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Re: Celgene to be Bought 

By: Zimbler0 in POPE 5 | Recommend this post (1)
Sat, 05 Jan 19 5:59 PM | 73 view(s)
Boardmark this board | Pope 5 		Msg. 19193 of 62138
(This msg. is a reply to 19174 by Decomposed)
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Decomposed > Celgene was the closest thing I've ever seen to a sure thing - a relatively small pharmaceutical company with drug sales that would definitely approach its current market cap in the not too distant future - and if I could find another like it today I would again go massively overweight on it.


Well, I'm glad you saw it and happy that you made a lot of money with it.
Congratulations.

But I would not have slept well doing what you did.

I like diversification. I currently own shares in some 17 different companies
and two managed municipal bond funds. Not to mention the 401K - which is all
mutual funds. Yes, there are a couple of things I own that I am not real
enthused about - but none of them are so 'doggish' that I feel I should unload.

And I sleep very well.

True, I won't hit one out of the park like you did with Celgene . . .
But i can live with what I'm doing.

Zim.




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Mad Poet Strikes Again.


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The above is a reply to the following message:
Re: Celgene to be Bought
By: Decomposed in POPE 5
Sat, 05 Jan 19 6:07 AM 		Msg. 19174 of 62138

Zimbler0:

Re: "But, at the time, I didn't like the speculative nature of Celgene."Interesting that you (and others I spoke to) considered it speculative.

At the time I bought Celgene, it was a $7 billion company. Its new drug for Multiple Myeloma had just had its trial prematurely halted and production approval fast tracked by the FDA due to spectacularly positive results. Multiple Myeloma is among the worst types of cancers, with 30,000 new cases diagnosed in the United States each year. Since there was no other decent treatment and everyone with the disease dies on average in 2.5 years (4.5 years today thanks mostly to Revlimid) - I knew that these would be desperate people and nearly all would be obtaining the drug either through their insurance or through hardship programs established by Celgene. The drug ran around $12,000 per month (though I learned that later. Revlimid is $20,000 per month today). Okay, time to draw my 2005 conclusions: At any given time, 75,000 Multiple Myeloma patients would be buying Revlimid at $144,000 per patient per year, minus XXX percent that were uninsured. That would be as much as $4.3 billion dollars in annual sales. At the time, Pfizer's (and the world's) blockbuster drug, Lipitor, had about $10 billion in annual sales and was responsible for most of Pfizer's market cap of $100 billion dollars. Sure, Pfizer had other great drugs - BUT SO DID CELGENE. Celgene would have high marketing costs in the coming years (as is normal for any product rollout) but no other significant expenses associated with the drug. I concluded that Celgene was a spectacularly underpriced company with very little risk.

Oh. And my calculations were all based on the United States. It didn't take much imagination to see that Revlimid would soon be selling around the world, which indeed it was. All that was needed was to buy Celgene and wait two to three years for drug production to ramp up.

Celgene was the closest thing I've ever seen to a sure thing - a relatively small pharmaceutical company with drug sales that would definitely approach its current market cap in the not too distant future - and if I could find another like it today I would again go massively overweight on it.

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