Celgene Corporation
Jan 12, 2015
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Celgene Corporation Announces 2015 and Long-Term Financial Outlook and Preliminary 2014 Results

SUMMIT, N.J.--(BUSINESS WIRE)-- Celgene Corporation (NASDAQ:CELG) provided a business update as well as its preliminary 2014 results and financial outlook for 2015 and beyond at the 33rd Annual J.P. Morgan Healthcare Conference. In 2015, total net product sales are expected to be approximately $9,000 million to $9,500 million, a 22 percent increase year-over-year, based on the mid-point of the range. The negative impact of foreign exchange on net product sales is expected to approach $100 million in 2015 compared to 2014. For the full-year 2015, REVLIMID® net sales are expected to be in the range of $5,600 million to $5,700 million. Adjusted diluted earnings per share (EPS) for the full-year 2015 is expected to be in the range of $4.60 to $4.75, a 26 percent increase year-over-year, based on the mid-point of the range. Based on U.S. Generally Accepted Accounting Principles (GAAP), diluted EPS is expected to be in the range of $3.68 to $3.92.

"2014 was an exceptional year for Celgene and the momentum from our core businesses positions us for another year of outstanding execution," said Bob Hugin, Celgene's Chairman and Chief Executive Officer. "The depth of our 2014 accomplishments creates an inflection point, providing greater clarity on the opportunities for 2020 and beyond."

Preliminary 2014 Financial Results Year-Over-Year (Unaudited)

Certain activities involved in determining the audited results for the fiscal year ended December 31, 2014 are in process and could result in the final reported audited results being different from the unaudited results noted in this press release. Please see the attached Reconciliation of Estimated/Projected GAAP to Adjusted (Non-GAAP) Measures for further information.

Celgene Forecasts Strong Product Sales and Earnings Growth in 2015

2017 and 2020 Long-term Financial Targets

2015 Expected Operational Milestones

Hematology/Oncology

I&I

Q4 and Full year 2014 Conference Call and Webcast Information

Celgene will host a conference call to discuss the results and achievements of its fourth quarter and full year 2014 operating and financial performance on January 29, 2015, at 9 a.m. ET. The conference call will be available by webcast on the Investor Relations webpage at www.celgene.com. An audio replay of the call will be available from noon ET January 29, 2015, until midnight ET February 5, 2015. To access the replay, in the U.S. dial (855) 859-2056; outside the U.S. dial (404) 537-3406; and enter conference ID number 61454428.

About Celgene

Celgene Corporation, headquartered in Summit, New Jersey, is an integrated global biopharmaceutical company engaged primarily in the discovery, development and commercialization of innovative therapies for the treatment of cancer and inflammatory diseases through gene and protein regulation. For more information, please visit www.celgene.com. Follow Celgene on Social Media: @Celgene, Pinterest, LinkedIn and YouTube.

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 Reconciliation of Estimated/Projected GAAP to Adjusted (Non-GAAP) Measures for explanations of the amounts excluded and included to arrive at the adjusted measures for the year ended December 31, 2014 and for the projected amounts for the year ending December 31, 2015.

 
Celgene Corporation and Subsidiaries
Reconciliation of Estimated/Projected GAAP to Adjusted (Non-GAAP) Measures
(Unaudited)
               
Three Months Ended Twelve Months Ended Twelve Months Ending
December 31, 2014 December 31, 2014 December 31, 2015
Range Range Range
Low High Low High Low High
Estimated/projected diluted earnings per common share - GAAP (1) $ 0.71 $ 0.74 $ 2.38 $ 2.41 $ 3.68 $ 3.92
 
Per share impact of excluded items before tax:
Cost of goods sold (excluding amortization of acquired intangible assets):
Share-based compensation expense (2) 0.01 0.01 0.03 0.03 0.04 0.04
 
Research and Development:
Share-based compensation expense (2) 0.07 0.07 0.24 0.24 0.32 0.31
Upfront collaboration expense (1)(3) 0.06 0.06 0.54 0.54 - -
IPR&D Impairment (1)(4) - - 0.15 0.15 - -
 
Selling, general and administrative:
Share-based compensation expense (2) 0.08 0.08 0.27 0.27 0.37 0.35
Settlement of contingent obligation (5) - - 0.03 0.03 - -
 
Amortization of acquired intangible assets (1)(6) 0.08 0.08 0.31 0.31 0.31 0.31
 
Acquisition related charges, net:
Change in fair value of contingent consideration (1)(7) 0.05 0.04 0.06 0.05 0.15 0.12
 
Net income tax adjustments (8)   (0.05)     (0.07)   (0.30)     (0.32)   (0.27)   (0.30)
Estimated/projected diluted earnings per common share - Adjusted Approximately $ 1.01 Approximately $ 3.71 $ 4.60 $ 4.75
 
Twelve Months Ended Twelve Months Ending
December 31, 2014 December 31, 2015
Range Range
Low High Low High
 
Operating margin percentage of revenue - GAAP (1) 32.8% 32.9% 41.1% 42.2%
Plus adjustments:
Share-based compensation expense (2) 5.8% 5.8% 6.7% 6.1%
Upfront collaboration expense (1)(3) 5.9% 5.9% 0.0% 0.0%
IPR&D Impairment (1)(4) 1.7% 1.7% 0.0% 0.0%
Settlement of contingent obligation (5) 0.3% 0.3% 0.0% 0.0%
Amortization of acquired intangible assets (1)(6) 3.4% 3.4% 2.8% 2.7%
Change in fair value of contingent consideration (1)(7)   0.7%   0.6%   1.4%   1.0%
Operating margin percentage of revenue - Adjusted   50.6%   50.6%   52.0%   52.0%
 

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) Our projected 2015 financial measurements do not include the effect of any business 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 BioScience Inc. (Abraxis) that may occur after the day prior to the date of this press release.

(2) Exclude share-based compensation expense.

(3) Exclude upfront payment expense for research and development collaboration arrangements.

(4) Exclude in-process research and development (IPR&D) impairment recorded as a result of changes in estimated probability-weighted cash flows related to CC-292.

(5) Exclude settlement of contingent obligation to make matching contributions to a non-profit organization.

(6) Exclude amortization of intangible assets acquired in the acquisitions of Pharmion Corp., Gloucester Pharmaceuticals, Inc. (Gloucester), Abraxis and Celgene Avilomics Research, Inc. (Avila).

(7) Exclude changes in the fair value of contingent consideration related to the acquisitions of Gloucester, Abraxis, Avila and Nogra Pharma Limited.

(8) Net income tax adjustments reflect the estimated tax effect of the above adjustments and the impact of certain other non-operating tax adjustments, including the 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
Patrick E. Flanigan III, 908-673-9969
VP, Investor Relations
or
Brian Gill, 908-673-9530
VP, Corporate Communications

Source: Celgene Corporation

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