Celgene CorporationCELG

Morningstar Rating

Stock Research and Analysis

by Karen Andersen, CFA

Celgene is amid a global expansion led by its blood cancer drug Revlimid, and the acquisitions of Pharmion and Abraxis have added to the strength of its portfolio. We think Celgene still faces several competitive and regulatory risks, such as near-term Read more

Bulls Say

Revlimid continues to generate impressive data in approved and potential new indications, and growth should be bolstered by expanded duration of use and geographic reach.

Celgene has made two sizable purchases that contribute to its positive moat trend. The acquisition of Pharmion further solidified Celgene's strategic focus on blood-related cancer therapies, and the more recent Abraxis acquisition moves the firm into the broader oncology market.

While its size limits the number of potential suitors, Celgene's strong growth and profitability could make it an attractive takeout target for large pharmaceutical or biotech firms looking to expand their oncology product portfolios.

Celgene is launching another multiple myeloma drug, Pomalyst, in 2013, and its foray into immunology with apremilast could result in an approved drug by 2014. Read more

Bears Say

Revlimid side effects have delayed the drug's first-line and maintenance setting approval in Europe, and it is unclear when the firm will ever have enough data to reassure regulators of the drug's risk/benefit profile.

Competition in the multiple myeloma market is getting stronger; Velcade has produced outstanding trial results and is vying with Revlimid in the first-line setting, and Onyx's Kyprolis launched as a second-line option in 2012.

Revlimid sales cannibalize sales of Thalomid, stunting initial sales growth in the multiple myeloma market.

The cost of Revlimid--now approaching $100,000 a year in the U.S.--fuels legislator and health insurer debates regarding cancer drug pricing.

Generic challenges to Celgene's Revlimid patents from firms like Actavis could mean competition before 2019 (the expiration of the drug's basic composition patent). Read more

Management

We assign Celgene standard marks for stewardship, as the firm has seen tremendous growth under recent leadership teams. Robert Hugin, previously Celgene's CFO (and subsequently COO), took over as CEO in 2010. While Hugin lacks previous health-care industry Read more

Profile

Celgene is a biopharmaceutical firm that discovers, develops, and markets therapeutics for the treatment of cancer and immunological diseases. Celgene markets Thalomid and Read more