Celgene Reports Second Quarter 2013 Operating and Financial Results

  Celgene Reports Second Quarter 2013 Operating and Financial Results

        — Net Product Sales of $1.56 Billion, Increased 17 Percent Y/Y

— Adjusted Diluted Earnings Per Share of $1.52, Increased 25 Percent Y/Y; GAAP
        Diluted Earnings Per Share of $1.11, Increased 35 Percent Y/Y

  — 2013 Adjusted Diluted Earnings Per Share and Net Product Sales Guidance
                                    Raised

Business Wire

SUMMIT, N.J. -- July 25, 2013

Celgene Corporation (NASDAQ: CELG) reported net product sales of $1,564
million for the second quarter of 2013, a 17 percent increase from the same
period in 2012. Adjusted net income for the second quarter of 2013 increased
20 percent to $653 million compared to $545 million in the second quarter of
2012. Second quarter total revenue was $1,599 million compared to $1,367
million in second quarter of 2012. For the same period, adjusted diluted
earnings per share (EPS) increased 25 percent to $1.52 from $1.22.

Based on U.S. GAAP (Generally Accepted Accounting Principles), Celgene
reported second quarter of 2013 net income of $478 million or $1.11 per
diluted share. For the second quarter of 2012, net income was $367 million or
$0.82 per diluted share.

“In the second quarter, the Celgene team delivered outstanding results,” said
Bob Hugin, Chairman and Chief Executive Officer of Celgene Corporation. “The
positive outcome of the MM-020 trial along with other clinical and regulatory
milestones met in the quarter represent significant advances for patients
worldwide and support our commitment to our long-term growth outlook.”

2013 Adjusted Diluted EPS, Net Product Sales and REVLIMID^® Net Product Sales
Guidance Raised

  *Adjusted diluted EPS guidance is raised to a range of $5.80 to $5.90 from
    the previous range of $5.55 to $5.65, an increase of approximately 19%
    over 2012 adjusted diluted EPS.
  *GAAP diluted EPS is expected to be in the range of $4.17 to $4.31 which
    includes upfront payment expense for collaborations.
  *Total Net Product Sales guidance is raised to approximately $6,200 million
    from $6,000 million, an increase of approximately 15 percent over 2012
    Total Net Product Sales.
  *REVLIMID^® Net Product Sales guidance is raised to a range of $4,200
    million to $4,300 million, from the previous range of $4,100 million to
    $4,200 million, an increase of approximately 13 percent over 2012
    REVLIMID^® Net Product Sales.

Second Quarter 2013 Financial Highlights

Unless otherwise stated, all comparisons are for the second quarter of 2013
compared to the second quarter of 2012. The adjusted operating expenses
presented below exclude share-based employee compensation expense, IPR&D
impairments, if any, and upfront collaboration payments. See the attached
Reconciliation of GAAP to Adjusted Net Income for further information.

Net Product Sales Performance

  *REVLIMID^® sales for the second quarter increased 13 percent to $1,052
    million and were driven by overall market share gains and increased
    duration of therapy. U.S. sales of $625 million and international sales of
    $427 million increased 16 percent and 8 percent, respectively. In the
    U.S., growth was driven by increases in volume and price. International
    growth was volume driven and negatively impacted by currency and price.
  *ABRAXANE^® sales for the second quarter were $155 million, a 41 percent
    increase. U.S. sales of $120 million and international sales of $35
    million increased 38 percent and 55 percent, respectively. The increase in
    U.S. sales was primarily driven by increased use in non-small cell lung
    cancer. The increase in international sales was driven by increased demand
    in breast cancer.

  *VIDAZA^® second quarter sales increased 5 percent to $211 million. U.S.
    sales increased 3 percent to $84 million. International sales increased 7
    percent to $127 million. International sales were driven primarily by
    buying patterns and increased demand in the Asia-Pacific region and Latin
    America.
  *POMALYST^® second quarter sales were $66 million. U.S sales were $58
    million. Sales in Europe from early access programs were $8 million. The
    second quarter was the first full quarter of sales in the U.S.
  *THALOMID^® sales were $66 million in the second quarter, a 13 percent
    decrease year-over-year.

Research and Development (R&D)

Adjusted R&D expenses were $345 million compared to $349 million for the
second quarter of 2012. On a GAAP basis, R&D expenses were $458 million for
the second quarter of 2013 and $447 million for the same period in 2012. GAAP
R&D expenses increased primarily due to higher 2013 upfront payments for
collaborations.

Selling, General, and Administrative (SG&A)

Adjusted SG&A expenses were $384 million for the second quarter of 2013
compared to $296 million for the second quarter of 2012. The change was
primarily due to the POMALYST^® launch, pre-launch activities for ABRAXANE^®
in pancreatic cancer and investments in the Inflammation & Immunology
franchise. On a GAAP basis, SG&A expenses were $418 million for the second
quarter of 2013 compared to $323 million for the same period in 2012.

Cash, Cash Equivalents, and Marketable Securities

Operating cash flow was $737 million in the second quarter of 2013. During the
quarter, the Celgene Board of Directors authorized the repurchase of up to an
additional $3,000 million of the Company’s common stock. Year-to-date, Celgene
has repurchased approximately $1,840 million of its common stock and exhausted
all previous stock repurchase authorizations. Celgene purchased approximately
6.9 million shares during the second quarter of 2013 at a total cost of
approximately $834 million. Celgene ended the quarter with $4,081 million in
cash and marketable securities.

Key Accomplishments in First Half of 2013

Hematology

  *Achieved statistical significance in the primary endpoint of progression
    free survival in the phase III MM-020 trial in newly diagnosed multiple
    myeloma (NDMM)
  *Received approval in Europe for REVLIMID^® in deletion-5q myelodysplastic
    syndrome
  *Received U.S. approval for REVLIMID^® for relapsed and refractory mantle
    cell lymphoma
  *Received a positive opinion from the European Committee for Medicinal
    Products for Human Use (CHMP) for pomalidomide in relapsed and refractory
    multiple myeloma (RRMM)
  *Received approval for REVLIMID^® in RRMM by the China State Food and Drug
    Administration
  *Received reimbursement in Mexico for REVLIMID^® in RRMM
  *Presented updates to the CALGB 100104 and MM-015 trials at the
    International Myeloma Workshop meeting in Kyoto, Japan
  *Granted U.S. approval for POMALYST^® in RRMM

Oncology

  *Submitted supplemental New Drug Application in the U.S. for ABRAXANE^® in
    advanced pancreatic cancer; granted Priority Review
  *Submitted a marketing authorization for ABRAXANE^® for advanced pancreatic
    cancer in Europe
  *Received notice that the National Comprehensive Cancer Network (NCCN)
    updated the guidelines for ABRAXANE^® in pancreatic cancer to Category 1
    from 2B

Inflammation & Immunology

  *Reported positive results in ESTEEM 1 and 2 phase III registration trials
    in psoriasis (PSOR)
  *Presented 16-week data from the first phase III trial ESTEEM 1 in PSOR at
    the American Academy of Dermatology annual meeting
  *Presented 52-week data from PALACE 1 in psoriatic arthritis (PsA), 24-week
    data from PALACE 3 in PsA and positive phase II trial in Behçet's disease
    at the 14^th Annual EULAR European Congress of Rheumatology 2013
  *Reported positive phase III results in PALACE 4 trial in an early PsA
    population (DMARD naïve patients)
  *Submitted a New Drug Application (NDA) in the U.S. for apremilast in PsA
  *Submitted a New Drug Submission (NDS) for apremilast in PsA in Canada
  *Initiated the PSOR/PsA registration trial in Japan

Key Milestones Expected During the Second Half of 2013

Hematology

  *EMA decision on approval for pomalidomide in RRMM in Q3
  *Begin to submit dossiers for registration of REVLIMID^® in NDMM in the
    U.S., Europe and other markets
  *Targeting presentation of MM-020 data at the American Society of
    Hematology (ASH) annual meeting
  *Completion of enrollment in phase III RELEVANCE^® trial of REVLIMID^® in
    untreated follicular lymphoma

Oncology

  *U.S. FDA PDUFA date of September 21^st for ABRAXANE^® in advanced
    pancreatic cancer
  *Mature overall survival data from phase III clinical trial of ABRAXANE^®
    in metastatic melanoma
  *Initiation of phase III trials of ABRAXANE^® in triple negative breast
    cancer and adjuvant pancreatic cancer

Inflammation & Immunology

  *Submission of NDA in the U.S. and NDS in Canada for apremilast in PSOR
  *Submission of a Marketing Authorization Application (MAA) in Europe for
    apremilast in PSOR and PsA
  *Presentation of additional ESTEEM 1 data in difficult to treat patient
    subsets (scalp and nails) and HRQOL (Health Related Quality of Life)
    measures
  *Presentation of PALACE 2 and 3 52-week data in PsA
  *Completion of enrollment in phase III POSTURE trial of apremilast in
    ankylosing spondylitis

Second Quarter 2013 Conference Call and Webcast Information

Celgene will host a conference call to discuss the second quarter of 2013
operating and financial performance on Thursday, July 25, 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 July 25, 2013, until
midnight ET August 1, 2013. To access the replay, in the U.S. dial (855)
859-2056; international dial (404) 537-3406; and Participant Pass code
22906674. The Company’s third quarter of 2013 financial and operational
results are expected to be reported on October 24.

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 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. REVLIMID^®
is approved in the U.S. for the treatment of patients with mantle cell
lymphoma (MCL) whose disease has relapsed or progressed after two prior
therapies, one of which included bortezomib.

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 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 the 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.

About POMALYST^®

In the U.S., POMALYST^® (pomalidomide) is indicated for patients with multiple
myeloma who have received at least two prior therapies including lenalidomide
and bortezomib and have demonstrated disease progression on or within 60 days
of completion of the last therapy. Approval is based on response rate.
Clinical benefit, such as improvement in survival or symptoms, has not been
verified.

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 financial 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 six-month
periods ended June 30, 2013 and 2012, and for the projected amounts for the
year ending December 31, 2013.


Celgene Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
(In millions, except per share data)
                                                               
                                                                           
                       Three-Month Periods Ended           Six-Month Periods Ended
                       June 30,                            June 30,
                       2013             2012               2013            2012
                                                                           
Net product            $ 1,564.1        $ 1,336.6          $ 2,993.4       $ 2,582.1
sales
Other revenue           34.9           30.2             70.2          58.0    
Total revenue           1,599.0        1,366.8          3,063.6       2,640.1 
                                                                           
Cost of goods
sold
(excluding
amortization
of
acquired
intangible               80.9             71.9               161.4           144.4
assets)
Research and             458.1            447.2              910.5           809.2
development
Selling,
general and              418.1            323.0              787.1           648.8
administrative
Amortization
of acquired              65.7             44.1               131.4           85.9
intangible
assets
Acquisition
related
charges and             12.5           39.3             45.7          28.2    
restructuring,
net
Total costs             1,035.3        925.5            2,036.1       1,716.5 
and expenses
                                                                           
Operating                563.7            441.3              1,027.5         923.6
income
                                                                           
Other income            (5.9     )      (0.6     )        (21.3   )      (8.9    )
(expense), net
                                                                           
Income before            557.8            440.7              1,006.2         914.7
income taxes
                                                                           
Income tax              79.7           73.3             143.2         145.8   
provision
                                                                           
Net income             $ 478.1         $ 367.4           $ 863.0        $ 768.9   
                                                                           
                                                                           
Net income per
common share:
Basic                  $ 1.15           $ 0.84             $ 2.07          $ 1.76
Diluted                $ 1.11           $ 0.82             $ 2.00          $ 1.72
                                                                           
Weighted
average
shares:
Basic                    414.1            436.7              416.0           437.5
Diluted                  429.3            445.4              431.0           447.1
                                                                           
                                                                           
                       June 30,         December 31,
                       2013             2012
Balance sheet
items:
Cash, cash
equivalents &          $ 4,081.4        $ 3,900.3
marketable
securities
Total assets             11,963.7         11,734.3
Short-term               887.8            308.5
borrowings
Long-term debt           2,730.4          2,771.3
Total
stockholders'            5,407.1          5,694.5
equity
                                                                           


Celgene Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Net Income
(In millions, except per share data)
                                                              
                           Three-Month Periods           Six-Month Periods Ended
                           Ended
                           June 30,                      June 30,
                           2013          2012            2013            2012
                                                                         
Net income -               $ 478.1       $ 367.4         $ 863.0         $ 768.9
GAAP
                                                                         
Before tax
adjustments:
Cost of goods
sold (excluding
amortization
of acquired
intangible
assets):
Products exited
or to be exited     (1 )     -             (0.6  )         -               (2.0    )
-Pharmion
Share-based
compensation        (2 )     3.7           3.0             6.5             5.9
expense
                                                                         
Research and
development:
Share-based
compensation        (2 )     31.8          23.6            58.8            48.6
expense
IPR&D               (3 )     -             -               -               22.2
impairments
Upfront
collaboration       (4 )     81.8          75.0            177.5           75.0
payments
                                                                         
Selling,
general and
administrative:
Share-based
compensation        (2 )     34.3          27.1            70.1            53.9
expense
                                                                         
Amortization of
acquired            (5 )     65.7          44.1            131.4           85.9
intangible
assets
                                                                         
Acquisition
related charges
and
restructuring,
net:
Change in fair
value of            (6 )     12.5          38.1            45.7            25.6
contingent
consideration
Acquisition and
restructuring       (6 )     -             1.2             -               2.6
costs
                                                                         
Net income tax      (7 )    (55.0 )      (34.3 )        (108.4  )      (57.6   )
adjustments
Net income -               $ 652.9      $ 544.6        $ 1,244.6      $ 1,029.0 
Adjusted
                                                                         
Net income per
common share -
Adjusted
Basic                      $ 1.58        $ 1.25          $ 2.99          $ 2.35
Diluted                    $ 1.52        $ 1.22          $ 2.89          $ 2.30
                                                                         

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.

Explanation of adjustments:
        Exclude the net (benefit) cost of activities arising from the
(1)   acquisition of Pharmion Corp. (Pharmion) that are planned to be
        exited.
        Exclude share-based compensation expense totaling $69.8 for the
        three-month period ended June 30, 2013 and $53.7 for the three-month
(2)     period ended June 30, 2012. Exclude share-based compensation expense
        totaling $135.4 for the six-month period ended June 30, 2013 and
        $108.4 for the six-month period ended June 30, 2012.
(3)     Exclude in-process research and development impairments recorded as a
        result of changes in estimated probability-weighted cash flows.
(4)     Exclude upfront payments for research and development collaboration
        arrangements.
        Exclude amortization of intangible assets acquired in the acquisitions
(5)     of Pharmion, Gloucester Pharmaceuticals, Inc. (Gloucester), Abraxis
        BioScience Inc. (Abraxis) and Celgene Avilomics Research, Inc.
        (formerly known as Avila Therapeutics)(Avila).
        Exclude acquisition related charges and restructuring, including
(6)     changes in the fair value of contingent consideration, related to the
        acquisitions of Gloucester, Abraxis and Avila.
        Net income tax adjustments reflect the estimated tax effect of the
        above adjustments and the impact of certain other non-operating tax
(7)     adjustments, including one-time effects of acquisition related
        matters, adjustments 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 millions, except per share data)
                                                            
                                                                   
                                                   Range
                                                   Low             High
                                                                   
Projected net income - GAAP                 (1 )   $ 1,792.8       $ 1,855.0
                                                                   
Before tax adjustments:
Cost of goods sold (excluding
amortization
of acquired intangible assets):
Share-based compensation expense                     12.6            12.2
                                                                   
Research and development:
Share-based compensation expense                     123.2           118.4
Upfront collaboration payments                       267.5           267.5
                                                                   
Selling, general and administrative:
Share-based compensation expense                     163.9           157.5
                                                                   
Amortization of acquired intangible                  265.4           262.8
assets
                                                                   
Acquisition related charges and
restructuring, net:
Change in fair value of contingent                   63.0            63.0
consideration
                                                                   
Net income tax adjustments                           (194.4  )       (199.4  )
                                                                  
Projected net income - Adjusted                    $ 2,494.0      $ 2,537.0 
                                                                   
Projected net income per diluted                   $ 4.17          $ 4.31
common share - GAAP
                                                                   
Projected net income per diluted                   $ 5.80          $ 5.90
common share - Adjusted
                                                                   
Projected weighted average diluted                  430.0         430.0   
shares
                                                                   

        Our projected earnings do not include the effect of any business
        combinations, collaboration agreements, asset acquisitions, intangible
(1)   asset impairments, or changes in the fair value of our CVRs issued as
        part of the acquisition of Abraxis that may occur after the date of
        this press release.

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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