Celgene raised the price of Revlimid (3%), Pomalyst (3%), and Otezla (10%). | CELG Message Board Posts

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Msg  198446 of 209196  at  6/26/2015 1:12:32 PM  by

Rob Cos


Celgene raised the price of Revlimid (3%), Pomalyst (3%), and Otezla (10%).

 

 

Quick Take: Company Update

Cowen

June 26, 2015

Price: $118.81 (06/25/2015)

 

Price Target: $146.00

 

OUTPERFORM (1)

 

Price Hikes For Revlimid, Pomalyst,Otezla

 

Key Data

Symbol NASDAQ: CELG

Market Cap (MM) $94,233.5

 

The Cowen Insight

Celgene raised the price of Revlimid (3%), Pomalyst (3%), and Otezla (10%). We estimate these increases will contribute approximately $50MM to CELG's top line and $0.05 to EPS in 2015. Trading at 19x 2016E EPS, we view CELG shares as attractive and expect the stock to outperform on upward earnings revisions, growing optimism toward GED-0301, and a possible late 2015 Revlimid patent settlement.

 

Multiple Price Increases

Third-party sources report that Celgene increased the U.S. prices of Revlimid and Pomalyst by 3.0%, effective June 24. The prior price hike on these two drugs was also 3.0%, effective December 22, 2014. This pricing activity is consistent with Celgene's history of a roughly 6% per annum price increase.

 

In addition, Celgene increased the U.S. price of Otezla by 10%, effective June 24. Otezla's price was last increased by 8% in March 2015. Otezla's price may be benefiting from the rapid price increase seen in the anti-TNF category. Assuming CELG is able to capture two thirds of the price increase in H2, we estimate the U.S. price hike will contribute approximately >$50MM (Revlimid: ~$35MM; Pomalyst: $7M; Otezla: $12MM) to Celgene's top line and ~$0.05 to EPS in 2015.

 

Our Thesis On Celgene

Revlimid ($5.0B in 2014 sales, +16% Y/Y) looks to have a bright future, including much remaining patent exclusivity and the opportunity to grow its penetration in ex-U.S. geographies based upon recent label expansions. With support from newer products (Pomalyst, Abraxane, and Otezla) and an interesting earlier stage pipeline (GED-0301 for Crohn’s, AG-221 and AG-120 for cancer, ACE-536/sotatercept in beta thalassemia/anemia), Celgene should be able to achieve its 2020 financial targets calling for roughly 20% top- and bottom-line growth. We believe CELG shares are inexpensive in comparison to this growth outlook.



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