Not sure that months is correct, think it should be years. Rob has patiently and continuously provided "data" to support up moves. The only thing missing on the current move up is Ortegia predicting a crash. Miss that guy! Was my key to buy!
Rob has saved me a lot of scratch research time on this one!
Cantor Fitz - Strong ASH - Raising PT to $131 from $120, & 2016 & 2017 EPS on Margins...Strong Tailwind...Partners Coming into View..ABRAXANE Upside?...We Continue to Like the Shares
December 8, 2014
Target Price: $131.00
Strong ASH - Raising PT to $131 from $120, and 2016 & 2017 EPS on Margins
o Strong Tailwind. Celgene, in our view, appears to have a strong tailwind
heading into 2015 and beyond, based on the volume of data that support the
core hematology franchise, Revlimid and Pomalyst, as well as the potential from
partnered assets. At ASH thus far, compelling evidence for continued duration
of treatment as well as combinations (novel, triplets, etc.) for multiple myeloma,
with Revlimid serving as a backbone, is in evidence. This is not a new dynamic,
but the totality of it speaks to continued growth for the already sizable multibillion
franchise, in particular due to opportunities in disease other than multiple
o Partners Coming into View. We have previously pointed to the upside
opportunity from the company's large Phase II pipeline and stable of partnered
relationships, which have yet to be fully incorporated in the valuation, in
our view. With some key data presented thus far from partners and the
opportunity for advancing candidates into pivotal studies, we believe that
additional valuation expansion could occur.
o Glimpse of Things to Come. In addition to data presentations from Celgene sponsored,partner-sponsored and other clinical programs, an investor reception
was also held on December 7th. With the company reconfirming that operating
leverage should continue to persist, we think there is continued opportunity for
rising EPS forecasts. As a result, we are raising our 2016 (nonGAAP, ex-
SOE) EPS forecast to $6.29 from $6.15, based on this dynamic, and 2017
as well. With this, our PT is now $131, or 21x our new 2016 EPS forecast
o ABRAXANE Upside? In addition to the ASH-related data, Celgene also
highlighted ABRAXANE neoadjuvant data to be presented at the San Antonio
Breast Cancer Symposium later this week. With neoadjuvant treatment growing,
and the franchise having experienced weakness in 3Q:14, we think it possible
that new data could boost to sales trends.
o We Continue to Like the Shares. We continue to like Celgene shares for
the revenue and EPS growth opportunities, dynamic pipeline (e.g., GED-0301,
multiple partnerships, post-ASH digestion, and additional indications from
currently marketed products), share repurchase, and the overall directionality of
EPS growth. We maintain our BUY rating.
Celgene’s portfolio diversification story is in full swing, with the approvals and launches of Pomalyst and ABRAXANE in pancreatic cancer earlier this year and OTEZLA, which posted nearly a three-fold increase in revenues between its initial launch and first full quarter on the market. A second and larger indication of psoriasis was added to OTEZLA’s label, and we believe it will be a significant market opportunity. The company’s flagship product, REVLIMID, should maintain growth from new indications and increasing duration of treatment, but we believe it is the combination of EPS upside from new products and indications and a strong milestone calendar that should drive P/E multiple expansion. Revlimid is the most significant component of the company’s top and bottom lines and the focus of great scrutiny, but revenue and earnings acceleration should also come from new products and indications, and this is spread over multiple products, hence diminishing risk from any one single product.
We have held the view that new sources of revenue, in their totality, could be meaningful to the company, and this has included the launch of POMALYST, new indications for ABRAXANE, and the approval/launch for OTEZLA. With ABRAXANE moving to become a foundation of treatment for pancreatic cancer and POMALYST hitting the market globally, we are forecasting strong sales and EPS growth. The company has a robust Phase II pipeline, which is under-appreciated, in our view, and there is a high degree of operating leverage in the P&L, suggesting multiple levers to earnings growth.
Our price target is $131, which reflects our view that the shares can maintain the current 20x multiple on our 2016 EPS forecast, now $6.28 up from $6.15. We continue to think that an industry-leading P/E multiple is warranted given accelerating double-digit EPS growth through 2017, strong cash flow, upside from the portfolio (REVLIMID, POMALYST, ABRAXANE, OTEZLA), and strategic value as a leading hematology company. We also believe a high multiple of sales is justified given accelerating top-line growth, reflective of our $131 price target
More like a small short squeeze, 12 mill short as of 11/15 per Barron's. You have to be hedge fund stupid to be short CELG through ASH.
Thanks for the update. Margin expansion is always good. Analysts love margin expansion. They appeared at an analyst meeting last week and the overall summary presented by the CEO was great. I own a few of these biotechs and after listening to a few calls my head is spinning. Both CELG and REGN have deep pipelines and the drugs not approved but in various phases of testing are sometimes hard to keep straight.
thanks for the tip. i think CELG is in the process of making up for every investing mistake i've ever made.
Celgene CEO Hugin on CNBC Fast Money Halftime starting at Noon
Scott Wapner ScottWapnerCNBC 48s48 seconds ago
ALERT: Laszlo Birinyi, Rick Rieder and an exclusive with the CEO of CELG. Today at Noon
RBC - CELG hosted an ASH analyst event which supported our bullish view that CELG - duration & recent data reads "all add on top" of RLI guidance/duration - incr Target to $135 from $115"
CELG, PCYC mgmt meetings from ASH
Increasing CELG PT to $135 from $115
December 8, 2014
RBC Capital Markets, LLC
Michael J. Yee (Analyst)
CELG hosted an ASH analyst event which supported our bullish view that CELG: (1) thematically is in the midst of an early innings pipeline thesis on display at ASH, (2) investor enthusiasm on partnered pipeline (AGIO, XLRN, Sutro, Venti-RX, Acetylon HDAC, etc) should pick up over the next couple of years, driving an increasingly positive view of CELG's future growth drivers beyond Revlimid, and importantly, (3) mgmt has been conservative on Revlimid long-term guidance and duration of therapy and recent read-outs from AMGN ASPIRE (and probably pending ABBV ELO study) all "add on top" of Revlimid and make duration of therapy longer, eg., towards 22-25mos duration and 20% better than 15-18mos used in the last few years.
Positive takeaways: (1) CELG acknowledges Revlimid duration of therapy will keep going up based on "combinations" and they've been waiting to see ongoing datasets (eg., ASPIRE) before incorporating into their models and long-term guidance, (2) CELG reiterated a commitment to margin expansion which might be a positive sign towards 2015 guidance in January, (3) positive commentary on Phase III R-squared (Revlimid/Rituxan) in front-line iNHL (our consultant feedback is also positive on that study), (4) commitment to MOR-202 anti-CD38 differentiation on combinations though they're still dose escalating to find optimal dose.
We are raising our Celgene price target to $135 from $115 based on our increasing confidence in CELG's emerging pipeline, longer duration of therapy given all these combinations with Revlimid. We use a higher target multiple of 23x 2016E EPS (up from 19x) in our valuation, which is a premium to peer group of 18-22x based on strong pipeline and above average margins as well as visible growth coming out of ASH. Our bear case is: settlement with ACT is apparently "expected", no catalysts after ASH and stock at highs, partnerships don't impact revenues until 2017+, MOR-202 too far behind JNJ/SNY.
PCYC: Post our meeting with management, we maintain our Sector Perform (Speculative risk) rating on PCYC based primarily on valuation and our view that consensus peak of $6B already accounts for CLL label expansion and the additional indications coming are in analyst models already. We view 2015 US Imbruvica consensus $805-850M as achievable but scripts need to be watched as NRx have plateaued for the last 2 months. Consensus $130M+ OUS seems achievable for FY15. Note we confirmed in discussions that Veterans Affairs (VA) business can be slow and requires much back-and-forth to confirm formulary and will probably be less than 5-7% of revenues consistent with Revlimid and Hep C drugs. However, PCYC management does think NRx will eventually pick up as they're trying to get community docs, where some are using only in handfuls of pts and just trying Ibrutinib, to use it much more broadly across their eligible pts. Also, for TRx, perhaps a natural bolus of sickest, relapsed CLL pts got on therapy in 2014 and some might be coming off, offsetting NRx, and causing TRx to moderate right now.
That said, in the bigger picture we do see a number of positive catalysts later in H2:15 that could lead investors to get excited about label expansions and push PCYC stock higher: (1) Phase III RESONATE-2 study will likely be positive on PFS (80-90% confidence) at final analysis (there's no interim analysis) and open Imbruvica to "tx-naive" front-line CLL pts 65yo (our consultant estimates 10-20% more pts treated after data); (2) Phase II DAWN study in follicular lymphoma should be positive and open up $500M-$1B long-term opportunity; Phase I showed 30% ORR, which is lower than GILD Zydelig of ~50% and PFS ~12mos and has got accelerated approval. We'd want to see 50% ORR levels or better PFS than GILD
Yes we know how the deal is structured. AG-221 is world wide for CELG with AGIO getting low to mid teens royalties. AG-120 is CELG has outside US rights and AGIO has US rights.
Buying CELG is like taking the best of biotech, much better than holding a biotech ETF. Its the way to play biotech.
NO they get non-US rights, which are big, AGIO gets all US rights for AG-221.
Go to Investorvillage CELG board to read these notes as they wont post with bullets or bold here and you lose context - also I post the link to webcast replay there and it wont post here
One of the best CELG webcasts in its history - here are notes I posted quickly during the ASH webcast all in one post..... (also link to replay)...
MAKE SURE YOU LISTEN TO REPLAY:
MY QUICKNOTES POSTED ON IV AS CONF WAS GOING ON:
Dr Fouse - A record 318 abstracts with CELG/partner drugs at 2014 ASH - 268 by CELG & partners & 50 by other companies with CELG drugs as backbone of their treatment (Already mention AGIO twice and AG-221 specifically).
Sub Analyses of MM-020 further enhances Continuous Rd in NDMM - Interinm OS benefit of continuous RD vs Tx
" Revlimid as backbone" mentioned 5 trials especially ASPIRE - "remarkable effectiveness improving strong PFS by 9 months - good ability to be tolerated...RLI backbone lends itself to combo therapy...leader"
Consistently better outcomes - Novel triplits (3 drug combos) coming clearly with Revlimid as the backbone
Strong Pomalyst data abstracts 86, 303, 304, 3109 &big MM-010 data reinforces strong MM-002 & MM-003 data adds significantly to evidence this will be backbone of third line.
DLC-001 Revlimid in RR DLBCL - Seeing a dramatic difference between PFS & OS...Select patients by ABC subtype in new DLC-02 Robust trial - any day now... primary endpoint PFS - really good pool of patients to show the value of Revlimid in this setting
R squared (Revlimid + Rituxan) schedule and dosing in 1st line Follicular Lymphoma Abstracts 799 & 4477 - R2 has great promise
VERY positive comments on Agios (AGIO) AG-221 56% Response, 5 CRs, 9 Complete Responses with hema recovery. Up to 8 months durability . 90% at least 3 months duration
"Particularly striking" even AG-221 (AGIO/CELG drug) patients not achieving CR we are seeing very good durability - drug is working.
"we are VERY excited about this AG-221 program....data is STRIKING...Very excited to move this forward aggressively"
Abraxane leads to a more rapid exposure to unbound paclitaxel vs Crempohor EL Paclitaxel - perfect for combination therapy.
ACE-011 and ACE-536 - Enormous KOL enthusiasm - expect both in Ph 3 Bet Thal trials in 2015 . (XLRN partner drugs
Revlimid has a profound Immuno-modulatory Effect that leads to improved immune dell function and modulates T Cells & Natural Killer Cells and is ideal for combination therapy
Expect aggressive advancement in combos - Imids & Antibodies, Abraxane & anti PD-1/PDL-1, Revlimid & anti-PD-1/PDL-1 and CC 486 & PD-1/PDL-1
Dr Fouse is simply the answer to yrs of my prayers.She is simply amazing.
Growth drivers in MM, NDMM, New combo therapy, Duration of therapy but RLI is much more than myelome....Growth could triple in the next few yrs...drivers include....
• o Discussion with US and EU Reg authorities in non del5Q MDS
• o Expansion via Acceleron ACE-011 & ACE-536 and AGIO AG-221 (& AG-120)
• o FLASH Data ASCO 2015
• o Discussion with Regulatory Authorities on using pathological Complete Response as an Overall Survival Surrogate
• o Significant Growth in Revlimid 2015-2017
Myloid - MDS space
• VERY VERY EXCITED you think of us as myeloma do not overlook this space - More than triple this business in next couple of yrs.
Partnering in Thematic Centers of Excellence...Protein Homestasis, Epigenetics and Immuno-oncology (chart by partner name ) IMPRESSIVE...
• Sanford-Burnham Medical Research Institute
• Acetylon Pharmaceuticals
• Quanticel Pharmaceuticals
• Bluebird Bio
• Sutro Biopharma
Business overview - JF - "we have a lot coming in the VERY NEAR TERM, lots of growth in 2015, new data at ASH like ASPIRE not in our guidance, Conservative guidance with lots of potential upside....
even more confident after seeing the ASPIRE detail...we have thought about it but have been VERY conservative in duration in our model and this will be positive upside to that duration
We are feeling GREAT about our business for the rest of this yr - VERY confident vs estimates...and definitely for 2015. Lots of upside items, approvals, commercial acceleration...Revlimid duration, new indications, MDS should triple next couple yrs,
One of the best webcasts in the history of CELG
Rivals the huge R&D day presentation but that was a half day presentation
The amount of upside in the revenue and EPS numbers from both CELG's internal programs and partner programs is enormous
ASH 2014 will be known as the ASH CELG analysts/investors came out of the ether that $0 is in stock price for this shadow pipeline of 25 +biotech partnerships that will be worth $5 to $10 billion+ a yr in revenues.....
some day not to mention the increasing value of the equity investments - I suspect XLRN will be a wholly owned CELG subsidiary in 2015 followed soon thereafter by AGIO.
I emailed and tweeted Meg T multiple times to these partner deals and sent her both the MS report and powerpoint detailing each one...now she is talking about all of CELG partners on Fast Money. Sent it to almost every person on CNBC airwaves, 20+ CELG analysts, 300+ people on my distribution list including many institutional investors and tweeted for anyone who searches $CELG which is many - also Cramer retweeted to almost 800,000 followers...
Getting the word out - but now I have more ammo with the quotes in WSJ on AG-221 and the XLRN results...
Its gonna be a fun week and rest of the yr.
And analysts are asleep as to the power of the Abraxane late breaker later this week at San Antonio Breast Cancer Symposium. JP Morgan should be spectacular Jan 12 as well