BMO "CELG appears on cusp of a pivotal 2013 with several near term opps/catalysts"
BMO "CELG appears on cusp of a pivotal 2013 with several opps to expand RLI EU frontline, introduce new RLI indications & launch new product opps to diversify.Multiple Levers of Growth Emerging in 2013. $90 target"
Stock Rating: Outperform
Industry Rating: Outperform
December 10, 2012
Multiple Levers of Growth Emerging in 2013
Celgene Corporation (CELG) hosted an investor briefing at the American Society of Hematology (ASH) annual meeting to review key data presentations and ongoing initiatives for its hematology franchise. With primary focus on lead product Revlimid in myeloma, timelines were affirmed for 2H13 re-filing for frontline use in Europe assuming overall survival (OS) trends continue to improve on mature data from pivotal study MM-015 in 1Q13. Additional frontline data from study MM-020 comparing Rd vs. MPT should report in 1Q13 providing additional opportunity for EU filing in 2H13. Additional expansion opportunities were highlighted for Revlimid, including CLL, on optimal dose identification in CLL-009, MCL on recent sNDA filing, Follicular NHL on continuing enrollment of RELEVANCE phase 3, and DLBCL on phase 3 protocol development.
Pipeline development was also highlighted with PFS and OS benefit for pomalidomide in MM-003 study of relapsed/refractory myeloma and multiple combination studies under consideration. Finally, the Vidaza franchise is being reinvigorated with oral CC-486 in the QUAZAR study in lower risk MDS/AML.
CELG appears on the cusp of a pivotal year in 2013 with several opportunities to expand Revlimid frontline labeling in Europe, introduce new indications for the product and launch new product opportunities to diversify away from Revlimid. Within the hematology franchise, we believe that upside potential from Revlimid in CLL, MCL, NHL, and DLBCL has been under-estimated as has the potential for a salvage agent like pomalidomide to increase willingness to dose Revlimid to progression. With multiple levers of growth in 2013, we believe CELG remains an attractive investment at current levels.
Our 2012 non-GAAP EPS estimate is $4.89.
Our $90 price target is based on 16x our 2013 non-GAAP EPS estimate of $5.63.