Credit: Shutterstock photoBiotech giant Celgene ( CELG ) offered preliminary fourth-quarter results Monday that looked as if they would come in ahead of analyst estimates for profits, an announcement the company made shortly after it agreed to buy privately held Impact Biomedicines.
[ibd-display-video id=3070892 width=50 float=left autostart=true] Celgene said it expects adjusted earnings of anywhere between $2.00 per share, up 24% from the year-ago figures. Revenue is expected to climbed 17% to $3.483 billion. Analysts polled by Thomson Reuters expected earnings of $1.93 on sales of $3.46 billion.
Celgene shares dropped 0.8% to close at 104.18 on Monday.
The company said late Sunday it was purchasing Impact Biomedicines with an upfront payment of $1.1 billion. Celgene will make additional milestone payments if Impact's fedratinib wins FDA approval and has strong sales, bringing the total potential price tag to roughly $7 billion.
Fedratinib is a potential treatment for myelofibrosis, a type of bone marrow cancer.
"Myelofibrosis is a disease with high unmet medical need as the number of patients who are ineligible for or become resistant to existing therapy continues to increase," said Nadim Ahmed, President, Hematology and Oncology for Celgene, in a statement announcing the Celgene-Impact deal. "We believe fedratinib is uniquely positioned as a potential treatment for myelofibrosis and it provides strategic options for us to build leadership in this disease with luspatercept and other pipeline assets."
Impact Bio's founders had sold fedratinib to France's Sanofi ( SNY ), which gave up development of the treatment in 2013 due to serious side effects. But Impact later bought the rights back.
If successful, fedratinib would compete with a similar drug from Incyte ( INCY ), known as Jakafi.
Celgene has had disappointing sales and trials of new drugs recently, while its blockbuster cancer fighter Revlimid faces challenges. Celgene cut its full-year outlook in late October, sending shares plunging. The stock has risen somewhat since then, but only in line with the S&P 500 index.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
