Celgene Reports Second Quarter 2012 Operating And Financial Results

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 for metastatic 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- and six-month periods ended June 30, 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 June 30,												Six-Month Periods Ended June 30,
						2012						2011						2012						2011
Net product sales					$	1,336,590					$	1,154,328					$	2,582,089					$	2,237,937
Other revenue						30,174						28,827						57,963						70,499
Total revenue						1,366,764						1,183,155						2,640,052						2,308,436
Cost of goods sold (excluding amortization of
acquired intangible assets)						71,852						126,443						144,372						253,711
Research and development						447,098						371,520						809,142						806,998
Selling, general and administrative						323,027						305,643						648,805						607,904
Amortization of acquired intangible assets						44,148						70,087						85,908						139,137
Acquisition related (gains) charges and restructuring, net						39,285						(9,477	)					28,215						(106,221	)
Total costs and expenses						925,410						864,216						1,716,442						1,701,529
Operating income						441,354						318,939						923,610						606,907
Other income (expense), net						(670	)					(528	)					(8,924	)					(1,688	)
Income before income taxes						440,684						318,411						914,686						605,219
Income tax provision						73,311						39,203						145,776						70,925
Net income						367,373						279,208						768,910						534,294
Non-controlling interest						-						190						-						694
Net income attributable to Celgene					$	367,373					$	279,398					$	768,910					$	534,988
Net income per share attributable to Celgene:
Basic					$	0.84					$	0.60					$	1.76					$	1.15
Diluted					$	0.82					$	0.59					$	1.72					$	1.14
Weighted average shares:
Basic						436,703						462,625						437,526						464,300
Diluted						445,379						469,962						447,092						470,958

				June 30,					December 31,
					2012					2011
Balance sheet items:
Cash, cash equivalents & marketable securities				$	2,561,544				$	2,648,154
Total assets					10,381,207					10,005,910
Short-term borrowings					390,434					526,684
Long-term debt					1,272,112					1,275,585
Total stockholders' equity					5,958,028					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 June 30,												Six-Month Periods Ended June 30,
								2012						2011						2012						2011
Net income attributable to Celgene - GAAP							$	367,373					$	279,398					$	768,910					$	534,988
Before tax adjustments:
Total revenues:
	Sales of products exited or to be exited			(1	)			-						(6,565	)					-						(23,468	)
	Abraxis non-core other revenues			(2	)			-						(809	)					-						(1,714	)
Cost of goods sold (excluding amortization
of acquired intangible assets):
	Share-based compensation expense			(3	)			2,983						2,420						5,859						4,427
	Abraxis inventory step-up			(4	)			-						41,666						-						83,333
	Products exited or to be exited			(2	)			(572	)					4,730						(1,981	)					15,280
Research and development:
	Share-based compensation expense			(3	)			23,556						22,880						48,584						55,472
	Abraxis non-core activities			(2	)			-						1,879						-						8,728
	IPR&D impairments			(5	)			-						-						22,151						118,000
	Upfront collaboration payments			(6	)			75,000						40,982						75,000						40,982
Selling, general and administrative:
	Share-based compensation expense			(3	)			27,075						25,613						53,891						48,707
	Abraxis non-core activities			(2	)			-						5,857						-						15,065
Amortization of acquired intangible assets				(7	)			44,148						70,087						85,908						139,137
Acquisition related (gains) charges and restructuring, net:
	Change in fair value of contingent consideration			(8	)			38,071						(11,635	)					25,638						(111,170	)
	Acquisition and restructuring costs			(8	)			1,214						2,158						2,577						4,949
Other income (expense), net
	EntreMed, Inc. equity method loss			(9	)			-						234						-						489
	Abraxis non-core activities			(2	)			-						93						-						2,036
	Gain on divestment of non-core activities			(10	)			-						(2,931	)					-						(2,931	)
Non-controlling interest -Abraxis				(2	)			-						(190	)					-						(694	)
Net income tax adjustments				(11	)			(34,296	)					(58,660	)					(57,556	)					(121,020	)
Net income attributable to Celgene - non-GAAP							$	544,552					$	417,207					$	1,028,981					$	810,596
Net income per share attributable to Celgene -non-GAAP:
Basic							$	1.25					$	0.90					$	2.35					$	1.75
Diluted							$	1.22					$	0.89					$	2.30					$	1.72

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- and six-month periods ended June 30, 2012 and 2011, and for the projected amounts for the year ending December 31, 2012.

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 $53,614 for the three-month period ended June 30, 2012 and $50,913 for the three-month
		period ended June 30, 2011. Exclude share-based compensation expense totaling $108,334 for the six-month period ended June 30, 2012 and
		$108,606 for the six-month period ended June 30, 2011.
(4)		Exclude acquisition-related inventory step-up adjustments to fair value which were expensed for Abraxis in 2011.
(5)		Exclude in-process research and development, or IPR&D, impairment for the six-month period ended June 30, 2012 related to the timing of obtaining
		approval for ISTODAX for the treatment of peripheral T-cell lymphoma, or PTCL, in the European Union. Exclude IPR&D impairment for the
		six-month period ended June 30, 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 upfront payments for research and development collaboration arrangements.
(7)		Exclude amortization of intangible assets acquired from the acquisitions of Pharmion, Gloucester Pharmaceuticals, Inc., or Gloucester, Abraxis
		and Celgene Avilomics Research, Inc. (formerly known as Avila Therapeutics), or Avila.
(8)		Exclude acquisition related charges and restructuring related to Gloucester, Abraxis and Avila.
(9)		Exclude the Company's share of EntreMed, Inc. equity losses in 2011.
(10)		Exclude the 2011 gain recognized on divestment of non-core activities obtained in the acquisition of Abraxis.
(11)		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, acquisition related matters, an adjustment to the amount of unrecognized tax benefits and deferred
		taxes on unremitted foreign earnings.

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				$ 1,641,000				$ 1,692,000
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				57,000				52,000
Upfront collaboration payments				75,000				75,000
Selling, general and administrative:
Share-based compensation expense				118,000				107,000
Amortization of acquired intangible assets				178,000				178,000
Acquisition related (gains) charges and restructuring, net:
Change in fair value of contingent consideration				41,000				36,000
Acquisition and restructuring costs				4,000				3,000
Net income tax adjustments				(110,000)				(104,000)
Projected net income - non-GAAP				$ 2,136,000				$ 2,158,000
Projected net income per diluted common share - GAAP				$ 3.69				$ 3.80
Projected net income per diluted common share - non-GAAP				$ 4.80				$ 4.85
Projected weighted average diluted shares				445,000				445,000

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