Although growth prospects for Celgene’s (CELG-$154.44) oncology
franchise remain strong, the product portfolio remains highly concentrated. To
justify a PE ratio almost twice that of key competitors, the company needs
additional revenue streams to offset competitive risks.
Just in 2013, Celgene has
invested more than $500 million in third-party ventures – young companies
working on promising drugs, ranging from epigenetics (structure-based drug
design) to cancer metabolism and immunotherapy. Celgene will owe millions more in
milestone payments – should any of these ventures pan out.
Luckily, the balance sheet is sound, with healthy credit metrics and liquidity available to finance both internal R&D expense and external ventures. The company holds a revolving credit facility totaling some $1.5 billion and its long-term debt maturities are staggered, with the bulk of maturities scheduled out to 2017 and beyond.
Luckily, the balance sheet is sound, with healthy credit metrics and liquidity available to finance both internal R&D expense and external ventures. The company holds a revolving credit facility totaling some $1.5 billion and its long-term debt maturities are staggered, with the bulk of maturities scheduled out to 2017 and beyond.
Read more at YCharts: Celgene’s
Revlimid: Sales to $8B? Patent to 2023?
Editor David J
Phillips does not hold a financial interest in any stocks mentioned in this
article. The 10Q Detective has a Full Disclosure Policy.
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