Over the past two years, shares of Celgene ( CELG) have gained a stunning 275%. Due to the stock's remarkable performance, Celgene is a favorite among investors and analysts. Thirteen analysts recommend buying the stock vs. six with hold recommendations. Considering that earnings and guidance are already in the public's hands, Celgene will likely look to flaunt something to generate interest and keep momentum going when the company reports fourth-quarter and full-year 2006 results before the market opens Thursday. On Jan. 8, the company
preannounced 2006 revenue of $890 million and earnings per share of roughly 57 cents. At the time, the Thomson/First Call consensus estimate was $897 million in sales and a profit of 53 cents a share. Celgene also issued guidance for 2007 that was a tad disappointing. Projected sales of $1.3 billion and EPS of $1 were slightly below the $1.38 billion and $1.09 consensus estimate of the Street.
Celgene said it will report Revlimid revenue of $315 million to $320 million in 2006. However, the drug for multiple myeloma and myelodysplastic syndromes is expected to be a blockbuster. Cowen and Co. analyst Phil Nadeau predicts peak sales of $2.7 billion in 2011. Cowen does not have a banking relationship with Celgene but does make a market in the stock. In January, Celgene raised the prices on Revlimid by an average of 6.5%. Nevertheless, management issued total sales guidance that was $80 million below the consensus. That suggests that Revlimid may not be selling at quite as torrid a pace as Wall Street expects. Revlimid competes with Millennium Pharmaceuticals' ( MLNM) Velcade in multiple myeloma. Lehman Brothers analyst Craig Parker believes Revlimid is experiencing slower-than-anticipated penetration in second- and third-line settings, whereas "our conversations with MLNM management indicate that Velcade is holding its own in the face of Revlimid competition." In fact, Millennium management is confident it will be able to maintain its sales. Earlier in the month, management said Velcade revenue should come in at $220 million in 2006. In the current year, sales are expected to grow to $240 million to $260 million, according to CEO Deborah Dunsire. A price increase, yet lower-than-expected guidance and a strong performance from a competing drug -- perhaps Lehman's Parker is on to something. It certainly won't help Revlimid's case that Velcade has some marketing muscle behind it. Johnson & Johnson's ( JNJ) Ortho Biotech unit co-promotes the drug with Millennium.