Celgene (Nasdaq: CELG) reported a respectable first quarter. Revenue was up 40%; adjusted earnings up 32%. The company raised 2011 revenue and earnings guidance. Yet investors gave the company no love. It's trading flat today, thanks to a likely combination of several different factors.

First, Celgene is notoriously conservative with its guidance. Last year it increased earnings guidance after releasing results from the first, second, and third quarters. That's a neat parlor trick, but eventually the patrons catch on.

In addition, Celgene's top line depends heavily on cancer treatment Revlimid. It makes up more than 65% of revenue, and it'll be an even bigger contributor when Vidaza begins seeing generic competition in the U.S. next month. The 39% increase in Revlimid sales was impressive, but it owed partly to a price increase. Sure, new cancer treatments like Bristol-Myers Squibb's (NYSE: BMY) Yervoy and Dendreon's (Nasdaq: DNDN) Provenge are launching at exorbitant prices, but investors are rightfully worried that price increases can't drive sales forever.

There's also the issue of secondary malignancies hanging over Revlimid. One of Celgene's strategies to further increase sales of Revlimid is to show that the drug is more effective the longer it's used. Longer use equals more pills sold. But a study presented late last year showed that patients on Revlimid were also getting secondary tumors. Whether they're clinically meaningful is debatable, but until that debate gets settled, investors will worry that doctors may not extend treatments.

Celgene trades around 17 times current 2011 adjusted earnings estimate, which is about a 21% increase over 2010 earnings. That seems neither overly expensive nor overly cheap. It looks like investors were right to do nothing with the stock today.

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