UBS today "Take aways from Palumbo MM call. Expect impressive difference in efficacy between MPR+R & MP...the importance of maintenance therapy will be further appreciated following data presentations at this year’s ASH . BUY $65 target"

UBS Investment Research Nov 4, 2009

Celgene Corporation

BUY

Target $65


Key Take-Aways from MM Conference Call

􀂄 Expect impressive difference in efficacy between MPR+R & MP We note that relative to Velcade’s landmark Vista trial, there were half as many patients enrolled in MM-015 and there was a shorter follow-up period prior to crossing the pre-specified O’Brien-Fleming boundary for efficacy. As such, we do believe there will be an impressive difference in efficacy between the MPR+R maintenance arm vs. the MP arm.

􀂄 Maturation of data likely necessary to observe MPR/MP separation Also, given that the follow up in the trial was short, we estimate approximately 10 months, at the time of crossing the O’Brien-Fleming boundary, we expect there to be little to no separation of the MPR & MP arms when the data is presented at ASH as we believe the data needs to continue to mature.

􀂄 MM treatment paradigms shifting. We believe that the treatment paradigms for multiple myeloma will continue to evolve. We expect physicians will continue to investigate new combinations of novel agents to drive improved responses in the front-line setting.

Additionally, we anticipate that the importance of maintenance therapy will be further appreciated following data presentations at this year’s ASH conference.

􀂄 Valuation: Buy with a $65 price target Our price target is based on a PEG of 0.9, a 23.3% CAGR (08-12E) off our 2011 EPS estimate of $3.04 (ex-ESOs).