Morgan Joseph Initiates Coverage on Celgene Pharmaceuticals (CELG) with a Buy

June 16, 2009 7:52 AM EDT

Morgan Joseph initiates coverage on Celgene Pharmaceuticals (Nasdaq: CELG) with a Buy rating. Price target $52.

Morgan analyst says, "Celgene's key growth driver, Revlimid, which contributes just over 60% of total sales, is a leading therapy in the multiple myeloma market with compelling data in the refractory setting. Revlimid had sales of $1.32 billion in 2008, which we expect to grow 25% to $1.66 billion in 2009. We expect Revlimid's growth to continue at a similar pace with increased penetration in international markets in the next two years...The stock has languished in the previous 12 months from its highs in the summer of 2009 over $70 to the low $40s currently, primarily due to growth and pricing concerns. As a result, Celgene is trading at a deep discount based on PEG ratios (0.5 vs. 1.3). In our opinion, Celgene's fundamentals remain strong. Management expects EPS to grow at approximately 35% and cash flow from operations of more than $1 billion in 2009. Although pricing concerns can linger until healthcare legislation is passed, and economic conditions stabilize throughout the world, we believe Celgene will continue to have strong pricing power into the next decade due to compelling clinical data."

To see more analyst ratings on CELG Click Here.

Celgene Corporation is an integrated biopharmaceutical company. The Company is primarily engaged in the discovery, development and commercialization of therapies designed to treat cancer and immune-inflammatory related diseases.

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