Does celgene have too many eggs in one drug basket?

No. 2 biotech CELGENE (CELG) may be getting too reliant on Revlimid for revenue, as the cancer drug accounted for nearly two-thirds of the company's sales in the first quarter, an

analyst said Friday. Revlimid, a driver for Celgene, had accounted for an average 62.4% of company sales over the previous four quarters but was up to 64% last quarter, Argus analyst David

Toung said in a note to clients. "We are concerned about the risk of revenue concentration from Revlimid," he wrote in a note downgrading Celgene shares to hold from buy.

"This drug, a treatment for multiple myeloma and other conditions, accounted for 64% of revenue in Q1 and that proportion is growing." Part of the problem is that Celgene's

total first-quarter sales grew 18% but came in about $80 million light as the company's psoriasis drug, Otezla, faced steep discounting. Celgene said it had lowered the price of Otezla

to boost purchases by large institutions, and thus sales of the drug missed views by $95 million. "In other words, the company increased its 'gross-to-net' discounting for

Otezla, enabling it to be placed ahead of biologic drugs as a treatment for plaque psoriasis and psoriatic arthritis," Toung said. Otezla retains some advantage over biologics as an

oral solid vs. competitors which are typically infused or injected, he said. Still, the diminishing price for Otezla could have an impact on Celgene's gross margin.

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Revlimid's patent in the U.S. is good through 2027, but a settlement in 2015 will allow Natco Pharma to begin selling a generic version in March 2022. In the first quarter, Revlimid

sales grew by 20.3%. The company's multiple myeloma drug Pomalyst led the pack in growth, up 33.5%. Otezla was next, up 22.5%, and chemotherapy drug Abraxane, gained 6.1%. On the stock

market today, Celgene stock closed down 1.65% to 122.41, hitting a two-month low intraday. RELATED: Did Regeneron, Sanofi Just Launch A Blockbuster Drug? Vertex Big Winner In Biopharma Q1 As

AbbVie, AstraZeneca Dip Celgene Dips On $95 Million Lag In Psoriasis Sales, But Earnings Top