Feuerstein's Biotech Mailbag

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J.D. writes in to ask about Celgene(CELG). "What do you think of Celgene going into earnings and two European approvals coming in the first quarter? Will they get to $100 this year?"

Unfortunately, Celgene reported earnings on Thursday, and I passed J.D.'s question to my colleague Marc Lichtenfeld, who covers Celgene more closely than I do. Marc's answer is below:

This is an example of liking the company but not the stock. Celgene has amply rewarded investors over the past few years, and it's a little scary to jump off the train at this point. Right now, sentiment is what's driving the stock. As long as there is no negative news and the market remains strong, I see no reason why Celgene shouldn't continue higher.

However, if the company stumbles with a regulatory issue, disappointing trial results or an earnings miss, I suspect the stock's lofty multiple will have to come down. It's a Wall Street darling now. But if sentiment and earnings projections shift lower, there could be a significant correction in store.

Thanks for the help, Marc. And thanks to readers for sending in your questions. Remember, I like email, so if you have questions or issues to raise, don't hesitate to write.

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