The board of directors at Celgene Corporation (CELG) recommended a two-for-one stock split. The action is subject to shareholders clearing the change in Celgene’s certificate of incorporation to double the number of authorized shares to 812 million. A decision regarding the matter is expected to be reached on Jun 18, 2014, at the annual meeting of the shareholders of Celgene.
Celgene stated in its press release that further details will be disclosed through a proxy statement, which will be available to the company’s shareholders by Apr 30, 2014. Following the stock split, every shareholder at Celgene will get an additional share for each share he/she currently holds.
The share price would become half the previous value as a stock split does not alter the value of a company. Stock split would definitely enhance shareholders’ confidence making the shares more affordable.
Celgene, which recently announced fourth quarter 2013 results, provided a rosy long-term projection earlier in the year driven by its strong product portfolio. Moreover, with multiple pipeline events lined up, the product portfolio will be bolstered further in the event of the pipeline delivering.
Management at Celgene is highly bullish on the prospects of its pipeline candidate apremilast (proposed brand name: Otezla). Apremilast is under review in the U.S. for the psoriatic arthritis indication (target date: Mar 21, 2014). The candidate is also under review in the U.S. for the moderate-to-severe psoriasis indication (target date: Sep 23, 2014).
Celgene is also seeking EU approval for the candidate in the combined psoriasis and psoriatic arthritis indication. The European Committee for Medicinal Products for Human Use (CHMP) is expected to render its opinion by Dec 31, 2014.
Celgene, a biopharmaceutical company, carries a Zacks Rank #3 (Hold). Actelion Ltd. (ALIOF), Alexion Pharmaceuticals, Inc. (ALXN) and Medivation Inc. (MDVN) are examples of better-ranked stocks in the biopharma space. While Actelion and Alexion carry a Zacks Rank #1 (Strong Buy), Medivation holds a Zacks Rank #2 (Buy).