Looking to replenish its coffers, Celgene announced that it's selling $1.25 billion of five-, 10- and 30-year debt in its first bond sale. According to a company statement, Celgene expects to use the proceeds from for general corporate purposes, including R&D, expansion international operations, capital expenditures, strategic transactions and to meet working capital needs.
Celgene's revenues have been growing at a 46 percent clip annually for the past five years. But as the Motley Fool points out, it's unlikely that growth will continue into the future because as companies mature, each new drug makes less of an impact on revenues. While Celgene does have some drugs in its pipeline, it's still heavily reliant on sale of Revlimid. The multiple myeloma and its predecessor drug Thalomid accounted for almost 80 percent of the biotech's sales last year.
Most of Celgene's funds were spent on the $2.9 billion buyout of Abraxis in April. That gave the biotech control of breast cancer drug Abraxane, as well as a discovery platform and a pipeline of experimental oncology therapies. In the coming years Celgene will likely turn increasingly to dealmaking as a source new drugs--and today's offering will help bankroll those deals. The developer has a pipeline which includes drugs for lung cancer; chemotherapy-induced anemia; multiple myeloma; Crohn's disease, a gastrointestinal disorder; psoriasis, a skin disorder; and psoriatic arthritis.
- read the Celgene release on the bond sale
- check out the Motley Fool article for more