Celgene Corporation (NASDAQ:CELG) posted fourth quarter results, beating profit predictions but missing sales projections slightly. The firm continues to move on growth track while the stock still looks inexpensive. It is trading around $116 right now, up over 2% in the last trading session. Total revenues in the last reported quarter surged 17% YoY to $2.98 billion. A slowing from 22% growth rate for the year, however that was likely just a slight hiccup for the firm.
The details
The major growth driver for Celgene’s rising sales are higher volumes, depending on higher patient counts and rising average duration. It is a huge positive. The company does not record growth by overly increasing its prices, but rather by extending its medications to more patients, which turns company less susceptible to political pressure.
Adjusted net income surged 34%, which represents the immense operating leverage company possesses. High product gross margins, with extremely low proportional and increased fixed costs indicate that earnings can surge at a much faster rate than the firm’s net sales. EPS growth is additionally supported by a dropping share count, although Celgene’s stock repurchases are slightly offset by the release of new shares for either paying employees or for acquisitions. Adjusted EPS surged 36% to $1.61 in 4Q2016.
Whilst its operational report keep enhancing continuously, Celgene persists to make new agreements in order to support future growth. Last month Celgene reported it would buy privately held Delinia in a deal valued for $300 million so as to get access to DEL-106 plan. It intends to upregulate regulatory T cells through IL-2 mutein fusion protein. In case the things move as planned, the medication will permit for the cure of autoimmune diseases, the deal will close in this ongoing quarter.
In December Celgene bought Acetylon Pharmaceuticals, which is advancing product candidates for autoimmune ailments and in other areas like oncology.