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What's in Store for Celgene Corporation (CELG) Q1 Earnings?

Zacks Equity Research

Celgene Corporation CELG is expected to significantly benefit from key drug Revlimid's performance in the upcoming quarterly results.

The company has surpassed earnings estimates in the trailing four quarters. In the last reported quarter, the company delivered a positive earnings surprise of 3.02%.

Celgene Corporation Price, Consensus and EPS Surprise


Celgene Corporation Price, Consensus and EPS Surprise | Celgene Corporation Quote

Let's see how things are shaping up ahead of this announcement.

Factors at Play

Celgene expects net revenues of $17.0- $17.2 billion in 2019. Revlimid sales are projected to be $10.8 billion and Abraxane sales to be around $1.1 billion. Pomalyst’s revenues are expected to be $2.4 billion, whereas Otezla sales are projected to be $1.9 billion.

Celgene’s key product, Revlimid, is likely to be the main growth driver in the first quarter. Revlimid, an oral, immunomodulatory drug, is currently approved for several indications, including the newly diagnosed multiple myeloma ("MM"), myelodysplastic syndromes ("MDS") and mantle cell lymphoma ("MCL"). Share gains in key markets and longer treatment duration are contributing to the drug’s growth. Continued uptake in front-line non-stem cell-eligible and post-stem cell transplant maintenance segments should further propel sales of the drug in the first quarter.

Apart from Revlimid, Pomalyst, Otezla and Abraxane are expected to contribute to the top line. Psoriasis drug, Otezla, performed impressively in 2018 and we expect the momentum to continue in the first quarter as well.

Apart from the regular top and bottom-line numbers, investors will also focus on pipeline updates from the company. The CHMP recommended approval of the triplet regimen of Revlimid as combination therapy with Velcade and dexamethasone (RVd) for the treatment of adult patients with previously-untreated multiple myeloma, who are not eligible for transplant.

The company has also submitted a New Drug Application (NDA) to the FDA for multiple sclerosis (MS) candidate, ozanimod. Ozanimod, an oral, sphingosine 1-phosphate (S1P) receptor modulator, is currently being evaluated for the treatment of relapsing forms of multiple sclerosis (RMS). Celgene has also submitted its application for review in Europe for the same.

We expect the company to throw more light on its promising candidates. Celgene and partner Acceleron Pharma have submitted a Biologics License Application (BLA) for pipeline candidate, luspatercept, which is a first-in-class erythroid maturation agent (EMA) that regulates late-stage red blood cell (RBC) maturation.

Key Anticipated Updates

Celgene has been in news since the beginning of 2019, owing to the announcement of a merger agreement with large-cap pharma company, Bristol-Myers Squibb Company BMY. Bristol-Myers recently announced that its shareholders have given a green signal to the acquisition. More than 75% of the shareholders voted in favor of the merger at the Special Meeting of Stockholders. The transaction will close in the third quarter of 2019.

Earnings Whispers

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 Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.

Earnings ESP: The company’s Earnings ESP is -0.53%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Celgene has a Zacks Rank #3 (Hold). Although the rank is favorable, the company’s negative ESP makes surprise prediction difficult.

We caution against the stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Share Price Performance

Celgene’s stock has gained 25.1% in the past six months against the industry’s 4% decline.

Stocks to Consider

Here are some stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Biogen BIIB is scheduled to release results on Apr 24. The company has an Earnings ESP of +0.73% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

GlaxoSmithKline plc GSK is scheduled to release results on May 1. The company has an Earnings ESP of +2.63% and a Zacks Rank #2.

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