It seems I shouldn't have thrown out Celgene (Nasdaq: CELG) because of its lofty price-to-earnings ratio in my best midsized biotech article. The cancer-drug specialist justified its valuation quite effectively today with a stellar second-quarter performance.

Revenue was up 36% on the back of top-selling Revlimid, which jumped 48%. Vidaza also had a nice showing, up 43% year over year. It's hard to argue with that kind of growth.

Some of Revlimid's growth is coming from doctors using the drug in a maintenance phase. The data presented at the American Society of Clinical Oncology earlier this year clearly worked as a nice little advertisement for increasing Revlimid's use. Longer use equals more revenue per patient; it doesn't get any simpler than that.

Profit growth was even more impressive. Earnings -- backing out acquisition charges but including stock-based compensation -- increased 55%. Ironically, Celgene's beaten-down price must be taking a toll on the employee's stock options because the stock-based compensation only increased by $0.01 year over year. If you do back out stock options, adjusted earnings increased by only 50%.

The strong quarter led Celgene to raise guidance for the second quarter in a row. It's not all that surprising, as Celgene's management is typically conservative, but the increased guidance also includes a $0.05 reduction in earnings for the acquisition of Abraxis BioScience (Nasdaq: ABII), which Celgene thinks will close in the fourth quarter.

At one time, Celgene seemed like it could do no wrong. Having better-than-a-10-bagger from mid-2002 through mid-2007 will do that to investors. But the company proved mortal, and investors knocked the stock down over the past couple years, even further than they did for other midsized biotechs Biogen Idec (Nasdaq: BIIB), Amgen (Nasdaq: AMGN), and Gilead Sciences (Nasdaq: GILD), especially during the market crash in late 2008 / early 2009. But since April 2009, Celgene has come back further than the others. Based on this quarter, it looks like investors' confidence in that comeback was justified.