- Preliminary 2016 Unaudited Financial
Results Including Net Product Sales and Diluted EPS
- Raising 2017 Guidance for Total Revenue
and Diluted EPS
- Reaffirming 2020 Total Revenue and
Adjusted Diluted EPS Financial Targets
Celgene Corporation (NASDAQ:CELG) today provided a business
update as well as its preliminary 2016 unaudited results and
financial guidance for 2017 at the 35th Annual J.P. Morgan
Healthcare Conference. In 2017, total revenue is expected to be
approximately $13.0 billion to $13.4 billion, an 18 percent
increase year-over-year, based on the mid-point of the range. The
negative impact of foreign exchange on total revenue is expected to
be approximately $170 million in 2017. For the full-year 2017,
REVLIMID® net sales are expected to be in the range of $8.0 billion
to $8.3 billion.
Based on U.S. Generally Accepted Accounting Principles (GAAP),
diluted earnings per share (EPS) for the full-year 2017 is expected
to be in the range of $5.85 to $6.21, excluding the impact of any
strategic transactions, impairments and loss contingencies that
have not yet occurred. For the full-year 2017, adjusted diluted EPS
is expected to be in the range of $7.10 to $7.25, a 21 percent
increase year-over-year, based on the mid-point of the range.
“In 2016, we made exceptional progress strengthening and growing
our franchises while accelerating and adding to our robust
pipeline; our significant business momentum supports raising our
2017 guidance,” said Mark J. Alles, Chief Executive Officer of
Celgene. “We are entering a pivotal two-year period with multiple
catalysts increasing our confidence in our ability to achieve or
exceed our 2020 targets and sustain our growth from 2020 to
2030.”
Preliminary 2016 Financial Results
Year-Over-Year (Unaudited)
- Total net product sales are expected to
be approximately $11,187 million, up 22 percent year-over-year.
- REVLIMID®: $6,976 million, 20 percent
year-over-year increase
- POMALYST®/IMNOVID®: $1,311 million, 33
percent year-over-year increase
- OTEZLA®: $1,017 million, 116 percent
year-over-year increase
- ABRAXANE®: $973 million, 1 percent
year-over-year increase
- GAAP operating margin is expected to be
approximately 28 percent, an increase from 24 percent in the prior
year, primarily due to increased product sales. Full-year 2016 GAAP
diluted EPS is expected to be in the range of $2.43 to $2.51, a 27
percent year-over-year increase.
- Adjusted operating margin is expected
to be approximately 55 percent for the full year, an increase of
290 basis points (bps) year-over-year. Adjusted diluted EPS is
expected to be approximately $5.94, a 26 percent year-over-year
increase.
Certain activities involved in determining the audited results
for the fiscal year ended December 31, 2016 are in-process and
could result in the final reported audited results being different
from the unaudited results noted in this press release.
Additionally, please see the attached Use of Non-GAAP Financial
Measures and Reconciliation of Estimated/Projected GAAP to Adjusted
(Non-GAAP) Measures for further information relevant to the
interpretation of adjusted financial measures and reconciliations
of these adjusted financial measures to the most comparable GAAP
measures, respectively, for each of 2016 and 2017.
Celgene Expects Strong Product Sales
and Earnings Growth in 2017
Year-over-Year
Change*
Total Revenue Approximately $13.0B to $13.4B 18% REVLIMID® Net
Sales Approximately $8.0B to $8.3B 17% POMALYST®/ IMNOVID® Net
Sales Approximately $1.6B 22% OTEZLA® Net Sales Approximately $1.5B
to $1.7B 57% ABRAXANE® Net Sales Approximately $1.0B 3% GAAP
diluted EPS $5.85 to $6.21 N/M
** Adjusted diluted EPS $7.10
to $7.25 21% GAAP operating margin Approximately 45.5% N/M**
Adjusted operating margin 56.4% +150bps Weighted average diluted
shares ~815M +12M
*Year-over-year percentage change based on mid-point in
range.
**Not meaningful as the 2017 measures exclude the impact
of any strategic transactions, impairments and loss contingencies
that have not yet occurred.
Reaffirming Expected 2020 Long-term
financial Targets
- 2020 Total Revenue to exceed $21
billion
- Adjusted Diluted EPS to exceed
$13.00
2017 Expected Operational
Milestones
Hematology/Oncology
Regulatory
Submissions/Decisions
- Decision by the U.S. Food and Drug
Administration (FDA) and European Medicines Agency (EMA) on
REVLIMID® as maintenance treatment for patients with multiple
myeloma following autologous stem cell transplant
- Submission of a supplemental New Drug
Authorization (sNDA) to the U.S. FDA for REVLIMID® in combination
with bortezomib and dexamethasone (RVd) in patients with newly
diagnosed multiple myeloma (NDMM)
- Approval by the U.S. FDA for enasidenib
(AG-221) for the treatment of patients with relapsed and/or
refractory acute myeloid leukemia (AML) with isocitrate
dehydrogenase-2 (IDH2) mutation
Clinical Data
- Data from the phase III RELEVANCE®
trial with REVLIMID® in combination with rituximab in patients with
newly diagnosed follicular lymphoma (FL)
- Data from the phase III AUGMENT® trial
with REVLIMID® in combination with rituximab in patients with
relapsed and/or refractory FL
- Data from the phase III apact®
(PANC-003) trial with ABRAXANE® as adjuvant therapy in patients
with surgically resected pancreatic cancer
- Data from the phase IV abound.70+ trial
with ABRAXANE® in combination with carboplatin as a first-line
treatment in patients with advanced non-small cell lung cancer
(NSCLC)
- Data from the phase II abound.PS2 trial
with ABRAXANE® in combination with carboplatin as a first-line
treatment in patients with advanced NSCLC and an Eastern
Cooperative Group (ECOG) performance status of 2 (PS2)
- Data from the phase II abound.2L+ trial
with ABRAXANE® alone or in combination with CC-486 or durvalumab as
a second or third-line treatment in patients with advanced
non-small cell lung cancer
- Data from the phase II trial with
CC-486 in combination with fulvestrant in patients with ER+, HER2
breast cancer
- Data from phase I/II trials with CC-122
and CC-220 in patients with relapsed and/or refractory multiple
myeloma
- Data from the phase I/II FUSION™ trial
evaluating durvalumab as a single agent or in combination with
novel agents in patients with relapsed and/or refractory multiple
myeloma (RRMM), myelodysplastic syndromes and AML in collaboration
with AstraZeneca, plc.
- Data from the phase II YOSEMITE trial
with demcizumab in combination with ABRAXANE® in patients with
first-line metastatic pancreatic cancer in collaboration with
OncoMed Pharmaceuticals, Inc.
- Data from the phase II DENALI trial
with demcizumab in patients with first-line advanced stage NSCLC in
collaboration with OncoMed Pharmaceuticals, Inc.
Trial Enrollment
- Complete enrollment in the phase III
OPTIMISMM® trial with POMALYST®/IMNOVID® in second-line RRMM
- Complete enrollment in the phase III
ROBUST® trial with REVLIMID® in newly diagnosed diffuse large
B-cell lymphoma (DLBCL)
- Complete enrollment in the phase III
QUAZAR trial with CC-486 in post-induction AML maintenance
- Complete enrollment in the phase III
MEDALIST™ trial with luspatercept in patients with low and INT-1
myelodysplastic syndrome with ring sideroblasts who require red
blood cell (RBC) transfusions
- Complete enrollment in the phase III
BELIEVE™ trial with luspatercept in patients with beta-thalassemia
who have regular RBC transfusions
Trial Initiations
- Initiate enrollment in a phase III
trial with CC-122 in relapsed and/or refractory non-Hodgkin’s
lymphoma (NHL)
- Initiate enrollment in a pivotal
program with marizomib in glioblastoma
- Initiate enrollment in a phase II trial
with luspatercept in myelofibrosis in collaboration with Acceleron
Pharma, Inc.
- Initiate enrollment in a phase II trial
with bb2121, a B-cell maturation antigen (BCMA) chimeric antigen
receptor (CAR) T cell therapy, in RRMM in collaboration with
bluebird bio, Inc.
- Initiate enrollment in a pivotal
program with JCAR017 in relapsed and/or refractory non-Hodgkin’s
lymphoma in collaboration with Juno Therapeutics, Inc.
Inflammation and Immunology (I&I)
Regulatory
Submissions/Decisions
- Submission of an sNDA for OTEZLA®
once-daily formulation
- Submission of an NDA for ozanimod in
patients with multiple sclerosis
Clinical Data
- Data from the phase III SUNBEAM and
RADIANCE trials with ozanimod in multiple sclerosis
- Data from the phase II STEPSTONE trial
with ozanimod in Crohn’s disease
- Data from a phase II trial with
GED-0301 in ulcerative colitis
- Data from a phase II trial with OTEZLA®
in ulcerative colitis
Trial Enrollment
- Complete enrollment in the phase III
TRUE NORTH trial with ozanimod in ulcerative colitis
- Complete enrollment in the phase III
REVOLVE trial (CD-002) with GED-0301 in Crohn’s disease
- Complete enrollment in the phase III
RELIEF® trial with OTEZLA® in Behçet’s disease
- Complete enrollment in a phase II trial
(UC-001) with OTEZLA® in ulcerative colitis
- Complete enrollment in a pediatric
phase II trial (PPSO-001) with OTEZLA® in psoriasis
Trial Initiations
- Initiate enrollment in a phase III
trial with RPC-4046 in eosinophilic esophagitis
- Initiate enrollment in a phase III
trial with OTEZLA® in scalp psoriasis
- Initiate enrollment in a phase III
trial with OTEZLA® in ankylosing spondylitis
- Initiate enrollment in a phase IIb
trial with CC-220 in systemic lupus erythematosus
- Initiate enrollment in a phase IIa
trial with CC-90001 in idiopathic pulmonary fibrosis
Research and Early Development
- File at least 8 Investigational New
Drug (IND) or Clinical Trial Applications (CTA)
- Submission of an IND for a new CELMoD®
compound in patients with multiple myeloma
- Submission of an IND for EM901, a
T-cell bi-specific antibody targeting BCMA in patients with
multiple myeloma
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 next-generation solutions in protein homeostasis,
immuno-oncology, epigenetics, immunology and neuro-inflammation.
For more information, please visit www.celgene.com. Follow Celgene
on Social Media: @Celgene, Pinterest, LinkedIn, Facebook and
YouTube.
Forward-Looking Statement
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.
Use of Non-GAAP Financial Measures
In addition to financial information prepared in accordance with
U.S. GAAP, this document also contains certain non-GAAP financial
measures based on management’s view of performance including:
- Adjusted operating margin
- Adjusted earnings per share
Management uses such measures internally for planning and
forecasting purposes and to measure the performance of the Company.
We believe these adjusted financial measures provide useful and
meaningful information to us and investors because they enhance
investors’ understanding of the continuing operating performance of
our business and facilitate the comparison of performance between
past and future periods. These adjusted financial measures are
non-GAAP measures and should be considered in addition to, but not
as a substitute for, the information prepared in accordance with
U.S. GAAP. When preparing these supplemental non-GAAP financial
measures we typically exclude certain GAAP items that management
does not consider to be normal, recurring, cash operating expenses
but that may not meet the definition of unusual or non-recurring
items. Other companies may define these measures in different ways.
The following categories of items are excluded from adjusted
financial results:
Acquisition and Divestiture-Related Costs: We exclude the impact
of certain amounts recorded in connection with business
combinations and divestitures from our adjusted financial results
that are either non-cash or not normal, recurring operating
expenses due to their nature, variability of amounts, and lack of
predictability as to occurrence and/or timing. These amounts may
include non-cash items such as the amortization of acquired
intangible assets, amortization of purchase accounting adjustments
to inventories, intangible asset impairment charges and expense or
income related to changes in the estimated fair value measurement
of contingent consideration. We also exclude transaction and
certain other cash costs associated with business acquisitions and
divestitures that are not normal recurring operating expenses,
including severance costs which are not part of a formal
restructuring program.
Share-based Compensation Expense: We exclude share-based
compensation from our adjusted financial results because
share-based compensation expense, which is non-cash, fluctuates
from period to period based on factors that are not within our
control, such as our stock price on the dates share-based grants
are issued.
Collaboration-related Upfront Expenses: We exclude
collaboration-related upfront expenses from our adjusted financial
results because we do not consider them to be normal, recurring
operating expenses due to their nature, variability of amounts, and
lack of predictability as to occurrence and/or timing. Upfront
payments to collaboration partners are made at the commencement of
a relationship anticipated to continue for a multi-year period and
provide us with intellectual property rights, option rights and
other rights with respect to particular programs. The variability
of amounts and lack of predictability of collaboration-related
upfront expenses makes the identification of trends in our ongoing
research and development activities more difficult. We believe the
presentation of adjusted financial results excluding
collaboration-related upfront expenses, provides useful and
meaningful information about our ongoing research and development
activities by enhancing investors’ understanding of our normal,
recurring operating research and development expenses and
facilitates comparisons between periods and with respect to
projected performance. All expenses incurred subsequent to the
initiation of the collaboration arrangement, such as research and
development cost-sharing expenses/reimbursements and milestone
payments up to the point of regulatory approval are considered to
be normal, recurring operating expenses and are included in our
adjusted financial results.
Research and Development Asset Acquisition Expense: We exclude
costs associated with acquiring rights to pre-commercial compounds
because we do not consider such costs to be normal, recurring
operating expenses due to their nature, variability of amounts, and
lack of predictability as to occurrence and/or timing. Research and
development asset acquisition expenses includes expenses to acquire
rights to pre-commercial compounds from a collaboration partner
when there will be no further participation from the collaboration
partner or other parties. The variability of amounts and lack of
predictability of research and development asset acquisition
expenses makes the identification of trends in our ongoing research
and development activities more difficult. We believe the
presentation of adjusted financial results excluding research and
development asset acquisition expenses, provides useful and
meaningful information about our ongoing research and development
activities by enhancing investors’ understanding of our normal,
recurring operating research and development expenses and
facilitates comparisons between periods and with respect to
projected performance.
Restructuring Costs: We exclude costs associated with
restructuring initiatives from our adjusted financial results.
These costs include amounts associated with facilities to be
closed, employee separation costs and costs to move operations from
one location to another. We do not frequently undertake
restructuring initiatives and therefore do not consider such costs
to be normal, recurring operating expenses.
Certain Other Items: We exclude certain other significant items
that may occur occasionally and are not normal, recurring, cash
operating expenses from our adjusted financial results. Such items
are evaluated on an individual basis based on both the quantitative
and the qualitative aspect of their nature and generally represent
items that, either as a result of their nature or magnitude, we
would not anticipate occurring as part of our normal business on a
regular basis. While not all-inclusive, examples of certain other
significant items excluded from adjusted financial results would
be: expenses for significant fair value adjustments to equity
investments, significant litigation-related loss contingency
accruals and expenses to settle other disputed matters.
Estimated Tax Impact From Above Adjustments: We exclude the net
income tax impact of the non-tax adjustments described above from
our adjusted financial results. The net income tax impact of
the non-tax adjustments includes the impact on both current and
deferred income taxes and is based on the taxability of the
adjustment under local tax law and the statutory tax rate in the
tax jurisdiction where the adjustment was incurred.
Non-Operating Tax Adjustments: We exclude the net income tax
impact of certain other significant income tax items, which are not
associated with our normal, recurring operations (“Non-Operating
Tax Items”), from our adjusted financial
results. Non-Operating Tax Items include items which may occur
occasionally and are not normal, recurring operating expenses (or
benefits), including adjustments related to acquisitions,
divestitures, collaborations, certain adjustments to
the amount of unrecognized tax benefits related to prior year
tax positions, and other similar items.
Long-Term Targets
A reconciliation of long-term adjusted financial targets to the
most comparable GAAP measures cannot be provided because we are
unable to forecast with reasonable certainty many of the items
necessary to calculate such comparable GAAP measures, including
share-based compensation expense, collaboration-related upfront
expense, research and development asset acquisition expense,
acquisition-related expenses, fair value adjustments to contingent
consideration, the ultimate outcome of legal proceedings and
unusual gains and losses, as well as unforeseen events, risks and
developments. These items are uncertain, depend on various factors,
and could be material to our results computed in accordance with
GAAP. We believe the inherent uncertainties in reconciling our
long-term non-GAAP measures to the most comparable GAAP measures
would make the forecasted comparable GAAP measures nearly
impossible to predict with reasonable certainty and therefore
inherently unreliable.
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
three- and twelve-month periods ended December 31, 2016 and for the
projected amounts for the twelve-month period ending December 31,
2017.
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, 2016 December
31, 2016 December 31, 2017 Range Range Range
Low High Low High Low High
Estimated/projected diluted earnings per common share - GAAP (1) $
0.49 $ 0.57 $ 2.43 $ 2.51 $ 5.85 $ 6.21 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 0.04 0.04 0.04 0.04
Research and development: Share-based compensation expense (2) 0.08
0.08 0.32 0.32 0.34 0.32 Collaboration-related upfront expense
(1)(3) 0.16 0.16 1.02 1.02 - - Research and development asset
acquisition expense (1)(4) 0.34 0.34 1.11 1.11 0.37 0.37
Selling, general and administrative: Share-based compensation
expense (2) 0.10 0.10 0.40 0.40 0.43 0.40 Litigation-related loss
contingency accrual expense (1)(5) 0.09 0.09 0.25 0.25 - -
Amortization of acquired intangible assets (1)(6) 0.15 0.11 0.59
0.55 0.45 0.41 Acquisition related (gains) charges and
restructuring, net: Change in fair value of contingent
consideration (1)(7) 0.02 0.01 0.04 0.03 0.18 0.16 Restructuring
charges (8) - - 0.02 0.02 - - Other income (expense), net:
Equity investment adjustment (1)(9) 0.34 0.34 0.34 0.34 - -
Income tax provision: Estimated tax impact from above adjustments
(10) (0.06 ) (0.09 ) (0.51 ) (0.54 ) (0.56 ) (0.66 ) Non-operating
tax adjustments (11) (0.11 ) (0.11 ) (0.11 ) (0.11 ) - -
Estimated/projected diluted earnings per common share - Adjusted
Approximately $ 1.61 Approximately $ 5.94 $ 7.10 $ 7.25
Twelve Months Ended Twelve Months Ending December 31,
2016 December 31, 2017 Range Range Low High Low High
Operating margin percentage of revenue - GAAP (1) 27.8 % 28.1 %
45.1 % 46.1 % Plus adjustments: Share-based compensation expense
(2) 5.4 % 5.4 % 5.1 % 4.6 % Collaboration-related upfront expense
(1)(3) 7.3 % 7.3 % 0.0 % 0.0 % Research and development asset
acquisition expense (1)(4) 8.0 % 8.0 % 2.3 % 2.2 %
Litigation-related loss contingency accrual expense (1)(5) 1.8 %
1.8 % 0.0 % 0.0 % Amortization of acquired intangible assets (1)(6)
4.2 % 4.0 % 2.8 % 2.5 % Change in fair value of contingent
consideration (1)(7) 0.3 % 0.2 % 1.1 % 1.0 % Restructuring charges
(8) 0.1 % 0.1 % 0.0 % 0.0 % Operating
margin percentage of revenue - Adjusted 54.9 % 54.9 %
56.4 % 56.4 % Explanation of adjustments: (1)
Our projected 2017 financial measures do not include the effect of
any business combinations, collaboration agreements, asset
acquisitions, asset impairments, additional litigation-related loss
contingency accruals, changes in the fair value of our CVRs issued
as part of the acquisition of Abraxis BioScience Inc. (Abraxis) or
non-operating tax adjustments 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
research and development asset acquisition expenses; 2016 includes
EngMab AG. (5) Exclude loss contingency accrual expense related to
a contractual dispute. (6) Exclude amortization of intangible
assets acquired in the acquisitions of Pharmion Corp., Gloucester
Pharmaceuticals, Inc. (Gloucester), Abraxis, Celgene Avilomics
Research, Inc. (Avila), and Quanticel Pharmaceuticals, Inc.
(Quanticel). The excluded expense for 2016 includes $101.5 million
related to the impairment of an intangible asset acquired in the
Avila acquisition. (7) Exclude changes in the fair value of
contingent consideration related to the acquisitions of Gloucester,
Abraxis, Avila, Nogra Pharma Limited, and Quanticel. (8) Exclude
restructuring charges related to our relocation of certain
operations into our two Summit, NJ locations as well as costs
associated with certain headcount reductions. (9) Fair value
adjustment to our equity investment in Juno Therapeutics, Inc. per
ASC 320 "Investments—Debt and Equity Securities." (10) Exclude the
estimated tax impact from the above adjustments. (11) Exclude the
tax benefit of a loss related to a prior year acquisition.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170109005808/en/
For Celgene Corporation:Patrick E. Flanigan III,
908-673-9969Corporate VP, Investor RelationsorBrian Gill,
908-673-9530VP, Corporate Communications
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