NEW YORK (TheStreet) -- Shares of Celgene Corp. (CELG - Get Report) are rising by 9.24% to $121.74 on heavy trading volume on Wednesday afternoon, after the company settled a patent dispute yesterday over its popular blood cancer drug, Revlimid.
The settlement will permit Natco Pharma, an India-based drugmaker and U.S. partner Arrow International Limited, a unit of Allergan, to sell a generic version of the drug in the U.S. in March 2022, according to a company statement released yesterday. Starting on January 31, 2026, Natco can sell the drug without volume restrictions.
Revlimid, a multiple myeloma treatment, is a major seller for Celgene and made up about 63% of the $2.3 billion in total sales earned in the quarter ending September 30, Reuters reported.
About 7.8 million shares of Celgene were traded by midday today, well above the company's average volume of 4.34 million shares per day.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate CELGENE CORP as a Buy with a ratings score of B. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CELG's revenue growth has slightly outpaced the industry average of 13.4%. Since the same quarter one year prior, revenues rose by 17.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Biotechnology industry and the overall market, CELGENE CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- The gross profit margin for CELGENE CORP is currently very high, coming in at 96.58%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -1.46% is in-line with the industry average.
- CELGENE CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. 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 ($4.82 versus $2.40).
- The debt-to-equity ratio is very high at 2.88 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.79, which shows the ability to cover short-term cash needs.
- You can view the full analysis from the report here: CELG