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How Celgene Is Positioned after 2Q17

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Part 2
How Celgene Is Positioned after 2Q17 PART 2 OF 8

How Celgene Performed in 2Q17

Celgene’s revenue trends

In 2Q17, Celgene (CELG) generated revenues of ~$3.3 billion, which reflected ~19% growth on a year-over-year (or YoY) basis and ~10% growth on a quarter-over-quarter basis. In 2Q17, Revlimid, Otezla, and Pomalyst primarily contributed to the high revenue growth. Celgene’s Revlimid, Otezla, and Pomalyst witnessed 20%, 23%, and 49% growth, respectively, on a YoY basis in 2Q17.

In 2Q17, Celgene reported adjusted diluted earnings per share (or EPS) of $1.82, which reflected ~26% growth on a YoY basis. In 2Q17, Celgene reported adjusted product gross margin of ~96.8% and adjusted operating margin of 59.5%, which reflected improvement by 50 basis points and 490 basis points, respectively.

Celgene’s revenue growth could boost the SPDR S&P 500 ETF (SPY). Celgene comprises ~0.50% of SPY’s total portfolio holdings.

How Celgene Performed in 2Q17

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The chart above represents the revenue trajectory of Celgene from 1Q16 to 2Q17 and analysts’ estimates of 3Q17 and 4Q17. To learn more about Celgene’s historical revenue trends, please read Celgene’s Financial Performance in 2016: Strong Growth in Volumes.

2Q17 expenses

In 2Q17, Celgene reported adjusted R&D (research and development) expenses of ~$835 million and SG&A (selling, general, and administrative) expenses of ~$939 million. In 2Q17, Celgene had net income of ~$1.1 billion compared to $598.0 million in 2Q16.

Fiscal 2017 guidance

After 2Q17, Celgene updated its guidance for fiscal 2017. Celgene updated its adjusted diluted EPS from $7.15–$7.30 to $7.25–$7.35 and its adjusted operating margin from about 57.0%–57.5%.

Celgene anticipates total revenues for fiscal 2017 to be around $13.0 billion–$13.4 billion.

Recent collaboration

In June 2017, Celgene entered into a collaboration with BeiGene Ltd. (BGNE) for the development and commercialization of BeiGene’s investigational drug BGB-A317, an anti-programmed cell death protein 1 (or PD-1) inhibitor.

Celgene will develop and commercialize the drug in the US, Europe, Japan, and the rest of world outside Asia for the treatment of solid tumors. BeiGene would have exclusive commercialization rights for the development and commercialization of BGB-A317 for hematological malignancies worldwide and solid tumors in Asia (excluding Japan).

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