Analysts bullish on Revlimid sales ahead of Celgene report

A version of the controversial morning sickness drug thalidomide, Revlimid is sold in the U.S. and Europe as a treatment for multiple myeloma, a bone marrow cancer. It also is sold in Europe to treat a malignant blood disease called MDS.

Katherine S. Kim lifted her first-quarter Revlimid U.S. sales estimate to $222 million from $215 million, based on two months of IMS sales data, which appear to be tracking towards the $220 million to $225 million range.

She expects Summit, N.J.-based Celgene also will update guidance on its earnings call next Wednesday. Kim said that based on "significant" cost savings and a lower tax rate, she forecasts accelerated earnings per share growth in 2009-2010.

Kim backed a "Buy" recommendation and $80 price target on the stock ahead of the company's earnings report.

Lehman Brothers analyst Jim Birchenbough said within the large-cap biotech sector, Celgene remains one of his top picks based on market expansion opportunities in myeloma and strong sequential growth seen in the first quarter.

In a note to clients, he said he doesn't think positive data on Revlimid rival Velcade, made by Millenium Pharmaceuticals Inc., will hurt Revlimid as a first-line treatment for myeloma, since Velcade's dosing regimen makes it more attractive for younger patients considering stem cell transplant. That leaves the larger elderly, non-transplant opportunity open for Revlimid.

In afternoon trading, shares rose $1.38, or 2.2 percent, to $64.49.