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Celgene Corporation Message Board

  • rob_cos rob_cos Mar 5, 2014 10:04 AM Flag

    C- Countdown to PDUFA for Otezla -BUY shrs here/ $186 Target. PsA Market is Primed. The Next Wave-Pipepline.

    Cantor Fitz full comments- Countdown to PDUFA for Otezla (apremilast) - Reiterate BUY/ $186 Target. PsA Market is Primed. The Next Wave-Pipeline/ We Like the Shares here...

    Cantor Fitzgerald
    Equity Research
    March 5, 2014

    BIOTECHNOLOGY

    Celgene Corporation (CELG - BUY - $186.00)
    Countdown to PDUFA for Otezla (apremilast) - Reiterate BUY and $186 Price Target
    Company Update
    · PDUFA is March 21st. The PDUFA date for Otezla (apremliast) for psoriatic arthritis (PsA) is approaching, with the official date of March 21st. We believe that approval will occur within this time frame, and Celgene will be ready to launch Otezla in fairly short order, marketing the drug to rheumatologists with a sales force of roughly 100 reps. Following the launch in PsA is a PDUFA date in late September for psoriasis, a much larger market overall vs. PsA. Our sales forecast for 2014 is currently $198 million, which is ahead of Bloomberg consensus of $105 million.
    · PsA Market is Primed. We think that the PsA market will be a solid fit for Otezla given the dissatisfaction with current drugs and currently formulary guidelines that acknowledge the limitations of existing drugs such as methotrexate in favor of biologic agents. Given Otezla's profile, we think the drug has a good chance of widespread use, whether as a "methotrexate without monitoring", or an alternative to biological therapy. Further, patient demand, we think, will play a role, given that the results of a multi-year study published in JAMA Dermatology in August 2013, 45.5% of PsA are dissatisfied with current treatments, and may discontinue treatments with biologic therapy due to adverse events.
    · The Next Wave. A feature of our thesis on shares of Celgene is diversification of risk (multiple products launching) and the early-stage pipeline. We believe the pipeline has the opportunity to add value over the next 12-24 months as compounds advance. Celgene's pipeline has been under the radar, in our view,

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    • The Next Wave. A feature of our thesis on shares of Celgene is diversification of risk (multiple products launching) and the early-stage pipeline. We believe the pipeline has the opportunity to add value over the next 12-24 months as compounds advance. Celgene's pipeline has been under the radar, in our view, behind the launches of Pomalyst, ABRAXANE in pancreatic cancer and Otezla. We believe that the company has a "next wave" and as visibility grows on the pipeline, value should accrue to the shares.
      · We Like the Shares; Reiterate BUY. We maintain our $186 PT, which is based on a P/E multiple of 20x our 2015 EPS forecast of $9.30, a figure that is consistent with other large-cap biotech stocks. We think the shares have several attractive features, including portfolio diversification, revenue and EPS growth, cash flow and share repurchase.

 
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