Revlimid is Celgene Corporation’s (NASDAQ:CELG) cancer drug that did about $7 billion in sales last year. Celgene Corporation (NASDAQ:CELG) has patent exclusivity on Revlimid for another half-decade, but still, when a drug has such significant sales, and is so crucial to a company’s future, it is only natural that CELG stock owners show concern.
Celgene stock owners wonder how much more Revlimid has in the tank. When will it peak? Celgene Corporation (NASDAQ:CELG) management claims that Revlimid’s best days are still ahead, but that’s hard to believe given how Revlimid has already exceeded all expectations.
Still, there are three big reasons why CELG stock owners should worry less about Revlimid, and realize the deep value in Celgene stock at just 13.5x forward earnings.
First, Revlimid sales are actually accelerating! As seen in the chart below, sales for the drug have accelerated in each of the last three years. That’s quite a feat. Furthermore, it suggests that sales of the drug won’t fall from a cliff anytime soon.
Second, Celgene Corporation (NASDAQ:CELG) is relying less and less on Revlimid.
This is perhaps the most surprising chart of all to a casual investor with basic knowledge of Celgene Corporation (NASDAQ:CELG). Despite Revlimid’s accelerated growth over the last year especially, it is actually responsible for less of the company’s total revenue than ever before.
Currently, Revlimid accounts for 60.66% of Celgene Corporation (NASDAQ:CELG) total revenue. That’s down from 64.5% two years ago, and 70% in 2010.
Yes, Revlimid is still very important for the future of Celgene Corporation (NASDAQ:CELG) and CELG stock. However, it is clear that Celgene Corporation (NASDAQ:CELG) has more than just one piece to its puzzle.
Third, Otezla is a major catalyst in the making.
Last year, Celgene’s psoriatic arthritis drug Otezla topped $1 billion in global sales with growth of more than 100% compared to 2015.
Management said that sales could top $1.5 billion this year. In the first quarter, sales of Otezla grew just 24% to $242 million. However, international markets were a huge driver with $43 million and an increase of 105% year-over-year. Looking ahead, Otezla could easily top $2 billion in annual sales as Celgene Corporation (NASDAQ:CELG) launches the drug in various European markets, Japan, Asia, and Latin America.
Beyond Otezla, Pomalyst/Imnovid remains a growth driver, as is the inevitable launch of mega-blockbuster MS drug Ozanimod.
Needless to say, there’s a lot to be excited about, if you are a Celgene stock owner.