Celgene Reports Strong Fourth Quarter and Full Year 2012 Operating and Financial Results
Celgene Reports Strong Fourth Quarter and Full Year 2012 Operating and
Financial Results
Total Revenues of $5.5 Billion, Increased 14 Percent Y/Y
Adjusted Diluted Earnings per Share of $4.91, Increased 30 Percent Y/Y; GAAP
Diluted Earnings per Share of $3.30 Increased 16 Percent Y/Y
New and Updated Data on Over Ten Pivotal Phase III Trials Expected in 2013
Affirms 2013 Financial Outlook
Business Wire
SUMMIT, N.J. -- January 24, 2013
Celgene Corporation (NASDAQ: CELG) reported net product sales of $1,416
million for the fourth quarter 2012, a 14 percent increase from the same
period in 2011. Adjusted net income for the fourth quarter 2012 increased 21
percent to $572 million compared to $473 million in the fourth quarter 2011.
For the same period, adjusted diluted earnings per share increased 26 percent
to $1.32 from $1.05.
Full year total revenues for 2012 were $5,507 million and net product sales
were $5,386 million. Full year adjusted net income for 2012 was $2,162 million
or adjusted diluted earnings per share of $4.91.
Based on U.S. GAAP (Generally Accepted Accounting Principles), Celgene
reported fourth quarter 2012 net income of $263 million or $0.61 per diluted
share. For the fourth quarter 2011, net income was $410 million or diluted
earnings per share of $0.91. Full year GAAP net income for 2012 was $1,456
million or diluted earnings per share of $3.30.
“Our 2012 financial and operational results reflect strong operating momentum
and execution worldwide,” said Bob Hugin, Chairman and Chief Executive Officer
of Celgene Corporation. “The achievements of 2012 and our outlook for 2013
position us for our next phase of growth.”
Fourth Quarter and Full Year 2012 Financial Highlights
Unless otherwise stated, all comparisons are for the fourth quarter and full
year 2012 compared to the fourth quarter and full year 2011. The adjusted
operating expenses presented below exclude share-based employee compensation
expense, non-core operations acquired from Abraxis, IPR&D impairments, upfront
payments for R&D and a Canadian pricing settlement. Please see the attached
Reconciliation of GAAP to Adjusted Net Income for further information.
Net Product Sales Performance
* REVLIMID^® sales for the fourth quarter increased 17 percent to $1,002
million and were driven by strong overall market share and increased
duration of therapy. Fourth quarter U.S. sales of $577 million and
international sales of $425 million increased 18 percent and 16 percent,
respectively. Full year REVLIMID sales were $3,767 million, an increase of
17 percent.
* ABRAXANE^® sales for the fourth quarter were $106 million, an increase of
3 percent. U.S. sales were $84 million and international sales were $22
million, a decrease of 9 percent and increase of 90 percent, respectively.
U.S. sales were affected by the restoration of the full supply of generic
paclitaxel, the shortage of which benefited the fourth quarter 2011. Full
year ABRAXANE sales were $427 million, an increase of 11 percent.
* VIDAZA^® fourth quarter sales increased 14 percent to $216 million. U.S.
sales increased 3 percent to $88 million. International sales increased 23
percent to $128 million, primarily driven by market share increases in
most regions. Full year VIDAZA sales were $823 million, an increase of 17
percent.
* THALOMID^® sales were $73 million in the fourth quarter, representing a 12
percent decrease; for 2012 sales were $302 million, a decrease of 11
percent.
Research and Development (R&D)
Adjusted R&D expenses were $318 million for the fourth quarter 2012 compared
to $349 million for the fourth quarter 2011. The change is primarily due to
more collaboration milestone payments recorded in 2011.
For the full year 2012, adjusted R&D expenses were $1,310 million compared to
$1,240 million for the full year 2011. Adjusted R&D expenses included
absorption of the Avila Therapeutics acquisition which closed in March 2012,
increased activities related to validation of the Phoenix, Arizona
manufacturing facility for ABRAXANE and advancing more than 30 late-stage
clinical trials.
On a GAAP basis, R&D expenses were $473 million for the fourth quarter 2012
and $436 million for the same period in 2011; full year R&D expenses were
$1,724 million for 2012 compared to $1,600 million for 2011. The increase in
R&D expenses on a GAAP basis reflects the impact of an IPR&D impairment charge
recorded during the fourth quarter 2012.
Selling, General, and Administrative (SG&A)
Adjusted SG&A expenses were $340 million for the fourth quarter 2012 compared
to $278 million for the fourth quarter 2011. The increase was primarily due to
launch preparation expenses for ABRAXANE in non-small cell lung cancer (NSCLC)
in the U.S. and POMALYST^® globally.
For the full year 2012, adjusted SG&A was $1,257 million versus $1,099 million
in 2011. The increase was primarily due to the ABRAXANE NSCLC and POMALYST
launch preparations. On a GAAP basis, SG&A expenses were $370 million for the
fourth quarter 2012 compared to $315 million for the same period in 2011; full
year SG&A expenses were $1,374 million for 2012 compared to $1,226 million for
2011.
Cash, Cash Equivalents, and Marketable Securities
Operations generated cash flow of $2,031 million for 2012, an increase of 12
percent compared to 2011. Under the authorized stock repurchase program,
Celgene purchased approximately 7.5 million shares during the fourth quarter
at a total cost of approximately $580 million. For the full year 2012, Celgene
purchased approximately 28.6 million shares at a cost of approximately $2,100
million. As of December 31, 2012, the Company had approximately $1,800 million
remaining under the existing stock repurchase program. The Company ended the
year with $3,900 million in cash and marketable securities and approximately
420 million actual shares and 430 million fully diluted shares outstanding.
Product and Pipeline Updates
Hematology
REVLIMID: The Company presented final data from a pivotal phase II trial in
relapsed/refractory mantle cell lymphoma at the American Society of Hematology
(ASH) meeting in December 2012. The trial achieved its primary efficacy
endpoints as specified in Special Protocol Assessment (SPA) requirements. A
Supplemental New Drug Application (sNDA) was submitted to the FDA and a
decision is expected in 2013.
Also at ASH 2012, there was an update of the MM-015 trial. Mature survival
data from the MM-015 trial are expected in first quarter 2013 allowing for a
resubmission of the marketing application for REVLIMID in newly diagnosed
multiple myeloma (NDMM) with the European Medicines Agency (EMA) in the second
half 2013.
The Company presented data on a phase II trial of the combination of REVLIMID
with RITUXAN in patients with Non-Hodgkin’s Lymphoma (NHL) at ASH 2012.
Enrollment in phase III trials in both NHL and chronic lymphocytic myeloma
(CLL) are ongoing with enrollment in the phase III CLL-008 trial due to
complete in the first quarter 2013.
POMALYST: The Company presented final phase III data from MM-003 in relapsed
and refractory multiple myeloma at ASH 2012 showing a statistically
significant overall survival benefit of POMALYST in combination with low-dose
dexamethasone versus high-dose dexamethasone. The data supports the pending
application for relapsed refractory multiple myeloma (RRMM) with the EMA. An
EMA decision is expected in 2013.
In the U.S., an action by the FDA is expected by the February 10, 2013
Prescription Drug User Fee Act (PDUFA) date.
Oncology
ABRAXANE: The Company reported that the ABRAXANE phase III trial of over 840
patients with pancreatic cancer met the primary endpoint of overall survival.
ABRAXANE in combination with gemcitabine demonstrated a statistically
significant improvement in overall survival of 8.5 months compared to 6.7
months in patients receiving gemcitabine alone (HR 0.72, P=0.000015). Based on
the results of this trial, Celgene plans to submit dossiers for registration
in the U.S. and Europe during the first half 2013 followed by submissions in
other countries/regions during the second half 2013.
ABRAXANE received FDA approval for the first-line treatment of patients with
advanced NSCLC in October, 2012. Through regional partnerships, Celgene has
NSCLC applications under review in Japan, Australia, and New Zealand and
anticipates receiving Regulatory Health Authority decisions in first half
2013. In addition, Celgene is evaluating regulatory strategies to obtain NSCLC
in other countries.
Positive data from the phase III trial comparing ABRAXANE to dacarbazine in
over 510 treatment-naïve metastatic malignant melanoma patients were presented
at the Society of Melanoma Research meeting November, 2012. In this trial,
chemotherapy-naïve patients with metastatic melanoma treated with ABRAXANE had
a progression free survival of 4.8 months versus 2.5 months in patients
treated with dacarabzine (HR:0.792; 95.1% CI: 0.631, 0.992; P=0.044). Mature
phase III overall survival data are expected in mid-2013.
Inflammation & Immunology
Apremilast: Data from the PALACE-1 trial in psoriatic arthritis were presented
at the American College of Rheumatology meeting in November, 2012. Results
from PALACE-2 and -3 are expected to be presented in 2013. In addition,
results from PALACE-4 in treatment-naïve psoriatic arthritis are expected
during the first half of 2013.
In January, the Company announced the phase III trials, ESTEEM-1 and -2,
achieved a highly statistically significant benefit in the primary endpoint of
PASI 75 at week 16 in psoriasis. In addition, patients on apremilast also
achieved a statistically significant benefit over placebo in the major
secondary endpoint, Static Physician Global Assessment (sPGA). Presentation of
the full data set are planned for a medical congress in 2013.
The phase II trial (BCT-001) in patients with Behçet’s disease achieved its
primary endpoint of demonstrating a statistically significant improvement in
the number of oral ulcers at day 85 between apremilast and placebo. Regulatory
and clinical strategies are under review for this indication.
Enrollment in the phase III POSTURE study of apremilast in ankylosing
spondylitis is expected to complete in the second half of 2013. Data are
expected in 2014.
Celgene plans to submit an NDA to the FDA for apremilast in psoriatic
arthritis in the first quarter 2013 with a submission for psoriasis to follow
in the second half of 2013. A submission with the EMA for both psoriasis and
psoriatic arthritis is expected in the second half 2013.
New and Updated Data on Over Ten Pivotal Phase III Trials Expected in 2013
Data on over ten pivotal phase III trials on Celgene products are expected in
2013. This includes:
* Final progression free survival (PFS) data from the MM-020 trial of
REVLIMID in newly diagnosed multiple myeloma (NDMM)
* Updated data on trials of REVLIMID in NDMM including MM-015
* Data on VIDAZA in acute myeloid leukemia (AML)
* Data on RBC-transfusion independence in myelofibrosis for POMALYST
* Mature overall survival (OS) data for ABRAXANE in metastatic melanoma
* Data from PALACE-2, -3 and -4 of apremilast in psoriatic arthritis
* Data from ESTEEM-1 and -2 of apremilast in psoriasis
Data on many of these trials are expected to be presented at major medical
congresses throughout the year.
2013 Guidance Affirmed
* Total net product sales expected to increase approximately 11 percent
year-over-year to approximately $6,000 million
* REVLIMID net product sales anticipated to increase approximately 10
percent year-over-year to a range of $4,100 to $4,200 million
* Adjusted diluted EPS expected to increase approximately 13 percent
year-over-year to a range of $5.50 to $5.60. Guidance assumes a constant
fully diluted share count of 430 million from December 2012 through 2013
* GAAP diluted EPS expected to be in the range of $4.67 to $4.79
Fourth Quarter and Full Year 2012 Conference Call and Webcast Information
Celgene will host a conference call to discuss the results and achievements of
its fourth quarter and full year 2012 operating and financial performance on
January 24, 2013, at 9 a.m. ET. The conference call will be available by
webcast at www.celgene.com. An audio replay of the call will be available from
noon ET January 24, 2013, until midnight ET January 31, 2013. To access the
replay, in the U.S. dial 800-585-8367; outside the U.S. dial 404-537-3406; and
enter reservation number 86013069. The Company’s first quarter 2013 financial
and operational results are expected to be reported on April 25.
About REVLIMID
In the U.S., REVLIMID (lenalidomide) in combination with dexamethasone is
indicated for the treatment of multiple myeloma (MM) patients who have
received at least one prior therapy. REVLIMID is also indicated for patients
with transfusion-dependent anemia due to Low- or Intermediate-1-risk
myelodysplastic syndromes (MDS) associated with a deletion 5q cytogenetic
abnormality with or without additional cytogenetic abnormalities.
Data from investigational studies of REVLIMID in relapsed/refractory mantle
cell lymphoma and in combination therapy for patients with NHL are described
above. REVLIMID is not approved for the treatment of either of these
indications.
About ABRAXANE
In the U.S., ABRAXANE for Injectable Suspension (paclitaxel protein-bound
particles for injectable suspension) (albumin-bound) is indicated for the
treatment of metastatic breast cancer after failure of combination
chemotherapy for metastatic disease or relapse within six month of adjuvant
chemotherapy. Prior therapy should have included an anthracycline unless
clinically contraindicated. Abraxane is also indicated for first-line
treatment of locally advanced or metastatic non-small cell lung cancer, in
combination with carboplatin, in patients who are not candidates for curative
surgery or radiation therapy.
Data from investigational studies of paclitaxel protein-bound particles for
injectable suspension (albumin-bound) in pancreatic cancer and metastatic
malignant melanoma are described above. ABRAXANE is not approved for either of
these indications.
About VIDAZA
In the U.S., VIDAZA is indicated for treatment of patients with the following
French-American-British (FAB) myelodysplastic syndrome subtypes: refractory
anemia (RA) or refractory anemia with ringed sideroblasts (RARS) (if
accompanied by neutropenia or thrombocytopenia or requiring transfusions),
refractory anemia with excess blasts (RAEB), refractory anemia with excess
blasts in transformation (RAEB-T), and chronic myelomonocytic leukemia
(CMMoL).
About Celgene
Celgene Corporation, headquartered in Summit, New Jersey, is an integrated
global biopharmaceutical company engaged primarily in the discovery,
development and commercialization of novel therapies for the treatment of
cancer and inflammatory diseases through gene and protein regulation. For more
information, please visit the company's Web site at www.celgene.com.
Forward-Looking Statements
This press release contains forward-looking statements, which are generally
statements that are not historical facts. Forward-looking statements can be
identified by the words "expects," "anticipates," "believes," "intends,"
"estimates," "plans," "will," “outlook” and similar expressions.
Forward-looking statements are based on management’s current plans, estimates,
assumptions and projections, and speak only as of the date they are made. We
undertake no obligation to update any forward-looking statement in light of
new information or future events, except as otherwise required by law.
Forward-looking statements involve inherent risks and uncertainties, most of
which are difficult to predict and are generally beyond our control. Actual
results or outcomes may differ materially from those implied by the
forward-looking statements as a result of the impact of a number of factors,
many of which are discussed in more detail in our Annual Report on Form 10-K
and our other reports filed with the Securities and Exchange Commission.
In addition to financial information prepared in accordance with U.S. GAAP,
this press release also contains adjusted financial measures that we believe
provide investors and management with supplemental information relating to
operating performance and trends that facilitate comparisons between periods
and with respect to projected information. These adjusted measures are
non-GAAP and should be considered in addition to, but not as a substitute for,
the information prepared in accordance with U.S. GAAP. We typically exclude
certain GAAP items that management does not believe affect our basic
operations and that do not meet the GAAP definition of unusual or
non-recurring items. Other companies may define these measures in different
ways. See the attached Reconciliations of GAAP to Adjusted Net Income for
explanations of the amounts excluded and included to arrive at adjusted net
income and adjusted earnings per share amounts for the three- and twelve-month
periods ended December 31, 2012 and for the projected amounts for the year
ending December 31, 2013.
Celgene Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data)
Three-Month Periods Ended Twelve-Month Periods Ended
December 31, December 31,
2012 2011 2012 2011
Net product $ 1,415,497 $ 1,242,635 $ 5,385,599 $ 4,699,690
sales
Other revenue 31,913 41,262 121,114 142,380
Total revenue 1,447,410 1,283,897 5,506,713 4,842,070
Cost of goods
sold (excluding
amortization of
acquired
intangible 80,130 77,503 299,124 425,859
assets)
Research and 473,419 436,427 1,724,156 1,600,264
development
Selling,
general and 370,092 315,107 1,373,541 1,226,314
administrative
Amortization of
acquired 62,434 75,045 194,499 289,226
intangible
assets
Acquisition
related (gains)
charges and 140,087 (24,916 ) 168,951 (142,346 )
restructuring,
net
Total costs 1,126,162 879,166 3,760,271 3,399,317
and expenses
Operating 321,248 404,731 1,746,442 1,442,753
income
Other income (30,945 ) (3,069 ) (64,951 ) (23,231 )
(expense), net
Income before 290,303 401,662 1,681,491 1,419,522
income taxes
Income tax
(benefit) 27,188 (8,516 ) 225,311 102,066
provision
Net income 263,115 410,178 1,456,180 1,317,456
Non-controlling - - - 694
interest
Net income
attributable to $ 263,115 $ 410,178 $ 1,456,180 $ 1,318,150
Celgene
Net income per
share
attributable to
Celgene:
Basic $ 0.62 $ 0.93 $ 3.38 $ 2.89
Diluted $ 0.61 $ 0.91 $ 3.30 $ 2.85
Weighted
average shares:
Basic 421,592 441,064 430,927 455,348
Diluted 432,310 449,747 440,796 462,748
December 31,
2012 2011
Balance sheet
items:
Cash, cash
equivalents & $ 3,900,270 $ 2,648,154
marketable
securities
Total assets 11,734,306 10,005,910
Short-term 308,459 526,684
borrowings
Long-term 2,771,333 1,275,585
debt
Total
stockholders' 5,694,467 5,512,727
equity
Celgene Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Net Income
(In thousands, except per share data)
Three-Month Periods Ended Twelve-Month Periods Ended
December 31, December 31,
2012 2011 2012 2011
Net income
attributable to $ 263,115 $ 410,178 $ 1,456,180 $ 1,318,150
Celgene - GAAP
Before tax
adjustments:
Total revenues:
Sales of
products (1 ) - (1,752 ) - (26,688 )
exited or to
be exited
Abraxis
non-core (2 ) - - - (1,714 )
other
revenues
Cost of goods
sold (excluding
amortization
of acquired
intangible
assets):
Share-based
compensation (3 ) 3,240 2,708 12,413 9,762
expense
Abraxis
inventory (4 ) - - 90,278
step-up
Products
exited or to (2 ) 441 3,744 (1,553 ) 23,032
be exited
Research and
development:
Share-based
compensation (3 ) 26,555 24,705 102,413 104,704
expense
Abraxis
non-core (2 ) - - - 8,728
activities
IPR&D (5 ) 69,156 - 122,509 118,000
impairments
Upfront
collaboration (6 ) 59,500 62,497 189,500 128,479
payments
Selling,
general and
administrative:
Share-based
compensation (3 ) 30,207 26,831 116,217 102,736
expense
Abraxis
non-core (2 ) - - - 15,065
activities
Canadian
pricing (7 ) - 9,814 - 9,814
settlement
Amortization of
acquired (8 ) 62,434 75,045 194,499 289,226
intangible
assets
Acquisition
related (gains)
charges and
restructuring,
net:
Change in
fair value of (9 ) 140,087 (24,916 ) 166,374 (147,463 )
contingent
consideration
Acquisition
and (9 ) - - 2,577 5,117
restructuring
costs
Other income
(expense), net
EntreMed,
Inc. equity (10 ) - 102 - 644
method loss
Abraxis
non-core (2 ) - - - 2,036
activities
Gain on
divestment of (11 ) - - - (2,931 )
non-core
activities
Non-controlling
interest (2 ) - - - (694 )
-Abraxis
Net income tax (12 ) (82,521 ) (115,898 ) (198,643 ) (293,373 )
adjustments
Net income
attributable to $ 572,214 $ 473,058 $ 2,162,486 $ 1,752,908
Celgene - Adjusted
Net income per share
attributable to
Celgene -Adjusted:
Basic $ 1.36 $ 1.07 $ 5.02 $ 3.85
Diluted $ 1.32 $ 1.05 $ 4.91 $ 3.79
In addition to financial information prepared in accordance with U.S. GAAP,
this press release also contains adjusted financial measures that we believe
provide investors and management with supplemental information relating to
operating performance and trends that facilitate comparisons between periods
and with respect to projected information. These adjusted measures should be
considered in addition to, but not as a substitute for, the information
prepared in accordance with U.S. GAAP. We typically exclude certain GAAP items
that management does not believe affect our basic operations and that do not
meet the GAAP definition of unusual or non-recurring items. Other companies
may define these measures in different ways.
Celgene Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Net Income
Explanation of adjustments:
(1) Exclude sales related to non-core former Pharmion Corp., or Pharmion,
products to be exited and Abraxis BioScience Inc., or Abraxis, products
that have been exited.
Exclude the estimated impact of activities arising from the acquisition
(2) of Abraxis that are not related to core nab technology and were
divested in 2011, including other miscellaneous revenues, cost of goods
sold (excluding amortization of acquired intangible assets), operating
expenses and other costs related to such activities. Exclude the net
(benefit) cost of activities arising from the acquisition of Pharmion
that are planned to be exited.
Exclude share-based compensation expense totaling $60,002 for the
(3) three-month period ended December 31, 2012 and $54,244 for the
three-month period ended December 31, 2011. Exclude share-based
compensation expense totaling $231,043 for the twelve-month period
ended December 31, 2012 and $217,202 for the twelve-month period ended
December 31, 2011.
(4) Exclude acquisition-related inventory step-up adjustments to fair value
which were expensed for Abraxis in 2011.
Exclude in-process research and development, or IPR&D, impairments
(5) recorded as a result of changes in estimated probability-weighted cash
flows.
Exclude upfront payments for research and development collaboration
(6) arrangements and purchases of intellectual property for unapproved
products.
(7) Exclude 2011 pricing settlement with the Patented Medicine Prices
Review Board of Canada related to sales of THALOMID.
Exclude amortization of intangible assets acquired from the
(8) acquisitions of Pharmion, Gloucester Pharmaceuticals, Inc., or
Gloucester, Abraxis and Celgene Avilomics Research, Inc. (formerly
known as Avila Therapeutics), or Avila.
(9) Exclude acquisition related charges and restructuring, including
changes in the fair value of contingent consideration, related to the
acquisitions of Gloucester, Abraxis and Avila.
(10) Exclude the Company's share of EntreMed, Inc. equity losses in 2011.
(11) Exclude the 2011 gain recognized on divestment of non-core activities
obtained in the acquisition of Abraxis.
Net income tax adjustments reflect the estimated tax effect of the
(12) above adjustments and the impact of certain other non-operating tax
adjustments, including one-time effects of changes in tax law,
acquisition related matters, an adjustment to the amount of
unrecognized tax benefits and deferred taxes on unremitted foreign
earnings.
Celgene Corporation and Subsidiaries
Reconciliation of Full-Year 2013 Projected GAAP to Adjusted Net Income
(In thousands, except per share data)
Range
Low High
Projected net income - GAAP (1 ) $ 2,006,000 $ 2,058,000
Before tax adjustments:
Cost of goods sold
(excluding amortization
of acquired intangible
assets):
Share-based compensation 14,000 14,000
expense
Research and development:
Share-based compensation 119,000 114,000
expense
Selling, general and
administrative:
Share-based compensation 135,000 130,000
expense
Amortization of acquired 265,000 263,000
intangible assets
Acquisition related (gains)
charges and restructuring,
net:
Change in fair value of 11,000 11,000
contingent consideration
Net income tax adjustments (185,000 ) (182,000 )
Projected net income - $ 2,365,000 $ 2,408,000
Adjusted
Projected net income per $ 4.67 $ 4.79
diluted common share - GAAP
Projected net income per
diluted common share - $ 5.50 $ 5.60
Adjusted
Projected weighted average 430,000 430,000
diluted shares
Our projected earnings do not include the effect of any 2013 business
(1) combinations, collaboration agreements, asset acquisitions, intangible
asset impairments, or changes in the fair value of our CVRs issued as
part of the acquisition of Abraxis.
Contact:
Celgene Corporation
Investors:
Patrick E. Flanigan III, 908-673-9969
Vice President
Investor Relations
or
Media:
Brian P. Gill, 908-673-9530
Vice President
Corporate Communications
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