Merrill
2Q08 beats on strong Revlimid, Thalomid, Vidaza sales
2Q08 EPS, ex-items, of $0.37 beat our $0.36 and consensus $0.35, on strong
Revlimid, Thalomid (and now) Vidaza sales offset by expenses related to the
Pharmion acquisition. We raised our top and bottom-line estimates going forward
and raised our 12-month price objective to $88 from $76. Reiterate Buy.
Revlimid continues to drive growth
2Q08 WW Revlimid sales of $325mn beat our $315mn on continued steady US
growth and the ramp in Europe. CELG expects a 2/3 US, 1/3 ex-US Revlimid
sales split by YE08. Look for a Revlimid filing in Japan (large opportunity) by
YE08/early’09. Thalomid WW sales of $131mn beat estimates as CELG launches
it ex-US. Vidaza sales of $60mn beat our $50mn and it now has a marketing
advantage after the Dacogen trial failure. We expect EUR approval by YE08. (see
detailed 2Q results, variance, new estimates, pipeline update in report)
Raising top and bottom line estimates
We raised our WW Revlimid estimates to $1.35bn, $1.91bn and $2.43bn from
$1.33bn, $1.86bn and $2.35bn in ’08 –’10. We also raised our WW Vidaza
estimates to $211mn, $384mn and $490mn from $170mn, $306mn and $370mn
in ’08-’10. We raised our EPS, ex-options, to $1.53, $2.25 and $2.82 from $1.51,
$2.22 and 2.77 in ‘08-‘10. CELG raised ’08 revenue guidance to $2.2bn from
$2.1bn and EPS guidance to ~$1.50 from ~$1.45.
Reiterate Buy, remains a top pick
We raised our P.O. to $88 from $76 based on P/E 39x ’09e EPS of $2.25. CELG
deserves a premium biotech multiple in view of its 35% EPS 4yr CAGR fueled by
the high margin Revlimid and WW expansions. It remains a top biotech pick. |
