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Celgene keeps rising on outlook, study results

NEW YORK (AP) -- Shares of Celgene Corp. extended their rally Tuesday on the cancer drug maker's strong outlook and positive trial results for one of its most important experimental drugs.

THE SPARK: On Monday, Celgene said it expects to report adjusted net income of $5.50 to $5.60 per share and $6 billion in revenue in 2013, including $4.1 billion to $4.2 billion in sales of its cancer drug Revlimid. That's a bit less than analysts expected: FactSet reports that analysts expected income of $5.58 per share and $6.05 billion in revenue on average.

However the company backed its 2015 guidance and predicted further growth into 2017, and said sales of its drug Abraxane will reach more than $1 billion a year.

The company also said its drug apremilast met its goal as a treatment for psoriasis. Earlier this year Celgene said the drug was effective as a treatment for a related condition, psoriatic arthritis.

THE BIG PICTURE: The Summit, N.J., company expects to earn an adjusted $8 to $9 per share in 2015 on $8 billion to $9 billion in product sales, including $1 billion to $1.25 billion in sales of Abraxane. Abraxane was originally approved treatment for breast cancer, and in October the Food and Drug Administration approved its use against some types of lung cancer. Celgene is also hoping to win FDA approval for the drug as a treatment for melanoma.

Celgene said its net income should grow to a range of $13 to $14 per share in 2017, and revenue will be around $12 billion. That includes $1.5 billion to $2 billion from Abraxane.

The company will ask the FDA and European Union authorities to approve apremilast later this year, and it is conducting studies of the drug as a treatment for other inflammatory conditions.

THE ANALYSIS: Stifel Nicolaus analyst Joel Sendek anticipated Wall Street would appreciate the insight into Celgene's expected growth and wrote that the company may be able to surpass its own long-term forecasts. He maintained a "Buy" rating on the stock and raised his price target to $98 per share from $89, saying annual sales of apremilast should exceed $1 billion a year by 2017.

SHARE ACTION: Celgene shares rose 4.4 percent Monday, and gained $5.24, or 6 percent, to $90.97 in late trading. The stock was already trading around all-time highs, and earlier Tuesday it peaked at $91.05.