Biotech Stock-Picking: Incyte, Celgene

TheStreet.com's Adam Feuerstein says, "Biotechnology is one of the few investment sectors where stocks can literally double overnight."

So how much do you know about investing in biotech stocks?

Get up to speed with the following insights and advice from TheStreet.com.

From Incyte's Rheumatoid Arthritis Pill Promising:

An experimental pill from Incyte ( INCY)reduced symptoms in rheumatoid arthritis patients, according to results from a small phase II study presented Sunday Oct. 26 .

These results put the efficacy of INCB18424 generally in line with a current class of injectable RA drugs known as tumor necrosis factor-alpha inhibitors, or TNF-alpha inhibitors.

TNF-alpha inhibitors as a class generate billions of dollars in sales annually and include drugs like Johnson & Johnson's ( JNJ) Remicade, Abbott's ( ABT) Humira and Amgen ( AMGN) and Wyeth's ( WYE) Enbrel.

"The holy grail in RA has been an oral drug with robust efficacy, a favorable side effect profile, and durable response," wrote JPMorgan analyst Cory Kasimov in a research note to clients.

Read the full version of Incyte's Rheumatoid Arthritis Pill Promising.

From Biotech Earnings Preview: A Place to Hide?:

According to the Credit Suisse biotech team, prescription data suggest that the large-cap biotech sector isn't due to repeat the strength seen in the second quarter, in part due to seasonality, raised expectations, and the foreign exchange rate.

"That said, we expect some companies to beat and with the economic outlook increasingly dim, we believe investors will again turn to biotech as a defensive sector," Credit Suisse writes.

Celgene ( CELG), Biogen Idec ( BIIB) and Gilead ( GILD) are among the names most likely to beat for the quarter.

Read the full article. (Update: Biotech Sector Got It Right Last Quarter)

From Celgene Profit Swells:

... the drugmaker reported that third-quarter profit rose 251% on gains made through an acquisition and higher sales of its cancer drugs.

The Summit, N.J.-based drugmaker on Thursday reported profits of $136.8 million, or 29 cents a share in the third quarter, compared with net income of $38.8 million, or 9 cents a share, in the year-ago period.

Higher sales of Celgene's cancer drugs bolstered the company's earnings performance. Sales of Revlimid totaled $343 million in the quarter, an increase of 72% compared with the prior-year period.

On its earnings conference call, Celgene management said Revlimid's performance in Europe, where the multiple myeloma drug is still being rolled out across various countries, was strong even with negative foreign currency effects. In the U.S., Revlimid prescription volume increased more than 7% quarter over quarter despite a typically slow summer and increased competition from Velcade, another multiple myeloma drug marketed by Japanese drug maker Takeda.

Read the full version of Celgene Profit Swells.

From Biogen Earnings Rise, Surpass Estimates:

The company said Tuesday that it earned $207 million, or 70 cents a share, in the third quarter, versus a year ago profit of $119 million, or 41 cents a share.

The company garnered $573 million in worldwide sales from multiple sclerosis drug Avonex.

Analysts had predicted $528 million in sales from Avonex...

Read the full version of Biogen Earnings Rise, Surpass Estimates.

From Amgen Boosts Forecast; Shares Advance:

Amgen beat earnings expectations, fueled by better-than-expected sales of anemia drugs Aranesp and Epogen.

The company reported $845 million in worldwide sales of Aranesp, up from $818 million in the third quarter of the year prior. However, U.S. Aranesp sales were lifted by $54 million thanks to an accounting change.

...without the change, U.S. sales would have declined 12%. The drop, which was slightly offset by price increases, reflects the damage done to demand by regulatory, reimbursement and label alterations.

Without the help of favorable foreign-exchange rates, Amgen said international sales of Aranesp decreased 2%. All told, worldwide sales of Aranesp, excluding the accounting change and benefit from foreign exchange, dropped 8% year over year.

Amgen reported $634 million in sales of Epogen, while analysts had expected $610 million. Amgen said the 7% increase year-over-year increase was due primarily to an increase in the product's sales price, beneficial changes in wholesale inventory levels and revised estimates of dialysis demand.

Read the full version of Amgen Boosts Forecast; Shares Advance.

From Genzyme Misses Product-Sales Estimates:

The company reported a third-quarter profit of $119.6 million, or 42 cents a share, down from $159.3 million, or 58 cents a share, in the year-ago quarter.

Analysts, on average, had expected $1 a share, with revenue of $1.18 billion. The overall sales shortfall, though slight, came as Genzyme was just shy of consensus expectations for its biggest sellers.

Biotech Select The company reported $171 million in sales from Renegel and Renvela, missing the $174 million that had been anticipated. Genzyme reported $309 million in revenue from Cerezyme, below expectations for $320 million, and it garnered sales of $126 million from Fabrazyme vs. a target of $129 million.

Read the full version of Genzyme Misses Product-Sales Estimates.

Plus, don't miss Genzyme Garners FDA Panel's Nod

They Just Don't Get Lilly! (Video, Oct. 24)

Marek Fuchs pontificates about why there were two sets of bad earnings-good earnings headlines about Eli Lilly ( LLY) -- from the same news sources.

To watch the video, click the player below:

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