3 Reasons This Biotech Could Be A Better Buy Than Gilead Sciences
Celgene: Better Buy Than Gilead?• Reason #1–Clearer competitive landscape.• Celgene’s Revlimid–Market leading second-line multiple myeloma treatment.» $3.6 billion in year-to-date sales through September.
– Potential FDA approval in February for first-line use.– Few competitive threats beyond Amgen’s Kyprolis.» Kyprolis may end up being used alongside, rather
than instead of Revlimid.
Celgene: Better Buy Than Gilead?• Reason #1 continued–Clearer competitive landscape.• Gilead Sciences Sovaldi and Harvoni –Market leading first-line hepatitis C treatment» $8.55 billion in year-to-date sales through
September.– Increasing competition from AbbVie next year.» AbbVie FDA decision on its drugs this month.
– Tougher year-over-year sales comparisons in 2015.» Sovaldi sales success this year sets the bar high.
Celgene: Better Buy Than Gilead?
• Reason #2– Faster earnings growth• Celgene EPS growth of 32% in 2015.
– Label expansion may offer margin friendly volume growth.– Otezla growth potential to make an impact.
• Gilead Sciences EPS growth of 27% in 2015.– Tough earnings comparison given Sovaldi spike in 2014.
Celgene: Better Buy Than Gilead?
• Reason #3– Stronger short-term balance sheet.• Current ratio = short term assets/short term liabilities.
– Celgene’s current ratio is 6.3.– Gilead Sciences current ratio is 2.08.
Celgene: Better Buy Than Gilead– Celgene may offer more catalysts to over-deliver in 2015
• Potential for Revlimid approval in front-line multiple myeloma.– 13% compounded annual growth for Revlimid through 2017.
• Potential for Abraxane revenue to grow.– 28% compounded annual growth for Abraxane through 2017.
• Potential for Otezla revenue to grow.– FDA approval for Psoriasis this past September.– Estimated sales of $1.5-$2 billion in 2017.
• Potential for Pomalyst sales to grow.– 49% compounded annual growth for Pomalyst through 2017.
• Data readouts– 30 phase 3 trials planned/underway.– 100 phase 2 trials planned/underway.Source: Celgene Investor Presentation
1 great health care stock to buy for 2015 and
beyond.