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Celgene Corporation Message Board

  • rob_cos rob_cos Jan 27, 2013 1:20 PM Flag

    SA article re: CELG 2017 revs 2x's 2013 - here are my comments at bottom of CELG article...

    Read the Seeking Alpha article on CELG just out "Celgene 2017 Guidance: 2 Times 2013 Revenue" - good article about the revenue growth and a pipeline he "suggests you should click on the link and gape at". I added this comment at the bottom of the article :

    Excellent article - funny thing is all of the ests are STILL conservative and despite this run - CELG is still very undervalued. CFO noted the that the $13-$14 eps in 2017 excludes buybacks. Analysts ests with continued buybacks (which will happen given CELG new CFO coms & HUGE cash flow growing to $5 billion a yr after all expenses) real EPS is $15-$16 in '17. This makes growth rate well over 25% - but using 25 % to be conservative - $15-$16 EPS at a 1.0 PEG ratio with 25% growth is $375 - $400. Even at current 0.8 PEG its $300 to $320.

    Right now near $100 CELG is STILL discounted to BIIB & AMGN's current PEG of 1.2 with a ridiculously low 0.8 PEG - if you simply go out to 2016 (also based on very conservative #'s & no buybacks) CELG PEG ratio is 0.3-0.4 - so you get the 25% eps growth at a 60% to 70% discount - its more than a half off sale.

    The revaluation of CELG's undervalued stock is only beginning - the reason? Things are really different this time different. Recent data from Pomalyst (approval coming from FDA any day now), Apremilast and Abraxane makes it clear now that CELG is going from ONE $1 billion a yr drug to FIVE billion dollar a yr drugs (including perhaps a $7 billion a yr drug in Revlimid, and a couple of $2-$3 billion dollar a yr drugs) - Revlimid, Pomalyst, Abraxane, Apremilast and Vidaza (international sales alone will be $1 billion in a few yrs and oral Vidaza version is showing amazing early results and is in ph 3 now).

    Celgene also has the highest margins and lowest tax rates in the entire sector and the highest gross margin in the entire S&P 500. Operating leverage will explode EPS higher than even the raised ests as these margins and tax rates kick in to a doubling of revenues with R&D as a percentage of revenue declining as it always does at this stage of a large biotech's growth phase.

    CELG is going to go much higher imo. Great article.

    Sentiment: Strong Buy

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