US biotech Celgene Corporation (NASDAQ:CELG) plummeted in pre-market trade on Thursday after it slashed both near-term and longer-term guidance.
The New Jersey-headquartered group now expects diluted earnings per share to be between US$4.78 and US$5.19 in 2017, while margins are also set to come under pressure with Celgene now guiding for an operating margin of around 37.5% (from 41.5%).
Revenues in 2017 are also expected to be at the lower end of previous guidance as well at US$13bn.
Celgene also made some cuts to its longer term forecasts, and now expects net sales to grow to between US$19bn and US$20bn by 2020. It had originally targeted US$21bn by then.
Adjusted diluted earnings per share forecasts have also been lowered to US$12.50 from US$13.
While the cuts weighed heavily on the stock, the third quarter performance wasn’t too bad.
Revenues climbed to US$3.29bn in the three months to September 30 from US$2.98bn a year earlier, although that was slightly below consensus estimates of US$3.42bn.
The top line miss didn’t affect earnings though, which jumped to US$988mln, or US$1.21 a share, from US$171mln or US$1.21 a share in the year earlier period.
Adjusted earnings per share came in at US$1.91 – comfortably above Wall Street’s target of US$1.87.
Celgene’s cancer drug Pomalyst was the stand-out performance with sales better than expected, although sales of its major product, blood cancer treatment Revlimid, came in below consensus.
"In consideration of certain market dynamics and recent pipeline events, we are updating our 2020 outlook, and remain confident in our ability to deliver industry leading growth," said chief executive Mark Alles.
“Over the coming months, we look forward to sharing data supporting our innovative, next generation pipeline products and significant growth drivers.”
In pre-market trade on Thursday morning, the stock was down 15.9% to US$100.60. In the regular session, shares tanked 16.37% to US$99.99.