2Q EARNINGS: Celgene reports higher income on cancer drugs, raises estimates
This article was originally published in Scrip
Celgene credited double-digit sales growth for a pair of drugs and a solid launch of a new blood cancer therapy as it reported better-than-expected profit. The company also raised its earnings forecast for the year.
The company’s non-GAAP operating profit of $1.52 a share was well above analysts’ estimates. Net income jumped 30% to $478 million, or $1.11 a share, on $1.6 billion in sales. The company cited a 13% increase in revenue for its biggest product, blood cancer drug Revlimid, and a 41% jump in sales for Abraxane (paclitaxel), a therapy approved for breast and lung cancers. In its first full quarter of sales in the US, Pomalyst (pomalidomide) posted $66 million in sales, which Celgene executives said exceeded their expectations.
Revlimid (lenalidomide) recorded $1.05 billion in sales in the quarter on higher demand and a price increase in the US. Abraxane’s $155 million in revenue was driven by demand among lung cancer patients in the US and for breast cancer outside the country.
“Our outlook supports raising our full-year financial guidance for Revlimid sales, total product sales and earnings per share,” CEO Robert Hugin told analysts and investors on a conference call. “
Revlimid sales will be as much as $4.3 billion the year, Celgene executives estimate. The full-year non-GAAP profit will be as much as $5.90 a share this year, about 19% over 2012, the company said. Sales will rise to as much $6.2 billion.
Some analysts speculated before the earnings announcement July 25 that Celgene would both beat quarterly earnings estimates and increase its profit target for the year (scripintelligence.com July 18, 2013).
Celgene's stock is soaring, up 79% on the year. The shares rose more than 3% following the earnings announcement to close at $140.65 each in Nasdaq Stock Market trading.
Asked if the company is interested in buying competitor Onyx Pharmaceuticals, company executives declined to answer the question directly but implied that they’re not interested in a large acquisition.