When it comes to biotech stocks, the volatility is often stomach-churning. It’s not uncommon to see a company’s valuation plunge 50% or more, such as when there is a bad clinical trial. But this kind of risk is usually for the smaller operators, which have limited sources and little or no revenues.

But sometimes even the mega operators run into thorny issues. And this has certainly been the case with Celgene Corporation (NASDAQ:CELG). It seems that nothing has gone right during the past six months or so. Keep in mind that during this period Celgene stock has lost about 40% of its value. The current price is actually at levels not seen since 2014.

So what has gone on? Why the terrible performance of Celgene stock? Well, first of all, in October, the company suffered a major defeat with its much-anticipated drug for Crohn’s disease. It wound up scrapping the Phase 3 trial. This was a major blow as the drug was likely to ultimately generate over $2 billion a year in revenues. As a result, Celgene stock took a big hit.

Then in late February, there was more bad news. The Food and Drug Administration refused to review a filing for a drug that targets multiple sclerosis. It was an embarrassment since it lacked sufficient information for review. So yes, Celgene stock took yet another hit.

In the meantime, Wall Street is also worried about the company’s Revlimid drug, which accounts for about two-third’s of revenues. By 2022, it will lose its patent protection, resulting in competition from generic drug companies.  For the most part, Celgene is in a race to overcome the likely reduction in revenues.

Celgene Stock and the Pipeline

While Celgene stock has considerable risks, key advantages still remain. Consider that the pipeline still looks promising and should be able to overcome the issues with Revlimid. Some of the drugs include Luspatercept (targeted at the hematology market), GED-0301 (for inflammation) and Marizomib (a brain tumor treatment).

But Celgene is also investing aggressively in China, which should expand the market opportunity. A key part of the strategy is a partnership with Beigene Ltd (ADR)(NASDAQ:BGNE).

And then there have been the acquisitions, which could help get Celgene stock back on track. One was for Juno, which is a top developer of CAR-T therapies for blood cancers. Keep in mind that the company’s drugs could have wide applications, such as for leukemia, myeloma and breast/lung cancers. In other words, Juno’s portfolio could lead to substantial revenue growth.

Then there was the deal with Impact Biomedicines. The company is in clinical development of a rare blood cancer, known as myelofibrosis.

What’s more, the dealmaking is likely to continue for some time.  No doubt, it helps that Celgene has $12 billion in the bank and has been cranking out substantial cash flows.

Bottom Line on Celgene Stock

As should be no surprise, the valuation on Celgene stock is much more attractive now. Note that the forward price-to-earnings ratio is at 9X, which is at a material discount to other mega biotech operators like Amgen, Inc. (NASDAQ:AMGN), Gilead Sciences, Inc. (NASDAQ:GILD) and Regeneron Pharmaceuticals Inc (NASDAQ:REGN).

And yes, the risks for Celgene stock are important. But in light the low valuation and the potential of the pipeline, the shares do look attractive — especially for investors with a long-term approach.

Tom Taulli is the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.