Waiting on Celgene Ruling
Celgene was halted at $52 on Wednesday.An oncology drug advisory panel of the Food and Drug Administration is scheduled to meet this morning to vote on whether the company's drug Revlimid should be recommended for approval.
Celgene is seeking to have Revlimid approved for the treatment of anemia.
A vote is expected by 12:30 EST.
We're reiterating our Sell Rating on Celgene, as we have done twice over the last week.
CELG trades at a lofty 100 X earnings.
We should pay high multiples for biotechs.
But Celgene is a two trick pony.
Regulators are weighing whether Revlimid is too toxic.
Revlimid is a newer version of thalidomide, which has been linked to severe birth defects.
Even if it gets approved, which it most likely will, I only see $300 million in first year revenues for the drug.
In sync with our take, analysts have already started downgrading the stock ahead of the panel meeting, believing that all the good news is priced into the stock.
We're watching this one closely, as I'm sure you all are.
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