Celgene Reports First Quarter 2014 Operating and Financial Results

  Celgene Reports First Quarter 2014 Operating and Financial Results

  *REVLIMID^® for Newly Diagnosed Multiple Myeloma Submitted in U.S. and EU
  *Late-stage product acquisition of GED-0301 from Nogra Pharma Ltd
  *2014 Adjusted Diluted EPS and Net Product Sales Guidance Affirmed

Business Wire

SUMMIT, N.J. -- April 24, 2014

Celgene Corporation (NASDAQ:CELG) reported net product sales of $1,708 million
for the first quarter of 2014, a 19 percent increase from the same period in
2013. First quarter total revenue increased 18 percent to $1,730 million
compared to $1,465 million in the first quarter of 2013. Adjusted net income
for the first quarter of 2014 increased 19 percent to $705 million compared to
$592 million in the first quarter of 2013. For the same period, adjusted
diluted earnings per share increased 22 percent to $1.67 from $1.37.

Based on U.S. GAAP (Generally Accepted Accounting Principles), Celgene
reported first quarter of 2014 net income of $280 million or $0.66 per diluted
share. For the first quarter of 2013, net income was $385 million or $0.89 per
diluted share.

“The first quarter reflected the continued strength of our product portfolio
and our growth has us firmly on track to deliver on our 2014 guidance,” said
Bob Hugin, Chairman and Chief Executive Officer of Celgene Corporation. “Our
longer-term growth prospects are significantly enhanced by the approval of
Otezla for psoriatic arthritis and the advancement and expansion of our
pipeline.”

First Quarter 2014 Financial Highlights

Unless otherwise stated, all comparisons are for the first quarter of 2014
compared to the first quarter of 2013. The adjusted operating expense
categories presented below exclude share-based employee compensation expense,
upfront collaboration payments and settlement of contingent obligations.
Please see the attached Reconciliation of GAAP to Adjusted Net Income for
further information.

Net Product Sales Performance

  *REVLIMID^® sales for the first quarter increased 14 percent to $1,144
    million and were driven by overall market share, increased duration of
    therapy and geographic expansion. U.S. sales of $642 million and
    International sales of $502 million increased 13 percent and 16 percent,
    respectively.
  *ABRAXANE^® sales for the first quarter were $185 million, a 51 percent
    increase. U.S. sales of $142 million and International sales of $43
    million increased 51 percent and 49 percent, respectively. The increase in
    sales reflects the impact of the ongoing U.S. launch in pancreatic cancer
    and early launch success for pancreatic cancer in Europe.

  *VIDAZA^® first quarter sales decreased 27 percent to $148 million. U.S.
    sales decreased 83 percent to $14 million reflecting the impact of a full
    quarter of generic competition. International sales were $134 million and
    increased 14 percent from 2013. International sales were driven by
    increased demand in Europe and Japan.
  *POMALYST^®/IMNOVID^® sales were $136 million. U.S. sales were $89 million
    and International sales were $47 million. POMALYST^®/IMNOVID^® sales were
    driven by market share gains and increasing duration in the U.S. and the
    commercial launch in Europe.
  *All other product sales, which include THALOMID^®, ISTODAX^® and an
    authorized generic of VIDAZA^® drug product in the U.S., were $95 million
    in the first quarter of 2014 compared to $71 million for the first quarter
    of 2013.

Research and Development (R&D)

Adjusted R&D expenses were $358 million for the first quarter of 2014 compared
to $330 million for the first quarter of 2013. The increase was primarily due
to an increase in clinical trial activity for pipeline assets. On a GAAP
basis, R&D expenses were $714 million for the first quarter of 2014 and $452
million for the same period in 2013. GAAP R&D expenses increased primarily due
to upfront payments for new collaborations entered into during the quarter and
an increase in share-based compensation expense.

Selling, General, and Administrative (SG&A)

Adjusted SG&A expenses were $418 million for the first quarter of 2014
compared to $333 million for the first quarter of 2013. The change was
primarily due to launch activities for ABRAXANE^® in pancreatic cancer, the
ongoing launch of POMALYST^®/IMNOVID^® in the U.S. and Europe and the launch
of OTEZLA^® for psoriatic arthritis in the U.S. On a GAAP basis, SG&A expenses
were $494 million for the first quarter of 2014 compared to $369 million for
the same period in 2013. The increase in GAAP SG&A expenses also included an
increase in share-based compensation expense and the settlement of a
contingent obligation.

Cash, Cash Equivalents, and Marketable Securities

In the first quarter of 2014, Celgene purchased approximately 10.7 million of
its shares at a total cost of approximately $1,661 million. As of March 31,
2014, the Company had $407 million remaining under the stock repurchase
program. On April 17, the Celgene Board of Directors authorized the repurchase
of up to an additional $4,000 million of the Company’s common stock.

Operating cash flow was $557 million in the first quarter of 2014. Celgene
ended the quarter with $5,110 million in cash, cash equivalents and marketable
securities.

2014 Adjusted Diluted EPS Guidance and Net Product Sales Guidance Affirmed

  *Total revenue expected to be approximately $7,500 million, an increase of
    15 percent year-over-year
  *Total net product sales expected to be $7,300 million to $7,400 million,
    an increase of 16 percent year-over-year based on the mid-point of the
    range
  *REVLIMID^® net sales expected to be $4,900 million to $5,000 million, an
    increase of 16 percent year-over-year based on the mid-point of the range
  *ABRAXANE^® net sales expected to be $850 million to $900 million, an
    increase of 35 percent year-over-year based on the mid-point of the range
  *Adjusted operating margin expected to be approximately 50 percent after
    investments in both new and ongoing R&D efforts, including collaborations,
    and in certain commercial capabilities, most notably the I&I franchise;
    GAAP operating margins are expected to be approximately 36 percent
  *Adjusted diluted EPS expected to be in the range of $7.00 to $7.20, an
    increase of approximately 19 percent year-over-year based on the mid-point
    of the range. On a GAAP basis, diluted EPS is expected to be in the range
    of $4.94 to $5.18

Product and Pipeline Updates

Hematology

REVLIMID^®: The Company submitted REVLIMID^® for newly diagnosed multiple
myeloma with the U.S. Food and Drug Administration (FDA) and with the European
Medicines Agency (EMA). Regulatory actions are expected in 2015.

Enrollment in the phase III REMARC trial (N=621) with REVLIMID^® as
maintenance in patients with diffuse large B-cell lymphoma responding to
R-CHOP induction has completed. Enrollment in the phase III RELEVANCE^® trial
(N=1,000) of REVLIMID^® in combination with rituximab in newly diagnosed
follicular lymphoma is expected to complete by year-end.

Two new trials with REVLIMID^® in lymphoma have initiated. The phase III trial
AUGMENT^TM (NHL-007) will compare REVLIMID^® plus rituximab to rituximab in
patients with relapsed and/or refractory follicular lymphoma. In the phase
IIIb MAGNIFY^TM trial (NHL-008), patients with relapsed and/or refractory
indolent lymphoma will receive REVLIMID^® plus rituximab induction which will
be followed by maintenance with either REVLIMID^® monotherapy or rituximab
monotherapy.

Celgene’s collaboration partner Agios Pharmaceuticals Inc. presented initial
phase I data on AG-221 at the American Association for Cancer Research (AACR)
Annual Meeting in April. The data presented were in patients with advanced
hematologic malignancies with an isocitrate dehydrogenase-2 (IDH2) mutation.
In the first two cohorts, six of seven evaluable patients had objective
responses, including three complete remissions (CR) and two complete
remissions with incomplete platelet recovery (CRp). AG-221 also substantially
lowered plasma levels of the oncometabolite 2-hydroxyglutarate (2HG) with a
favorable exposure profile and good tolerability to date.

Oncology

ABRAXANE^®: The phase III APACT (PANC-003) trial comparing ABRAXANE^® in
combination with gemcitabine versus gemcitabine alone as an adjuvant treatment
in patients with surgically resected pancreatic cancer began enrollment.
Enrollment commenced in a phase III trial evaluating ABRAXANE^® versus placebo
as maintenance therapy after induction with ABRAXANE^® plus carboplatin in
patients with squamous cell non-small cell lung cancer. The Company continues
to evaluate strategies for combinations of ABRAXANE^® with novel therapies
including anti-PD1 and PD-L1 agents as well as with Celgene pipeline agents,
across a range of tumor types.

Inflammation & Immunology (I&I)

OTEZLA^®: On March 21, the U.S. FDA approved OTEZLA^®, the Company's oral,
selective inhibitor of phosphodiesterase 4, for the treatment of adult
patients with active psoriatic arthritis. The FDA is reviewing OTEZLA^® for
the treatment of moderate-to-severe plaque psoriasis with a Prescription Drug
User Fee Act (PDUFA) date of September 23, 2014. A combined submission of
OTEZLA^® for the treatment of psoriatic arthritis and for psoriasis is under
review with the EMA and an opinion from the European Committee for Medicinal
Products for Human Use (CHMP) is expected by year-end.

Data on OTEZLA^® from the ESTEEM 1 and ESTEEM 2 phase III studies were
presented at the 72nd Annual Meeting of the American Academy of Dermatology in
Denver, CO. OTEZLA^® demonstrated clinically meaningful and sustained
improvements in skin, nail and scalp of adult moderate to severe plaque
psoriasis patients with no new or unexpected adverse events identified.

Celgene, in conjunction with collaboration partner Acceleron Pharma, presented
interim data from an ongoing phase IIa study of sotatercept (ACE-011) in
patients with end-stage renal disease on hemodialysis at the National Kidney
Foundation 2014 Spring Clinical Meeting. Sotatercept appears to be generally
well tolerated in chronic kidney disease and produces dose dependent increases
in hemoglobin by a novel mechanism.

Business Update

In April, Celgene entered into a global license agreement with Nogra Pharma
Limited, a private pharmaceutical company based in Dublin, Ireland, to develop
and commercialize GED-0301, an oral antisense DNA oligonucleotide targeting
Smad7 mRNA for the treatment of moderate-to-severe Crohn’s disease and other
indications. A double-blind, placebo-controlled, multicenter phase II trial of
three doses of GED-0301 in 166 patients with active Crohn’s disease has been
completed. The data have been submitted to a major medical journal and will be
presented at an upcoming medical congress. Based upon these results, Celgene
plans to initiate a phase III registration program by year-end 2014. Under the
terms of the license agreement, Nogra Pharma Limited will receive an upfront
payment of $710 million, regulatory, development and net sales milestone
payments and tiered royalties. Aggregate payments for regulatory and
development milestones could potentially be $815 million for multiple
indications. Starting from global annual net sales levels of $500 million,
aggregate tiered sales milestones could total a maximum of $1,050 million if
annual net sales reach $4,000 million. The license agreement will become
effective upon the expiration or termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

First Quarter 2014 Conference Call and Webcast Information

Celgene will host a conference call to discuss the first quarter of 2014
operating and financial performance on Thursday, April 24, 2014, 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 April 24, 2014, until midnight
ET May 1, 2014. To access the replay in the U.S., dial (855) 859-2056; outside
the U.S. dial (404) 537-3406. The participant passcode is 23324156. The
Company’s second quarter of 2014 financial and operational results are
expected to be reported on July 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 months of adjuvant chemotherapy.
Prior therapy should have included an anthracycline unless clinically
contraindicated. ABRAXANE^® is 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. ABRAXANE^® is also indicated for the first-line treatment
of metastatic adenocarcinoma of the pancreas in combination with gemcitabine.

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 OTEZLA^®

In the U.S., OTEZLA^® (apremilast) is indicated for the treatment of adult
patients with active psoriatic arthritis.

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 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-month periods
ended March 31, 2014 and 2013, and for the projected amounts for the year
ending December 31, 2014.


Celgene Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
(In millions, except per share data)
                                                          
                                                                  
                                                 Three-Month Periods Ended
                                                 March 31,
                                                 2014             2013
                                                                  
Net product sales                                $ 1,707.5        $ 1,429.3
Other revenue                                     22.5           35.3     
      Total revenue                               1,730.0        1,464.6  
                                                                  
Cost of goods sold (excluding
amortization of
      acquired intangible assets)                  86.1             80.5
Research and development                           713.7            452.4
Selling, general and administrative                494.1            369.0
Amortization of acquired intangible                65.7             65.7
assets
Acquisition related charges, net                  8.6            33.2     
      Total costs and expenses                    1,368.2        1,000.8  
                                                                  
Operating income                                   361.8            463.8
                                                                  
Other income (expense), net                       (29.5    )      (15.4    )
                                                                  
Income before income taxes                         332.3            448.4
                                                                  
Income tax provision                              52.6           63.5     
                                                                  
Net income                                       $ 279.7         $ 384.9    
                                                                  
                                                                  
Net income per common share:
      Basic                                      $ 0.69           $ 0.92
      Diluted                                    $ 0.66           $ 0.89
                                                                  
Weighted average shares:
      Basic                                        405.7            417.9
      Diluted                                      422.5            432.2
                                                                  
                                                                  
                                                 March 31,        December 31,
                                                 2014             2013
Balance sheet items:
      Cash, cash equivalents &                   $ 5,110.1        $ 5,687.0
      marketable securities
      Total assets                                 12,704.5         13,378.2
      Short-term borrowings                        869.8            544.8
      Long-term debt                               4,224.3          4,196.5
      Total stockholders' equity                   4,484.6          5,589.9
                                                                             

                                                              
Celgene Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Net Income
(In millions, except per share data)

                                                     Three-Month Periods Ended
                                                     March 31,
                                                     2014            2013
                                                                     
Net income - GAAP                                    $  279.7        $ 384.9
                                                                     
  Before tax adjustments:
  Cost of goods sold (excluding
  amortization
  of acquired intangible assets):
  Share-based compensation expense              (1 )    6.1            2.8
                                                                     
  Research and development:
  Share-based compensation expense              (1 )    47.0           27.0
  Upfront collaboration expense                 (2 )    309.0          95.7
                                                                     
  Selling, general and administrative:
  Share-based compensation expense              (1 )    51.3           35.8
  Settlement of contingent obligation           (3 )    25.0           -
                                                                     
  Amortization of acquired intangible           (4 )    65.7           65.7
  assets
                                                                     
  Acquisition related charges, net:
  Change in fair value of contingent            (5 )    8.6            33.2
  consideration
                                                                     
  Net income tax adjustments                    (6 )   (87.5  )      (53.4 )
Net income - Adjusted                                $  704.9       $ 591.7 
                                                                     
Net income per common share - Adjusted
  Basic                                              $  1.74         $ 1.42
  Diluted                                            $  1.67         $ 1.37
                                                                     

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.

Explanation of adjustments:
(1)   Exclude share-based compensation expense totaling $104.4 for the
        three-month period ended March 31, 2014
        and $65.6 for the three-month period ended March 31, 2013.
(2)     Exclude upfront payment expense for research and development
        collaboration arrangements.
(3)     Exclude settlement of a contingent obligation to make matching
        contributions to a non-profit organization.
(4)     Exclude amortization of intangible assets acquired in the acquisitions
        of Pharmion Corp., Gloucester Pharmaceuticals, Inc.
        (Gloucester), Abraxis BioScience Inc. (Abraxis) and Celgene Avilomics
        Research, Inc. (Avila).
(5)     Exclude changes in the fair value of contingent consideration related
        to the acquisitions of Gloucester, Abraxis and Avila.
(6)     Net income tax adjustments reflect the estimated tax effect of the
        above adjustments and the impact of certain
        other non-operating tax adjustments, including one-time effects of
        acquisition related matters, adjustments to the
        amount of unrecognized tax benefits, and nonrecurring items connected
        with the launch of new products.
        

                                                        
Celgene Corporation and Subsidiaries
Net Product Sales
(In millions)
                                                                               
                                Three-Month Periods
                                Ended
                                March 31,                   % Change
                                2014          2013          Reported     Operational^(1)     Currency^(2)
                                                                                             
REVLIMID^®
      U.S.                      $ 641.8       $ 568.3       12.9   %     12.9      %         0.0     %
      International              502.0        434.5       15.5   %     15.1      %         0.4     %
      Worldwide                   1,143.8       1,002.8     14.1   %     13.9      %         0.2     %
                                                                                             
ABRAXANE^®
      U.S.                        141.5         93.7        51.0   %     51.0      %         0.0     %
      International              43.3         29.0        49.3   %     47.7      %         1.6     %
      Worldwide                   184.8         122.7       50.6   %     50.2      %         0.4     %
                                                                                             
VIDAZA^®
      U.S.                        14.6          86.7        -83.2  %     -83.2     %         0.0     %
      International              133.8        117.4       14.0   %     13.5      %         0.5     %
      Worldwide                   148.4         204.1       -27.3  %     -27.6     %         0.3     %
                                                                                             
POMALYST^®/IMNOVID^®(3)
      U.S.                        88.7          21.8        306.9  %     306.9     %         0.0     %
      International              46.9         6.7         600.0  %     608.5     %         -8.5    %
      Worldwide                   135.6         28.5        375.8  %     377.8     %         -2.0    %
                                                                                             
THALOMID^®
      U.S.                        40.0          35.4        13.0   %     13.0      %         0.0     %
      International              18.0         22.0        -18.2  %     -18.0     %         -0.2    %
      Worldwide                   58.0          57.4        1.0    %     1.1       %         -0.1    %
                                                                                             
azacitidine for
injection
      U.S.                        18.4          -           N/A          N/A                 N/A
      International              -            -           N/A          N/A                 N/A
      Worldwide                   18.4          -           N/A          N/A                 N/A
                                                                                             
ISTODAX^®
      U.S.                        14.9          12.1        23.1   %     23.1      %         0.0     %
      International              1.2          0.8         50.0   %     47.8      %         2.2     %
      Worldwide                   16.1          12.9        24.8   %     24.7      %         0.1     %
                                                                                             
All Other
      U.S.                        1.8           -           N/A          N/A                 N/A
      International              0.6          0.9         N/A          N/A                 N/A
      Worldwide                   2.4           0.9         N/A          N/A                 N/A
                                                                                             
Total Net Product Sales
      U.S.                        961.7         818.0       17.6   %     17.6      %         0.0     %
      International              745.8        611.3       22.0   %     21.6      %         0.4     %
      Worldwide                 $ 1,707.5     $ 1,429.3     19.5   %     19.3      %         0.2     %

^(1)   - Operational includes impact from both volume and price
^(2)     - Currency includes the impact from both foreign exchange rates and
         hedging activities
^(3)     - POMALYST^® was approved in the U.S. on February 8, 2013; IMNOVID^®
         was approved in the EU on August 5, 2013
         


Celgene Corporation and Subsidiaries
Reconciliation of Full-Year 2014 Projected GAAP to Adjusted Net Income
(In millions, except per share data)
                                                           
                                                                   
                                                   Range
                                                   Low             High
                                                                   
Projected net income - GAAP                        $ 2,097.9       $ 2,200.7
                                                                   
   Before tax adjustments:
   Cost of goods sold (excluding amortization of acquired intangible assets):
   Share-based compensation expense                  26.8            26.5
                                                                   
   Research and Development:
   Share-based compensation expense                  200.7           198.7
   Upfront collaboration expense                     309.0           309.0
                                                                   
   Selling, general and administrative:
   Share-based compensation expense                  232.9           230.6
   Settlement of contingent obligation               25.0            25.0
                                                                   
   Amortization of acquired intangible               258.3           258.3
   assets
                                                                   
   Acquisition related charges, net:
   Change in fair value of contingent                17.0            16.6
   consideration
                                                                   
   Net income tax adjustments                        (192.6  )       (205.4  )
                                                                  
Projected net income - Adjusted                    $ 2,975.0      $ 3,060.0 
                                                                   
Projected net income per diluted common            $ 4.94          $ 5.18
share - GAAP
                                                                   
Projected net income per diluted common            $ 7.00          $ 7.20
share - Adjusted
                                                                   
Projected weighted average diluted shares            425.0           425.0

        Our projected 2014 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 BioScience Inc. (Abraxis) that may
        occur after the day prior to 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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