CELG Celgene Corporation

By Lisa Beilfuss 

Celgene Corp. cut its sales targets for next year and said 2017 profit would come in lower than it previously estimated, though the biopharmaceutical company said it is on track to meet longer-term targets.

Celgene, based in Summit, N.J., generates most of its revenue from its blood-cancer drug Revlimid. The company has said sales of its flagship drug would slow a bit in 2016, although the drug posted a 17% sales increase in the first quarter, down just slightly from an 18% clip in the fourth quarter.

The company has started to expand beyond its roots in the multiple myeloma market, bracing from eventual generic competition to Revlimid. Such competition won't occur until 2022 to 2025 thanks to a settlement reached late last year -- a development that is behind the 13% share price gain over the last three months, according to RBC analyst Michael Yee. Nonetheless, the company last year acquired autoimmune disease company Receptos and has launched a drug to treat Crohn's disease, among other moves to make up for eventual revenue erosion.

On Thursday, Celgene raised its forecast for Revlimid sales in 2017 by $1 billion, bringing its forecast to $8 billion. "That really shows how underlying fundamentals of the drug remain strong," Mr. Yee said, noting that Revlimid is vulnerable to foreign exchange moves that have been hurting companies that do significant business abroad.

Given persistent strength of the U.S. dollar that makes products more expensive in foreign currencies, and because Revlimid is comprising a smaller share of total sales, Celgene on Thursday cut its overall sales and earnings targets for next year.

Celgene now expects to book total product sales of $12.7 billion to $13 billion in 2017, down from an earlier estimate of $13 billion to $14 billion and shy of the $13.1 billon analysts have expected.

Amid the lower sales expectation, Celgene said adjusted earnings per share next year would range between $6.75 to $7 a share, down from its earlier forecast of $7.25. Analysts have predicted adjusted profit of $7.20 a share for 2017. The company expects to post $5.60 to $5.70 a share for 2016, bumping up the bottom end of its forecast by a dime after cutting the guidance sharply earlier this year.

Chief Executive Mark Alles on Thursday highlighted the company's pipeline and said Celgene expects significant clinical data over the next two years. He said 2020 targets are on track, still forecasting $21 billion in net product sales and at least $13 a share in adjusted per-share profit.

For the first quarter, Celgene reported a profit of $800.7 million, or 99 cents a share, up from $718.9 million, or 86 cents, a year earlier. Excluding share-based compensation expenses, among other items, earnings per share rose to $1.32 from $1.07.

Revenue climbed 21% to $2.51 billion. Analysts projected $1.27 in adjusted earnings per share on $2.58 billion in sales, according to Thomson Reuters.

Shares in the company added 3.4% to $109.53 in afternoon trading.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

April 28, 2016 15:50 ET (19:50 GMT)

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