Celgene Corporation : Celgene Reports First Quarter 2012 Operating and Financial Results
04/26/2012| 07:05am US/Eastern
Recommend:
0
-- Non-GAAP Net Product Sales of $1.25 Billion, Increased 17 Percent
Y/Y
-- Non-GAAPTotal Revenue of $1.27 Billion, Increased 15
Percent Y/Y
-- Non-GAAP Diluted Earnings Per Share of $1.08, Increased 30 Percent
Y/Y
-- 2012 Revenue and Earnings Guidance Reaffirmed
Celgene Corporation (NASDAQ: CELG) reported Non-GAAP net product sales
of $1,245 million for the first quarter of 2012, a 17 percent increase
from the same period in 2011. Non-GAAP net income for the first quarter
of 2012 increased 23 percent to $484 million compared to $393 million in
the first quarter of 2011. For the same periods, non-GAAP diluted
earnings per share increased 30 percent to $1.08 from $0.83.
Based on U.S. GAAP (Generally Accepted Accounting Principles), Celgene
reported first quarter 2012 net product sales of $1,245 million and net
income of $402 million or $0.90 per diluted share. For the first quarter
of 2011, net product sales were $1,084 million and net income was $256
million or $0.54 per diluted share.
"We ended the first quarter with positive momentum across our product
portfolio despite a slower-than-expected January," said Bob Hugin,
Chairman and Chief Executive Officer of Celgene Corporation. "The
meaningful clinical and regulatory accomplishments during the quarter
position us to achieve transformational milestones throughout 2012 that
are designed to sustain our industry-leading growth well into the
future."
First Quarter 2012 Financial Highlights
Unless otherwise stated, all comparisons are for the first quarter of
2012 compared to the first quarter of 2011. The non-GAAP operating
expenses presented below exclude share-based employee compensation
expense, non-core operations acquired from Abraxis, and IPR&D
impairments.
Net Product Sales Performance
REVLIMID® sales for the first quarter increased 17 percent
to $861 million and were driven by overall market share gains,
increased duration of therapy and geographic expansion. U.S. sales of
$489 million and international sales of $372 million increased 17
percent and 16 percent, respectively. Compared to the fourth quarter
of 2011, U.S. and international sales were relatively unchanged. Net
sales were impacted by increased Medicare Part D Coverage Gap rebates,
in addition to reduced inventory levels in the U.S. and some
international markets.
ABRAXANE® sales for the first quarter were $104 million, a
41 percent increase, and reflect the product re-launch in the U.S. and
Europe. U.S. sales of $81 million and international sales of $23
million increased 30 percent and 103 percent, respectively. Compared
to the fourth quarter of 2011, U.S. sales declined 11 percent and
international sales increased 94 percent. U.S. sales were affected by
lower inventory levels and the restoration of the full supply of
generic paclitaxel. International sales were favorably impacted by
improved performance in Europe and distributor buying patterns in Asia.
VIDAZA® first quarter sales increased 14 percent to $186
million. U.S. sales increased 3 percent to $74 million. International
sales increased 23 percent to $112 million, driven by launches in
multiple markets, including the United Kingdom and Japan. Compared to
the fourth quarter of 2011, U.S. sales declined 14 percent and
international sales increased 9 percent. Sales were affected by lower
wholesaler inventory levels in the U.S. that were offset in part by
increased volume in Europe and Latin America.
THALOMID® sales were $78 million in the first
quarter, representing a 9 percent decrease. Compared to the fourth
quarter of 2011, sales declined 5 percent.
Research and Development (R&D)
Non-GAAP R&D expenses were $315 million for the first quarter compared
to $278 million for the first quarter 2011. The change is primarily due
to apremilast pre-launch production support, increased activities
related to validation of the Phoenix manufacturing facility for
ABRAXANE, and the clinical costs associated with the over 25 on-going
pivotal and phase III trials. On a GAAP basis, R&D expenses were $362
million for the first quarter 2012 and $435 million for the same period
in 2011.
Selling, General, and Administrative (SG&A)
Non-GAAP SG&A expenses were $299 million for the first quarter of 2012
compared to $270 million for the first quarter of 2011. The change was
primarily due to increased REVLIMID marketing and pomalidomide prelaunch
activities, in addition to patient assistance programs. On a GAAP basis,
SG&A expenses were $326 million for the first quarter of 2012 compared
to $302 million for the same period in 2011.
Cash, Cash Equivalents, and Marketable Securities
Operating cash flow was $311 million in the first quarter of 2012, an
increase of 13 percent compared to 2011. Under its authorized stock
repurchase program, Celgene purchased approximately 2.35 million shares
during the first quarter of 2012 at a total cost of approximately $169
million. As of March 31, 2012, the Company had $1,218 million remaining
under the existing stock repurchase program. Celgene also used cash of
approximately $350 million for the acquisition of Avila Therapeutics,
Inc., which closed during the first quarter. Celgene ended the first
quarter with $2,269 million in cash and marketable securities.
2012 Guidance Reaffirmed
Non-GAAP Total Revenue is expected to increase approximately 15
percent year-over-year to a range of $5,400 to $5,600 million.
REVLIMID Net Product Sales is expected to increase approximately 19
percent year-over-year to a range of $3,750 to $3,850 million.
Non-GAAP diluted EPS is expected to increase approximately 25 percent
year-over-year to a range of $4.70 to $4.80.
Product and Pipeline Updates
Hematology
REVLIMID: Celgene submitted a marketing application for deletion 5q
transfusion dependent low-risk myelodysplastic syndromes (MDS) with the
European Medicines Agency (EMA). A decision is expected by the end of
2012. A recommendation by the Committee for Medicinal Products for Human
Use (CHMP) on the pending application for newly diagnosed multiple
myeloma (NDMM) and maintenance therapy is expected later this quarter.
Regulatory submissions for this indication in additional markets,
including the U.S., are planned throughout 2012.
The Company is making progress in the lymphoma and leukemia programs.
Enrollment in the pivotal MCL-001 trial in relapsed and refractory
mantle cell lymphoma is complete. Data are expected in the second half
of 2012 with a supplemental New Drug Application (sNDA) submission to
the Food and Drug Administration (FDA) planned in early 2013. Also,
based upon activity observed in the phase II portion, Celgene recently
decided to advance into the phase III portion of the DCL-001 trial in
relapsed and refractory diffuse large B-cell non-Hodgkin's lymphoma.
Pomalidomide: Celgene submitted an NDA to the FDA for patients with
relapsed and refractory multiple myeloma. Over the next few months the
Company will be notified if the submission is accepted and whether a
priority or standard review is granted. A marketing application
submission with the EMA for the same indication is planned in the second
quarter of 2012. The phase III trial in myelofibrosis is fully enrolled;
data are expected by year-end 2012.
Oncology
ABRAXANE: The supplemental NDA submission for first-line treatment of
advanced non-small cell lung cancer was accepted for filing by the FDA.
A decision is expected in October. The Company is evaluating regulatory
strategies to obtain approvals in Europe and other international markets
for this indication.
The phase III trial in over 800-patients with advanced metastatic
pancreatic cancer comparing ABRAXANE plus gemcitabine to gemcitabine
alone is fully enrolled. Data on the primary endpoint of overall
survival is expected in late 2012 or early 2013.
The phase III trial comparing ABRAXANE to dacarbazine in over 510
treatment-naïve metastatic melanoma patients is fully enrolled.
Progression-free survival is the primary endpoint, with overall survival
as a key secondary endpoint. Data on the primary efficacy endpoint is
expected in mid-2012.
Inflammation & Immunology
Apremilast: Celgene recently initiated a phase III trial in ankylosing
spondylitis. The trial will randomize approximately 450 patients to
receive 20mg apremilast, 30mg apremilast, or placebo twice daily. The
primary endpoint is the proportion of patients achieving an ASAS 20
score at week 16. A number of secondary endpoints will also be evaluated.
Data from several trials are expected beginning this quarter and ending
in early 2013, including: phase IIb rheumatoid arthritis (Q2), phase III
psoriatic arthritis (summer), and phase III moderate-to-severe psoriasis
(late 2012 / early 2013). If the data are positive, Celgene plans to
submit marketing applications in the U.S. and Europe for psoriatic
arthritis and moderate-to-severe psoriasis during 2013.
Business Development
Today, Celgene announced the formation of a strategic partnership with
Epizyme to discover, develop and commercialize personalized therapeutics
for patients with genetically-defined cancers by inhibiting histone
methyltransferases (HMTs), an important epigenetic target class.
Under this agreement, Celgene has the exclusive option to license
ex-U.S. rights to Epizyme's available HMT inhibitor programs for three
years. Epizyme retains all U.S. rights to the collaboration programs and
received a $90 million upfront payment, which included an equity
investment. For each HMT inhibitor that Celgene licenses, Epizyme is
eligible to earn more than $160 million in milestone payments and up to
double digit royalties on ex-U.S. sales.
This collaboration enhances Celgene's leadership role in epigenetics, a
therapeutic class in which the Company has two of the four
commercialized oncology products - VIDAZA and ISTODAX®.
Epigenetic therapies could have a role in treating a broad range of
hematologic malignancies and solid tumors. Celgene has an active
development program in this area. Early clinical data recently presented
at the American Association for Cancer Research highlighted the
potential benefit of emerging treatment strategies that include
azacitidine in patients with non-small cell lung cancer. Celgene is
advancing CC-486, oral azacitidine, into a phase III trial in lower-risk
MDS in the second half of 2012. Phase II trials are planned evaluating
treatment strategies that include CC-486 in a variety of solid tumor
indications, including non-small cell lung cancer.
First Quarter 2012 Conference Call and Webcast Information
Celgene will host a conference call to discuss the first quarter 2012
operating and financial performance on Thursday, April 26, 2012, at 9:00
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 April 26, 2012,
until midnight ET May 3, 2012. To access the replay, in the U.S. dial
800-585-8367; international dial 404-537-3406; and Participant Pass code
69468804. The Company's second quarter 2012 financial and operational
results are expected to be reported in late July.
About REVLIMID
In the U.S., REVLIMID (lenalidomide) in combination with dexamethasone
is indicated for the treatment of multiple myeloma (MM) patients who
have received at least one prior therapy. REVLIMID is indicated for
patients with transfusion-dependent anemia due to Low- or
Intermediate-1-risk myelodysplastic syndromes (MDS) associated with a
deletion 5q cytogenetic abnormality with or without additional
cytogenetic abnormalities.
About ABRAXANE
In the U.S., ABRAXANE for Injectable Suspension (paclitaxel
protein-bound particles for injectable suspension) is indicated for the
treatment of breast cancer after failure of combination chemotherapy formetastatic disease or relapse within six month of adjuvant
chemotherapy. Prior therapy should have included an anthracycline unless
clinically contraindicated.
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," "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.
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 periods ended
March 31, 2012 and 2011, and for the projected amounts for the year
ending December 31, 2012.
Celgene Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data)
Three-Month Periods Ended
March 31,
2012
2011
Net product sales
$
1,245,499
$
1,083,609
Collaborative agreements and other revenue
2,631
9,303
Royalty revenue
25,158
32,369
Total revenue
1,273,288
1,125,281
Cost of goods sold (excluding amortization of acquired intangible
assets)
72,520
127,268
Research and development
362,044
435,478
Selling, general and administrative
325,778
302,261
Amortization of acquired intangible assets
41,760
69,050
Acquisition related (gains) charges and restructuring, net
(11,070
)
(96,744
)
Total costs and expenses
791,032
837,313
Operating income
482,256
287,968
Equity in gains (losses) of affiliated companies
1,187
(556
)
Interest and other income (expense), net
(9,441
)
(604
)
Income before income taxes
474,002
286,808
Income tax provision
72,465
31,722
Net income
401,537
255,086
Non-controlling interest
-
504
Net income attributable to Celgene
$
401,537
$
255,590
Net income per common share attributable to Celgene:
Basic
$
0.92
$
0.55
Diluted
$
0.90
$
0.54
Weighted average shares:
Basic
438,349
465,993
Diluted
448,598
472,235
March 31,
December 31,
2012
2011
Balance sheet items:
Cash, cash equivalents & marketable securities
$
2,269,367
$
2,648,154
Total assets
10,347,539
10,005,910
Short-term borrowings
150,528
526,684
Long-term debt
1,273,850
1,275,585
Total equity
6,077,719
5,512,727
Celgene Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Net Income
(In thousands, except per share data)
Three-Month Periods Ended
March 31,
2012
2011
Net income attributable to Celgene - GAAP
$
401,537
$
255,590
Before tax adjustments:
Net product sales:
Sales of products exited or to be exited:
Pharmion
(1)
-
(1,072
)
Abraxis
(1)
-
(15,831
)
Collaborative agreements and other revenue:
Abraxis non-core revenues
(2)
-
(905
)
Cost of goods sold (excluding amortization
of acquired intangible assets):
Share-based compensation expense
(3)
2,876
2,007
Abraxis inventory step-up
(4)
-
41,667
Products exited or to be exited:
Pharmion
(2)
(1,409
)
1,001
Abraxis
(2)
-
9,549
Research and development:
Share-based compensation expense
(3)
25,028
32,592
Abraxis non-core activities
(2)
-
6,849
IPR&D impairments
(5)
22,151
118,000
Selling, general and administrative:
Share-based compensation expense
(3)
26,816
23,094
Abraxis non-core activities
(2)
-
9,208
Amortization of acquired intangible assets:
Pharmion
(6)
1,000
39,937
Gloucester
(6)
12,875
6,550
Abraxis
(6)
21,938
22,563
Avila
(6)
5,947
-
Acquisition related (gains) charges and restructuring, net:
Change in fair value of contingent consideration
(7)
(12,433
)
(99,535
)
Abraxis acquisition and restructuring costs
(7)
-
2,791
Avila acquisition and restructuring costs
(7)
1,363
-
Equity in gains (losses) of affiliated companies:
EntreMed, Inc.
(8)
-
255
Abraxis non-core activities
(2)
-
1,845
Interest and other income (expense), net:
Abraxis non-core activities
(2)
-
98
Non-controlling interest:
Abraxis non-core activities
(2)
-
(504
)
Net income tax adjustments
(9)
(23,260
)
(62,360
)
Net income - non-GAAP
$
484,429
$
393,389
Net income per common share - non-GAAP:
Basic
$
1.11
$
0.84
Diluted
$
1.08
$
0.83
Celgene Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Net Income
Explanation of adjustments:
(1)
Exclude sales related to non-core former Pharmion Corp., or
Pharmion, products to be exited and Abraxis BioScience Inc., or
Abraxis, products that have been exited.
(2)
Exclude the estimated impact of activities arising from the
acquisition of Abraxis that are not related to core nab technology
and were divested in 2011, including other miscellaneous revenues,
cost of goods sold (excluding amortization of acquired intangible
assets), operating expenses and other costs related to such
activities. Exclude the net (benefit) cost of activities arising
from the acquisition of Pharmion that are planned to be exited.
(3)
Exclude share-based compensation expense totaling $54,720 for the
three-month period ended March 31, 2012 and $57,693 for the
three-month period ended March 31, 2011. The after tax net impact
reduced GAAP net income for the three-month period ended March 31,
2012 by $40,101, or $0.09 per diluted share and for the
three-month period ended March 31, 2011 by $42,241, or $0.09 per
diluted share.
(4)
Exclude acquisition-related inventory step-up adjustments to fair
value which were expensed for Abraxis in 2011.
(5)
Acquired intangible asset impairment for the three-month period
ended March 31, 2012 related to the timing of obtaining approval
for ISTODAX for the treatment of peripheral T-cell lymphoa, or
PTCL in the European Union. IPR&D impairment for the three-month
period ended March 31, 2011 related to a reduction in the
probability of obtaining progression free survival labeling for
the treatment of non-small cell lung cancer for ABRAXANE in the
United States.
(6)
Exclude amortization of acquired intangible assets from the
acquisitions of Pharmion, Gloucester Pharmaceuticals, Inc., or
Gloucester, Abraxis and Avila Therapeutics, or Avila.
(7)
Exclude acquisition related charges and restructuring related to
Gloucester, Abraxis and Avila.
(8)
Exclude the Company's share of EntreMed, Inc. equity losses in 2011.
(9)
Net income tax adjustments reflect the estimated tax effect of the
above adjustments and the impact of certain other non-operating
tax adjustments, including one time effects of changes in tax law
and acquisition related matters.
Celgene Corporation and Subsidiaries
Reconciliation of Full-Year 2012 Projected GAAP to Non-GAAP Net
Income
(In thousands, except per share data)
Range
Low
High
Projected net income - GAAP
$
1,566,000
$
1,631,000
Before tax adjustments:
Cost of goods sold (excluding amortization
of acquired intangible assets):
Share-based compensation expense
11,000
10,000
Research and development:
Share-based compensation expense
121,000
109,000
IPR&D impairment
22,000
22,000
Upfront payment
65,000
65,000
Selling, general and administrative:
Share-based compensation expense
118,000
107,000
Amortization of acquired intangible assets
199,000
199,000
Acquisition related (gains) charges and restructuring, net:
Change in fair value of contingent consideration
103,000
103,000
Acquisition and restructuring costs
2,000
1,000
Net income tax adjustments
(115,000
)
(111,000
)
Projected net income - non-GAAP
$
2,092,000
$
2,136,000
Projected net income per diluted common share - GAAP
$
3.52
$
3.67
Projected net income per diluted common share - non-GAAP
$
4.70
$
4.80
Projected weighted average diluted shares
445,000
445,000
Celgene Corporation Investors: Patrick E. Flanigan III,
908-673-9969 Vice President Investor Relations or Media: Brian
P. Gill, 908-673-9530 Vice President Corporate Communications
Recommend:
