It sure looks that way, given the upbeat, nay, rapturous, comments about Celgene (CELG) emanating from the analyst community following the American Society of Hematology, or ASH, conference that began on Friday.
Bernstein’s Geoffrey Porges and Wen Shi, rounds up Celgene’s presentations from the conference:
Celgene has the most involvement in ASH of the large cap companies under its coverage, thanks to its Revlimid / Thalomid / Pomalyst franchise in myeloma, ongoing trials of Revlimid in additional haematological malignancies (such as the continued development of the Revlimid / Rituxan combination in lymphoma), and a number of partnered early stage products. The R-Squared (Revlimid / Rituxan) regimen continues to appear promising, showing significant increases in ORR and CR rates and may represent an underappreciated future growth opportunity for Revlimid…AG-221, through Celgene’s partner Agios Pharmaceuticals (AGIO), continues to show promise in AML…ACE-536, through Celgene’s partner Acceleron Pharma (XLRN), continues to show effectiveness in beta thalassemia…
Cantor Fitzgerald’s Mara Goldstein, for one, lifted her estimates and price target on Celgene citing the “strong tailwind” provided by the conference:
Celgene, in our view, appears to have a strong tailwind
heading into 2015 and beyond, based on the volume of data that support the core hematology franchise, Revlimid and Pomalyst, as well as the potential from partnered assets. At ASH thus far, compelling evidence for continued duration of treatment as well as combinations (novel, triplets, etc.) for multiple myeloma, with Revlimid serving as a backbone, is in evidence. This is not a new dynamic, but the totality of it speaks to continued growth for the already sizable multibillion franchise, in particular due to opportunities in disease other than multiple myeloma…
In addition to data presentations from Celgene-sponsored, partner-sponsored and other clinical programs, an investor reception was also held on December 7th. With the company reconfirming that operating leverage should continue to persist, we think there is continued opportunity for rising EPS forecasts. As a result, we are raising our 2016 (non-GAAP, ex- SOE) EPS forecast to $6.29 from $6.15, based on this dynamic, and 2017 as well. With this, our PT is now $131, or 21x our new 2016 EPS forecast of $6.29.
UBS analyst Matthew Roden and team calls the data released at ASH “good enough to raise numbers.” He explains:
We are attending the ASH meeting, where data across multiple Celgene programs support higher numbers, in our view. We also had a chance to speak to management about ongoing development programs and continue to see unrecognized value across the pipeline. Bigger picture, we think Celgene’s competitive positioning in core markets is practically unmoveable, driving a 29% 5-year EPS CAGR. We maintain our Buy rating but increase our PT to $130 (from $112) looking into next year…
Despite the recent strength in the stock, we think the pipeline is only modestly reflected and continue to see upside to Revlimid sales numbers through execution in myeloma and increasing use in MDS and leukemia/lymphomas.
That’s the kind of optimism that used to be reserved for Gilead Sciences (GILD) (though less so now, it seems).
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