also, another once-promising CD19 CAR-T candidate included in the Celgene/Juno partnership had to be abandoned last year. Juno halted development of JCAR015 after two patients taking the experimental drug in a phase 2 study died. 

Several of Celgene's possible blockbuster candidates are in late-stage studies. But even late-stage programs can fail. Celgene experienced this last year with a phase 3 study of Revlimid in treating diffuse large B-cell lymphoma (DLBCL). No overall survival benefit was seen for patients taking Revlimid.  

Celgene is counting on its pipeline to deliver impressive growth. Another old saying relating to eggs seems applicable: Don't count them before they hatch.

Zombie apocalypse?

There's also the possibility of a zombie apocalypse that could decimate Celgene's share price. Hey, don't immediately dismiss this scenario. Both the U.S. military and Centers for Disease Control and Prevention (CDC) have plans for a zombie attack. 

Of course, the U.S. government's plans were tongue in cheek. So is my listing of a zombie apocalypse as a threat to Celgene. But it's about the only other thing I could think of as an argument against the stock. The reality is that it's hard to make a good bear case when it comes to Celgene.

Although the biotech does still receive a big chunk of its revenue from Revlimid, the drug's sales don't appear to be in any trouble for a long time to come. Celgene has appealed those EPO patent rulings and doesn't expect decisions on the appeals for several years. Even if Johnson & Johnson's Darzalex proves successful as a stand-alone treatment, it will be quite a while before the drug would be able to challenge Revlimid directly.

While pipeline risks exist for Celgene, that's true for every other drugmaker. Celgene's sheer number of pipeline candidates reduces its risk to a large extent. 

Perhaps an effective pessimistic argument against Celgene could be made in a few years. For now, however, I think the bear case for the biotech stock should probably go into hibernation -- unless those zombies appear.