Color on Baird's Upgrade of Celgene (CELG)

October 13, 2008 11:12 AM EDT

Robert W. Baird upgrades Celgene Corp. (Nasdaq: CELG) from Neutral to Outperform and raises its price target from $65 to $66.

After more than 4 years on the sidelines, the firm says it finally believes that shares of Celgene offer an attractive risk/reward profile. The firm still sees longer-term performance-versus-expectation concerns at Celgene, but feels that market turmoil has created a buying opportunity.

The firm sees several factors that could create upside in shares of Celgene:

• recent data shows Velcade gaining traction, as well as showing continued Revlimid growth. Additionally, the firm believes Revlimid's sales could top its Q3 estimates of $345 million given strong script trends and anticipated European Union uptake.
  
• Baird sees large-cap biotech leading a broader market recovery as estimates are low and valuations are near historical trough levels.
  
• physicians view Celgene's Revlimid as one of the most promising new NHL therapies. The firm believes full data on Revlimid presented at ASH could provide the stock with a year-end boost.

With shares of Celgene trading about 5% higher to around $57.40 today, Baird's $66 price target represents potential price appreciation of about 15% from current levels.

Celgene Corporation, a biopharmaceutical company, engages in the discovery, development, and commercialization of innovative therapies to treat cancer and immune-inflammatory related diseases in Europe and the United States.

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