Biotech on sale

You may not have heard of the biotech company Celgene (Nasdaq: CELG), but it recently sported a market value greater than CVS Health, FedEx or General Motors. Its stock has been pounded, falling more than 30 percent in October, and that presents a great opportunity for long-term investors.

Celgene is widely considered one of the best big biotech companies, with one of the best clinical pipelines. It markets a slate of top-selling drugs, including the most widely used first- and second-line multiple myeloma drug Revlimid, the most widely used thirdline multiple myeloma drug Pomalyst, pancreatic cancer drug Abraxane and psoriasis drug Otezla. Its recent sell-off is due to a key clinical miss, combined with slowing sales of major drugs such as Abraxane and Otezla due to new competitive threats, and reduced company projections for 2020.

Yet there’s reason to like Celgene: Its collaborations with innovative biotech upstarts give it a plethora of high-value assets in immuno-oncology, it plans on filing for FDA approval of what could turn out to be the bestin-class oral multiple sclerosis drug, and its lowered projections still reflect compounded annual revenue and EPS growth rates of at least 14 percent from 2016 to 2020. With its recent forward-looking price-to-earnings (P/E) ratio rather low, recently near 12, consider Celgene for your portfolio. (The Motley Fool has recommended and owns shares of Celgene.)