U.S. stocks have been extremely volatile over the past two months, and that make it diffcult for investors to decide whether or not they could be in for a rocky start to 2015. Everyone agrees that great companies suffer decline along with the bad ones when the market crashes. So many of you might be hunting for great stocks trading at a fair value. With that in mind, here is one stock that investors should put on their watchlist if markets collapse.
Celgene Corporation is well-known biotech company with proven record of drug development success. The company currently hold multiple FDA-approved therapies. That include Revlimid, a top-selling treatment for multiple myeloma which generate an annual revenue of above $5 billion.
On January 12, Celgene issued a generally upbeat guidance for its flagship cancer-fighting drug Revlimid, which represent a forecasted 66% of overall sales. Celgene is looking for total revenue to climb to about $20 billion by 2020, higher versus nearly $7.34 billion in 2014. In short-term, Celgene’s Q4 sales forecast missed estimates due in part to negative currency effects but preliminary EPS came in ahead of analysts’ estimates. Many tech companies could see a negative currency impact with their Q4 earnings, analysts say. Revlimid sales will rise about 14% to $5.6 billion-$5.7 billion in 2015 thanks to approvals to treat more types of cancer.
“2014 was an exceptional year for Celgene and the momentum from our core businesses positions us for another year of outstanding execution,” said CEO Bob Hugin. “The depth of our 2014 accomplishments creates an inflection point, providing greater clarity on the opportunities for 2020 and beyond.”
The Summit, New Jersey-based company is scheduled to release fourth-quarter earnings on Jan. 29. Celgene’s adjusted EPS grew 34 percent to $1.01, the company said in preliminary results. Analysts are looking for 99 cents.
Celgene also has the cancer drug Abraxane in the list of four, which generated revenue of $212 million in the third quarter of 2014, and Pomalyst, a third-line treatment used to treat multiple myeloma (cancer resulting from a progressive blood disease) that saw its sales go up by 102% from third quarter of 2013 to $181 million. Celgene’s anti-inflammatory newcomer Otezla is also available in the market. The drug won FDA approval in September as a treatment for psoriasis which has high demand and Celgene expect that someday Otezla will turn into a billion dollar a year therapy.
Its wholly-owned subsidiary, Celgene International Sàrl, declared on January 16 that it received EC marketing approval of OTEZLA for the treatment of both psoriasis and psoriatic arthritis, two diseases involving dysregulated immune system activity.
“The approval of OTEZLA® is an important new option for the treatment of patients who are not experiencing adequate relief for their conditions. OTEZLA® has shown significant and clinically meaningful improvements in psoriasis and psoriatic arthritis, including difficult to treat areas such as nail, scalp, and itch, which can all be the cause of great burden for patients,” said Dr. Diamant Thaci, Professor of Dermatology and the Head of the Comprehensive Center of Inflammation and Medicine at the University of Lübeck, in Germany. “OTEZLA® has also been generally well tolerated and does not require routine laboratory monitoring, which can be beneficial for both physicians and patients.”
Celgene keeps moving forward as it offers investors a rich clinical pipeline comprised of many potential therapies. There have been over 100 phase II clinical trials either planned or under way, and more than 30 phase III clinical trials ongoing. The company is on track to declare further combinations of its cancer treatments with other immunotherapy drugs this year, Jackie Fouse, president of Celgene’s hematology and oncology segment, said at the JPMorgan Healthcare Conference in San Francisco.
Furthermore, Celgene signed parternship agreements with some of the small-cap biotech companies that are on the cutting edge of research and development. One such company Agios Therapeutics is expected to bring possible next-generation cancer treatments.
The pipeline could provide upbeat news flow in the years ahead, but even if some experience failure would not hurt investors much as Celgene maintains one of the best balance sheet in its industry. Take an example of its cash and short-term investments, which have climbed from $5.7 billion by the end of 2013 to $6.8 billion as of the third quarter. As a result, its current ratio stands at 6.3, which is better when compared to most of its big cap biotech peers, and that gives a view that the company is in strong positition to meet its short term obligations.