Celgene Corporation (CELG) is scheduled to report its third quarter financial results on Thursday October 22.
For the last 16 quarters, the company has reported increasing revenue but earnings have been volatile. In the last four quarters, the company's actual earnings exceeded the market's consensus forecast. For the fiscal quarter, ending September 2009, the consensus EPS forecast has increased over the past week from $0.539 to $0.540 (0.19%) and increased over the past month from $0.539 to $0.540 (0.19%). Of the 24 analysts making quarterly forecasts, one raised and none lowered their forecast. So, the trend is likely to continue in the September 2009 quarter as well. Analysts' estimates for the quarter ending September 2009 (Q3) range from a low of $0.52 to a high of $0.57, with a consensus of $0.54. I believe the company is likely to report an EPS of in excess of $0.54 on revenues of $675 million.
In the third quarter, the company continued to expand its drugs globally, with REVLIMID (flagship blood cancer treatment) approvals in Eastern Europe and Latin America, its MVA filing in Japan and reimbursement approvals for the data and THALOMID in Europe.
Celgene has a robust, deep and differential pipeline with tremendous global potential. The company seems to continue its investments in promising compounds in hematology, oncology and information.
The company's fundamentals are strong. Cash flow is very positive. Celgene's COGS is among the lowest in the industry and its tax rate is also one of the lowest in the industry.
For the fiscal year ending December 2009, the consensus EPS forecast has remained the same over the past week at $2.048 and remained the same over the past month at $2.048. Of the 25 analysts making yearly forecasts, two raised and one lowered their forecast. Based on the recent developments in current global trends, the company is likely to report REVLIMID revenue of approximately $1.65 billion, a growth of approximately 25% from the previous year, making REVLIMID one of the fastest growing oncology products to date. The second half of the year is expected to yield multiple commercial, clinical and regulatory catalysts to drive its performance and help the company achieve it's near and long term goals. The only seemingly black spot in the September 2009 quarter is an allegation by Beth Jacobson who is suing Celgene on the grounds that the company misappropriated her idea regarding multiple myeloma treatment. She believes she has the right to a share in the profits for discovering how this drug in particular could prolong the lives of patients with multiple myeloma.
Currently, the stock is trading at $54.78, compared to the 52 week range of $36.9-$66.5. The stock seems to be appropriately valued at the current levels.
