- Strong Operating Momentum Drives Q1
Results
- 2016 Guidance: Raising Lower-End of Ranges
for Net Product Sales and Adjusted Diluted EPS
- 2017 Financial Targets Updated; 2020
Financial Targets On-Track
Celgene Corporation (NASDAQ:CELG) reported net product sales of
$2,495 million for the first quarter of 2016. Net product sales
grew 21 percent from the same period in 2015, including a 2 percent
negative impact from currency exchange effects. First quarter total
revenue increased 21 percent to $2,512 million compared to $2,081
million in the first quarter of 2015. Adjusted net income for the
first quarter of 2016 increased 19 percent to $1,064 million
compared to $891 million in the first quarter of 2015. For the same
period, adjusted diluted earnings per share (EPS) increased 23
percent to $1.32 from $1.07.
Based on U.S. GAAP (Generally Accepted Accounting Principles),
Celgene reported first quarter of 2016 net income of $801 million
or $0.99 per diluted share. For the first quarter of 2015, net
income was $719 million or $0.86 per diluted share.
“Our global teams generated excellent first quarter results and
our strong operating momentum makes us confident that we will
achieve or exceed our ambitious 2016 goals,” said Mark Alles, Chief
Executive Officer of Celgene. “We are driving long-term value
creation through the continued advancement of our innovative
pipeline with significant clinical data expected over the next two
years.”
First Quarter 2016 Financial
Highlights
Unless otherwise stated, all comparisons are for the first
quarter of 2016 compared to the first quarter of 2015. The adjusted
operating expense categories presented below exclude share-based
employee compensation expense and upfront collaboration expense.
Please see the attached Reconciliation of GAAP to Adjusted Net
Income for further information.
Net Product Sales Performance
- REVLIMID® sales for the first quarter
increased 17 percent to $1,574 million. Growth was driven by
increased market share in newly diagnosed multiple myeloma and
increases in duration. U.S. sales of $997 million and international
sales of $577 million increased 23 percent and 8 percent,
respectively.
- POMALYST®/IMNOVID® sales were $274
million, a 38 percent increase year-over-year. U.S. sales of $171
million and international sales of $103 million increased 33
percent and 47 percent, respectively. POMALYST®/IMNOVID® sales were
driven by increases in market share and duration trends.
- ABRAXANE® sales for the first quarter
were $225 million, a 1 percent increase year-over-year. U.S. sales
of $144 million and international sales of $81 million decreased 10
percent and increased 26 percent, respectively. The decrease in
sales in the U.S. reflects quarterly customer buying patterns and
increased competition in breast cancer and lung cancer from new
market entrants.
- OTEZLA® sales in the first quarter were
$196 million, a 224 percent increase year-over-year. Growth was
driven by market share gains in the U.S. and Europe. U.S. sales
were $175 million and international sales were $21 million.
- In the first quarter, all other product
sales, which include THALOMID®, ISTODAX®, VIDAZA® and an authorized
generic version of VIDAZA® drug product in the U.S., were $226
million compared to $230 million in the first quarter of 2015.
Research and Development (R&D)
Adjusted R&D expenses were $591 million for the first
quarter of 2016 compared to $431 million for the first quarter of
2015. The difference was primarily due to an increase in clinical
trial activity across the portfolio and includes $65 million of
milestones achieved by collaboration partners in the first quarter
of 2016 while there were none in the first quarter of 2015. On a
GAAP basis, R&D expenses were $733 million for the first
quarter of 2016 and $506 million for the same period in 2015, also
reflecting an increase in upfront collaboration expenses.
Selling, General, and Administrative (SG&A)
Adjusted SG&A expenses were $468 million for the first
quarter of 2016 compared to $463 million for the first quarter of
2015. On a GAAP basis, SG&A expenses were $543 million for the
first quarter of 2016 compared to $529 million for the same period
in 2015.
Cash, Cash Equivalents, and Marketable Securities
Operations generated cash flow of $975 million in the first
quarter of 2016, an increase of 14 percent year-over-year. In the
first quarter, Celgene purchased approximately $1,410 million of
its shares. As of March 31, 2016, Celgene had $2,481 million
remaining under the existing share repurchase program. Celgene
ended the quarter with $5,707 million in cash and marketable
securities.
2016 Guidance Updated
Previous 2016Guidance
Updated 2016Guidance
Net Product Sales: Total $10.5B-$11.0B
$10.75B-$11.0B REVLIMID® $6.6B-$6.7B Approximately $6.7B
POMALYST®/IMNOVID®
Greater than $1.0B
Greater than $1.0B ABRAXANE® Greater than $1.0B $950M-$1.0B OTEZLA®
Greater than $1.0B Greater than $1.0B Adjusted operating margin
Approximately 53.5% Approximately 53.5% GAAP operating margin
Approximately 42% Approximately 42% Adjusted diluted EPS $5.50 to
$5.70 $5.60 to $5.70 GAAP diluted EPS $4.26 to $4.64 $4.26 to $4.56
Weighted average diluted shares 825M 811M
2017 Targets Updated
- Updated targets reflect current
exchange rates, inclusive of existing hedging contracts
- Total net product sales are expected to
be in the range of $12.7 billion to $13.0 billion versus the
previous range of $13.0 billion to $14.0 billion
- REVLIMID® net sales are expected to be
approximately $8.0 billion versus the previous target of $7.0
billion
- ABRAXANE® net sales are expected to be
approximately $1.0 billion versus the previous range of $1.5
billion to $2.0 billion
- Adjusted diluted EPS is expected to be
in the range of $6.75 to $7.00 versus the previous target of
$7.25
- Weighted average diluted shares
expected to be 825 million versus the previous target of 830
million
2020 Net Product Sales and Adjusted
Diluted EPS Targets On-Track
- Updated targets reflect current
exchange rates
- Total net product sales are expected to
be more than $21.0 billion
- Adjusted diluted EPS expected to be
more than $13.00
Product and Pipeline
Updates
Hematology/Oncology
In collaboration with our partner Agios Pharmaceuticals Inc.,
enrollment began in a phase III trial with AG-221 in IDH-2 mutated
relapsed and/or refractory acute myeloid leukemia (AML). In
collaboration with our partner Acceleron Pharma Inc., enrollment
began in a phase III trial evaluating luspatercept in patients with
anemia due to low- or intermediate-risk myelodysplastic syndromes
and a phase III trial in regularly transfused beta-thalassemia
patients is initiating.
During the quarter, several early- and mid-stage clinical trials
began enrollment. These include:
- The phase I/II ENHANCETM trial
evaluating CC-122 in combination with ibrutinib and obinutuzumab in
patients with relapsed and/or refractory chronic lymphocytic
leukemia (CLL)
- A phase II trial evaluating
luspatercept in patients with anemia due to low- or
intermediate-risk myelodysplastic syndromes who are ring
sideroblasts negative or are eligible but have not yet received an
erythropoiesis-stimulating agent
- A safety trial with AG-120 or AG-221 in
combination with standard chemotherapy in patients with newly
diagnosed AML with an IDH-1 and/or IDH-2 mutation
- A phase Ib trial from the FUSIONTM
program combining durvalumab and POMALYST®/IMNOVID® in patients
with relapsed and refractory multiple myeloma
The phase III apact® trial evaluating ABRAXANE® in combination
with gemcitabine as adjuvant therapy in patients with surgically
resected pancreatic cancer completed enrollment. Data from this
trial are expected in 2017.
At the American Society of Clinical Oncology (ASCO) annual
meeting in June 2016, expected presentations include:
- A meta-analysis of overall survival in
patients treated with REVLIMID® maintenance after high-dose
melphalan and autologous stem cell transplant
- Data on combinations with REVLIMID® or
POMALYST®/IMNOVID® with novel agents in relapsed and/or refractory
multiple myeloma
- Data from the ETNA (Evaluating
Treatment with Neoadjuvant Abraxane) phase III trial comparing
neoadjuvant ABRAXANE® to paclitaxel in patients with HER2-negative
high-risk breast cancer
Inflammation & Immunology (I&I)
In March, a New Drug Application in Japan was submitted for
OTEZLA® for the treatment of psoriasis and psoriatic arthritis. A
decision from the Japan Pharmaceuticals and Medical Devices Agency
is now expected by year-end.
At the American Academy of Dermatology in March, an analysis of
pooled 182-week (3.5-year) safety data from the ESTEEM 1 and 2
trials of patients with moderate to severe plaque psoriasis who are
candidates for phototherapy or systemic therapy and pooled 3-year
safety data from the PALACE 1-3 trials of patients with active
psoriatic arthritis were presented.
The phase IIIb PSA-006 trial evaluating OTEZLA® in psoriatic
arthritis patients with early disease met the primary endpoint of
ACR 20 response rate. The data will be presented at a future
medical congress.
The registration-enabling endoscopy trial (CD-001) with GED-0301
in patients with active Crohn’s disease completed enrollment. Data
from the trial are expected to be presented at a major medical
meeting in 2017.
Data from the phase II TOUCHSTONE trial with ozanimod showing
the histologic improvement in patients with ulcerative colitis were
presented at the Congress of the European Crohn's and Colitis
Organization (ECCO) in March 2016. Data from the enrolling phase
III TRUE NORTH trial of ozanimod in patients with ulcerative
colitis are expected in 2018.
Data at 72-weeks from the phase II portion of the RADIANCE trial
evaluating ozanimod in patients with multiple sclerosis were
presented at the ACTRIMS (Americas Committee for Treatment &
Research in Multiple Sclerosis) meeting in February 2016.
In February, data from the phase II portion of the RADIANCE
trial evaluating ozanimod in patients with relapsing multiple
sclerosis were published in Lancet Neurology. The phase III trials
with ozanimod in multiple sclerosis (SUNBEAM and RADIANCE) have
completed enrollment and are ongoing with data analysis expected in
2017.
The phase II trial evaluating RPC4046 in eosinophilic
esophagitis met the primary endpoint of reduction of mean
eosinophil count. Celgene is evaluating the data to determine next
steps with the program. AbbVie, Inc. has a co-development option on
RPC4046. The study results will be presented at a future medical
meeting.
Business Update
In February, Celgene exercised its option to exclusively license
bb2121, bluebird bio’s therapy targeting B cell maturation antigen
(BCMA). Celgene will be responsible for worldwide development and
commercialization of bb2121 after the phase I trial is
completed.
At the end of February, Celgene closed on the sale to Human
Longevity, Inc. of Celgene Cellular Therapeutics’ (CCT) biobanking
business known as LifebankUSA and CCT’s biomaterials portfolio of
assets including Biovance®.
In April, Celgene exercised its option to develop and
commercialize the Juno Therapeutics, Inc. CD19 program outside
North America and China. Both companies will now share global
development expenses for products in the CD19 program. Celgene has
commercial rights outside of North America and China and will pay
Juno a royalty at a percentage in the mid-teens on any future net
sales of therapeutic products developed through the CD19 program in
Celgene’s territories.
First Quarter 2016 Conference Call and
Webcast Information
Celgene will host a conference call to discuss the first quarter
of 2016 operating and financial performance on Thursday, April 28,
2016, at 9 a.m. ET. The conference call will be available by
webcast at www.celgene.com. An audio replay of the call will be
available from noon April 28, 2016, until midnight ET May 5, 2016.
To access the replay in the U.S., dial (855) 859-2056; outside the
U.S. dial (404) 537-3406. The participant passcode is 79676290.
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 patients with
multiple myeloma. 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. 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. 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 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.
About VIDAZA®
In the U.S., VIDAZA® (azacitidine for injection) is indicated
for treatment of patients with the following
French-American-British (FAB) myelodysplastic syndrome subtypes:
refractory anemia (RA) or refractory anemia with ringed
sideroblasts (RARS) (if accompanied by neutropenia or
thrombocytopenia or requiring transfusions), refractory anemia with
excess blasts (RAEB), refractory anemia with excess blasts in
transformation (RAEB-T), and chronic myelomonocytic leukemia
(CMMoL).
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 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. 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-month periods ended March 31, 2016 and 2015,
and for the projected amounts for the year ending December 31,
2016.
Celgene Corporation and Subsidiaries Condensed
Consolidated Statements of Income (Unaudited) (In
millions, except per share data)
Three-Month Periods Ended March 31,
2016 2015 Net product sales $ 2,494.7 $
2,055.2 Other revenue 16.9 25.6 Total
revenue 2,511.6 2,080.8 Cost of
goods sold (excluding amortization of acquired intangible assets)
105.9 104.0 Research and development 733.2 506.0 Selling, general
and administrative 543.0 529.2 Amortization of acquired intangible
assets 91.8 63.6 Acquisition related charges and restructuring, net
36.2 19.0 Total costs and expenses
1,510.1 1,221.8 Operating income
1,001.5 859.0 Interest and investment income, net 6.8 9.0
Interest (expense) (121.9 ) (49.2 ) Other income (expense), net
35.2 8.3 Income before income
taxes 921.6 827.1 Income tax provision 120.9
108.2 Net income $ 800.7 $ 718.9
Net income per common share: Basic $ 1.03 $ 0.90
Diluted $ 0.99 $ 0.86 Weighted average shares: Basic 780.6
798.9 Diluted 807.7 834.1 March 31, December 31,
2016 2015
Balance sheet items:
Cash, cash equivalents & marketable securities $ 5,707.3 $
6,551.9 Total assets* 25,963.9 26,964.4 Long-term debt* 14,268.3
14,161.4 Total stockholders' equity 5,074.8 5,919.0 * Total
assets and long-term debt as of December 31, 2015 have been
adjusted to reflect the retroactive adoption of ASU 2015-03 in the
first quarter of 2016. ASU 2015-03 requires the presentation of
debt issuance costs as a reduction of long-term debt.
Celgene Corporation and Subsidiaries Reconciliation of
GAAP to Adjusted Net Income (In millions, except per share
data) Three-Month Periods Ended March 31,
2016 2015 Net income - GAAP $ 800.7 $
718.9 Before tax adjustments: Cost of goods sold (excluding
amortization of acquired intangible assets): Share-based
compensation expense (1 ) 9.0 6.7 Research and development:
Share-based compensation expense (1 ) 62.2 56.2 Upfront
collaboration expense (2 ) 80.0 19.0 Selling, general and
administrative: Share-based compensation expense (1 ) 75.3 65.9
Amortization of acquired intangible assets (3 ) 91.8 63.6
Acquisition related (gains) charges and restructuring, net:
Change in fair value of contingent consideration (4 ) 33.0 19.0
Restructuring charges (5 ) 3.2 - Net income tax adjustments
(6 ) (90.9 ) (58.3 ) Net income - Adjusted $ 1,064.3
$ 891.0 Net income per common share - Adjusted
Basic $ 1.36 $ 1.12 Diluted $ 1.32 $ 1.07 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) Exclude share-based compensation
expense totaling $146.5 for the three-month period ended March 31,
2016 and $128.8 for the three-month period ended March 31, 2015.
(2) Exclude upfront payment expense for research and development
collaboration arrangements. (3) Exclude amortization of intangible
assets acquired in the acquisitions of Pharmion Corp., Gloucester
Pharmaceuticals, Inc. (Gloucester), Abraxis BioScience Inc.
(Abraxis), Celgene Avilomics Research, Inc. (Avila), and Quanticel
Pharmaceuticals, Inc. (Quanticel). (4) Exclude changes in the fair
value of contingent consideration related to the acquisitions of
Gloucester, Abraxis, Avila, Nogra Pharma Limited and Quanticel. (5)
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. (6) 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
adjustments related to the gain on the sale of certain assets.
Celgene Corporation and Subsidiaries
Reconciliation of Full-Year 2016 Projected GAAP to Adjusted Net
Income (In millions, except per share data)
Range Low High
Projected net income - GAAP (1 ) $ 3,453.6 $ 3,700.7
Before tax adjustments: Cost of goods sold (excluding amortization
of acquired intangible assets): Share-based compensation expense
36.8 35.0 Research and Development:
Share-based compensation expense
291.3 276.7 Upfront collaboration expense 130.0 130.0
Selling, general and administrative: Share-based compensation
expense 341.9 324.8 Amortization of acquired intangible
assets 381.6 348.6 Acquisition related charges and
restructuring, net: Change in fair value of contingent
consideration 132.0 119.4 Restructuring charges 30.0 15.0
Net income tax adjustments (255.6 ) (327.5 )
Projected net income - Adjusted $ 4,541.6 $ 4,622.7
Projected net income per diluted common share - GAAP $ 4.26
$ 4.56 Projected net income per diluted common share -
Adjusted $ 5.60 $ 5.70 Projected weighted average diluted
shares 811.0 811.0 (1)
Our projected 2016 earnings 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 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 March 31, % Change 2016
2015 Reported Operational(1)
Currency(2)
REVLIMID® U.S. $ 996.5 $
810.8 22.9 % 22.9 % 0.0 % International 577.1 532.1
8.5 % 12.8 % (4.3 )% Worldwide 1,573.6 1,342.9 17.2 % 18.9 % (1.7
)%
ABRAXANE® U.S. 143.8 159.1 (9.6 )% (9.6 )%
0.0 % International 81.1 64.3 26.1 % 28.5 % (2.4 )%
Worldwide 224.9 223.4 0.7 % 1.4 % (0.7 )%
POMALYST®/IMNOVID® U.S. 170.7 128.4
32.9 % 32.9 % 0.0 % International 103.3 70.1 47.4 %
47.9 % (0.5 )% Worldwide 274.0 198.5 38.0 % 38.2 % (0.2 )%
OTEZLA®(3) U.S. 174.8 59.4 N/A N/A N/A International
20.8 0.9 N/A N/A N/A Worldwide 195.6 60.3 N/A N/A N/A
VIDAZA® U.S. 3.5 5.9 (40.7 )% (40.7 )% 0.0 %
International 143.2 137.7 4.0 % 9.2 % (5.2 )%
Worldwide 146.7 143.6 2.2 % 7.2 % (5.0 )%
azacitidine for
injection U.S. 18.5 20.6 (10.2 )% (10.2 )% 0.0 % International
- - N/A N/A N/A Worldwide 18.5 20.6 (10.2 )% (10.2 )%
0.0 %
THALOMID® U.S. 27.5 32.4 (15.1 )% (15.1
)% 0.0 % International 13.5 14.5 (6.9 )% (1.5 )% (5.4
)% Worldwide 41.0 46.9 (12.6 )% (10.9 )% (1.7 )%
ISTODAX® U.S. 16.7 15.2 9.9 % 9.9 % 0.0 %
International 1.8 1.3 38.5 % 48.7 % (10.2 )%
Worldwide 18.5 16.5 12.1 % 12.9 % (0.8 )%
All Other
U.S. 1.2 1.8 N/A N/A N/A International 0.7 0.7 N/A
N/A N/A Worldwide 1.9 2.5 N/A N/A N/A
Total Net Product
Sales U.S. 1,553.2 1,233.6 25.9 % 25.9 % 0.0 % International
941.5 821.6 14.6 % 18.4 % (3.8 )% Worldwide $ 2,494.7
$ 2,055.2 21.4 % 22.9 % (1.5 )% (1) -
Operational includes impact from both volume and price (2) -
Currency includes the impact from both foreign exchange rates and
hedging activities (3) - OTEZLA® was approved in the U.S. for
Psoriatic Arthritis in March 2014 and approved in the U.S. for
Psoriasis in September 2014. OTEZLA® was approved for Psoriatic
Arthritis and Plaque Psoriasis in the EU in January 2015.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160428005852/en/
Celgene CorporationInvestors:Patrick E. Flanigan
III, 908-673-9969Corporate Vice President, Investor
RelationsorMedia:Brian P. Gill, 908-673-9530Vice President,
Corporate Communications
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