Celgene Corp. said on Monday that data from a late-stage trial showed its drug Abraxane didn't significantly extend progression-free survival in patients with the most common form of lung cancer.
That, along with 2010 earnings that fell short of Wall Street's expectations, drove the Summit, New Jersey-based biotechnology company's shares down 4.3 percent in midday trading on Nasdaq.
Celgene acquired Abraxane, a drug approved for breast cancer, with its $2.9 billion acquisition last year of Abraxis BioScience Inc. Positive lung cancer data would have helped justify the price of the acquisition in the minds of some investors.
The company also reported lower-than-expected 2010 earnings of $2.80 a share. Analysts had expected earnings of $2.82 a share, according to Thomson Reuters I/B/E/S.
"Although EPS results and guidance suggest a higher rate of near-term spend than the Street may have anticipated, and the lack of statistical significance for Abraxane on progression-free survival is somewhat disappointing, we believe the weakness in shares is overdone," said Brian Abrahams, an analyst at Wells Fargo Securities LLC.
Celgene, which announced its results at the JPMorgan healthcare conference in San Francisco, said it expects 2011 earnings, excluding one-time items, to rise to between $3.30 and $3.35 a share. Analysts on average were expecting $3.38 a share.
It said that despite the PFS results it expects 2015 Abraxane sales could top its earlier forecast of $1 billion, and it said it expects total revenue in 2015 to reach more than $8 billion.
"The negative impact of the negative PFS on the entire company is small," said Mark Schoenebaum, an analyst at ISI Group.
Celgene said unaudited net profit in the fourth quarter fell to about 41 cents a share from 54 cents a share a year ago.
Excluding one-time items, earnings rose to about 73 cents a share from 62 cents a year ago. Analysts on average expected 75 cents, according to Thomson Reuters I/B/E/S.
Net revenue in the quarter rose to $1.06 billion from $758 million a year ago. Sales of Revlimid, its most important driver of growth, rose 42 percent to $708 million.
The company expects 2011 adjusted revenue of $4.4 billion to $4.5 billion, up from $3.60 billion in 2010. It reported preliminary total revenue in 2010 of $3.62 billion.
Analysts on average expect 2011 revenue of about $4.42 billion.
Celgene said it expects 2011 sales of Revlimid to rise to between $3.0 billion and $3.1 billion, up from a preliminary $2.47 billion in 2010. Analysts expect $3.04 billion.
Celgene shares fell 4.2 percent to $56.70 in midday trading on Nasdaq.
© 2021 Thomson/Reuters. All rights reserved.