Celgene (NASDAQ:CELG) is on track to become part of Bristol-Myers Squibb (NYSE:BMY), but its earnings still matter for current shareholders because the acquisition includes a partial payment in the form of a share of Bristol-Myers Squibb. As Celgene's perceived value increases, Bristol-Myers Squibb's share price should increase, increasing the value of the takeout offer.

Last year was certainly a solid year for Celgene, with the biotech exceeding revenue and earnings guidance for the year. The pipeline front was impressive as well, with the company reporting a whopping 11 positive phase 3 clinical trials last year while bringing seven new drug candidates into clinical trials.

Check out the latest Celgene earnings call transcript.

Doctor talking to a patient in an exam room.

Image source: Getty Images.

Celgene results: The raw numbers

Metric

Q4 2018

Q4 2017

Year-Over-Year Change

Revenue

$4.037 billion

$3.483 billion

16%

Income from operations

$1.807 billion

$1.198 billion

51%

Earnings per share (EPS)

$1.50

($0.10)

N/A

Adjusted EPS

$2.39

$2.00

20%

Data source: Celgene.

What happened with Celgene this quarter?

  • Celgene's top-selling blood cancer drug, Revlimid, continues to grow well, with sales up 16% year over year, bolstered by extended use of the drug as a maintenance therapy.
  • Sales of its other major blood cancer drug, Pomalyst, are growing even quicker, up 28% year over year. U.S. sales increased 39%, driving the overall growth, as Pomalyst is being used in a triple combination with Johnson & Johnson's (NYSE:JNJ) Darzalex and a generic called dexamethasone.
  • Anti-inflammatory Otezla saw sales increase 21%, boosted by launches in additional countries, such as Japan, with international sales up 29%.
  • Abraxane, which treats solid tumors, saw sales increase 7%, but U.S. sales were up 15%, suggesting a rejuvenation of Abraxane sales as the drug starts to get used in combination with newer immuno-oncology drugs.

What management had to say

Mark Alles, Celgene's chairman and CEO, talked about the combination with Bristol-Myers Squibb:

The strategic rationale for this transaction is clear and compelling. The combination of our highly complementary portfolios creates a world leader in the important specialty areas of oncology and inflammation and immunology. We believe the combined company will have even greater financial strength to further accelerate our research and development engine, continue to invest in external partnerships, and to attract the most talented people in our industry.

Terrie Curran, Celgene's president of global inflammation and immunology, highlighted expectations for Otezla's continued growth:

I think, heading into 2019, I think the growth will continue to come from that prebiologic segment in the psoriasis market. Importantly, about 60% of patients in that segment remain untreated. So, there remains a really -- a fairly large opportunity for us to continue to grow in that segment.

Looking forward

Management is guiding for 2019 revenue to come in the range of $17 billion to $17.2 billion, up approximately 12% at the midpoint. On the bottom line, adjusted EPS is expected to fall between $10.60 and $10.80, up 21% at the midpoint.

On the pipeline front, Celgene expects to file for approvals in the U.S. and EU for ozanimod as a treatment for multiple sclerosis in March. Regulatory applications for luspatercept, which treats myelodysplastic syndromes and transfusion-dependent beta-thalassemia, are expected to be filed in the first half of the year. And the company expects a U.S. FDA approval for fedratinib by year-end 2019. 

Assuming they're all approved, they'll set up plenty of new sales growth in 2020 and beyond -- for Bristol-Myers, of course.

Editor's Note: The original article stated that a U.S. marketing application for fedratinib in myelofibrosis is expected by the end of the year. However, the company expects U.S. FDA approval by year-end 2019. The article has been updated to reflect this change. The Fool apologizes for the error.