Source Celgene.

Celgene's (NASDAQ:CELG) latest outlook for the next few years projects that sales will roughly double between 2013 and 2017. If Celgene delivers on that rosy outlook, investors might find including this biotech in long-haul investment portfolios makes a lot of sense. 

Getting to a double
Celgene's best-selling drug is Revlimid, which is the market-share-leading second-line therapy used for multiple myeloma. Since its launch in 2006, sales of Revlimid have grown steadily, reaching $1.3 billion in the third quarter of 2014. That $5.2 billion annual sales run rate means this one drug represents roughly 67% of Celgene's total product sales and suggests that if Celgene hopes to make good on its lofty sales target for 2017, Revlimid must gain ground.

Fortunately for investors, there are a couple of reasons Revlimid's sales could rise over the next few years. First, the U.S. Food and Drug Administration is expected in February to determine whether to approve Revlimid for use as a first-line multiple myeloma treatment in February; a green light would significantly widen Revlimid's addressable patient population. Second, Celgene is studying Revlimid across new indications including large B-cell lymphomas. If those studies pan out, Revlimid should have a good shot at achieving Celgene's forecast for sales of $7 billion in 2017.

Revlimid is likely to remain an important driver of Celgene's growth, but third-line multiple myeloma drug Pomalyst might also move the revenue needle over the next few years. Pomalyst is already widely used, with sales of $181 million the third quarter of 2014, up 102% year over year; however, management believes sales could hit $1.5 billion in 2017, particularly if Celgene can expand Pomalyst into the second-line setting.

In addition, Celgene should also see sales grow thanks to its cancer drug Abraxane and its autoimmune drug Otezla.

Abraxane is approved as a treatment for metastatic breast cancer, advanced non-small cell lung cancer, and pancreatic cancer, and is already generating sales of more than $200 million per quarter. Celgene thinks Abraxane's sales will grow by a compound 28% per year between 2013 and 2017 thanks in part to label expansions, including use in triple negative metastatic breast cancer and as a maintenance therapy for patients with non-small cell lung cancer. Overall, Celgene forecasts that Abraxane's sales will increase from $650 million in 2013 to between $1.5 billion and $2 billion in 2017.

Celgene's recently launched psoriasis drug Otezla should also begin contributing meaningfully to the top line in the next few years. Last spring, Otezla won FDA approval for use in psoriatic arthritis patients, and in September, the agency expanded Otezla's use to include the larger psoriasis indication. Since Otezla is dosed as a pill, rather than as an injection, and the number of patients in the U.S. diagnosed with psoriasis totals in the millions, Celgene believes it can carve out enough market share for the drug to become a billion-dollar blockbuster. So far, prescription trends suggest that is possible: Since March, Otezla has become the second most frequently prescribed therapy for new psoriatic arthritis patients.

If all goes as planned for these four therapies, Celgene thinks sales will total between $13 billion and $14 billion in 2017. That would be a remarkable rise from about $9 billion in sales expected for 2014, but it could prove to be just the tip of the iceberg. That's because Celgene spends more of its revenue on research and development than many of its big-cap biotech peers, which should mean the company will have a steady stream of new drug launches for years to come.

CELG R&D to Revenue (TTM) Chart

Celgene's projection for sales growth to fuel future earnings growth is additionally compelling. The company expects earnings per share could reach $7.50 in 2017, which means Celgene expects its earnings to grow more quickly than its sales over the coming years. 

Source: Celgene.

One more thing
Celgene's balance sheet appears to be rock solid. Even with significant reinvestment in R&D and partnerships with emerging biotech companies including Agios and bluebird bio, the amount of cash and short-term investments on its books grew from $5.7 billion to $6.8 billion between December 2013 and September 2014. The company's ability to make key investments to gain access to some of the most interesting compounds under development for the treatment of diseases such as cancer, while still socking away money for additional deals in the future, could suggest Celgene's opportunity stretches far beyond 2017. If so, investors might want to consider Celgene as a core holding in their long-term portfolio.