- Strong total revenue of $4.4 billion,
increased 15% Y/Y driven by volume
- Company raises 2019 total revenue guidance;
reaffirms 2020 outlook
- Fedratinib, ozanimod and luspatercept
regulatory filings accepted year-to-date; liso-cel BLA submission
on-track for Q4:19
Celgene Corporation (NASDAQ: CELG) reported second quarter 2019
total revenue of $4,400 million, a 15 percent increase compared to
$3,814 million in the second quarter of 2018.
Based on U.S. GAAP (Generally Accepted Accounting Principles),
Celgene reported net income of $1,571 million and diluted earnings
per share (EPS) of $2.16 for the second quarter of 2019. For the
second quarter of 2018, GAAP net income was $1,045 million and
diluted EPS was $1.43.
Adjusted net income for the second quarter of 2019 increased 31
percent to $2,079 million compared to $1,585 million in the second
quarter of 2018. For the same period, adjusted diluted EPS
increased 32 percent to $2.86 from $2.16.
“Outstanding operating performance in the second quarter
supports raising our full-year financial guidance,” said Mark J.
Alles, Chairman and Chief Executive Officer of Celgene Corporation.
“In parallel, we achieved multiple regulatory and clinical
milestones expected to generate even more business momentum into
the close of our transaction with Bristol-Myers Squibb.”
Second Quarter 2019 Financial
Highlights
Unless otherwise stated, all comparisons are for the second
quarter of 2019 compared to the second quarter of 2018. The
adjusted operating expense categories presented below exclude
share-based employee compensation expense and collaboration-related
upfront expense. Please see the attached Use of Non-GAAP Financial
Measures and Reconciliation of GAAP to Adjusted Net Income 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.
Net Product Sales Performance
- REVLIMID® sales for the second quarter were $2,732 million, an
increase of 11 percent year-over-year. U.S. sales were $1,810
million and international sales were $922 million, an increase of
14 percent and 6 percent year-over-year, respectively. REVLIMID®
sales growth was driven primarily by the adoption of triplet
therapy for myeloma resulting in increases in treatment duration
and market share.
- POMALYST®/IMNOVID® sales for the second quarter were $619
million, an increase of 22 percent year-over-year. U.S. sales were
$447 million and international sales were $172 million, an increase
of 31 percent and 4 percent year-over-year, respectively.
POMALYST®/IMNOVID® sales growth was driven primarily by the
adoption of triplet therapy for myeloma resulting in increases in
treatment duration and market share.
- OTEZLA® sales for the second quarter were $493 million, an
increase of 31 percent year-over-year. U.S. sales were $399 million
and international sales were $94 million, an increase of 37 percent
and 12 percent year-over-year, respectively. OTEZLA® sales growth
in the U.S. was driven by increase in demand and customer buying
patterns, while international sales were driven by continued
expansion in key markets.
- ABRAXANE® sales for the second quarter were $316 million, an
increase of 30 percent year-over-year. U.S. sales were $207 million
and international sales were $109 million, an increase of 36
percent and 20 percent year-over-year, respectively. ABRAXANE®
sales growth was driven primarily by increased demand due to
immuno-oncology (IO) combinations in non-small cell lung cancer
(NSCLC) and triple-negative breast cancer (TNBC).
- In the secondquarter, all other product sales, which include
IDHIFA®, THALOMID®, ISTODAX®, VIDAZA® and an authorized generic
version of VIDAZA® drug product primarily sold in the U.S., were
$239 million compared to $230 million in the second quarter of
2018.
Research and Development (R&D)
On a GAAP basis, R&D expenses were $1,100 million for the
second quarter of 2019 compared to $1,251 million for the same
period in 2018. Adjusted R&D expenses were $935 million for the
second quarter of 2019 compared to $948 million for the second
quarter of 2018. The decrease was driven by a reduction in expenses
related to certain collaboration arrangements and regulatory
submission-related work on multiple programs almost fully offset by
increased investments in ongoing late-stage pipeline programs.
Additional R&D expenses (only included on a GAAP basis)
decreased in 2019, as outlined in the attached Reconciliation of
GAAP to Adjusted Net Income.
Selling, General and Administrative (SG&A)
On a GAAP basis, SG&A expenses were $793 million for the
second quarter of 2019 compared to $790 million for the same period
in 2018. Adjusted SG&A expenses were $693 million for the
second quarter of 2019 compared to $672 million for the second
quarter of 2018. The increase was driven primarily by increased
pre-launch marketing related expenses partially offset by a
decrease in expense related to technology investments completed in
2018. Additional SG&A expense (only included on a GAAP basis)
decreased in 2019, as outlined in the attached Reconciliation of
GAAP to Adjusted Net Income.
Cash, Cash Equivalents, Marketable Debt Securities and
Publicly-Traded Equity Securities
Operating cash flow was $2.2 billion in the second quarter of
2019, compared to $1.2 billion for the second quarter of 2018.
Celgene ended the quarter with approximately $9.3 billion in cash,
cash equivalents, marketable debt securities and publicly-traded
equity securities.
2019 Total Revenue Guidance Raised;
Reaffirming 2020 Outlook*
- Full-Year 2019 Total Revenue increase driven by POMALYST® and
ABRAXANE® performance
- Full-Year 2019 Adjusted Operating Margin and Adjusted Diluted
EPS includes potential collaboration-related expenses of
approximately $160 million that may be incurred in the second half
of 2019
- Diluted shares outstanding reflects no planned share
repurchases in 2019
January 2019 Guidance
July 2019 Guidance
Total Revenue
$17.0B - $17.2B
$17.2B - $17.4B
REVLIMID® Net Product Sales
~ $10.8B
Unchanged
POMALYST®/IMNOVID® Net Product Sales
~ $2.4B
~ $2.5B
OTEZLA® Net Product Sales
~ $1.9B
Unchanged
ABRAXANE® Net Product Sales
~ $1.1B
~ $1.2B
GAAP Operating Margin
~ 49.0%
~48.0%
Adjusted Operating Margin
~57.5%
~58.0%
Adjusted Tax Rate
~17.0%
~16.75%
GAAP Diluted EPS
$8.90 - $9.63
$8.71 - $9.44
Adjusted Diluted EPS
$10.60 - $10.80
$10.65 - $10.85
Weighted average diluted shares
~715M
~730M
* Company reaffirms 2020 outlook: Total revenue of $19.0-$20.0
billion and adjusted diluted EPS of >$12.50 on a standalone
basis. Due to pending Bristol-Myers Squibb transaction, Celgene
does not anticipate providing any additional updates on our 2020
outlook going forward.
Portfolio Updates
- In July, Celgene announced that the U.S. Food and Drug
Administration (FDA) approved OTEZLA® for the treatment of adult
patients with oral ulcers associated with Behçet’s Disease. The
approval was based on efficacy and safety results from the phase
III RELIEF™ trial evaluating OTEZLA® in adult patients with
Behçet’sDisease with active oral ulcers who were previously treated
with at least one nonbiologic medication and were candidates for
systemic therapy.
- In June, Celgene announced that the U.S. FDA accepted the New
Drug Application (NDA) for ozanimod for the treatment of patients
with relapsing forms of multiple sclerosis (RMS) and set a
Prescription Drug User Fee Act (PDUFA) date of March 25, 2020. In
addition, the European Medicines Agency (EMA) accepted for review
the Marketing Authorization Application (MAA) for ozanimod in
relapsing-remitting multiple sclerosis (RRMS). A regulatory
decision from the EMA is expected in the first half of 2020. Both
applications are based primarily on data from the phase III
SUNBEAM™ and RADIANCE™ Part B trials evaluating ozanimod in
RMS.
- In June, Celgene and Acceleron Pharma announced that the U.S.
FDA accepted Celgene’s Biologics License Application (BLA) for
luspatercept for the treatment of adult patients with very low to
intermediate-risk myelodysplastic syndromes (MDS)-associated anemia
who have ring sideroblasts and require red blood cell (RBC)
transfusions, and for the treatment of adult patients with
beta-thalassemia-associated anemia who require RBC transfusions.
The FDA granted Priority Review for the evaluation of the
beta-thalassemia indication with a PDUFA date of December 4, 2019.
The FDA also set a PDUFA date of April 4, 2020 for the MDS
indication. In addition, the MAA has been accepted for review by
the EMA. The applications are based on data from the pivotal phase
III MEDALIST™ and BELIEVE™ trials evaluating luspatercept for the
treatment of anemia associated with MDS and beta-thalassemia,
respectively.
- In June, Celgene submitted a supplemental NDA (sNDA) to the
U.S. FDA for an OTEZLA® label update for the treatment of adult
patients with moderate to severe plaque psoriasis to include
clinical results from the phase III STYLE™ study evaluating
patients with plaque psoriasis of the scalp.
- At the 2019 American Society of Clinical Oncology (ASCO) Annual
Meeting, select data presentations on investigational products
included:
- First clinical data from the phase I/II trial evaluating
CELMoD® agent iberdomide (CC-220) in patients with relapsed and/or
refractory multiple myeloma (RRMM); The results included
encouraging preliminary safety and efficacy data from the ongoing
multicenter, open-label, dose-escalation study. A pivotal trial
with iberdomide is being planned;
- Updated data, including minimal residual disease (MRD), from
the ongoing phase I/II TRANSCEND CLL-004 trial evaluating liso-cel
in a heavily pretreated patient population with high-risk chronic
lymphocytic leukemia (CLL). In this trial, all patients had been
previously treated with ibrutinib, and more than half had received
prior venetoclax. The phase II pivotal trial with liso-cel in
patients with relapsed and/or refractory CLL is ongoing; and,
- Updated analysis of data from the phase II JAKARTA2 trial
reporting clinically meaningful response rates with fedratinib in
patients with myelofibrosis previously treated with ruxolitinib,
which utilized a more stringent definition of patients relapsed,
refractory, or intolerant to ruxolitinib. The U.S. FDA granted
Priority Review designation for the NDA for fedratinib in patients
with myelofibrosis with a PDUFA date of September 3, 2019.
- In May, Celgene announced that the U.S. FDA approved REVLIMID®
in combination with a rituximab product (R²) for the treatment of
adult patients with previously treated follicular lymphoma or
marginal zone lymphoma. The approval was based on data from the
phase III AUGMENT™ trial.
- In May, Celgene announced that the European Commission (EC)
approved REVLIMID® in combination with bortezomib and dexamethasone
(RVd) in adult patients with previously untreated multiple myeloma
who are not eligible for transplant. The approval for the REVLIMID®
triplet (RVd) was supported by data from the phase III SWOG S0777
trial. In addition, Celgene announced that the EC approved
pomalidomide (POMALYST®/IMNOVID®) in combination with bortezomib
and dexamethasone (PVd) in adult patients with multiple myeloma who
have received at least one prior treatment regimen including
lenalidomide. The approval of the pomalidomide (POMALYST®/IMNOVID®)
triplet (PVd) was supported by data from the phase III OPTIMISMM
trial. Results from the OPTIMISMM trial were recently published in
The Lancet Oncology.
- In May, Celgene announced that the U.S. FDA granted
Breakthrough Therapy Designation (BTD) for POMALYST® for the
treatment of patients with human immunodeficiency virus
(HIV)-positive Kaposi’s sarcoma who have previously received
systemic chemotherapy, as well as patients with HIV‐negative
Kaposi’s sarcoma. The BTD was granted by the FDA based on data from
a clinical trial performed under a Cooperative Research and
Development Agreement (CRADA). Celgene plans to submit an sNDA for
POMALYST® in this disease area by the end of 2019.
- In May, Celgene and bluebird bio announced that the New England
Journal of Medicine (NEJM) published interim results from CRB-401,
the ongoing phase I trial evaluating investigational product
ide-cel (bb2121) in patients with RRMM. The manuscript, “Anti-BCMA
CAR T Cell Therapy bb2121 in Relapsed/Refractory Multiple Myeloma”,
published in NEJM includes key safety and efficacy results from the
dose escalation and first expansion cohort, including a minimum of
six months follow up on all subjects. The BLA submission for
ide-cel is expected in the first half of 2020.
Transaction Update
On July 29, 2019, Bristol-Myers Squibb Company (NYSE: BMY)
announced that the EC has granted unconditional approval of
Bristol-Myers Squibb’s pending acquisition of Celgene. In June,
Bristol-Myers Squibb announced the planned divestiture of OTEZLA®
(apremilast) in light of concerns raised by the U.S. Federal Trade
Commission (“FTC”). The divestiture would be conditioned upon the
closing of the pending transaction between Bristol-Myers Squibb and
Celgene. Subject to the satisfaction of customary closing
conditions and receipt of regulatory approvals, Bristol-Myers
Squibb and Celgene intend to close the pending transaction at the
earliest possible date, which the parties currently expect to be at
the end of 2019 or the beginning of 2020.
Second Quarter 2019 Earnings Information
Due to the pending transaction with Bristol-Myers Squibb,
Celgene is not hosting a conference call in conjunction with its
second-quarter 2019 earnings release and does not expect to do so
for future quarters. Please direct any questions regarding this
press release to Celgene Investor Relations or Celgene
Communications.
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.
About REVLIMID®
In the U.S., REVLIMID® (lenalidomide) in combination with
dexamethasone is indicated for the treatment of adult patients with
multiple myeloma. REVLIMID® as a single agent is also indicated as
a maintenance therapy in adult patients with multiple myeloma
following autologous hematopoietic stem cell transplant. REVLIMID®
is indicated for patients with transfusion-dependent anemia due to
low- or intermediate-1-risk myelodysplastic syndromes associated
with a deletion 5q cytogenetic abnormality with or without
additional cytogenetic abnormalities. REVLIMID® is approved in the
U.S. for the treatment of patients with mantle cell lymphoma (MCL)
whose disease has relapsed or progressed after two prior therapies,
one of which included bortezomib. REVLIMID® is approved in the U.S.
in combination with a rituximab product for the treatment of adult
patients with previously treated follicular lymphoma or marginal
zone lymphoma. Limitations of Use: REVLIMID® is not indicated and
is not recommended for the treatment of chronic lymphocytic
leukemia (CLL) outside of controlled clinical trials.
About ABRAXANE®
In the U.S., ABRAXANE® for Injectable Suspension (paclitaxel
protein-bound particles for injectable suspension) (albumin-bound)
is indicated for the treatment of metastatic breast cancer after
failure of combination chemotherapy for metastatic disease or
relapse within six months of adjuvant chemotherapy. Prior therapy
should have included an anthracycline unless clinically
contraindicated. ABRAXANE® is indicated for the first-line
treatment of locally advanced or metastatic non-small cell lung
cancer, in combination with carboplatin, in patients who are not
candidates for curative surgery or radiation therapy. ABRAXANE® is
also indicated for the first-line treatment of metastatic
adenocarcinoma of the pancreas in combination with gemcitabine.
About POMALYST®
In the U.S., POMALYST® (pomalidomide) is indicated, in
combination with dexamethasone, for patients with multiple myeloma
who have received at least two prior therapies including
lenalidomide and a proteasome inhibitor and have demonstrated
disease progression on or within 60 days of completion of the last
therapy.
About OTEZLA®
In the U.S., OTEZLA® (apremilast) is indicated for the treatment
of adult patients with active psoriatic arthritis. OTEZLA® is
indicated in the U.S. for the treatment of patients with moderate
to severe plaque psoriasis who are candidates for phototherapy or
systemic therapy. OTEZLA® is indicated in the U.S. for the
treatment of adult patients with oral ulcers associated with
Behçet’s Disease.
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, including factors related to the proposed
transaction between Bristol-Myers Squibb and Celgene, such as, but
not limited to, the risks that: management’s time and attention is
diverted on transaction related issues, including the planned
divestiture of OTEZLA®; disruption from the proposed transaction
makes it more difficult to maintain business, contractual and
operational relationships; legal proceedings are instituted against
Bristol-Myers Squibb, Celgene or the combined company; and
Bristol-Myers Squibb, Celgene or the combined company is unable to
retain key personnel.
Hyperlinks are provided as a convenience and for informational
purposes only. Celgene bears no responsibility for the security or
content of external websites.
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 research and development expense
- Adjusted selling, general and administrative expense
- Adjusted operating margin
- Adjusted net income
- 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/Integration 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 and success payments. 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 as well as integration preparation
costs associated with our merger with Bristol-Myers Squibb.
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 research and development, which does not
include 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 research and development, which does not
include 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: significant litigation-related loss contingency accruals and
expenses to settle other disputed matters and, effective for fiscal
year 2018, changes in the fair value of our equity securities upon
the adoption of ASU 2016-01 (Financial Instruments-Overall:
Recognition and Measurement of Financial Assets and Financial
Liabilities).
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, the impact of tax reform
legislation commonly referred to as the Tax Cuts and Jobs Act (2017
Tax Act), and other similar items. We also exclude excess tax
benefits and tax deficiencies that arise upon vesting or exercise
of share-based payments recognized as income tax benefits or
expenses due to their nature, variability of amounts, and lack of
predictability as to occurrence and/or timing.
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 Reconciliations of GAAP to Adjusted Net Income
for explanations of the amounts excluded and included to arrive at
the adjusted measures for the three- and six-month periods ended
June 30, 2019 and 2018, and for the projected amounts for the
twelve-month period ending December 31, 2019.
Celgene Corporation and Subsidiaries Condensed
Consolidated Statements of Operations (Unaudited) (In
millions, except per share data) Three-Month
Periods Ended Six-Month Periods Ended June 30, June 30,
2019
2018
2019
2018
Net product sales
$ 4,399
$ 3,808
$ 8,423
$ 7,339
Other revenue
1
6
2
13
Total revenue
4,400
3,814
8,425
7,352
Cost of goods sold (excluding amortization of acquired
intangible assets)
151
126
291
261
Research and development
1,100
1,251
2,316
3,454
Selling, general and administrative
793
790
1,566
1,654
Amortization of acquired intangible assets
109
127
218
214
Acquisition/integration related charges and restructuring, net
136
34
213
65
Total costs and expenses
2,289
2,328
4,604
5,648
Operating income
2,111
1,486
3,821
1,704
Interest and investment income, net
38
9
72
22
Interest (expense)
(192)
(192)
(384)
(358)
Other (expense) income, net
(136)
4
126
969
Income before income taxes
1,821
1,307
3,635
2,337
Income tax provision
250
262
519
446
Net income
$ 1,571
$ 1,045
$ 3,116
$ 1,891
Net income per common share: Basic
$ 2.22
$ 1.46
$ 4.42
$ 2.58
Diluted
$ 2.16
$ 1.43
$ 4.31
$ 2.52
Weighted average shares: Basic
706.7
716.1
704.6
732.1
Diluted
726.7
732.6
723.7
750.6
June 30, December 31,
2019
2018
Balance sheet items: Cash, cash equivalents, debt securities
available-for-sale and equity investments with readily determinable
fair values
$ 9,323
$ 6,042
Total assets
39,183
35,480
Long-term debt, including current portion
19,790
20,270
Total stockholders' equity
10,051
6,161
Celgene Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Net Income (In
millions, except per share data) Three-Month Periods
Ended Six-Month Periods Ended June 30, June 30,
2019
2018
2019
2018
Net income - GAAP
$ 1,571
$ 1,045
$ 3,116
$ 1,891
Before tax adjustments: Cost of goods sold (excluding
amortization of acquired intangible assets): Share-based
compensation expense
(1)
13
9
25
18
Research and development: Share-based compensation expense
(1)
112
157
238
356
Collaboration-related upfront expense
(2)
53
146
269
391
Research and development asset acquisition expense
(3)
-
-
-
1,125
Adjustment related to clinical trial and development activity
wind-down costs
(4)
-
-
-
(60)
Selling, general and administrative: Share-based
compensation expense
(1)
100
118
219
311
Amortization of acquired intangible assets
(5)
109
127
218
214
Acquisition/integration related (gains) charges and
restructuring, net: Change in fair value of contingent
consideration and success payments
(6)
(46)
7
(16)
(23)
Juno acquisition related charges
(7)
-
27
-
88
Bristol-Myers Squibb acquisition/integration related charges
(8)
182
-
229
-
Other (expense) income, net: Change in fair value of equity
investments
(9)
147
6
(122)
(953)
Income tax provision: Estimated tax impact from above
adjustments
(10)
(141)
(52)
(226)
(185)
Non-operating tax adjustments
(11)
(21)
(5)
(37)
(16)
Net income - Adjusted
$ 2,079
$ 1,585
$ 3,913
$ 3,157
Net income per common share - Adjusted Basic
$ 2.94
$ 2.21
$ 5.55
$ 4.31
Diluted
$ 2.86
$ 2.16
$ 5.41
$ 4.21
Explanation of adjustments:
(1)
Exclude share-based compensation expense totaling $225 and $284 for
the three-month periods ended June 30, 2019 and 2018, respectively.
Exclude share-based compensation expense totaling $482 and $685 for
the six-month periods ended June 30, 2019 and 2018, respectively.
(2)
Exclude upfront payment expense for research and development
collaboration arrangements.
(3)
Exclude research and development asset acquisition expenses.
(4)
Exclude adjustment of clinical trial and development activity
wind-down costs associated with the discontinuance of GED-0301
clinical trials in Crohn's disease.
(5)
Exclude amortization of intangible assets acquired in the
acquisitions of Pharmion Corp., Gloucester Pharmaceuticals, Inc.
(Gloucester), Abraxis BioScience, Inc. (Abraxis), Quanticel
Pharmaceuticals, Inc. (Quanticel) and Juno Therapeutics, Inc.
(Juno).
(6)
Exclude changes in the fair value of contingent consideration
related to the acquisitions of Gloucester, Abraxis, Celgene
Avilomics Research, Inc., Quanticel and Juno (including success
payments).
(7)
Exclude acquisition costs related to the Juno acquisition.
(8)
Exclude acquisition and integration preparation costs related to
the pending Bristol-Myers Squibb merger.
(9)
Exclude changes in the fair value of equity investments upon the
adoption of ASU 2016-01 (Financial Instruments-Overall: Recognition
and Measurement of Financial Assets and Financial Liabilities).
(10)
Exclude the estimated tax impact of the above adjustments.
(11)
Exclude other non-operating tax expense items. The adjustments for
the three-month period ended June 30, 2019 are to exclude excess
tax benefits recorded in the Income Tax Provision as per ASU
2016-09 (Compensation-Stock Compensation) of $11 and a tax benefit
related to our equity investments of $10. The adjustments for the
six-month period ended June 30, 2019 are to exclude excess tax
benefits recorded in the Income Tax Provision per ASU 2016-09
(Compensation-Stock Compensation) of $27 and a tax benefit related
to our equity investments of $10. The adjustments for the
three- and six-month periods ended June 30, 2018 are to exclude
excess tax benefits recorded in the Income Tax Provision as per ASU
2016-09 (Compensation-Stock Compensation).
Celgene
Corporation and Subsidiaries Reconciliation of Full-Year
2019 Projected GAAP to Adjusted Net Income (In millions,
except per share data)
Range
Low
High
Projected net income - GAAP
(1)
$ 6,361
$ 6,890
Before tax adjustments: Cost of goods sold (excluding
amortization of acquired intangible assets): Share-based
compensation expense
40
34
Research and development: Share-based compensation expense
409
353
Collaboration-related upfront expense
320
320
Selling, general and administrative: Share-based
compensation expense
387
334
Amortization of acquired intangible assets
459
424
Acquisition/integration related charges and restructuring,
net: Change in fair value of contingent consideration and success
payments
22
(22)
Bristol-Myers Squibb acquisition/integration related charges
231
231
Other (expense) income, net: Change in fair value of equity
investments
(164)
(164)
Income tax provision: Estimated tax impact from above
adjustments
(253)
(442)
Non-operating tax adjustments
(37)
(37)
Projected net income - Adjusted
$ 7,775
$ 7,921
Projected net income per diluted common share - GAAP
$ 8.71
$ 9.44
Projected net income per diluted common share - Adjusted
$ 10.65
$ 10.85
Projected weighted average diluted shares
730.0
730.0
(1)
Our projected 2019 earnings do not include the effect of any
business combinations, collaboration agreements, asset
acquisitions, asset impairments, litigation-related loss
contingency accruals, changes in the fair value of our CVRs issued
as part of the acquisition of Abraxis, changes in the fair value of
equity investments upon the adoption of ASU 2016-01 (Financial
Instruments-Overall: Recognition and Measurement of Financial
Assets and Financial Liabilities) or non-operating tax adjustments
that may occur after the day prior to the date of this press
release. In addition, our projected 2019 financial measures do not
include the effect of costs associated with the Bristol-Myers
Squibb and Celgene transaction that may occur after the day prior
to the date of this press release.
Celgene Corporation and
Subsidiaries Net Product Sales (In millions)
Three-Month Periods
Ended June 30,
% Change
2019
2018
Reported
Operational(1)
Currency(2)
REVLIMID® U.S.
$ 1,810
$ 1,586
14.1%
14.1%
0.0%
International
922
867
6.3%
10.0%
(3.7)%
Worldwide
2,732
2,453
11.4%
12.7%
(1.3)%
POMALYST®/IMNOVID® U.S.
447
341
31.1%
31.1%
0.0%
International
172
166
3.6%
7.2%
(3.6)%
Worldwide
619
507
22.1%
23.3%
(1.2)%
OTEZLA® U.S.
399
291
37.1%
37.1%
0.0%
International
94
84
11.9%
14.9%
(3.0)%
Worldwide
493
375
31.5%
32.2%
(0.7)%
ABRAXANE® U.S.
207
152
36.2%
36.2%
0.0%
International
109
91
19.8%
22.9%
(3.1)%
Worldwide
316
243
30.0%
31.2%
(1.2)%
IDHIFA® U.S.
25
16
56.3%
56.3%
0.0%
International
3
1
200.0%
217.7%
(17.7)%
Worldwide
28
17
64.7%
65.9%
(1.2)%
VIDAZA® U.S.
2
3
(33.3)%
(33.3)%
0.0%
International
162
159
1.9%
5.6%
(3.7)%
Worldwide
164
162
1.2%
4.8%
(3.6)%
azacitidine for injection U.S.
6
5
20.0%
20.0%
0.0%
International
2
-
N/A
N/A
N/A
Worldwide
8
5
60.0%
60.3%
(0.3)%
THALOMID® U.S.
16
17
(5.9)%
(5.9)%
0.0%
International
8
11
(27.3)%
(23.3)%
(4.0)%
Worldwide
24
28
(14.3)%
(12.8)%
(1.5)%
ISTODAX® U.S.
8
14
(42.9)%
(42.9)%
0.0%
International
5
3
66.7%
69.3%
(2.6)%
Worldwide
13
17
(23.5)%
(23.0)%
(0.5)%
All Other U.S.
-
-
N/A
N/A
N/A
International
2
1
N/A
N/A
N/A
Worldwide
2
1
N/A
N/A
N/A
Total Net Product Sales U.S.
2,920
2,425
20.4%
20.4%
0.0%
International
1,479
1,383
6.9%
10.5%
(3.6)%
Worldwide
$ 4,399
$ 3,808
15.5%
16.8%
(1.3)%
(1)
Operational includes the impact from both fluctuations in volume
and net selling price changes.
(2)
Currency includes the impact from both fluctuations in foreign
exchange rates and hedging activities.
Celgene Corporation and
Subsidiaries Net Product Sales (In millions)
Six-Month Periods
Ended June 30,
% Change
2019
2018
Reported
Operational(1)
Currency(2) REVLIMID® U.S.
$ 3,496
$ 3,073
13.8%
13.8%
0.0%
International
1,813
1,614
12.3%
16.4%
(4.1)%
Worldwide
5,309
4,687
13.3%
14.7%
(1.4)%
POMALYST®/IMNOVID® U.S.
837
641
30.6%
30.6%
0.0%
International
339
319
6.3%
9.6%
(3.3)%
Worldwide
1,176
960
22.5%
23.6%
(1.1)%
OTEZLA® U.S.
700
567
23.5%
23.5%
0.0%
International
182
161
13.0%
15.2%
(2.2)%
Worldwide
882
728
21.2%
21.7%
(0.5)%
ABRAXANE® U.S.
403
311
29.6%
29.6%
0.0%
International
199
194
2.6%
5.9%
(3.3)%
Worldwide
602
505
19.2%
20.5%
(1.3)%
IDHIFA® U.S.
44
30
46.7%
46.7%
0.0%
International
6
1
500.0%
524.3%
(24.3)%
Worldwide
50
31
61.3%
62.4%
(1.1)%
VIDAZA® U.S.
5
5
0.0%
0.0%
0.0%
International
310
314
(1.3)%
1.8%
(3.1)%
Worldwide
315
319
(1.3)%
1.7%
(3.0)%
azacitidine for injection U.S.
11
11
0.0%
0.0%
0.0%
International
4
1
300.0%
301.0%
(1.0)%
Worldwide
15
12
25.0%
25.1%
(0.1)%
THALOMID® U.S.
31
36
(13.9)%
(13.9)%
0.0%
International
17
23
(26.1)%
(22.7)%
(3.4)%
Worldwide
48
59
(18.6)%
(17.3)%
(1.3)%
ISTODAX® U.S.
14
30
(53.3)%
(53.3)%
0.0%
International
9
6
50.0%
51.6%
(1.6)%
Worldwide
23
36
(36.1)%
(35.8)%
(0.3)%
All Other U.S.
-
-
N/A
N/A
N/A
International
3
2
N/A
N/A
N/A
Worldwide
3
2
N/A
N/A
N/A
Total Net Product Sales U.S.
5,541
4,704
17.8%
17.8%
0.0%
International
2,882
2,635
9.4%
13.1%
(3.7)%
Worldwide
$ 8,423
$ 7,339
14.8%
16.1%
(1.3)%
(1)
Operational includes the impact from both fluctuations in volume
and net selling price changes.
(2)
Currency includes the impact from both fluctuations in foreign
exchange rates and hedging activities.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190730005554/en/
Celgene Investors: 908-673-9628 ir@celgene.com or Media:
908-673-2275 media@celgene.com
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