Celgene Cuts Profit Guidance for 2017 Amid Currency Turmoilby
Company's top product, Revlimid, meets sales expectations
Pomalyst, Abraxane, Otezla all miss analysts' estimates
Celgene Corp. lowered its profit guidance for 2017 as the drugmaker said it anticipates slowing sales because of exchange rates.
Celgene slashed its forecast for 2017 earnings excluding one-time items to a range of $6.75 to $7 from a previous target of $7.25, according to a statement Thursday. The Summit, New Jersey-based company suggested last month that a strong U.S. dollar might prevent it from reaching profit goals; analysts expected adjusted earnings next year of $7.21, according to the average of estimates compiled by Bloomberg.
Celgene has sought to diversify away from its biggest drug, Revlimid, a pill for blood cancer that accounted for 63 percent of product sales last year. Under former CEO Bob Hugin, Celgene inked deals with smaller biotech firms and bought some late-stage experimental treatments. The company also reached an agreement in December with Natco Pharma Ltd. to keep its generic version of Revlimid off the U.S. market until 2022. Revlimid sales were $1.57 billion in the quarter, about matching analysts’ expectations. The drugmaker has been under new leadership since March, when former chief operating officer Mark Alles took over as chief executive officer.
More first-quarter results from Thursday’s release:
- First-quarter Pomalyst sales were $274 million, compared with the $304 million average of analysts’ estimates; Abraxane sales were $225 million compared with the $260 million analysts expected; Otezla sales were $196 million, analysts expected $205 million
- Net income rose 11 percent to $801 million, or 99 cents a share, from $719 million, or 86 cents a share, a year earlier
- Celgene had earnings excluding one-time adjustments of $1.32 a share, topping the $1.28 average of analysts’ estimates compiled by Bloomberg
While drug sales missed estimates, lower-than-expected operating costs and increased share repurchases more than made up the difference, Geoff Meacham, an analyst with Barclays Plc, said in an e-mail note to clients.