SUMMIT, N.J.--(BUSINESS WIRE)--July 24, 2008--
2008 Second Quarter Financial Results Year-Over-Year
- Non-GAAP Total Revenues Increased 63 Percent to $566.6
Million; GAAP Total Revenues $571.5 Million
- REVLIMID(R) Net Product Sales Increased 80 Percent to $325.8
Million
- Global THALOMID(R)/Thalidomide Net Product Sales Reached
$131.6 Million
- VIDAZA(R) Net Product Sales Achieved $59.7 Million
- Non-GAAP Operating Income Increased 60 Percent to $207.0
Million; GAAP Operating Income $140.0 Million
- Non-GAAP Net Income Increased to $172.7 Million; GAAP Net
Income $119.9 Million
- Non-GAAP Earnings Per Share Increased to $0.37 Per Diluted
Share; GAAP Earnings Per Diluted Share were $0.26
2008 Financial Outlook Update
- Total Revenues Expected to Increase Nearly 60 Percent
Year-Over-Year to Approximately $2.2 Billion
- Non-GAAP Diluted Earnings Per Share are Targeted to
Approximately $1.50
Recent Developments/Highlights
- Nearly 100 Abstracts Presented at The American Society of
Clinical Oncology (ASCO) and European Hematology Association
(EHA) Meetings, Evaluating Celgene Products, Including
REVLIMID, VIDAZA, THALOMID, Pomalidomide and Amrubicin.
Clinical Highlights Included:
- A Four-Month Landmark Analysis of an Eastern Oncology
Cooperative Group Phase III study (ECOG E4A03) Reported:
- Patients with Newly Diagnosed Multiple Myeloma (NDMM)
Continuing on REVLIMID Plus Low-Dose Dexamethasone (Rd)
Achieved a Two-Year Overall Survival Rate of 93 Percent,
Equal to the Two-Year Overall Survival Rate Observed in
Patients Treated with Autologous Stem Cell Transplants
- Patients Treated with Rd Achieved an Overall Response
Rate (ORR) of 89 Percent, Complete Response (CR) Rate of
22 Percent and CR + Very Good Partial Response Rate
(VGPR) of 56 Percent
- A Southwestern Oncology Group Phase III Study (SWOG 0232)
Reported NDMM patients Receiving REVLIMID(R) Plus
Dexamethasone (RD), Versus Dexamethasone (d) Alone,
Achieved a Progression-Free Survival of 77 Percent and CR +
VGPR of 62 Percent
- A Phase III Study of VIDAZA(R) in Higher-Risk
Myelodysplastic Syndromes (MDS) Patients Reported a Two-
Year Survival Rate that Nearly Doubled When Compared With
Conventional Care Regimens
- Preliminary Results From International Study NHL-003
Reported Single Agent REVLIMID Provides Responses For
Patients With Relapsed/Refractory Aggressive Non-Hodgkin's
Lymphoma (NHL) - Enrollment Completed
- Clinical Data Reported From Phase II Studies of Ambrubicin
in Small-Cell Lung Cancer (SCLC) Demonstrated Single Agent
Anti-Tumor Activity with Improved Overall Response Rates
Compared to Topotecan
- Thalidomide Pharmion(TM) Received Marketing Approval from
European Medicines Agency (EMEA) and Australian Therapeutic
Goods Administration for NDMM
- Celgene Received Regulatory Clearance for Swiss Manufacturing
Facility for the Production of REVLIMID for US and EU Markets
- Initiated REVLIMID NDMM Phase III MM-020 (Rd vs. MPT)
International Clinical Study Targeting Accrual of 1,500
Patients
- VIDAZA Received U.S. Orphan Drug Designation for the Treatment
of Acute Myeloid Leukemia
- Amrubicin Granted Orphan Drug Designation by the FDA and the
European Commission for SCLC
- Enrollment Completed for MMM-01, a Phase II Study of
Pomalidomide (CC-4047) in Myelofibrosis
- Enrollment Initiated for MM-002, a Phase I/II Study of
Pomalidomide in Relapsed/Refractory Multiple Myeloma
- Celgene Cellular Therapeutics Announced Clinical Transplant of
Human Placental-Derived Stem Cells in a Pediatric Patient with
Acute Lymphocytic Leukemia
- Recommendation by Celgene Standing Internal Safety Committee
to Temporarily Suspend New Enrollment of Patients into
Clinical Trials Evaluating MGCD0103 Pending Further Evaluation
- The Journal of Clinical Oncology Published Results of NHL-002,
REVLIMID in Relapsed/Refractory Aggressive Non Hodgkin's
Lymphoma, Showing Single-Agent Efficacy and Low Toxicity
Profile
- The Journal BLOOD Published Data from CLL-001 Showing REVLIMID
Induces Complete and Partial Remissions in Patients with
Relapsed and Refractory Chronic Lymphocytic Leukemia (CLL)
2008 Objectives
- Maximize the Clinical, Regulatory and Commercial Potential of
REVLIMID, VIDAZA and Thalidomide in Nearly 100 Countries Over
the Next Five Years
- Advance Global Regulatory Strategies to Expand REVLIMID(R)
Label to NDMM with FDA, EMEA and Other International
Regulatory Agencies
- Achieve Approval for VIDAZA(R) in High-Risk MDS with EMEA and
Other International Regulatory Agencies
- Gain FDA Approval to Expand VIDAZA Label to Include Survival
Data and Re-Launch in U.S.
- Initiate REVLIMID NHL and CLL Phase III Special Protocol
Assessment (SPA) Trials
- Complete REVLIMID Del 5Q MDS Phase III MDS-004 Clinical Trial
- Submit REVLIMID Regulatory Filing for Del 5Q MDS in Japan
- Advance Amrubicin Phase III Clinical Study in SCLC
- Advance Pomalidomide Clinical Strategies in Myelofibrosis,
Multiple Myeloma and Solid Tumors
- Progress Global Regulatory Strategies for Oral
Anti-Inflammatory Compounds Apremilast and CC-11050 in Broad
Range of Inflammatory Indications
- Advance Clinical Strategies for JNK-930
- Submit IND for Clinical Investigation of PDA-001 Proprietary
Placental Derived Stem Cells
Celgene Corporation (NASDAQ: CELG) reported non-GAAP net income
for the quarter ended June 30, 2008, of $172.7 million, or non-GAAP
earnings per diluted share of $0.37. Based on U.S. Generally Accepted
Accounting Principles (GAAP), Celgene reported net income of $119.9
million, or diluted earnings per share of $0.26 for the quarter ended
June 30, 2008. The second quarter of 2008 included the after-tax
impact of share-based employee compensation expense of $21.0 million.
GAAP net income for the second quarter of 2007 was $54.9 million, or
diluted earnings per share of $0.13, including the after-tax impact of
share-based employee compensation expense of $12.7 million.
Non-GAAP total revenue was $566.6 million for the quarter ended
June 30, 2008, an increase of 63 percent from 2007. GAAP total revenue
was $571.5 million. The increase in total revenue was driven by
REVLIMID net sales of $325.8 million, an increase of 80 percent over
the same period in 2007. Global Thalidomide and VIDAZA net sales
reached $131.6 million and $59.7 million, respectively. ALKERAN(R) net
sales for the second quarter of 2008 were $20.4 million compared to
$18.7 million in the second quarter of 2007. Revenue from Focalin(TM)
and the Ritalin(R) family of drugs totaled $26.2 million for the
second quarter of 2008 compared to $24.8 million over the same period
last year.
For the first six months of 2008, non-GAAP total revenue was
$1.028 billion, an increase of 60 percent year-over-year. REVLIMID net
sales for the first six months of 2008 reached $612.6 million compared
to $327.2 million in 2007, an increase of 87 percent year-over-year.
Global Thalidomide and VIDAZA net sales for the first six months of
2008 were $245.5 million and $73.5 million, respectively. Celgene
posted non-GAAP net income of $332.0 million or non-GAAP earnings per
diluted share of $0.73 during the first six months of 2008. For the
first six months of 2008, on a U.S. GAAP basis, Celgene reported a net
loss of $1.521 billion, or a loss per diluted share of $3.56, compared
to GAAP net income of $112.3 million or earnings per diluted share of
$0.27 for the first six months of 2007.
To support clinical development and to advance global regulatory
filings, the Company increased R&D investments in multiple
international clinical programs. For the second quarter of 2008 on a
non-GAAP basis the Company incurred R&D expenses, which exclude
share-based compensation expense, of $133.2 million compared to $87.4
million for the second quarter of 2007. On a GAAP basis, R&D expenses
were $144.9 million compared to $90.7 million for the same quarter in
2007. These R&D expenditures continue to support ongoing clinical
progress in multiple proprietary development programs for REVLIMID(R)
and other IMiDs(R) compounds; for VIDAZA(R), and other epigenetic
compounds; amrubicin, our lead compound for small cell lung cancer;
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.
Non-GAAP selling, general and administrative expenses, which
exclude share-based compensation expenses, were $162.5 million for the
second quarter of 2008 compared to $102.5 million for the second
quarter of 2007. On a GAAP basis, selling, general and administrative
expenses were $176.3 million for the second quarter in 2008 compared
to $110.9 million for the same quarter in 2007. The increase reflects
marketing and sales expenses related to ongoing product launch
activities for REVLIMID and Global Thalidomide in Europe, Canada and
Australia, as well as activities in preparation for the potential
relaunch of VIDAZA in the U.S. and launch in Europe. Also, the
increased expenses reflect the continued expansion of the
international operations of Celgene in over 60 countries.
For the quarter ended June 30, 2008, non-GAAP interest and other
income, net was $20.3 million compared to $23.6 million in the same
period during the prior year. Celgene reported $2.257 billion in cash,
cash equivalents, and marketable securities as of June 30, 2008.
"This was an extraordinary quarter by all measures underscored by
global contribution to solid financial and operational results," said
Chairman and Chief Executive Officer Sol J. Barer, Ph.D. "The results
of the quarter advance our corporate initiatives to become a premier
global biopharmaceutical company."
See the attached Reconciliation of GAAP to Non-GAAP Net Income
(Loss) 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- and six-months ended June 30, 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 second quarter 2008 operating and financial
performance on Thursday, July 24th 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, July 24, 2008 until midnight,
EDT July 31, 2008. To access the replay, dial 1-888-203-1112 and enter
reservation number 2639844. The international dial-in number is:
719-457-0820. The Company's third quarter 2008 financial and
operational results will be reported on October 23, 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 Six Months Ended
June 30, June 30,
--------------------- ---------------------
2008 2007 2008 2007
---------- ---------- ------------ --------
Net product sales $ 543,165 $ 318,945 $ 974,539 $588,741
Collaborative agreements
and other revenue 2,789 5,100 7,557 9,904
Royalty revenue 25,510 23,862 51,965 42,677
---------- ---------- ------------ --------
Total revenue 571,464 347,907 1,034,061 641,322
Cost of goods sold
(excluding amortization
expense) 75,194 28,698 119,918 50,774
Research and development 144,861 90,733 301,739 170,500
Selling, general and
administrative 176,287 110,940 316,737 215,933
Amortization of acquired
intangible assets 35,167 2,250 45,009 4,465
In-process research and
development - - 1,740,000 -
---------- ---------- ------------ --------
Total costs and
expenses 431,509 232,621 2,523,403 441,672
Operating income (loss) 139,955 115,286 (1,489,342) 199,650
Equity in losses of
affiliated companies 1,343 949 6,423 2,232
Interest and other income,
net 20,304 18,757 48,640 41,774
---------- ---------- ------------ --------
Income (loss) before taxes 158,916 133,094 (1,447,125) 239,192
Income tax provision 39,033 78,224 74,080 126,913
---------- ---------- ------------ --------
Net income (loss) $ 119,883 $ 54,870 $(1,521,205) $112,279
========== ========== ============ ========
Per Common Share:
Net income (loss)
-basic $ 0.27 $ 0.14 $ (3.56) $ 0.30
Net income (loss)
-diluted $ 0.26 $ 0.13 $ (3.56) $ 0.27
Weighted average shares
-basic 442,640 381,086 427,451 379,350
========== ========== ============ ========
Weighted average shares
-diluted 466,687 431,377 427,451 430,346
========== ========== ============ ========
June 30 December
31,
2008 2007
---------- ----------
Balance Sheet Items:
Cash, cash equivalents
& marketable
securities $2,257,272 $2,738,918
Total assets 4,134,891 3,611,284
Convertible notes - 196,555
Stockholders' equity 3,426,801 2,843,944
Celgene Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Net Income (Loss)
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ---------------------
2008 2007 2008 2007
--------- -------- ------------ --------
Net income (loss) as
reported $ 119,883 $ 54,870 $(1,521,205) $112,279
Before tax adjustments:
Net product sales:
Pharmion products to
be divested (1) (4,849) - (6,427) -
Cost of goods sold:
Share-based
compensation
expense (2) 632 408 1,160 797
Pharmion inventory
step-up (3) 8,605 - 11,123 -
Pharmion products
to be divested (1) 1,965 - 2,564 -
Research and
development:
Share-based
compensation
expense (2) 11,685 3,343 21,300 5,945
Upfront
collaboration
payment (4) - - 45,000 -
Selling, general and
administrative:
Share-based
compensation
expense (2) 13,828 8,424 24,961 15,006
Amortization of
acquired intangible
assets (5) 35,167 2,250 45,009 4,465
In-process research
and development (6) - - 1,740,000 -
Equity in losses of
affiliated companies:
Equity in losses
of EntreMed (7) 1,317 1,060 2,058 2,042
Interest and other
income, net
Share-based
compensation
expense (2) - 4,806 - 4,806
Income tax adjustment (8) (15,511) (4,384) (33,553) (5,477)
--------- -------- ------------ --------
Net income as adjusted $ 172,722 $ 70,777 $ 331,990 $139,863
========= ======== ============ ========
Per Common Share as
adjusted:
Net income -basic $ 0.39 $ 0.19 $ 0.78 $ 0.37
Net income -diluted (9)$ 0.37 $ 0.17 $ 0.73 $ 0.33
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 for the second
quarter totaling $26,145 in 2008 and $16,981 in 2007. The after
tax net impact reduced GAAP net income for the second quarter by
$21,011, or $0.05 per diluted share in 2008 and $12,718, or $0.03
per diluted share in 2007. Exclude SFAS 123R share-based
compensation expense for the six-month period totaling $47,421 in
2008 and $26,554 in 2007. The after tax net impact reduced GAAP
net income for the six-month period by $38,502, or $0.09 per
diluted share in 2008 and $20,509, or $0.05 per diluted share in
2007.
(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 for the second
quarter resulting from the acquisitions of Pharmion of $35,167 in
2008 and Penn T of $2,250 in 2007. Exclude amortization for the
six-month period from the acquisitions of Pharmion and Penn T of
$43,372 and $1,637, respectively, in 2008 and Penn T of $4,465 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.
(9) Diluted net income per share for the six months ended June 30,
2008 was determined using 454,405 weighted average shares.
Adjusted net income and earnings per share on both a basic and
diluted basis have been revised for the three- and six-month periods
ended June 30, 2007 to conform to the current year's presentation
basis. Amounts reported in the previous year for the three-month
period ended June 30, 2007 were $110,435, $0.29 and $0.26,
respectively. Amounts reported in the previous year for the six-month
period ended June 30, 2007 were $196,066, $0.52 and $0.46,
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
previously reported reflected a pro-forma annual income tax rate of
28.0%.
CONTACT:
Celgene Corporation
David W. 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
