(This commentary originally appeared on Friday on Real Money Pro. Click here to learn about this dynamic market information service for active traders.)
We have been looking at different sectors of the market, as first-quarter earnings largely were completed this week. On Monday, we touched on the automotive sector, which is facing several headwinds at the moment. Wednesday, we looked at some home builders that reported very good results into the seasonally strong Spring selling session. Today, we will look at several biotech stocks that delivered better numbers than investors are giving them credit for at the moment.
Let's start with biotech juggernaut Celgene (CELG) , which has actually traded slightly down since it reported its first-quarter numbers on Apr. 27. The company beat earnings estimates by a nickel per share on 18% year-over-year revenue growth. Celgene continues to be powered by blockbuster blood cancer drug Revlimid which saw sales growth just under 20% from the same period a year ago, as the compound continues to be approved for new indications.
And Celgene is not a one trick pony. Two other compounds are seeing faster sales growth than Revlimid -- and both should deliver north of $1.5 billion in revenue this year. Plus, another drug in its roster should chip in around $1 billion in revenue. Add in its dozens of collaboration deals across the sector in multiple disease areas and the $11-to-$12 a share the company should earn by 2020, and $120 a share is clearly a steal.
Acadia Pharmaceuticals (ACAD) met, but did not exceed, expectations when it report results earlier this week. The stock pulled back some 10% as a result. But its drug Nuplazid delivered over $15 million in sales this quarter -- an improvement of around 25% over the fourth quarter of last year, as the company continues to be in the initial stages or commercialization. Acadia has done a great job already in getting into the medicare formularies and garnering coverage through most insurance plans.
That growth should accelerate in the second quarter, as 25 new sales representatives in the long-term care space should be fully trained. The drug probably has $1 billion in peak sales potential for treating the psychosis found in a plurality of Parkinson's patients. The drug is already seeing some "off label" use in other forms of dementia, and should soon start a key trial to treat the same symptom in Alzheimers -- which could greatly widen its approved customer base in the future. I added some shares on the dip this week.
Going much smaller, Neos Therapeutics (NEOS) reported some good numbers this week, beating both top-and-bottom line consensus. This around $160 million market cap concern is squarely focused on the $9 billion ADHD market. Its first product aimed at that space, "Adzenys" is seeing 20% monthly script growth and averaged more than 10,000 scripts per month during the quarter.
Two other products, Cotempla and NT-0201, should be approved by the FDA this summer. Both should be able to be sold by the same sales force that markets Adzenys. The company is some way away from profitability, and might have to do one more capital raise in the foreseeable future. But I like its long-term growth prospects and the company is executing well with its commercialization plans.