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Celgene Reports Record Second Quarter 2011 Operating and Financial Results

^{Published on 2011-07-28 04:46:49 - Market Wire}
 

SUMMIT, N.J.--([ BUSINESS WIRE ])--Celgene Corporation (NASDAQ: CELG):

"The quarterly results were outstanding, and reflect the therapeutic value of our novel therapies for patients worldwide"

2011 Second Quarter Financial Results Year-Over-Year

• Non-GAAP Total Revenue Increased 38 Percent to $1.18 Billion; GAAP Total Revenue $1.18 Billion
• Global REVLIMID Net Product Sales Increased 35 Percent to $795 Million
• Global VIDAZA^® Net Product Sales Increased 23 Percent to $162 Million
• Global ABRAXANE^® Net Product Sales Reached $95 Million
• Non-GAAP Operating Income Increased 33 Percent to $518 Million; GAAP Operating Income $319 Million
• Non-GAAP Net Income Increased 29 Percent to $417 Million; GAAP Net Income $279 Million
• Non-GAAP Diluted Earnings Per Share Increased 29 Percent to $0.89; GAAP Diluted Earnings Per Share $0.59

2011 Financial Outlook Update

• Non-GAAP Total Revenue Expected to Increase Approximately 29 Percent Year-Over-Year to a Range of $4.60 to $4.70 Billion, Up From a Previous Range of $4.45 to $4.55 Billion
• REVLIMID Net Product sales Anticipated to Increase Approximately 30 Percent Year-Over-Year to a Range of $3.15 to $3.25 Billion, Up From a Previous Range of $3.05 to $3.15 Billion
• Non-GAAP Diluted Earnings Per Share Expected to Increase Approximately 25 Percent Year-Over-Year to a Range of $3.45 to $3.55, Up From a Previous Range of $3.35 to $3.40

Recent Developments and Highlights

• Overall Survival Benefit with REVLIMID As Continuous Therapy for Patients with Multiple Myeloma (MM) Achieved In Intergroup Phase III Study CALGB 100104
• FDA Granted Accelerated Approval of ISTODAX® As Treatment for Patients with Peripheral T-Cell Lymphoma (PTCL) Who Have Received at Least One Prior Therapy
• GELA, the Premier Cooperative Group in Adult Lymphoma Research, Chose REVLIMID for Major Study, aRELEVANCEa, in Newly-Diagnosed Follicular Lymphoma Scheduled to Start 2011
• Launched ABRAXANE for Metastatic Breast Cancer in the European Union
• ABRAXANE Phase III Trial in Melanoma, CA033, Fully Enrolled
• Phase II Trial Data of REVLIMID in Combination Therapy in Metastatic Castrate-Resistant Prostate Cancer Reported 86% of Patients Achieved a 50% Reduction in PSA
• Phase II Trial Data of REVLIMID Plus Rituximab for Untreated Indolent B-Cell Lymphoma Reported a 91% Overall Response Rate and 65% Complete Remission Rate and Patients with Follicular Lymphoma Achieved an 85% Complete Remission Rate
• ACE-011(Sotatercept) Phase II/III Trial in Chemotherapy Induced Anemia in Non-Small Cell Lung Cancer (NSCLC) Initiated
• Phase I Study of Oral Azacitidine in Myelodysplastic Syndromes, Chronic Myelomonocytic Leukemia, and Acute Myeloid Leukemia Published in Journal of Clinical Oncology

2H 2011 Selected Objectives

Hematology

• Submit REVLIMID Newly Diagnosed Multiple Myeloma Regulatory Filing With FDA
• Submit REVLIMID del 5q Myelodysplastic Syndromes Regulatory Filing With European Medicines Agency
• Launch ISTODAX in PTCL in the United States
• Complete Enrollment of Pivotal Phase II Trials Evaluating REVLIMID in Mantle Cell Lymphoma
• Initiate Phase II/III Combination Study of REVLIMID and VIDAZA in Patients with Acute Myeloid Leukemia

Oncology

• Submit ABRAXANE NSCLC Supplemental New Drug Application (sNDA) to FDA
• Complete Enrollment of ABRAXANE Phase III Trial in Pancreatic Cancer
• Complete Enrollment of ABRAXANE Phase II Trials in Melanoma, Bladder and Ovarian Cancer
• Complete Enrollment of REVLIMID Phase III Trial in Metastatic Castrate Resistant Prostate Cancer
• Advance Development Program of TORKi (mTOR Kinase Inhibitor) CC-223
• Advance Development Program of Oral Azacitidine in Solid Tumors

Inflammation and Immunology

• Present Phase II Data with Apremilast in Ankylosing Spondylitis
• Complete Enrollment of Six Phase III Trials Evaluating Apremilast in Psoriatic Arthritis (n = 2,000), and in Moderate-to-Severe Psoriasis (n = 1,200)
• Advance Phase II Apremilast Trial in Rheumatoid Arthritis
• Advance Development Program of Cellular Therapy PDA-001 in Crohna™s Disease, Multiple Sclerosis, Rheumatoid Arthritis, and Other Diseases
• Advance Tanzisertib (CC-930) Phase II Study in Idiopathic Pulmonary Fibrosis
• Advance Development of Pomalidomide in Systemic Sclerosis

Celgene Corporation (NASDAQ: CELG) announced non-GAAP (Generally Accepted Accounting Principles) net income of $417 million, or non-GAAP diluted earnings per share of $0.89, for the quarter ended June 30, 2011. Non-GAAP net income for the second quarter of 2010 was $323 million, or non-GAAP diluted earnings per share of $0.69. Based on U.S. GAAP, Celgene reported net income attributable to Celgene of $279 million, or GAAP diluted earnings per share of $0.59, for the quarter ended June 30, 2011. GAAP net income for the second quarter of 2010 was $155 million, or GAAP diluted earnings per share of $0.33.

Celgene posted non-GAAP net income of $811 million, or non-GAAP diluted earnings per share of $1.72, for the first six months of 2011 as compared to non-GAAP net income of $618 million or non-GAAP diluted earnings per share of $1.32 in 2010. On a GAAP basis, Celgene reported net income attributable to Celgene of $535 million, or diluted earnings per share of $1.14 for the first six months of 2011, compared to GAAP net income of $390 million, or diluted earnings per share of $0.83 in 2010.

aThe quarterly results were outstanding, and reflect the therapeutic value of our novel therapies for patients worldwide,a said Bob Hugin, Chief Executive Officer of Celgene Corporation. aWe are focused on operational excellence to leverage our global potential and drive both near and long-term industry-leading growth and profitability.a

Product Sales Performance

Non-GAAP total revenue was a record $1.18 billion for the quarter ended June 30, 2011, an increase of 38 percent over 2010. GAAP total revenue was $1.18 billion for the quarter ended June 30, 2011. The increase in total revenue was driven by global market share gains, geographic expansion and increased duration of therapy of REVLIMID and VIDAZA.Net sales of REVLIMID were $795 million, an increase of 35 percent over the same period in 2010. VIDAZA net sales were $162 million, an increase of 23 percent from 2010. Global THALOMID^® (inclusive of Thalidomide Celgene^® and Thalidomide Pharmion^®) net sales were $88 million, a decrease of 10 percent from 2010. Global ABRAXANE net sales were $95 million.

For the first six months of 2011, non-GAAP total revenue was a record $2.28 billion, an increase of 39 percent over the same period in 2010. GAAP total revenue was $2.31 billion for the first six months of 2011. REVLIMID net sales for the first six months of 2011 reached $1.53 billion, an increase of 37 percent over $1.12 billion for the same period in 2010. VIDAZA net sales for the first six months of 2011 reached $325 million, an increase of 29 percent over the same period in 2010. THALOMID net sales for the first six months of 2011 were $174 million. Global ABRAXANE net sales for the first six months of 2011 were $169 million.

Research and Development

For the second quarter of 2011, non-GAAP R&D expenses, which exclude share-based employee compensation expense, non-core R&D operations acquired from Abraxis and an upfront payment for an R&D collaboration agreement, were $306 million compared to $202 million for the second quarter of 2010. The increase was primarily due to support of ongoing clinical progress in multiple proprietary development programs in hematology, oncology, inflammation and immunology as well as multiple initiatives in our discovery program, peak enrollment in multiple late stage, large clinical trials and a $7 million milestone payment in the second quarter of 2011. On a GAAP basis, R&D expenses were $372 million for the second quarter of 2011 and $343 million for the same period in 2010.

Selling, General, and Administrative

Non-GAAP selling, general and administrative expenses, which exclude share-based employee compensation expense, and expenses from non-core selling, general, and administrative activities acquired from Abraxis, were $274 million for the second quarter of 2011 compared to $197 million for the second quarter of 2010. The increase was primarily due to higher marketing and sales related expenses resulting from multiple international medical meetings; ongoing product launch activities, including REVLIMID in Japan, VIDAZA in Europe, ISTODAX in the United States, and launch of ABRAXANE in the United States and Europe; as well as Abraxis ongoing operations and integration costs. On a GAAP basis, selling, general and administrative expenses were $306 million for the second quarter of 2011 and $219 million for the same period in 2010.

Interest and Other Income, Net

Non-GAAP interest and other income, net, was a net expense of $5 million for the second quarter of 2011, compared with a net benefit of $5 million for the second quarter of 2010, primarily due to interest expense associated with the $1.25 billion in senior notes issued in October 2010.

Cash, Cash Equivalents, and Marketable Securities

Cash, cash equivalents, and marketable securities totaled $2.79 billion as of June 30, 2011. Celgene repurchased 4.1 million shares during the second quarter for approximately $239 million.

Conference Call and Webcast Information

Celgene will host a conference call to discuss the results and achievements of its second quarter 2011 and its operating and financial performance on July 28, 2011, 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 July 28, 2011, until midnight ET August 4, 2011. To access the replay, in the U.S. dial 800-642-1687; outside the U.S. dial 706-645-9291; and enter reservation number 79273910. The companya™s third quarter financial and operational results are expected to be reported in late October.

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 [ 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," aoutlooka and similar expressions. Forward-looking statements are based on managementa™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 non-GAAP 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 non-GAAP measures 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 non-GAAP Net Income for explanations 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 six-month periods ended June 30, 2011 and 2010 and for the projected amounts for the year ending December 31, 2011.