With all the negativity on CELG stock, investors should not forget the Board has approved a shareholder vote to increase the outstanding shares for the purpose of splitting the stock 2 for 1. Boards do not normally take stock split actions unless the subsequent quarters after the stock split highly positive.
Full report on investorvillage CELG message board
BERNSTEIN * Quick Take - Celgene: Markman Schedule, Outcomes and NICE Decision Not Material to Outlook, Buy on Weakness - our target remains $214,,,
The major overhang for Celgene's stock this year is concern about the ongoing challenge to the market exclusivity of Revlimid. The next step in the litigation between Celgene (the plaintiff) and Natco and Watson (the defendants) is the Markman hearing about claim construction and interpretation. This week the court announced that the magistrate from the New Jersey District Court noted that the hearing is "being scheduled" for April 29th. Separately, the UK's National Institute for Clinical Excellence (NICE) recommended that Revlimid not be covered for second line treatment of multiple myeloma, and these two news items have contributed to the stock's overall –6% performance this week.
The court announcement comes earlier than the 3Q14 timeline we previously anticipated and may have spooked some investors who are already concerned about the outlook of Revlimid exclusivity. Based on the limited material impact that we expect this hearing to have on Celgene's dispute with Natco, and the lack of opportunity we expected in the UK with Revlimid's current label, we believe that the market's reaction to these events is overblown and likely to reverse.
Our confidence in Revlimid's patent exclusivity and sustained revenue and cash flow growth through 2025 remains unchanged and we recommend taking advantage of the stock's weakness to add to positions in one of the highest quality (and defensive) names in the biotech group.
· The earlier than expected date may not necessarily be reflective of the outlook for the case, nor the final date of the hearing. The language of the court documents is that the Markman hearing is "being scheduled" on April 29th. This announcement follows a teleconference that the two parties had with the magistrate, in the absence of the judge. An earlier than expected hearing date may not necessarily reflect urgency of the part of the judge to proceed with the case but a simple scheduling arrangement that the magistrate may have imposed but may yet be subject to further discussion with the judge and the parties involved. To date, the case has been proceeding slowly since both Natco and Celgene filed their claim construction (Markman) briefs in October 2013. Based on the slow course of this case to date, and the notes to this schedule, we believe it is quite likely that this hearing may be further postponed.
· We expect that the outcome of the Markman hearing will not have a material impact on the outcome of this case. The Markman hearing will likely discuss claim construction as submitted by the two parties. As the two parties did not agree to date that a certain claim definition would be dispositive in this case, we and our attorney consultants believe the hearing will not have a material impact on the eventual outcome. The markman hearing is likely to split the disputed claims roughly down the middle, and regardless has little bearing of the strength of either side's position in the litigation. We continue to believe that Natco faces a very high hurdle in their efforts to invalidate the entire portfolio of almost two dozen patents that are currently protecting Revlimid (discussed in our March 7th note, see below ). Compared to the magnitude of the number of patents and claims at issue, the claim terms and construction issues are relatively trivial.
· If the hearing does indeed take place on April 29, the outcome could be posted by mid-2014, perhaps late summer. Our patent advisors suggest that the court would be likely to issue its interpretation of the disputed claims by mid year, given an April 29 hearing. Should there not be a document from the judge in this timeframe, the decision could be postponed by several months due to summer staffing issues. A long fact discovery process will most likely be required after the hearing outcome is posted and before a trial date is set. Given the number and the breadth of the Revlimid patents, we believe that this process may be lengthy and cumbersome. With an earlier hearing timeline, the trial could take place in the first half of 2015 rather than the 2015-2016 that we previously anticipated. We and our attorney consultants expect that the parties may settle in the eve of the trial, perhaps earlier than previously anticipated. The result of an earlier settlement may help clarify Revlimid's exclusivity and potentially remove this overhang.
· We maintain our view that the likelihood of Natco challenging all Revlimid patents is extremely low. Overall, the outcome of the case will likely not be impacted by the outcome of the Markman hearing. Revlimid is currently protected by some two dozen patents in the US. Our attorney consultants believe that the polymorph patent 7465800 (or '800 patent) is a particularly solid pillar in the "dome" of patents that Celgene has built around Revlimid. Our outlook for Revlimid sales remains unchanged, we continue to project product sales growth from $9bn in 2015 to $16bn in 2019, and $21bn 2023. Based on our analysis of consensus expectations , we estimated that the stock had been already discounting a ~30% chance that Revlimid will lose its patent protection by 2019.
· The NICE decision is consistent with current practice in the UK and labeling and does not reflect Revlimid's ultimate potential.. The UK's NICE decision concerns the potential use of Revlimid in second line Myeloma. The lack of endorsement in this setting is consistent with the UK's longstanding preference for thalidomide on a cost basis over Revlimid, and for Revlimid's lack of front line results in their UK label and approval. In the future we would hope that NICE re-evaluates their recommendation when Revlimid is approved for front line and maintenance use, which is likely to occur in 2015. In those settings, it is easier to make the relative effectiveness arguments in favor of Revlimid over thalidomide. Thal is poorly tolerated for long duration treatment, and very few patients historically stayed on thal in the maintenance setting for much more than 8 or 9 months due to neuropathy, sedation, GI effects etc. These differences matter less in the second line setting where the duration is relatively short, hence NICE's decision. We only expect the growth trajectory of Revlimid to accelerate in Europe in 2015 and 2016, and would have been surprised to see any inflection earlier than that, either in the UK or in other markets. Revlimid's penetration is growing in Europe, and duration is increasing, but the overall market position there remains only 30-40% of their US market position today, much less where the US market is headed with maintenance being more and more widely adopted.
We continue to rate Celgene Outperform, with a target price of $214. We believe that the market's concern about Revlimid's patent protection and NICE recommendations is overdone. We see no reason to change our revenue and earnings forecasts for the stock and recommend investors add to positions on this temporary weakness
The decision on the court case will not be for several months, and the worst case scenario is the drug in question is exclusive till 2019. That is several more years of making money,besides other drugs in the pipeline and a very strong balance sheet. Also was put on Wells Fargo highest buy list today. the RBC analyst stated that this is a non-event and still a buy. Cramer also stated early on that this is the opportunity to get in.
Sentiment: Strong Buy
It seems like it was the week hands getting scared out today. There were analysts from 2 firms ( Wellf Fargo & RBC) and Cramer saying this is a buying op. Worst case scenario is they keep exclusive rights to that drug until 2019. That's several years to still make money!!! I believe you will see this back in the mid 150's Monday or Tuesday at the latest.
Sentiment: Strong Buy
This is the large programmed traders using fear (Crimea,etc,blah,blah,blah) to drive stock prices down so they can buy more cheaply.
technical trading for a while until all dust settles. i bought some more this morning, not sure what monday will bring...hopefully celg will bounce off the 200 day ma and range bound from there until the so called market correction is over (hoping, wishing)....i mean market correction should not be a concern as people are still taking medicines regardless
Barron's Article, this will go up on Monday
We continue to rate Celgene Outperform, with a target price of $214. We believe that the market’s concern about Revlimid’s patent protection and NICE recommendations is overdone. We see no reason to change our revenue and earnings forecasts for the stock and recommend investors add to positions on this temporary weakness.
You have to expect this after a big run, especially when there are a lot of worries in the world. China, Crimea, is Europe on the way back and are we finally pulling out of this 5 year down turn. The large investors that move these high PE stocks are also usually leveraged to the hilt and jump ship at any hint of bad news. The 3D printer stocks are also getting hit.
Upgrade after upgrade. Not much has changed as far as outlook. Were all the people buying this in 2013 just insane? It does seem suspicious that just about the time this starts to see the light of day there pops up something to put a kabash on it. As long as the revenue is in place. So am I.
Good info. Over sold. Polymorphs are patentable, no prior art and nothing obvious about Rev poly. IMHO
Wells Fargo - CELG: Adding To Wells Fargo Priority Stock List
We are adding CELG to the Wells Fargo Priority Stock List based on our belief that the company's long-term fundamentals remain strong, given CELG's heme/onc growth prospects, deep pipeline, and excellent long-term operating leverage; we view today's downside on the Markman hearing scheduling and UK reimbursement recommendation as an overreaction presenting an attractive opportunity to build a long-term position.
Great. That's the reason the buying just started, i am thinking everybody is trading based on the technical now a days.
Very helpful, thank you, rob_cos. Where is this update from? Source? I could not find any news except Cramer just saying Revlimid rejection in Europe...??