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Press release from Business Wire

Celgene Reports Record Non-GAAP Fourth Quarter and Full Year 2010 Operating and Financial Results

<p class='bwalignc'> - <i>Record Results Driven By Gains in Market Share and Duration of Therapy, Geographic Expansion and Reimbursement Approvals</i> </p> <p class='bwalignc'> - <i>2010 Non-GAAP Total Revenue Increased 34 Percent Y/Y</i> </p> <p class='bwalignc'> - <i>2010 Non-GAAP Diluted Earnings Per Share Increased 35 Percent Y/Y</i> </p>

Thursday, January 27, 2011

Celgene Reports Record Non-GAAP Fourth Quarter and Full Year 2010 Operating and Financial Results07:30 EST Thursday, January 27, 2011 SUMMIT, N.J. (Business Wire) -- Celgene Corporation (NASDAQ: CELG): 2010 Fourth Quarter Financial Results Year-Over-Year Non-GAAP Total Revenue Increased 38 Percent to $1.05 Billion; GAAP Total Revenue $1.07 Billion Global REVLIMID® Net Product Sales Increased 42 Percent to $708 Million Global VIDAZA® Net Product Sales Increased 20 Percent to $140 Million Global THALOMID® Net Product Sales of $91 Million ABRAXANE® Net Product Sales of $71 Million (Since October 15, 2010 Closing of Abraxis BioScience Acquisition) Non-GAAP Diluted Earnings Per Share Increased 18 Percent to $0.73; GAAP Diluted Earnings Per Share $0.45 (Includes Impact of Acquisition of Abraxis BioScience) 2010 Full Year Financial Results Year-Over-Year Non-GAAP Total Revenue Increased 34 Percent to $3.60 Billion; GAAP Total Revenue $3.62 Billion Global REVLIMID Net Product Sales Increased 45 Percent to $2.47 Billion Global VIDAZA Net Product Sales Increased 38 Percent to $534 Million Global THALOMID Net Product Sales of $387 Million Non-GAAP Diluted Earnings Per Share Increased 35 Percent to $2.80; GAAP Diluted Earnings Per Share $1.88 (Includes Impact of Acquisition of Abraxis BioScience) 2011 Selected Clinical/Regulatory ObjectivesHematology Submit REVLIMID® Newly Diagnosed Multiple Myeloma Regulatory Filing with FDA Submit REVLIMID del 5q Myelodysplastic Syndromes Regulatory Filing With EMA Launch ISTODAX® in Peripheral T-Cell Lymphoma in the United States Complete Enrollment of Pomalidomide Phase III Trial in Myelofibrosis Initiate Phase III Trial of Pomalidomide in Relapsed/Refractory Multiple Myeloma Initiate Phase III Study of REVLIMID in Patients with Follicular Lymphoma Complete Enrollment of Pivotal Phase II Trials Evaluating REVLIMID in Mantle Cell Lymphoma Oncology Submit ABRAXANE® Non-Small Cell Lung Cancer Supplemental New Drug Application to FDA Complete Enrollment of ABRAXANE Phase III Trial in Pancreatic Cancer Complete Enrollment of ABRAXANE Phase III trial in Melanoma and Phase II Trials in Bladder and Ovarian Cancer Complete Enrollment of REVLIMID Phase III Trial in Androgen Independent Prostate Cancer Advance Development Program of TORKi (mTOR Kinase Inhibitor) CC-223 Inflammation and Immunology Complete Enrollment of Six Phase III Trials Evaluating Apremilast in Psoriatic Arthritis (n = 2,000), and in Moderate-to-Severe Psoriasis (n = 1,200) Advance Phase II Apremilast Trials in Multiple Indications Advance Development Program of CC-930 in Idiopathic Pulmonary Fibrosis Advance Development Program of Cellular Therapy PDA-001 in Crohn's Disease, Multiple Sclerosis, Rheumatoid Arthritis, and Stroke Celgene Corporation (NASDAQ: CELG) announced non-GAAP (Generally Accepted Accounting Principles) net income of $347.6 million, or non-GAAP diluted earnings per share of $0.73 for the quarter ended December 31, 2010. Non-GAAP net income for the fourth quarter of 2009 was $290.3 million or non-GAAP diluted earnings per share of $0.62. Based on U.S. GAAP, Celgene reported net income of $213.6 million, or diluted earnings per share of $0.45 for the quarter ended December 31, 2010. GAAP net income for the fourth quarter of 2009 was $254.2 million, or diluted earnings per share of $0.54. Celgene posted non-GAAP net income of $1.315 billion or non-GAAP diluted earnings per share of $2.80 in 2010 as compared to non-GAAP net income of $971.3 million and non-GAAP diluted earnings per share of $2.08 in 2009. On a GAAP basis, Celgene reported net income of $884.5 million, or diluted earnings per share of $1.88 in 2010, compared to GAAP net income of $776.7 million, or diluted earnings per share of $1.66 in 2009. “The 2010 record financial and operational results represent excellence in execution by all of our global teams,” said Bob Hugin, Celgene's Chief Executive Officer. “This operating momentum, combined with our continued investment in R&D, positions us well for sustained growth in both the near and long term.” Product Sales Performance Non-GAAP total revenue was a record $1.048 billion for the quarter ended December 31, 2010, an increase of 38 percent from 2009. GAAP total revenue was $1.066 billion for the quarter ended December 31, 2010. The increase in total revenue was driven by global market share gains and increased duration of therapy of REVLIMID® and VIDAZA®.Net sales of REVLIMID were $707.5 million, an increase of 42 percent over the same period in 2009. VIDAZA net sales were $140.4 million, an increase of 20 percent over the same period in 2009. Global THALOMID® (inclusive of Thalidomide Celgene® and Thalidomide Pharmion®) sales were $91.3 million, a 15 percent decrease over the same period in 2009. ABRAXANE® net sales, since the October 15, 2010 closing of the Abraxis BioScience, Inc. acquisition, were $71.4 million. Revenue from Focalin® and the Ritalin® family of drugs totaled $27.2 million for the fourth quarter of 2010 compared to $27.6 million over the same period in 2009. For the full year of 2010, non-GAAP total revenue was a record $3.595 billion, an increase of 34 percent year-over-year. GAAP total revenue was $3.620 billion for 2010. Total non-GAAP net product sales reached a record $3.479 billion, an increase of 36 percent year-over-year. REVLIMID net sales for the full year reached $2.466 billion compared to $1.706 billion in 2009. Global 2010 VIDAZA and THALOMID net sales for the full year were $534.0 million and $387.3 million, respectively. Revenue from Focalin and the Ritalin family of drugs totaled $106.6 million for 2010, an increase of two percent over 2009. Research and Development For the fourth quarter of 2010, non-GAAP R&D expenses, which exclude share-based employee compensation expense and estimated non-core R&D operations acquired from Abraxis, were $298.5 million compared to $181.8 million for the fourth quarter of 2009. These R&D expenditures continue to support ongoing clinical progress in multiple proprietary development programs for REVLIMID, VIDAZA, ABRAXANE, ISTODAX® and pomalidomide; apremilast and our oral anti-inflammatory compounds; our kinase inhibitor programs; our activin inhibitor program with ACE-011; and cellular therapy programs. On a GAAP basis, R&D expenses were $327.5 million for the fourth quarter of 2010 and $201.7 million in the same period in 2009. Selling, General, and Administrative Non-GAAP selling, general and administrative expenses, which exclude share-based employee compensation expense, and estimated expenses from non-core selling, general, and administrative activities acquired from Abraxis, were $252.4 million for the fourth quarter of 2010 compared to $193.3 million for the fourth quarter of 2009. The increase was primarily due to higher marketing and sales related expenses resulting from ongoing product launch activities, including REVLIMID in Japan, VIDAZA in Europe and ISTODAX in the United States, activities acquired from Abraxis, and higher facilities costs. On a GAAP basis, selling, general and administrative expenses were $295.1 million for the fourth quarter of 2010 and $211.6 million in the same period in 2009. Interest and Other Income, Net For the quarter ended December 31, 2010, non-GAAP interest and other income, net, decreased to a loss of $8.0 million compared to a $22.0 million gain in the same period in 2009. The decrease was primarily due to a reduction in interest and investment income, interest expense associated with the $1.25 billion in senior notes issued in October 2010 as well as a decrease in net hedging and foreign currency revaluation gains in the quarter ended December 31, 2010, compared to the same period in 2009. Cash, Cash Equivalents, and Marketable Securities Celgene reported $2.601 billion in cash, cash equivalents, and marketable securities as of December 31, 2010. Non-GAAP Financial Information See the attached Reconciliation of GAAP to non-GAAP Net Income for an explanation of the amounts excluded and included to arrive at non-GAAP net income and non-GAAP earnings per share amounts for the three-month and twelve-month periods ended December 31, 2010 and 2009. Non-GAAP financial measures provide investors and management with supplemental measures of operating performance and trends that facilitate comparisons between periods before and after certain items that would not otherwise be apparent on a GAAP basis. Certain unusual or non-recurring items that management does not believe affect the company's basic operations do not meet the GAAP definition of unusual or non-recurring items. Non-GAAP net income and non-GAAP earnings per share are not, and should not be viewed as a substitute for similar GAAP items. We define non-GAAP diluted earnings per share amounts as non-GAAP net income divided by the weighted average number of diluted shares outstanding. Our definition of non-GAAP net income and non-GAAP diluted earnings per share may differ from similarly named measures used by others. Conference Call and Webcast Information Celgene will host a conference call to discuss the results and achievements of its fourth quarter and full year 2010 operating and financial performance on January 27, 2011, 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 ET January 27, 2011, until midnight ET February 3, 2011. To access the replay, in the U.S. dial 800-642-1687; outside the U.S. dial 706-645-9291; and enter reservation number 35819129. The Company's first quarter 2011 financial and operational results are expected to be reported in late April. 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. This release contains certain forward-looking statements which involve known and unknown risks, delays, uncertainties and other factors not under the Company's control. The Company's actual results, performance, or achievements could be materially different from those projected by these forward-looking statements.The factors that could cause actual results, performance, or achievements to differ from the forward-looking statements are discussed in the Company's filings with the Securities and Exchange Commission, such as the Company's Form 10-K, 10-Q and 8-K reports.Given these risks and uncertainties, you are cautioned not to place undue reliance on the forward-looking statements.   Celgene Corporation and SubsidiariesCondensed Consolidated Statements of Operations(In thousands, except per share data)                                                 Three Months Ended Twelve Months Ended December 31, December 31, 2010   2009 2010 2009   Net product sales $ 1,034,874 $ 725,001 $ 3,503,038 $ 2,567,354 Collaborative agreements and other revenue 3,375   6,764 10,540 13,743 Royalty revenue   28,039     29,272   106,767   108,796 Total revenue   1,066,288     761,037   3,620,345   2,689,893   Cost of goods sold (excluding amortization of acquired intangible assets) 114,321 49,030 307,771 216,289 Research and development 327,530 201,738 1,128,495 794,848 Selling, general and administrative 295,112 211,564 950,634 753,827 Amortization of acquired intangible assets 68,030 16,000 203,231 83,403 Acquisition related charges and restructuring, net   28,536     -   48,729   - Total costs and expenses   833,529     478,332   2,638,860   1,848,367   Operating income 232,759 282,705 981,485 841,526   Equity in losses of affiliated companies 1,182 159 1,928 1,103 Interest and other income (expense), net   (5,220 )   22,023   37,599   135,280   Income before income taxes 226,357 304,569 1,017,156 975,703   Income tax provision   13,120     50,354   132,974   198,956   Net income 213,237 254,215 884,182 776,747   Non-controlling interest   320     -   320   -   Net income attributable to Celgene $ 213,557   $ 254,215 $ 884,502 $ 776,747     Net income per common share attributable to Celgene: Basic $ 0.46 $ 0.55 $ 1.91 $ 1.69 Diluted $ 0.45 $ 0.54 $ 1.88 $ 1.66   Weighted average shares - basic   469,244     459,223   462,298   459,304   Weighted average shares - diluted   476,709     466,965   469,517   467,354     December 31, 2010 2009 Balance sheet items: Cash, cash equivalents & marketable securities $ 2,601,301 $ 2,996,752 Total assets 10,079,399 5,389,311 Long-term debt 1,247,584 - Stockholders' equity 5,976,964 4,394,606   Celgene Corporation and SubsidiariesReconciliation of GAAP to Non-GAAP Net Income(In thousands, except per share data)                                                     Three Months Ended Twelve Months Ended December 31, December 31, 2010 2009 2010 2009   Net income attributable to Celgene - GAAP $ 213,557 $ 254,215 $ 884,502 $ 776,747   Before tax adjustments: Net product sales: Sales of products to be divested: Pharmion (1 ) (1,511 ) (3,286 ) (8,234 ) (12,654 ) Abraxis (1 ) (15,864 ) - (15,864 ) -   Collaborative agreements and other revenue: Abraxis non-core revenues (2 ) (943 ) - (943 ) -   Cost of goods sold (excluding amortization of acquired intangible assets): Share-based compensation expense (3 ) 1,867 1,140 6,776 4,444 Abraxis and Pharmion inventory step-up (4 ) 34,722 - 34,722 354 Cost of products to be divested: Pharmion (2 ) 1,569 2,866 9,783 8,262 Abraxis (2 ) 9,298 - 9,298 - EntreMed intercompany royalty (5 ) (202 ) (388 ) (283 ) (585 )   Research and development: Share-based compensation expense (3 ) 21,725 19,910 82,097 64,751 Upfront collaboration payments (6 ) - - 121,176 34,500 Abraxis non-core activities (2 ) 7,338 - 7,338 -   Selling, general and administrative: Share-based compensation expense (3 ) 27,647 18,240 93,924 74,624 Abraxis non-core activities (2 ) 15,089 - 15,089 -   Amortization of acquired intangible assets: Pharmion (7 ) 39,832 16,000 159,750 83,403 Gloucester (7 ) 6,550 - 21,833 - Abraxis (7 ) 21,648 - 21,648 -   Acquisition related charges and restructuring, net: Gloucester contingent liability accretion (8 ) 5,997 - 22,694 - Abraxis acquisition costs (8 ) 16,907 - 20,403 - Abraxis restructuring costs (8 ) 18,614 - 18,614 - Change in fair value of contingent value rights issued as part of Abraxis acquisition (8 ) (12,982 ) - (12,982 ) -   Equity in losses of affiliated companies: EntreMed, Inc. (5 ) 352 469 1,295 1,449 Abraxis non-core activities (2 ) 1,307 - 1,307 -   Interest and other income (expense), net: Abraxis non-core activities (2 ) (2,774 ) - (2,774 ) -   Non-controlling interest: Abraxis non-core activities (2 ) (320 ) - (320 ) -   Net income tax adjustments (9 )   (61,830 )   (18,854 )   (175,553 )   (63,973 ) Net income attributable to Celgene - non-GAAP $ 347,593   $ 290,312   $ 1,315,296   $ 971,322     Net income per common share attributable to Celgene -non-GAAP: Basic $ 0.74 $ 0.63 $ 2.85 $ 2.11 Diluted $ 0.73 $ 0.62 $ 2.80 $ 2.08   Celgene Corporation and SubsidiariesReconciliation of GAAP to Non-GAAP Net Income       Explanation of adjustments: (1)   Exclude sales related to non-core former Pharmion Corp., or Pharmion, and Abraxis BioScience Inc., or Abraxis products to be divested. (2) Exclude the estimated impact of activities arising from the acquisitions of Abraxis that are not related to core nab technology and of Pharmion that are planned to be divested, including other miscellaneous revenues, the cost of goods sold for products to be divested as well as operating expenses and other costs related to such activities. (3) Exclude share-based compensation expense for the fourth quarter totaling $51,239 in 2010 and $39,290 in 2009. The after tax net impact reduced GAAP net income for the fourth quarter by $38,797, or $0.08 per diluted share in 2010 and $30,371, or $0.07 per diluted share in 2009. Exclude share-based compensation expense for the twelve-month period totaling $182,797 in 2010 and $143,819 in 2009. The after tax net impact reduced GAAP net income for the twelve-month period by $140,448, or $0.30 per diluted share in 2010 and $111,419, or $0.24 per diluted share in 2009. (4) Exclude acquisition-related inventory step-up adjustments to fair value which were expensed for Abraxis in 2010 and Pharmion in 2009. (5) Exclude the Company's share of EntreMed, Inc. THALOMID royalties and equity losses. (6) Exclude upfront payments for research and development collaboration arrangements with Agios Pharmaceuticals, Inc. for the twelve-month period in 2010 and GlobeImmune, Inc. and Array BioPharma Inc. of $30,000 and $4,500, respectively for the twelve-month period in 2009. (7) Exclude amortization of acquired intangible assets from the acquisitions of Pharmion, Gloucester Pharmaceuticals, Inc., or Gloucester and Abraxis. (8) Exclude acquisition and restructuring related charges for Gloucester and Abraxis. (9) Net income tax adjustments reflects the estimated tax effect of the above adjustments. Celgene CorporationJacqualyn A. Fouse, 908-673-9956Sr. Vice President and Chief Financial OfficerorCelgene CorporationTim Smith, 908-673-9951Director, Investor Relations