Five reasons why Celgene’s (NASDAQ: CELG) stock will keep on climbing higher


Celgene (NASDAQ: CELG) revealed an 18% sales increase on $1.98B making a 24% higher profit per share but the interesting thing to note is that all these increases were due to its organic growth. Here is what the management team of the drug company Celgene told us how they have been able to achieve such a stellar growth.

Organic growth.

Mark Alles, COO & President of Celgene, assured the stockholders that they have thought about their future and will move beyond Revlimid. The basic plan is to expand Otezla and gain new signs for Abraxane and Revlimid which would allow sales to increase and extend the patent life of these drugs.


No price increases!


According to Peter Kellogg, the Chief Financial Officer and Executive Vice President, volume was why there was such a sales growth which contributed 15 out 19 points. Celgene is doing great without the need to increase prices. Around three-fourth revenue increases came from greater demand of drugs like Pomalyst, Abranxane, Revlimid and Otezla. A 15% surge in volume shows that the marketing team in Celgene is doing a pretty good job in developing interest in the general investors.


No share repurchase!

The company’s growth in this quarter came because of their improvements in operations. Peter Kellogg said that due to foreign exchange an increased interest on an  a bond worth $2.5B cancelled the adverse result of the repurchased shares.

No dividend in the near time:

Even though Celgene has a lot of accumulated cash, it has no plans for now to share profits with the shareholders by giving dividends. Celgene is increasing its options for the existing drugs, increasing new therapies as well as founding new partnerships. For this it needs capital.

Also running trials in the clinic is not cheap, also partnerships often require paying in advance. Its partnership with OncoMed (NASDAQ:OMED), cost $155M in advance, and a $22.25M equity investment. Celgene can surely bare these expenses but investors seem to be far away from getting any dividends soon.

Otezla seems to be the hero.

If they see only the latest data, this medicine performs far better than all the branded competitors as compared to old drugs like HUMIRA and ENBREL – Scott Smith, President Immunology & Inflammation said earlier. Its still early to predict, but all directions seem to be showing positive signs for Otezla, as Scott noted.


In the lesser arthritis psoriatic indication Otezla has outperformed established medicines like AbbVie‘s (NYSE:ABBV) Humira, the leading performing medicine right now, and Amgen‘s (NASDAQ:AMGN) Enbrel when new patients are concerned. This trend seems to be really promising for Otezla. Now it seems really hard for Celgene’s stock to plummet and with a predicted growth of around 20% till 2017, the stock will surely keep on rising.