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Celgene Reports Q1 2013 With Unsurprising Results, Should Follow BIIB & Bio Sector

Celgene Reports First Quarter 2013 Operating and Financial Results (press release, 4/25/2013)

- Net Product Sales of $1.43 Billion, Increased 15 Percent Y/Y

- Total Revenue of $1.46 Billion, Increased 15 Percent Y/Y

- Adjusted Diluted Earnings Per Share of $1.37, Increased 27 Percent Y/Y

-2013 Adjusted Diluted EPS Guidance Raised; Net Product Sales Guidance Affirmed

Celgene stock is only slightly higher after the company reported results for Q1 2013. Investors seem a little bit worried about the slip in net income, which came in at $385 M versus $402 M in Q1 2012 (GAAP). Using adjusted net income, Q1 2013 was $592 M versus $484 M in Q1 2012 (non-GAAP). Expenses rose, although one-time events dragged down the non-adjusted data and may be distorting the market's perspective Celgene's fundamentals.

"The adjusted operating expenses presented below exclude share-based employee compensation expense, IPR&D impairments and upfront collaboration payments."

Looking at their product lineup, we see consistent growth in most of the company's marketed products, and all of the products that can be considered "vital" to Celgene's valuation of $50 B including Revlimid (Lenalidomide), Vidaza (Azacitidine), and Abraxane (Protein-bound paclitaxel) with 16%, 10%, and 18% in sales growth (respectively). The success of these products in the last year drove the company's top-line growth, which came in at 15% year-over-year. The company also maintained existing financial forecasts, which estimate that the company will see 11% growth in net product sales throughout the next year. These are good figures, but they are not surprising.

Due to a lack of surprises, investors should expect CELG to mirror the movements of the biotech sector (NASDAQ: BIIB) , and act as a barometer for the health of medium sized pharmaceutical companies for the next few weeks until we reach the PDUFA goal date for Revlimid (lenalidomide) on June 5th 2013 for submitted sNDA for the mantle cell lymphoma (MCL) indication, followed by data releases which may skew bullish/bearish perspective on Celgene going forward.

This makes CELG one of many attractive picks in the event that the broader market makes a sudden turn for the worse. The company is expensive, but is financially secure and may be able to grow Revlimid sales significantly with its introduction into other cancer indications.

From Bio-Wire - April 25 2013 2:28 PM