Significantly Enhances Celgene’s I&I
Franchise with the Addition of Ozanimod, Potentially a
Best-in-Class Oral Agent in Phase III Trials for Inflammatory Bowel
Disease and Multiple Sclerosis
Accelerates Growth Beginning in 2019;
Significant Growth Driver Beyond 2020 with Expected Ozanimod Peak
Annual Sales of $4 - $6 Billion
Raising 2020 Financial Targets to Exceed $21
Billion in Total Net Product Sales and Adjusted EPS to Exceed
$13.00
Raising 2015 Adjusted Diluted EPS Guidance
Based on Strong Preliminary Second Quarter Results
Celgene Corporation (NASDAQ: CELG) and Receptos, Inc. (NASDAQ:
RCPT) today announced the signing of a definitive agreement in
which Celgene has agreed to acquire Receptos. Under the terms of
the merger agreement, Celgene will pay $232.00 per share in cash,
or a total of approximately $7.2 billion, net of cash acquired.
The acquisition of Receptos significantly enhances Celgene’s
Inflammation & Immunology (I&I) portfolio, further
diversifies the Company’s revenue beginning in 2019 and beyond, and
builds upon Celgene’s growing expertise in inflammatory bowel
disease (IBD). The transaction adds Ozanimod, a novel, potential
best-in-class, oral, once-daily, selective sphingosine 1-phosphate
1 and 5 receptor modulator (S1P) to Celgene’s deep and diverse
pipeline of potential disease-altering medicines and
investigational compounds.
Based on clinical studies, Ozanimod demonstrated several areas
of potential advantage over existing oral therapies for the
treatment of ulcerative colitis (UC) and relapsing multiple
sclerosis (RMS), including its cardiac, hepatotoxicity and
lymphocyte recovery profile. The phase III TRUE NORTH trial in UC
is currently underway with data expected in 2018. The phase III
RADIANCE and SUNBEAM RMS trials are ongoing and data are expected
in the first half of 2017 to support a RMS approval in 2018.
Additionally, Ozanimod is positioned to potentially become the
first S1P receptor modulator to be approved for IBD.
"The Receptos acquisition provides a transformational
opportunity for Celgene to impact multiple therapeutic areas,” said
Bob Hugin, Chairman and Chief Executive Officer of Celgene. “This
acquisition enhances our I&I portfolio and allows us to
leverage the investments made in our global organization to
accelerate our growth in the medium and long-term.”
Celgene has a strong scientific foundation in inflammation and
immunology that covers a broad spectrum of diseases. Anchored by
the successful global launch of OTEZLA® (apremilast) in psoriasis
and psoriatic arthritis, and new opportunities for expansion as a
result of the addition of the Receptos programs, Celgene’s I&I
pipeline will, upon completion of the transaction, consist of three
high-potential commercialized or late-stage assets; OTEZLA,
GED-0301 and Ozanimod. All three candidates are in phase III
development and encompass four indications: Behçet’s disease,
Crohn’s disease (CD), UC and RMS. The pipeline also includes seven
molecules in phase II development in a variety of indications,
including RPC4046 for eosinophilic esophagitis (EoE), and a growing
number of phase I and preclinical assets. Learn more about
Celgene’s I&I pipeline here.
“In Celgene, we have found the ideal partner to maximize the
potential of Ozanimod and our promising pipeline in order to
improve the lives of patients worldwide,” said Faheem Hasnain,
President and Chief Executive Officer of Receptos.
“Ozanimod is a potentially transformational oral therapy that
has demonstrated robust clinical activity with impressive
immune-inflammatory modulating properties in phase II trials,” said
Scott Smith, President, I&I for Celgene. “Ozanimod is a highly
differentiated next-generation S1P receptor modulator with
important efficacy and safety features that create the opportunity
for development across a spectrum of immune-inflammatory
diseases.”
Recent Receptos Clinical Data: Ulcerative Colitis
Ozanimod phase II data were presented by Receptos at the
Gastroenterology Conference Digestive Disease Week (DDW) in May
2015 in Washington, D.C. The TOUCHSTONE phase II study, evaluating
Ozanimod in UC, met key clinical and endoscopic endpoints for both
induction and maintenance with statistical significance in patients
on the 1.0 mg dose of Ozanimod in the 8-week induction and 32-week
maintenance periods. The overall safety and tolerability profile of
Ozanimod was consistent with the results of the phase II trial in
RMS. A phase III program, TRUE NORTH, in UC has initiated
enrollment and a phase II program in CD is expected to initiate by
year-end.
Recent Receptos Clinical Data: Relapsing Multiple
Sclerosis
At the 2015 Annual Meeting of the American Academy of Neurology
(AAN) in Washington, D.C., Receptos presented results of an
Ozanimod phase II study in RMS. The study demonstrated that
Ozanimod achieved the primary endpoint of reduction in MRI brain
lesion activity as well as secondary endpoints measuring effects on
other MRI parameters. The overall safety profile of Ozanimod was
consistent with the results of prior trials and continues to
demonstrate differentiation against other oral agents for the
treatment of RMS. Two phase III clinical trials are underway:
RADIANCE and SUNBEAM, both of which are randomized, controlled,
double-blind studies designed to compare 0.5 mg and 1.0 mg of
Ozanimod against interferon beta-1a (Avonex®) in patients with
RMS.
Terms of the Agreement
Celgene will acquire all of the outstanding shares of common
stock of Receptos through a tender offer, followed by a second-step
merger. In the tender offer, Celgene, through a wholly-owned
subsidiary, will offer to purchase all of the outstanding shares of
common stock of Receptos for $232.00 per share in cash, or an
aggregate of approximately $7.2 billion, net of cash acquired. The
transaction has been approved by the boards of directors of both
companies and is subject to customary closing conditions, including
the tender of at least a majority of outstanding shares of Receptos
common stock and expiration of the applicable waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The
transaction is anticipated to close in 2015.
Celgene will acquire all remaining shares of Receptos common
stock that are not tendered in the tender offer through a
second-step merger, which will be completed shortly following the
tender offer. Celgene expects to fund the transaction through a
combination of existing cash and new debt. The resulting capital
structure is consistent with Celgene’s financial strategy and
investment grade profile. This acquisition maintains flexibility
for additional value creating transactions and share buyback.
J.P. Morgan and Citi are acting as financial advisors to Celgene
on the transaction. Centerview Partners LLC is acting as financial
advisor to Receptos. Legal counsel for Celgene is Proskauer Rose
LLP, and Receptos’ legal counsel is Latham & Watkins LLP.
Preliminary Second Quarter 2015 Financial Highlights for
Celgene
Preliminary net product sales of $2,254 million for the second
quarter of 2015 compared to $1,845 million in the second quarter of
2014, represents an increase of 22 percent. Second quarter total
revenue also increased 22 percent to approximately $2,278 million
compared to $1,873 million in the second quarter of 2014. For the
same period, adjusted diluted EPS increased 37 percent to
approximately $1.23 from $0.90. Adjusted diluted EPS for the second
quarter of 2015 included a $0.06 per share gain related to the sale
of an equity investment upon the completion of their acquisition by
another company.
Based on U.S. GAAP (Generally Accepted Accounting Principles),
preliminary second quarter 2015 diluted EPS was approximately $0.43
per diluted share. For the second quarter of 2014, diluted EPS was
$0.72 per diluted share. Second quarter 2015 GAAP EPS included
increased expenses for upfront collaboration payments.
2015 Guidance for Celgene
- Reaffirming total net product sales to
a range of $9 billion to $9.5 billion
- Raising adjusted diluted EPS to a range
of $4.75 to $4.85 from the previous range of $4.60 to $4.75, an
increase of approximately 29 percent over 2014 adjusted diluted
EPS
- GAAP diluted EPS is expected to be in
the range of $2.43 to $2.71 from the previous range of $2.97 to
$3.19
2020 Long-term Financial Targets for Celgene
- Increasing 2020 net product sales to
exceed $21 billion, up from the previous target of greater than $20
billion
- Hematology franchise expected to exceed
$14.8 billion
- Oncology franchise expected to exceed
$2.2 billion
- I&I franchise now expected to
exceed $4.0 billion, up from the previous target of $3.0
billion
- Adjusted diluted EPS is expected to
exceed $13.00, up from the previous target of $12.50
- Fully diluted share count is expected
to be approximately 830 million
About Ozanimod
Ozanimod is a selective immune-inflammatory modulator of the G
protein-coupled receptors sphingosine 1-phosphate 1 and 5, which
are part of the sphingosine 1-phosphate (S1P) receptor family.
Treatment with S1P receptor modulators interferes with S1P
signaling and blocks the response of lymphocytes (a type of white
blood cell) to exit signals from the lymph nodes, sequestering them
within the nodes. The result is a downward modulation of
circulating lymphocytes and anti-inflammatory activity by
inhibiting cell migration to sites of inflammation.
About Receptos
Receptos is a biopharmaceutical company developing therapeutic
candidates for the treatment of immune and metabolic diseases.
Receptos' lead program, Ozanimod, is a sphingosine 1-phosphate 1
and 5 receptor small molecule modulator in development for
immune-inflammatory indications including IBD and RMS. Patents
supporting Ozanimod were exclusively licensed to Receptos from The
Scripps Research Institute (TSRI). Receptos is also developing
RPC4046, an anti-interleukin-13 (IL-13) antibody for (EoE), an
allergic/immune-mediated orphan disease, as well as other pipeline
and pre-clinical stage compounds.
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.
Conference Call and Webcast Information
Celgene will host a conference call today, July 14, to discuss
the strategic acquisition of Receptos at 5:30 p.m. EDT. The
conference call will be available by webcast on the Investor
Relations page of Celgene’s website, www.Celgene.com. An audio
replay of the call will be available from midnight July 14, 2015
until midnight July 30, 2015. To access the replay in the U.S.,
dial (855) 859-2056; outside the U.S. dial (404) 537-3406. The
participant passcode is 81657332.
Additional Information about the Transaction and Where to
Find It
The tender offer described herein has not yet
commenced. The description contained herein is for
informational purposes only and is not an offer to buy or the
solicitation of an offer to sell any shares of Receptos. At
the time the tender offer is commenced, Celgene and its
wholly-owned subsidiary, Strix Corporation, intend to file with the
U.S. Securities and Exchange Commission (the “SEC”) a Tender Offer
Statement on Schedule TO containing an offer to purchase, a form of
letter of transmittal and other documents relating to the tender
offer, and Receptos intends to file a Solicitation/Recommendation
Statement on Schedule 14D-9 with respect to the tender offer.
Celgene, Strix Corporation and Receptos intend to mail these
documents to the stockholders of Receptos. THESE DOCUMENTS, AS
EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE TENDER OFFER AND RECEPTOS
STOCKHOLDERS ARE URGED TO READ THEM CAREFULLY WHEN THEY BECOME
AVAILABLE. Stockholders of Receptos will be able to obtain a
free copy of these documents (when they become available) and other
documents filed by Receptos, Celgene or Strix Corporation with the
SEC at the website maintained by the SEC at www.sec.gov.
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. Celgene and Receptos 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 the control of
either company, including the following: (a) the occurrence of any
event, change or other circumstance that could give rise to the
termination of the merger agreement; (b) the inability to complete
the transaction due to the failure to satisfy conditions to the
transaction; (c) the risk that the proposed transaction disrupts
current plans and operations; (d) difficulties or unanticipated
expenses in connection with integrating Receptos into Celgene; (e)
the risk that the acquisition does not perform as planned; and (f)
potential difficulties in employee retention following the closing
of the transaction. 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 the public reports of each company
filed with the SEC.
In addition to financial information prepared in accordance with
U.S. GAAP, this press release also contains adjusted financial
measures that Celgene believes 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. Celgene typically excludes certain GAAP items that management
does not believe affect its 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) Diluted EPS for explanations of the amounts excluded and
included to arrive at Celgene’s adjusted EPS amounts for the three
month period ended June 30, 2015 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) Diluted EPS
(Unaudited) Three Months
Ended Twelve Months Ending June 30, 2015 December 31, 2015 Range
Range Low High Low High Estimated/projected diluted earnings per
common share - GAAP (1) $ 0.42 $ 0.44 $ 2.43 $ 2.71 Per
share impact of excluded items before tax: Share-based compensation
expense (2) 0.18 0.18 0.71 0.68 Upfront collaboration expense
(1)(3) 0.69 0.69 1.40 1.29 Amortization of acquired intangible
assets (1)(4) 0.08 0.08 0.31 0.31 Change in fair value of
contingent consideration (1)(5) (0.03 ) (0.05 ) 0.07 0.05
Acquisition related charges (1)(6) - - 0.09 0.03 Net income tax
adjustments (7) (0.11 ) (0.11 ) (0.26 )
(0.22 ) Estimated/projected diluted earnings per common
share - Adjusted Approximately $ 1.23 $ 4.75 $ 4.85
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 estimated/projected 2015 diluted EPS
amounts 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 or be announced after this press release. (2) Exclude
share-based compensation expense. (3) Exclude upfront payment
expense for research and development collaboration arrangements.
(4) Exclude amortization of intangible assets acquired in the
acquisitions of Pharmion Corp., Gloucester Pharmaceuticals, Inc.
(Gloucester), Abraxis and Celgene Avilomics Research, Inc. (Avila).
(5) Exclude changes in the fair value of contingent consideration
related to the acquisitions of Gloucester, Abraxis, Avila and Nogra
Pharma Limited. (6) Exclude acquisition related charges related to
the acquisition of Receptos, Inc. (7) 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 an adjustment related to
the gain on the sale of an equity investment.
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