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Celgene Corp. (CELG) Message Board

  • rob_cos rob_cos Oct 9, 2013 11:46 AM Flag

    B o A ML Increasing Revlimid projections, target to $179

    BoA ML Increasing Revlimid projections, PO to $179

    Following recent discussions with an ever increasingly bullish CELG management and ahead of MM-020 data (ASH abstract Nov 7, meeting Dec 6-10), we are taking the opportunity to re-evaluate our longer-term model to include a rosier Revlimid outlook, bolstered by: (1) inclusion of EU newly diagnosed myeloma revenues starting in 2015 following EU approval on MM020 data (2) increased share gains in the US in newly diagnosed myeloma starting in 2015 (management expects 10% share gains following US approval) (3) a surprising trend of expanded duration gains for Revlimid in the US starting 2H13 following introduction of new therapies (4) continued steady price increases not originally factored into our model. These changes are substantially higher than our prior longer term model (+$300M-880M to Revlimid 2015-2018 est) and bring our estimates in line with consensus. Our updated model is still short of CELG’s 2017 guidance for $12B in revenues, but we think that EPS guidance of $13.00-$14.00 is readily achievable on our $11B base estimate. Our PO moves from $164 to $179 (19xour 2015E EPS).

    Noteworthy take aways from management

    (1) CELG is more bullish about its 2017 financial guidance following MM020 data analysis and introduction of Pomalyst to the US market (2) MM020 data will show more details on differences between Revlimid fixed duration vs continuous treatment at ASH (3) CELG believes Kyprolis and Pomalyst product introductions are encouraging physicians to keep patients on Revlimid longer, as physicians worry less about generating and treating Revlimid resistance (4) CELG believes there is a growing interest in keeping patients on oral therapy for myeloma, allowing Revlimid retreatment following Pomalyst use (5) a Markman hearing on a generic Revlimid challenge has yet to be scheduled, possible date in 2014 following a protracted discovery process (CONTINUED IN REPLY)

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    • Noteworthy take aways from management

      (1) CELG is more bullish about its 2017 financial guidance following MM020 data analysis and introduction of Pomalyst to the US market (2) MM020 data will show more details on differences between Revlimid fixed duration vs continuous treatment at ASH (3) CELG believes Kyprolis and Pomalyst product introductions are encouraging physicians to keep patients on Revlimid longer, as physicians worry less about generating and treating Revlimid resistance (4) CELG believes there is a growing interest in keeping patients on oral therapy for myeloma, allowing Revlimid retreatment following Pomalyst use (5) a Markman hearing on a generic Revlimid challenge has yet to be scheduled, possible date in 2014 following a protracted discovery process (6) Management is confident in its FY13 guidance of $600-700M in Abraxane sales, with better than expected share gains in lung cancer and the steepest part of the launch curve in pancreatic still ahead. (7) CELG expects the apremilast launch to be better than Xeljanz based on view that PsA is a less competitive market dynamic than RA and that its clean safety profile will represent a lower barrier to start therapy (8) Potential dividend initiation continues to be on CELG’s radar, but not at least until 2015 to allow for better visibility on apremilast revenue trajectory.

      • 1 Reply to rob_cos
      • $179 will be low after:
        1) Q3 earnings call beat and raise and more (Revlimid will beat nicely as will EPS, Abraxane and Pomalyst.
        2) ACR detailed data and Oct 27 webcast on stunning long term data for Apremilast in 3 separate phase 3 trials - gets better with time and no safety issues
        3) Abraxane Melanoma data - nothing priced in - zero downside big upside if it hits OS
        4) ASH - MM-015 update and huge MM-020 detail and Avila compound data and others

 
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