Biotech Stocks to Buy – Celgene (CELG)
Celgene (CELG) is a large-cap stock with a robust drug pipeline and significant strength. Last month, the company approved a 2-for-1 stock split and doubled its existing share repurchase authorization to $1.15 billion, from the prior $575 million.
But headwinds include a patent dispute over Celgene’s flagship blood-cancer treatment Revlimid — a blockbuster drug that generated nearly $4.3 billion in sales last year — more than 60% of the company’s revenues. Word on Natco’s bid to challenge CELG’s patent and market a generic version of the drug could be decided later this month.
On the clinical trial front, phase III trials of Celgene’s psoriasis drug Otezla were disappointing in treating a severe form of spinal arthritis. The great news: CELG has a deep and diverse drug pipeline and the company is committed to taking care of its shareholders — last month’s 2-for-1 stock split was the fourth in 14 years.
CELG stock took a beating in the first four months of the year, falling by 20% through mid-April. Since then, however, CELG stock has gained nearly 28% and gotten back into the black for the year-to-date. Yet Celgene shares still sport a PEG ratio of just 0.8, which indicates a little bit of value.
Investors should keep an eye on the progress of the Revlimid case, but apart from a negative outcome, CELG should be poised to move higher this year.
As of this writing, Susan J. Aluise did not hold a position in any of the aforementioned securities.