Earnings Surge For Celgene

Celgene is on the right meds.

On Monday, shares of biotech firm Celgene ticked up 1.7%, or 84 cents, to close at $50.49 after it announced late Sunday that it expects its 2007 earnings to double on the spiking sales of its blood cancer drug Revlimid.

The company also predicts that the product will drive earnings throughout 2008.

Celgene, based in Summit, N.J., said earnings will likely double to $1.05 per share on a 50% jump in sales to $1.4 billion. The results come on the back of a more than 140% increase of Revlimid sales, to between $770 million and $775 million.

During the fourth quarter alone, Revlimid sales rose more than 95% to between $240 million and $245 million.

Celgene now expects its 2008 earnings to rise 45% to between $1.50 and $1.55 per share on a 30% increase in sales to approximately $1.8 billion. Revlimid sales are also expected to rise 60% to $1.25 billion.

Analysts polled by Thomson Financial expect 2007 earnings of $1.05 per share on sales of $1.37 billion and 2008 earnings of $1.55 per share on sales of $2.04 billion.

"Celgene remains biotech's best big-cap growth story, and today's strong guidance should alleviate any investor concerns about a possible Revlimid sales slowdown," Friedman Billings Ramsey analyst Jim Reddoch said.

Celgene has become one of the largest biotech companies--the fifth-biggest by market capitalization and the seventh by total sales in the U.S.--due to the success of its potent and pricey treatments for multiple myeloma, a blood-and-bone-marrow cancer, which together generated more than $300 million in sales in the most recent quarter.

Revlimid is now Celgene's top-selling drug, beating out Thalomid. Revlimid is also the third-fastest oncology drug ever to reach $1 billion in cumulative sales.

Thalomid is a brand name for the drug thalidomide, which was linked to birth defects a half-century ago when used as an anti-nausea drug.

Revlimid, Celgene's second biggest-selling drug, is basically an improved version of Thalomid. It is also used to treat multiple myeloma, but it was approved first for a rare blood disorder, a version of a set of diseases called myelodysplastic syndromes where part of a particular genetic chromosome is deleted.

Revlimid competes with Millennium Pharmaceuticals Velcade, which is also approved to treat a type of blood cancer. Wall Street has taken a more cautious outlook on that drug, though Cambridge, Mass.-based Millennium expects to turn a profit in 2008 on a 20% to 30% increase in Velcade sales.

Meanwhile, Celgene is adding another blood cancer treatment to its offering with the $2.9 billion acquisition of Boulder, Colo.-based Pharmion and its drug Vidaza.