NEW YORK (TheStreet) -- Shares of Celgene Corp (CELG) - Get Report were jumping, higher by 6.45% to $130.77 in pre-market trading Wednesday, after the biopharmaceutical company announced that it will acquire Receptos (RCPT) for roughly $7.2 billion late Tuesday.
Celgene hoped to enhance its inflammation and immunology portfolio with implications for inflammatory bowel disease and multiple sclerosis treatments with the purchase.
Celgene will pay Receptos $232 per share in cash.
As part of the deal, Celgene will bring Receptos' lead program, Ozanimod, into its drug portfolio.
"This acquisition enhances our inflammation and immunology portfolio and allows us to leverage the investments made in our global organization to accelerate our growth in the medium and long-term," said Celgene CEO Bob Hugin in a statement.
Summit, NJ-based Celgene, together with its subsidiaries, is an integrated biopharmaceutical company engaged primarily in the discovery, development and commercialization of therapies for the treatment of cancer and inflammatory diseases through gene and protein regulation.
Separately, TheStreet Ratings team rates CELGENE CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate CELGENE CORP (CELG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, robust revenue growth and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 160.60% and other important driving factors, this stock has surged by 33.53% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CELG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- CELGENE CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CELGENE CORP increased its bottom line by earning $2.40 versus $1.69 in the prior year. This year, the market expects an improvement in earnings ($4.75 versus $2.40).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 157.0% when compared to the same quarter one year prior, rising from $279.70 million to $718.90 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 21.9%. Since the same quarter one year prior, revenues rose by 20.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Biotechnology industry and the overall market, CELGENE CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: CELG Ratings Report