Celgene Corporation
Jan 28, 2010
PDF
Add to Briefcase

Celgene Reports Record Fourth Quarter and Full Year 2009 Product Sales and Operating Income

- Record Fourth Quarter and Full Year Results Driven By Gains in Global Market Share, Duration of Therapy and Reimbursement Approvals

- REVLIMID® Fourth Quarter Global Net Product Sales Increased 35% Y/Y and 11% Q/Q

- VIDAZA® Fourth Quarter Global Net Product Sales Increased 68% Y/Y and 13% Q/Q

- Full Year Non-GAAP Diluted Earnings Per Share Increased 33% Y/Y

SUMMIT, N.J., Jan 28, 2010 (BUSINESS WIRE) -- Celgene Corporation (NASDAQ: CELG):

2009 Fourth Quarter Financial Results Year-Over-Year:

2009 Full Year Financial Results Year-Over-Year:

2010 Financial Outlook Year-Over-Year

Recent Developments and Highlights

Hematology

Oncology

Inflammation and Immunology

Selected Corporate Developments

2010 Selected Corporate Objectives

Celgene Corporation (NASDAQ: CELG) announced non-GAAP (Generally Accepted Accounting Principles) net income of $290.3 million, or non-GAAP diluted earnings per share of $0.62 for the quarter ended December 31, 2009. Non-GAAP net income for the fourth quarter of 2008 was $200.9 million or non-GAAP diluted earnings per share of $0.43. Based on U.S. GAAP, Celgene reported net income of $254.2 million, or diluted earnings per share of $0.54 for the quarter ended December 31, 2009. GAAP net loss for the fourth quarter of 2008 was $149.3 million, or diluted loss per share of $0.33.

Celgene posted non-GAAP net income of $971.3 million or non-GAAP diluted earnings per share of $2.08 during 2009 as compared to non-GAAP net income of $718.8 million and non-GAAP diluted earnings per share of $1.56 in 2008. On a GAAP basis, Celgene reported net income of $776.7 million or diluted earnings per share of $1.66 for 2009, compared to GAAP net loss of $1.534 billion or a diluted loss per share of $3.46 in 2008, which was primarily due to an in-process research and development charge associated with the acquisition of Pharmion Corporation in March 2008.

Product Sales Performance

Non-GAAP total revenue was a record $757.8 million for the quarter ended December 31, 2009, an increase of 22 percent from 2008. GAAP total revenue was $761.0 million for the quarter ended December 31, 2009. The increase in total revenue was driven by global market share gains, increased duration of therapy of REVLIMID® and reimbursement approvals. Net sales of REVLIMID were $497.1 million, an increase of 35 percent over the same period in 2008. Global THALOMID® (inclusive of Thalidomide Celgene and Thalidomide Pharmion) and VIDAZA® net sales were $107.7 million and $116.7 million, respectively. Revenue from Focalin® and the Ritalin® family of drugs totaled $27.6 million for the fourth quarter of 2009 compared to $27.9 million over the same period in 2008.

For the full year of 2009, non-GAAP total revenue was a record $2.677 billion, an increase of 20 percent year-over-year. GAAP total revenue was $2.690 billion for 2009. Total non-GAAP net product sales reached a record $2.555 billion, an increase of 21 percent year-over-year. REVLIMID net sales for the full year reached $1.706 billion compared to $1.325 billion in 2008. Global 2009 THALOMID and VIDAZA net sales for the full year were $436.9 million and $387.2 million, respectively.

Research and Development

For the fourth quarter of 2009, non-GAAP R&D expenses, which exclude share-based employee compensation expense, were $181.8 million compared to $153.8 million for the fourth quarter of 2008, which also excluded the purchase of the VIDAZA royalty obligation. These R&D expenditures continue to support ongoing clinical progress in multiple proprietary development programs for REVLIMID, pomalidomide and other IMiDs® compounds; VIDAZA; amrubicin, our lead compound for small cell lung cancer; apremilast and our oral anti-inflammatory compounds; our kinase inhibitor programs; our activin inhibitor program with ACE-011; and cellular therapy programs. On a GAAP basis, R&D expenses were $201.7 million for the fourth quarter of 2009 and $468.6 million in the same period in 2008.

Selling, General, and Administrative

Non-GAAP selling, general and administrative expenses, which exclude share-based employee compensation expense, were $193.3 million for the fourth quarter of 2009 compared to $181.7 million for the fourth quarter of 2008. The increase was primarily due to marketing and sales expenses related to product launch activities of VIDAZA in Europe. On a GAAP basis, selling, general and administrative expenses were $211.6 million for the fourth quarter of 2009 and $200.2 million in the same period in 2008.

Interest and Other Income, Net

For the quarter ended December 31, 2009, interest and other income, net, decreased to $22.0 million compared to $34.9 million in the same period in 2008.

Cash, Cash Equivalents, and Marketable Securities

Celgene reported $2.997 billion in cash, cash equivalents, and marketable securities as of December 31, 2009, an increase of $774.7 million from December 31, 2008.

Non-GAAP Financial Information

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-month and full year periods ended December 31, 2009 and 2008. Non-GAAP financial measures provide investors and management with supplemental measures of operating performance and trends that facilitate comparisons between periods before 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.

Conference Call and Webcast Information

Celgene will host a conference call to discuss the results and achievements of its fourth quarter 2009 and its operating and financial performance on January 28, 2010, at 9 a.m. EST. The conference call will be available by webcast at http://www.celgene.com. An audio replay of the call will be available from noon January 28, 2010, until midnight EST February 4, 2010. To access the replay, in the U.S. dial 888-203-1112; outside the U.S. dial 719-457-0820; and enter reservation number 9427875. The Company's first quarter 2010 financial and operational results will be reported in late April.

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 http://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. The Company's actual results, performance, or achievements could be materially different from those projected by these forward-looking statements.The factors that could cause actual results, performance, or achievements to differ from the forward-looking statements are discussed in the Company's filings with the Securities and Exchange Commission, such as the Company's Form 10-K, 10-Q and 8-K reports.Given these risks and uncertainties, you are cautioned not to place undue reliance on the forward-looking statements.

Celgene Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
                 
                 
                 
    Three Months Ended   Twelve Months Ended
    December 31,   December 31,
    2009     2008     2009     2008  
                 
Net product sales   $ 725,001   $ 596,122     $ 2,567,354   $ 2,137,678  
Collaborative agreements and other revenue     6,764     4,986       13,743     14,945  
Royalty revenue     29,272     27,147       108,796     102,158  
Total revenue     761,037     628,255       2,689,893     2,254,781  
                 
Cost of goods sold (excluding amortization                
of acquired intangible assets)     49,030     67,814       216,289     258,267  
Research and development     201,738     468,568       794,848     931,218  
Selling, general and administrative     211,564     200,203       753,827     685,547  
Amortization of acquired intangible assets     16,000     26,125       83,403     103,967  
Acquired in-process research and development     -     -       -     1,740,000  
Total costs and expenses     478,332     762,710       1,848,367     3,718,999  
                 
Operating income (loss)     282,705     (134,455)       841,526     (1,464,218)  
                 
Equity in losses of affiliated companies     159     966       1,103     9,727  
Interest and other income, net     22,023     34,850       135,280     105,120  
                 
Income (loss) before income taxes     304,569     (100,571)       975,703     (1,368,825)  
                 
Income tax provision     50,354     48,690       198,956     164,828  
                 
Net income (loss)   $ 254,215   $ (149,261)     $ 776,747   $ (1,533,653)  
                 
Per common share:                
Net income (loss) - basic   $ 0.55   $ (0.33)     $ 1.69   $ (3.46)  
Net income (loss) - diluted   $ 0.54   $ (0.33)     $ 1.66   $ (3.46)  
                 
Weighted average shares - basic     459,223     458,742       459,304     442,620  
                 
Weighted average shares - diluted     466,965     458,742       467,354     442,620  
                 
                 
    December 31,   December 31,        
    2009     2008          
Balance sheet items:                
Cash, cash equivalents & marketable securities   $ 2,996,752   $ 2,222,091          
Total assets     5,375,565     4,445,270          
Stockholders' equity     4,394,606     3,491,328          
                       
Celgene Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Net Income (Loss)
(In thousands, except per share data)
                     
                     
        Three Months Ended   Twelve Months Ended
        December 31,   December 31,
          2009       2008       2009       2008  
                     
Net income (loss) - GAAP       $ 254,215     $ (149,261 )   $ 776,747     $ (1,533,653 )
                     
Before tax adjustments:                    
Net product sales:                    
Pharmion products to be divested   (1)    

(3,286)

      (4,812)       (12,654)       (16,965)  
                     
Cost of goods sold (excluding amortization                    
of acquired intangible assets):                    
Share-based compensation expense   (2)     1,140       706       4,444       2,535  
Pharmion inventory step-up   (3)     -       5,977       354       24,646  
Pharmion products to be divested   (1)     2,866       1,934       8,262       6,950  
EntreMed intercompany royalty   (4)     (388)      

(444)

      (585)       (843)  
                     
Research and development:                    
Share-based compensation expense   (2)     19,910       11,742       64,751       44,007  
Upfront collaboration payments   (5)     -       -       34,500       45,000  
Purchase of VIDAZA royalty obligation   (6)     -       303,069       -       303,069  
                     
Selling, general and administrative:                    
Share-based compensation expense   (2)     18,240       18,480       74,624       60,036  
                     
Amortization of acquired intangible assets   (7)     16,000       26,125       83,403       103,967  
Acquired in-process research and development   (8)     -       -       -       1,740,000  
                     
Equity in losses of affiliated companies:                    
Equity in losses of EntreMed   (9)     469       750       1,449       3,571  
                     
Net income tax adjustments   (10)     (18,854)       (13,367)       (63,973)       (63,559)  
Net income - non-GAAP       $ 290,312     $ 200,899     $ 971,322     $ 718,761  
                     
Per common share -non-GAAP:                    
Net income - basic       $ 0.63     $ 0.44     $ 2.11     $ 1.62  
Net income - diluted   (11)   $ 0.62     $ 0.43     $ 2.08     $ 1.56  
 
Explanation of adjustments:
(1)   Exclude sales and costs related to former non-core Pharmion Corp. products to be divested.
(2)  

Exclude share-based compensation expense for the fourth quarter totaling $39,290 in 2009 and $30,928 in 2008. The after tax net impact reduced GAAP net income for the fourth quarter by $30,371, or $0.07 per diluted share in 2009 and $24,251, or $0.05 per diluted share in 2008. Exclude share-based compensation expense for the twelve-month periods totaling $143,819 in 2009 and $106,578 in 2008. The after tax net impact reduced GAAP net income for the twelve-month periods by $111,419, or $0.24 per diluted share in 2009 and $85,051, or $0.19 per diluted share in 2008.

(3)   Exclude acquisition-related Pharmion Corp. inventory step-up adjustment to fair value expensed during the period.
(4)   Exclude the Company's share of THALOMID royalties payable to EntreMed, Inc.
(5)  

Exclude upfront payments for research and development collaboration arrangements with GlobeImmune, Inc. and Array BioPharma Inc. of $30,000 and $4,500, respectively, for the twelve-month period in 2009 and Acceleron Pharma, Inc. of $45,000 for the twelve-month period in 2008.

(6)   Exclude the purchase of VIDAZA royalty obligations related to unapproved forms.
(7)  

Exclude amortization of acquired intangible assets for the fourth quarter of 2009 and 2008 resulting from the acquisition of Pharmion Corp. of $16,000 and $26,125, respectively. Exclude amortization of acquired intangible assets for the twelve-month periods from the acquisition of Pharmion Corp. of $83,403 in 2009 and from the acquisitions of Pharmion Corp. and Penn T of $102,330 and $1,637, respectively, in 2008.

(8)   Exclude the in-process research and development write-off related to the acquisition of Pharmion Corp. in the twelve-month period in 2008.
(9)   Exclude the Company's share of equity losses in EntreMed, Inc.
(10)   Net income tax adjustments reflects the estimated tax effect of the above adjustments.
(11)  

Diluted net income per share for the three- and twelve-month periods of 2008 were determined using diluted weighted average shares of 468,477 and 461,626, respectively.

SOURCE: Celgene Corporation

Celgene Corporation
David Gryska, 908-673-9059
Sr. Vice President and
Chief Financial Officer
or
Tim Smith, 908-673-9951
Director
Investor Relations