SUMMIT, N.J.--(BUSINESS WIRE)--May 8, 2008--
2008 First Quarter Financial Results Year-Over-Year
Celgene Corporation (NASDAQ: CELG) reported non-GAAP net income
for the quarter ending March 31, 2008, was $159.3 million, or non-GAAP
earnings per diluted share of $0.36. Based on U.S. Generally Accepted
Accounting Principles (GAAP), Celgene reported net losses of $1.64
billion, or diluted earnings per share of ($3.98) for the quarter
ended March 31, 2008. The first quarter of 2008 included an after-tax
in-process research and development charge of $1.74 billion associated
with the acquisition of Pharmion Corporation, and the after-tax impact
of share-based employee compensation expense of $17.5 million,
compared to net income in the prior year of $57.4 million or diluted
earnings per share of $0.14, including the after-tax impact of
share-based employee compensation expense of $7.8 million.
Non-GAAP total revenue was $461.0 million for the quarter ended
March 31, 2008, an increase of 57 percent from 2007. GAAP total
revenue was $462.6 million. The increase in total revenue was driven
by REVLIMID(R) net sales of $286.8 million, an increase of 96 percent
over the same period in 2007. THALOMID(R) net sales reached $113.9
million. ALKERAN(R) net sales for the first quarter of 2008 were $15.1
million compared to $16.0 million in the first quarter of 2007.
Revenue from Focalin(TM) and the Ritalin(R) family of drugs totaled
$25.9 million for the first quarter of 2008 compared to $19.8 million
over the same period last year. First quarter 2008 product sales
included only three weeks of revenue from VIDAZA(R) and international
thalidomide sales from March 8, 2008 through March 31, 2008.
To support clinical development and to advance global regulatory
filings, the Company increased R&D investments in multiple
international clinical programs. For the first quarter of 2008 on a
non-GAAP basis the Company incurred R&D expenses, which exclude
stock-based compensation expense and the $45 million dollar upfront
collaborative payment to Acceleron, of $102.3 million compared to
$77.0 million for the first quarter of 2007. On a GAAP basis, R&D
expenses were $156.9 million compared to $79.6 for the same quarter in
2007. These R&D expenditures support ongoing clinical progress in
multiple proprietary development programs for REVLIMID and other
IMiDs(R) compounds; for apremilast (CC-10004), and other oral
anti-inflammatory compounds; our pleiotropic pathway modifier program;
as well as our kinase inhibitor and placental-derived stem cell
programs. In the second quarter of 2008, our R&D expenditures will
expand to include programs that support clinical research for
VIDAZA(R), and other epigenetic compounds, as well as amrubicin, our
lead compound for small cell lung cancer.
Non-GAAP selling, general and administrative expenses, which
exclude stock-based compensation expenses, were $129.3 million for the
first quarter of 2008 compared to $98.6 million for the first quarter
of 2007. On a GAAP basis, selling, general and administrative expenses
were $140.5 million for the first quarter in 2008 compared to $105.2
million for the same quarter in 2007. The increase reflects marketing
and sales expenses related to ongoing product launch activities in
Europe. Also, the increased expenses reflect the continued expansion
of Celgene International operations in over 50 countries.
For the quarter ended March 31, 2008, interest and other income,
(net) increased to $28.3 million compared to $23.0 million in the same
period during the prior year.
Celgene reported $2.0 billion in cash, cash equivalents, and
marketable securities as of March 31, 2008, a decrease of $700.0
million over the quarter ended December 31, 2007, reflecting the cash
used in connection with the acquisition of Pharmion.
"The clinical, regulatory and commercial momentum established in
the first quarter continues to advance our business and strategic
programs toward maximizing the global potential of Celgene," said
Chairman and Chief Executive Officer Sol J. Barer, Ph.D. "The Pharmion
acquisition brings together extraordinary people, science and
resources that continues to expand our portfolio of innovative
therapies, our industry leading programs for access, safety and
patient support, and ultimately moves us closer to our vision of
becoming the leading hematology and oncology company in the world."
See the attached Reconciliation of GAAP to Non-GAAP Net Income for
an explanation of the amounts excluded and included to arrive at
non-GAAP net income and non-GAAP earnings per share amounts for the
three-months ended March 31, 2008, and 2007. Non-GAAP financial
measures provide investors and management with supplemental measures
of operating performance and trends that facilitate comparisons
between periods before, during and after certain items that would not
otherwise be apparent on a GAAP basis. Certain unusual or
non-recurring items that management does not believe affect the
Company's basic operations do not meet the GAAP definition of unusual
or non-recurring items. Non-GAAP net income and non-GAAP earnings per
share are not, and should not be viewed as a substitute for similar
GAAP items. We define non-GAAP diluted earnings per share amounts as
non-GAAP net income divided by the weighted average number of diluted
shares outstanding. Our definition of non-GAAP net income and non-GAAP
diluted earnings per share may differ from similarly named measures
used by others.
Webcast
Celgene will host a conference call to discuss the results and
achievements of its first quarter 2008 operating and financial
performance on Thursday, May 8th at 9:00 a.m. EDT. The conference call
will be available by webcast at www.celgene.com. An audio replay of
the call will be available from noon, May 8, 2008 until midnight, EDT
May 15, 2008. To access the replay, dial 1-888-203-1112 and enter
reservation number 8774880. The international dial-in number is:
719-457-0820. The Company's second quarter 2008 financial and
operational results will be reported on July 24, 2008.
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
website at www.celgene.com.
This release contains certain forward-looking statements which
involve known and unknown risks, delays, uncertainties and other
factors not under the Company's control, which may cause actual
results, performance or achievements of the Company to be materially
different from the results, performance or other expectations implied
by these forward-looking statements. These factors include results of
current or pending research and development activities, actions by the
FDA and other regulatory authorities, and those factors detailed in
the Company's filings with the Securities and Exchange Commission such
as Form 10-K, 10-Q and 8-K reports.
Celgene Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
Three Months
Ended March 31,
---------------------------
2008 2007
------------ --------------
Net product sales $431,374 $269,796
Collaborative agreements and other revenue 4,768 4,804
Royalty revenue 26,455 18,815
------------ --------------
Total revenue 462,597 293,415
Cost of goods sold (excluding amortization
expense) 44,724 22,055
Research and development 156,877 79,575
Selling, general and administrative 140,451 105,207
Amortization of acquired intangible assets 9,842 2,214
In-process research and development 1,740,000 -
------------ --------------
Total costs and expenses 2,091,894 209,051
Operating (loss) Income (1,629,297) 84,364
Equity in losses of affiliated companies 5,079 1,283
Interest and other income, net 28,335 23,017
------------ --------------
(Loss) income before taxes (1,606,041) 106,098
Income tax provision 35,047 48,689
------------ --------------
Net (loss) income $(1,641,088) $57,409
============ ==============
Per Common Share:
Net (loss) income -basic $(3.98) $0.15
Net (loss) income -diluted $(3.98) $0.14
Weighted average shares -basic 412,263 377,599
============ ==============
Net income -diluted 412,263 429,306
============ ==============
March 31 December 31,
2008 2007
------------ --------------
Balance Sheet Items:
Cash, cash equivalents & marketable
securities $2,026,492 $2,738,918
Total assets 3,911,464 3,084,421
Convertible notes 196,512 196,555
Stockholders' equity 3,032,685 2,843,944
Celgene Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Net Income
(In thousands, except per share data)
Three Months
Ended March 31,
--------------------
2008 2007
------------ -------
Net (loss) income as reported $(1,641,088) $57,409
Before tax adjustments:
Net product sales: Pharmion products to be
divested (1) (1,578) -
Cost of goods sold:
Share-based compensation expense (2) 528 387
Pharmion inventory step-up (3) 2,518 -
Pharmion products to be divested (1) 599 -
Research and development:
Share-based compensation expense (2) 9,616 2,602
Upfront collaboration payment (4) 45,000 -
Selling, general and administrative:
Share-based compensation expense (2) 11,132 6,584
Amortization of acquired intangible assets(5) 9,842 2,214
In-process research and development (6) 1,740,000 -
Equity in losses of affiliated companies:
Equity in losses of EntreMed (7) 741 983
Income tax adjustment (8) (18,043) (1,093)
------------ -------
Net income as adjusted $159,267 $69,086
============ =======
Per Common Share as adjusted:
Net income -basic $0.39 $0.18
Net income -diluted $0.36 $0.16
Explanation of Adjustments:
(1)Exclude sales and cost of sales related to former non-core Pharmion
products to be divested.
(2)Exclude SFAS 123R share-based compensation expense totaling $21,276
in 2008 and $9,573 in 2007. The after tax net impact reduced GAAP net
income by $17,491, or $0.04 per diluted share and $7,790, or $0.02
per diluted share, respectively.
(3)Exclude Pharmion inventory step-up adjustment to fair value
resulting from acquisition.
(4)Exclude upfront payment for research and development collaboration
arrangement with Acceleron Pharma, Inc.
(5)Exclude amortization of acquired intangible assets resulting from
the acquisitions of Pharmion and Penn T of $8,206 and $1,636,
respectively, in 2008 and Penn T of $2,214 in 2007.
(6)Exclude the in-process research and development write-off related
to the acquisition of Pharmion.
(7)Exclude the Company's share of equity losses in EntreMed, Inc.
(8)The income tax adjustment reflects the tax effect of the above
adjustments.
Adjusted net income and earnings per share on both a basic and diluted
basis have been revised for the three-month period ended March 31,
2007 to conform to the current year's presentation basis. Amounts
originally reported were $85,630, $0.23 and $0.20, respectively. The
current year basis eliminates certain immaterial adjustments and
revises the method for determining the tax impact of pro-forma
adjustments. The 2007 adjusted income tax provision reflected a pro
forma annual income tax rate of 28.0%.
CONTACT:
Celgene Corporation
David Gryska, 908-673-9059
Sr. Vice President and
Chief Financial Officer
or
Brian P. Gill, 908-673-9530
Vice President
Corporate Communications
SOURCE: Celgene Corporation
