Excluding stock-based compensation expenses, Celgene’s earnings climbed 29% year over year to $1.07 per share in the reported quarter.
Total revenues shot up 20.3% year over year to $2.08 billion in the first quarter. Revenues were boosted by the impressive performance of Revlimid. Net product sales climbed 20.4% year over year to $2.06 billion. The negative impact of currency translation on net product sales was 2%. Revenues were slightly below the Zacks Consensus Estimate of $2.12 billion.
Quarter in Details
Net sales of Revlimid, the key growth driver at Celgene, came in at $1.3 billion, reflecting an increase of 17.4% over the year-ago period. The drug did well both in the U.S. (up 26%) and international markets (up 6%). Market share gains and increased duration of therapy drove sales in the reported quarter.
Net sales of another cancer drug, Abraxane, increased 20.9% year over year to $223.4 million. Net sales of Vidaza declined 3.2% year over year to $143.6 million. Lackluster U.S. sales (down 60%) due to generic competition hurt results during the quarter. Sales of another oncology drug Pomalyst came in at $199 million, up 46% from the year-ago period.
Newly approved Otezla sales in the first quarter were $60 million, up 27.7% sequentially. The FDA has cleared the drug for the treatment of adult patients with active psoriatic arthritis (Mar 2014) and for the treatment of patients with moderate-to-severe plaque psoriasis who are candidates for phototherapy or systemic therapy (Sep 2014).
All other product sales (inclusive of Thalomid, Istodax and an authorized generic version of Vidaza in the U.S.) came in at $86 million in the first quarter, down 7.5%.
Research and development expenses (excluding stock-based compensation and other special items) increased 20.4% to $431 million due to increased investment in pipeline. Selling, general and administrative (SG&A) expenses (excluding stock-based compensation and other special items) increased 10.8% to $463 million. Costs associated with the launch of Otezla, Pomalyst and Abraxane label expansion pushed up SG&A costs.
Outlook for 2015 Maintained
Celgene reaffirmed its 2015 guidance. The company expects adjusted earnings for 2015 in the range of $4.60–$4.75 per share (excluding stock-based compensation expenses). Net product sales for 2015 are expected to be approximately $9–$9.5 billon. Net sales of oncology drug, Revlimid, the key growth driver at Celgene, are projected in the range of $5.6–$5.7 billion. The Zacks Consensus Estimate for 2015 is $4.42 on revenues of approximately $9.4 billion.
Celgene expects 2015 to be dominated by news related to its pipeline and label expansion efforts.
Celgene’s first-quarter 2015 results were mixed with the company beating on earnings but missing on revenues. We are pleased with the continued growth in Revlimid sales. Newly launched Otezla also looks promising.
Celgene has been making prudent acquisitions and entering into deals to bolster its pipeline, the latest being the deal to acquire privately held biotechnology company, Quanticel Pharmaceuticals, Inc. The transaction is expected to close in the second half of 2015. Celgene does not expect the acquisition to impact its 2015 earnings guidance.