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New Position - CELG

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CELG - Celgene $33.05

Celgene (NASDAQ:CELG) is an integrated biopharmaceutical company primarily engaged in the discovery, development and commercialization of therapies designed to treat cancer and immunological diseases through regulation of cellular, genomic and proteomic targets. The company has built a discovery, development and commercialization platform for drug- and cell-based therapies that allows it to both create and retain significant value within its therapeutic franchise areas of cancer and immune/inflammatory diseases. This target-to-therapeutic platform integrates both small molecule and cell-based therapies and spans the key functions required to generate a pipeline of new drugs and cell therapy candidates.

Celgene was the beneficiary of good news in early March when the company received word that its new drug Revlimid had performed better than expected in two clinical trials for the treatment of the blood cancer, multiple myeloma. Analysts say the data could result in Revlimid's approval (for MM) by the end of 2005, in a market that would provide annual sales of over $500 million. While there is no way to know how quickly the success of the recent trials will result in revenue for the company, it's obvious that investors favor the outlook for CELG in the near-term.

Despite the character of the company's primary business (drug manufacturing), the current technical indications suggest relatively low downside risk in this position. But, because the price of this stock is often determined by unexpected news, it may not be appropriate for all traders.

Fundamentals
Chart Earnings Dates Analyst Ratings

PLAY (speculative - bullish/credit spread):

BUY PUT APR-27.50 LQH-PY OI=4088 ASK=$0.15
SELL PUT APR-30.00 LQH-PF OI=4575 BID=$0.40

INITIAL "NET-CREDIT" TARGET = $0.30-$0.35
POTENTIAL PROFIT (X 5 contracts) = $150
RETURN ON INVESTMENT (max) = 14%
COST BASIS = $29.75
LOSS-LIMIT/EXIT POINT = $31.00 (cons) - $29.50 (aggr)

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