We are maintaining our Outperform recommendation on Celgene Corporation (CELG) following the impressive preliminary results disclosed by the company for the fourth quarter and full year 2011.
On January 9, 2012, Celgene announced encouraging preliminary unaudited adjusted (excluding stock-based compensation expense and other special items) earnings of $1.05 per share for the final quarter of 2011, up approximately 46%. Preliminary adjusted revenues in the final quarter of 2011 came in at $1.28 billion, 22% above the year-ago figure.
For the full year 2011, adjusted earnings (excluding stock-based compensation expense and other special items) climbed approximately 36% year over year to $3.79 per share. The year-over-year beat was attributable to strong sales of Celgene’s cancer products Revlimid (up 30% to $3.2 billion), Vidaza (up 32% to $705 million) and Abraxane ($386 million).
2011 sales came in at $4.8 billion, 34% above the year-ago sales. The results were announced at the 30th annual healthcare conference of JPMorgan (JPM). The actual results will be disclosed on January 26, 2012.
Apart from announcing preliminary results, Celgene also provided a bright outlook for 2012. Adjusted earnings (excluding stock-based compensation expense and other special items) are projected in the range of $4.70-$4.80 per share, up 25%. Given the strong oncology portfolio, we expect Celgene to easily achieve the 2012 guidance.
We are also impressed by Celgene’s robust pipeline, which includes approximately 25 late-stage and 20 early-stage candidates. Key pipeline related news are expected in 2012. Positive news regarding the pipeline would boost the stock further.
In view of all these positive factors, we are maintaining our Outperform recommendation on the stock.
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