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UPDATE 2-Celgene's shares tumble on weak drug sales, lowered forecast

* Q3 sales of Otezla and Revlimid miss estimates

* Cuts Otezla 2017 sales forecast, keeps Revlimid's

* Cuts overall sales and profit forecasts for 2017

* Slashes 2020 net product sales forecast

* Shares fall more than 16 pct premarket (Adds details, updates shares)

Oct 26 (Reuters) - Celgene Corp's shares dived 16 percent on Thursday after the biotech reported lower-than expected quarterly sales for its flagship multiple myeloma drug Revlimid and its psoriasis drug Otezla.

The company also sharply cut its forecast for Otezla's full-year sales to nearly $1.25 billion from a range of $1.5 billion to $1.7 billion.

"Otezla miss is the biggest story of the quarter," RBC Capital Markets analyst Brian Abrahams said, attributing the weakness to competition, pricing pressure and a slowing U.S. dermatology market.

While Celgene maintained its full-year Revlimid sales forecast, it tempered its overall sales forecast and cut its profit outlook. It also slashed its 2020 net product sales forecast.

The U.S. biotechnology company's shares tumbled 16.53 percent at $99.80 in premarket trading.

Celgene had warned in July that Otezla's sales this year would likely be at the low end of its forecast. The drug has had sharply contrasting fortunes this year, starting off with a surprisingly weak first quarter, before bouncing back in the second.

The drug's sales increased 12 percent to $308 million in the third quarter, missing analysts estimate of $411 million and notching a growth rate that was fraction of the 48.5 percent-surge in the prior quarter.

Revlimid's sales rose 10 percent to $2.08 billion in the latest quarter, but fell short of analysts estimates of $2.11 billion, according to brokerage Cowen and Company.

The weak sales growth comes a week after Celgene abandoned testing its Crohn's disease drug, a major setback in its attempts to lower its dependence on Revlimid.

Celgene's total revenue rose nearly 11 percent to $3.29 billion, but was short of analysts estimate of $3.42 billion, according to Thomson Reuters I/B/E/S.

Jefferies analyst Michael Yee said the quarterly results were not a "total shocker" after Celgene's decision on the Crohn's disease drug.

One bright spot was the company's profit, which surged to $988 million from $171 million. Excluding items, its earnings of $1.91 per share beat analysts estimate of $1.87.

The company said it now expects 2017 sales of about $13 billion, the lower end of its previous forecast of $13 billion to $13.4 billion.

It cuts its 2017 profit forecast to $4.78-$5.19 per share from $5.36-$5.62, but edged up its adjusted profit forecast to $7.30-$7.35 per share from $7.25 to $7.35. (Reporting by Akankshita Mukhopadhyay in Bengaluru; Editing by Savio D'Souza)