In separate press releases on Thursday morning, Celgene (NASDAQ:CELG) reported 3Q results and announced that Abraxane demonstrated a statistically significant improvement in Progression Free Survival (PFS) in its latest Phase 3 study for advanced melanoma. Celgene reported revenue of $1.42B and adjusted, diluted earnings of $1.29 per share ($561M non-GAAP net income), a consensus beat for the company as estimates placed revenue at $1.41B and adjusted EPS at $1.27. Celgene reported third quarter net income (GAAP) of $424 million or $0.97 per diluted share. The company raised its adjusted EPS outlook for FY2012 to $4.85-$4.90 from $4.80-$4.85.
Abraxane is already available as a treatment for metastatic breast cancer and received FDA approval for advanced non-small cell lung cancer in combination with carboplatin just this month. Today’s news is another step towards adding a third indication to the versatile chemotherapy agent. The trial met its primary endpoint – improvement in PFS – and showed a favorable trend towards overall survival, its secondary endpoint. In chemotherapy-naive patients, Abraxane demonstrated a PFS of 4.8 months, nearly doubling the 2.5 month PFS in the control arm, patients treated with standard dacarbazine chemotherapy. Celgene is also pursuing a metastatic pancreatic cancer indication, with a Phase 3 trial set to report data in the fourth quarter. Management has guided for Abraxane sales, including all indications, of over $1B by 2015.
CELG is coming off some weakness in the past two weeks, and news today plus the expectations for pancreatic data should strengthen shares towards the end of the year. CELG crested on October 5 with a new 52-week high of $81.24 but has been on a losing streak since, down 9%. Falling analyst estimates for the fourth quarter – consensus from $1.20 to $1.19 in the last two months – weighed on the stock; however we may see revisions following 3Q financials. A pull-back after a new high is generally seen as healthy, and the combination of positive events Thursday support a trend north as the company moves forward with Abraxane development. On Thursday morning, CELG is up 1.25% to $74.99, and recent support is around $74.
