6
T his section is not only to update and in-
form our readers on the significant news of
those stocks that are in our BioPortfolio, but
to provide insight, market conditions that
will influence the biotech sector.
SPOTLIGHT BIOPORTFOLIO
Additions:
Deletions:
Rating Changes for January 2004.
Key Dates: Changes are in italics and
are for AMGN, GENZ, MEDI and
MLNM .
ADLR: In the first quarter of 2004, the
release of Phase III top-line data of
Entereg for POI.
ALXN: On Nov. 11, 2003, ALXN re-
leased Phase III clinical data for Pexeli-
zumab for patients undergoing coro-
nary artery bypass graft surgery with
cardiopulmonary bypass that meet all
endpoints except one.
AMGN: The NDA for Cinacalet for
hyperarathyroidsim in end-stage kid-
ney disease was filed on September 8,
2003.
BioTech Stock Updates
BioTech Stock Report, January 2004
conditioning therapy for autologous
stem cell transplantation. In addition,
there were several presentations on
Thalomid in other indications, such as
MDS in combination with EPO, myelo-
fibrosis, acute myeloid leukemia, and
chronic lymphocytic leukemia.
Celgene's presentation of clinical
data for Thalomid at ASH should sup-
port continued Thalomid sales growth.
Additionally, management appears
optimistic about the potential use of
Thalomid and ultimately Revimid in
combination with Velcade in late stage
or refractory multiple myeloma pa-
tients. Overall, 92% of Thalomid use is
in oncology, with greater than 75% of
Thalomid use in hematologic malignan-
cies, and the remaining oncology use
occurring in solid tumors. On the solid
tumor front, management continues to
keep a close eye on use in melanoma
and prostate cancer following recent
publications of the use of Thalomid in
those diseases.
We continue to believe that
strong near-term Thalomid growth and
the long-term potential of Revimid and
other pipeline products make Celgene
an attractive long-term story.
Management has said its 2003
earnings will be at or slightly above
the high end of the previous guidance
of $0.10-$0.15 per share. Wall Street
consensus is $0.14 per share. Thalo-
mid's sales guidance for 2003 is $215-
$220 million. Projected revenues from
Focalin and other Attention Deficit
Disorder (ADD) products are at $15
million. R&D spending guidance is
$125-$130 million to support acceler-
ated development of Revimid, broad
pivotal and other trials of Revimid and
Thalomid, as well as earlier stage pro-
grams. SG&A spending guidance is at
$90-$95 million. The primary risks we
see to Celgene's valuation, are poor
visibility on Focalin and other ADD
royalty revenue: clinical trial and regu-
latory risk surrounding Thalomid, Re-
vimid, and SelCIDs; and increasing
market sales data and news flow sur-
rounding Millennium's competing Ve l-
cade.
Given its solid fundamentals and
an estimated 4-year compounded an-
nual growth rate revenue of 46%; pro-
jected profitability in 2003; a broad
product pipeline led by an exciting
compound in Phase III trials; and a
strong cash position, Celgene is well
positioned for continued solid per-
formance in 2004 and 2005. Celgene's
share price has had a phenomenal run
this year and earlier this month, Cel-
gene closed at its 52-week high of
about $47 a share. Since then its share
price has pulled back, but with a 12-
month target price of $50, the company
is still attractive. We will adjust our
entry point from $30 to $40. $$
Celgene Corp.
