Celgene (CELG) is trading lower after presenting at the J.P. Morgan Healthcare Conference this morning and announcing a deal to expand in the blood cancer space.
The company preannounced fourth quarter results just above estimates. The initial guidance for fiscal 2018 EPS was above estimates but that was offset by revenue guidance that was below consensus. Celgene expects fiscal 2018 adjusted EPS up 18% to $8.70-8.90 with sales up 12% to $14.6 bln at the midpoint.
Last night, the company announced the acquisition of Impact Biomedicines, which is developing fedratinib for myelofibrosis and polycythemia vera. Celgene will pay ~$1.1 billion upfront and up to $1.25 billion in contingent payments based on regulatory approval milestones for myelofibrosis. Celgene said it plans to submit a new drug application (NDA) to the FDA for Fedratinib in mid-2018. Management said there is an unmet need in patients failing Incyte's (INCY) Jakafi, a similar drug.
Management also touted its partnerships for potential blockbuster drugs with blue bird (BLUE), Juno (Juno) and Agios (AGIO). None of which are included in the company 2020 targets. Celgene said its late stage pipeline with potential to add over $15 bln in incremental peak rev though 2030.
While the Impact deal seems to be a good strategic move, it doesn't qualm concerns over the company's reliance on Revlimid, which will account for almost two-thirds of its sales this year.