Celgene Corp. (NASDAQ:CELG) — This biotech company develops small molecule drugs for the treatment of blood-borne and solid-tumor cancers and inflammatory diseases. The stock has been on the Trade of the Day buy list for over a year, and in January, S&P said it had “the brightest growth prospects among large-cap biotech companies.”
On Jan. 9, we said, “Management provided encouraging guidance by adjusting earnings expectations for 2013 to $5.50-$5.60, up from a Zacks estimate of $4.91. The company’s oncology drug, Abraxane, is expected to be a blockbuster with sales estimates of $1 billion to $1.5 billion in 2015. And, according to management, it has other potentially high revenue drugs in its pipeline.”
On Monday, the FDA approved the company’s oncology drug Pomalyst used to treat myeloma. S&P said the drug offers significant commercial potential and boosted its price target by $11 to $125.
In early January, CELG broke from a classic cup-and-handle on high volume followed by a breakaway gap. From a technical analysis standpoint, it just doesn’t get better than this.
The stock has been consolidating since the breakout, which gives us an opportunity to buy this outstanding biotech growth stock at a reasonable price. The trading target is $118 to $120, but long-term investors have an opportunity to do much better than that by making CELG a cornerstone of their biotech holdings.