Celgene (CELG): Buy Yesterday's Weakness, say RBC

RBC Capital maintained an Outperform rating on Celgene (NASDAQ: CELG) with a price target of $100. Analyst Michael J. Yee recommended buy weakness related to yesterday's concerns about GED-031, as he doesn't think there will be any strictures in Phase II.

"Shares of CELG were weak yesterday on some investor concern that the Phase II GED-031 (new oral Crohn's disease drug) data will have side effects, specifically bowel strictures (fibrosis/inflammation in gut), will unlikely be twice-daily dosing which could limit the market opportunity, and/or uncertainty about dosing profile going into Phase III," said Yee.

"We'd be buyers here because although we already discussed some of this in our prior note regarding our very positive meeting with the CFO (CFO meeting consistent with our positive outlook and thinking; 9/10/14) - we re-confirmed with the company that 1) there are no strictures in Phase II; 2) any risk of strictures is theoretical and hypothesis based on mechanism of action; 3) there is a clear publication about this but then clinical data showed GED-0301 did not induce strictures (email us for this publication...); 4) bowel strictures are already known to be a part of the risks and manifestations of the underlying Crohn's disease. Bottom line is the company is considering ways to perhaps minimize any risk of this by looking at possible different dosing regimens in the future and to maximize the market opportunity," he added.

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 $91.96 yesterday.

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