Celgene (CELG) Q3 Earnings: What's In Store For The Stock?
Zacks Investment Research | Oct 19, 2016 09:48PM ET
Celgene Corporation (NASDAQ:CELG) is scheduled to report third-quarter 2016 results on Oct 27, before the opening bell. Celgene’s track record has been decent with the company beating earnings estimates on three occasions over the trailing four quarters. Overall, the company has delivered an average positive earnings surprise of 4.10%.
In the last reported quarter, Celgene reported a positive earnings surprise of 3.23%. Let's see how things are shaping up at the company ahead of this announcement.
Will Core Products Drive Results?
During its second-quarter 2016 call, Celgene has raised its 2016 outlook for both earnings and revenues, buoyed by the performance of core products and operating expense discipline. The company now expects earnings in the range of $5.70–$5.75 per share (old guidance: $5.60–$5.70 per share), while net product sales are anticipated to be approximately $11 billion (old guidance: $10.75–$11 billion).
Key drug, Revlimid, should continue acting as the main growth driver in the third quarter driven by new patient market share gains and increased duration. Meanwhile, the drug’s launch in the newly diagnosed multiple myeloma (NDMM) indication across geographies is well on track. While the U.S. NDMM launch is resulting in significant share and duration gains, NDMM share continues to grow in the reimbursed markets in Europe with additional reimbursement expected by the end of 2016.
Encouraged by the strong uptake, Celgene projects net sales of Revlimid to be approximately $6.8 billion (old guidance: around $6.7 billion) in 2016.
Meanwhile, Pomalyst/Imnovid continues to grow globally on the back of strong market share and treatment duration. Additionally, securing reimbursement in additional countries, particularly in Japan, should continue to drive the drug’s sales in the international markets.
Commercialization of Otezla, on the other hand, continues to be encouraging with physician and consumer campaigns fuelling brand awareness and patient requests for the drug, particularly in the U.S. The company is also working on expanding its footprint in the EU by gaining reimbursement for the drug.
Abraxane continued to enjoy a leadership position in the U.S. for pancreatic cancer in the second quarter, while its share grew in the reimbursed markets outside the U.S. Its market share remained same in the breast and lung cancer markets, despite competition from other agents.
Meanwhile, the company’s share buyback program should boost the bottom line.
On the third-quarter call, investors are expected to focus on the company’s performance and label expansion efforts, along with updates on the pipeline front. Note that during the quarter (Jul 2016), Celgene decided that it will not seek marketing approval for an expanded label of Revlimid as a maintenance treatment for a certain type of diffuse large B-cell lymphoma.
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Our proven model does not conclusively show that Celgene is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Original post
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