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Celgene Sees Year-over-Year Revenue Growth of 17.8%

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3Q15 earnings

In its 3Q15 earnings report released on November 5, 2015, Celgene (CELG) reported year-over-year (or YoY) revenue growth of about 17.8%, from $2.0 billion in 3Q14 to $2.3 billion in 3Q15. In 3Q15, the company reported diluted earnings per share (or EPS) of $1.23, which was in-line with Wall Street estimates.

Celgene’s EPS also included the dilutive impact of $0.04 for charges related to the acquisition of Receptos, which was completed on August 27, 2015. Celgene’s 3Q15 EPS was 26.8% higher than the company’s EPS of $0.97 in 3Q14.

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Net income

Celgene’s adjusted net income rose by 26% from $806 million in 3Q14 to $1,011 million in 3Q15. This growth was mainly driven by the strong performances of the company’s drugs Revlimid, Pomalyst, and Otezla.

Based on adjusted net income, Celgene registered a net income margin of 43.3%. This was higher than the profit margins of peers Biogen (BIIB) and Amgen (AMGN), which had margins of about 34.1% and 36.1%, respectively. It was lower than Gilead Sciences’ (GILD) net profit margin of 55.4%.

However, according to US GAAP (generally accepted accounting principles) accounting standards, Celgene reported a net loss of $34 million in 3Q15. This is on account of charges related to strategic transactions such as upfront costs and premiums paid for equity stake in the Juno Therapeutics collaboration and expenses related to the Receptos acquisition.

Following its 3Q15 earnings results, Celgene’s share price dropped by about 6.7% and closed at $120.5 on November 5, 2015.

Net product revenues

In 3Q15, Celgene’s net product revenues grew by 18.2% from $1.9 billion in 3Q14 to $2.3 billion in 3Q15. The growth was mainly driven by a rise in total product volumes sold in 3Q15 and a small price rise. However, this revenue growth was partially offset by unfavorable foreign exchange fluctuations.

Instead of directly investing in Celgene and being exposed to excessive company-specific risks, you can invest in the company through the Health Care Select Sector SPDR ETF (XLV). Celgene accounts for 3.3% of XLV’s total holdings.

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