"Celgene engages in the discovery of therapies designed to treat cancer and immune inflammatory related diseases. They have a number of products at the commercial stage including REVLIMID, THALOMID and VIDAZA. 

"Celgene is also researching stem cells derived from the human placenta as well as from the umbilical cord, thus tapping into a promising new technology while avoiding the political and ethical questions dogging others involved in stem cell research.

"We expect to see continued strength in REVLIMID and VIDAZA sales, expanding margins, and continued strong R&D in the company's robust pipeline.

"With $3.1 billion in total current assets (as of June 30th, 2009), no long term debt, and the decreased risk of being a big player in the biotech industry, Celgene is in a strong position. And the stock is still attractive.

"Since analysts expectations for Celgene have historically been extremely accurate, a target price is attained by using long-term EPS estimates.

"I previously felt that Celgene should trade at a multiple of 20 times forward earnings. But with earnings growth expected around 30%, Celgene now deserves a slightly higher multiple.

"Analysts have been raising their estimates; current year EPS is now expected to be $2.05 and 2010 EPS expected at $2.66.  I am upping my target price to $60 per share, which results in a current P/E of 29 and forward P/E of 22 times estimates.

"I give companies in high growth industries like biotech higher P/E's than slower growth companies in other industries. And Celgene consistently delivers positive earnings, something many biotech companies don't do.

"The stock has been a strong performer in recent months -- rising some 30% -- but the shares still have a bright future."