The board of directors for Celgene Inc. has authorized an additional stock repurchase of up to $3 billion, news that comes the same day the Summit-based biotech reported “meaningful improvements” on an investigational drug for psoriatic arthritis.
Celgene said the stock purchases may be made in the open market or through privately negotiated transactions. Repurchases will be made at management's discretion in accord with Securities and Exchange requirements, the company said in a news release.
During repurchases, companies use their own cash to buy back shares of their stock. Buybacks are widely seen as a way to boost shareholder value because it reduces the number of outstanding shares, thus increasing earnings per share. Celgene lists 417.1 million outstanding shares.
The company has bought back about $1.8 billion of its common stock this year, exhausting a previously authorized $2.5 billion repurchase program. Celgene has repurchased about $6.5 billion of its stock in the last four years.
Regarding its psoriatic arthritis drug, Celgene said patients who received its investigational drug, apremalist, for one year showed improvement in American College of Rheumatology scores.
Patients who used the drug in 20-milligram doses showed 63 percent improvement in ACR scores, while patients who used the drug in 30-milligram doses showed 55 percent improvement. The company tested 1,500 patients with psoriatic arthritis, a form of joint pain that often occurs with psoriasis of the skin.
The company earlier this year applied for U.S. approval for apremalist to treat psoriatic arthritis.
Shares of Celgene fell 26 cents to $118.49 in midday trading on the Nasdaq while broader markets declined. The company's stock is near the top of its 52-week range of $58.53 to $131.82.