UPDATE: Canaccord Genuity Starts Celgene (CELG) at Buy

Canaccord Genuity initiated coverage on Celgene (NASDAQ: CELG) with a Buy rating and a price target of $156. Analyst John Newman thinks Revlimid will reach $10 billion in worldwide revenues by 2020. He also noted potential in inflammatory diseases.

"We do not expect generic competition to surface until ~2022-2024, providing substantial cash flows mid-term. Importantly, we expect US FDA approval in front-line multiple myeloma during February 2015 and EU approval during H1/15 to increase current Revlimid sales by ~$400M in 2016," said Newman.

"Celgene plans to expand currently marketed drugs (Revlimid, Abraxane, Pomalyst, and Vidaza) outside of hematologic disease states, but also has a robust and broad clinical pipeline to support future revenue and EPS growth. Specifically, we estimate Agios’ AG-221 (IDH-2 inhibitor) and AG-120 (IDH-1 inhibitor) may generate ~$2B in peak sales combined by 2022 if approved. Additionally, we find the data for luspatercept/ sotatercept interesting as we feel these programs can potentially generate >$5B in sales by 2022 and trigger significant upside to the stock. Finally, GED-0301 could be a billiondollar- plus asset in Crohn’s disease and ulcerative colitis based on positive data seen to date," continued the analyst.

Newman added, "Celgene’s wholly owned Anti-Smad7 compound, GED-0301, could potentially be a blockbuster for inflammatory disease, with an estimated ~$800M in peak sales by 2022 in Crohn’s disease (CD) alone, not including potential for ulcerative colitis. Importantly, phase 2 clinical trials demonstrated an impressive 58% response rate in CD patients while having a clean safety profile. We believe the results will resonate favorably with physicians and possibly move the drug into earlier lines of therapy and before toxic biologic drugs, like Humira and Remicade, which could increase our peak sales valuation dramatically."

For an analyst ratings summary and ratings history on Celgene click here. For more ratings news on Celgene click here.

Shares of Celgene closed at $116.32 yesterday.

You May Also Be Interested In

• Scotiabank Starts Webull (BULL) at Sector Outperform
• Scotiabank Starts Robinhood Markets (HOOD) at Sector Outperform
• Cantor Fitzgerald Starts Tempus AI Inc (TEM) at Overweight