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Celgene Reports Strong Fourth Quarter And Full Year 2012 Operating And Financial Results

Stocks in this article: CELG

Data from investigational studies of REVLIMID in relapsed/refractory mantle cell lymphoma and in combination therapy for patients with NHL are described above. REVLIMID is not approved for the treatment of either of these indications.

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 month of adjuvant chemotherapy. Prior therapy should have included an anthracycline unless clinically contraindicated. Abraxane is also indicated for 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.

Data from investigational studies of paclitaxel protein-bound particles for injectable suspension (albumin-bound) in pancreatic cancer and metastatic malignant melanoma are described above. ABRAXANE is not approved for either of these indications.

About VIDAZA

In the U.S., VIDAZA 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).

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 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 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 adjusted net income and adjusted earnings per share amounts for the three- and twelve-month periods ended December 31, 2012 and for the projected amounts for the year ending December 31, 2013.

               
Celgene Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data)
   
 
Three-Month Periods Ended December 31, Twelve-Month Periods Ended December 31,
  2012     2011     2012     2011  
 
Net product sales $ 1,415,497 $ 1,242,635 $ 5,385,599 $ 4,699,690
Other revenue   31,913     41,262     121,114     142,380  
Total revenue   1,447,410     1,283,897     5,506,713     4,842,070  
 
Cost of goods sold (excluding amortization of
acquired intangible assets) 80,130 77,503 299,124 425,859
Research and development 473,419 436,427 1,724,156 1,600,264
Selling, general and administrative 370,092 315,107 1,373,541 1,226,314
Amortization of acquired intangible assets 62,434 75,045 194,499 289,226
Acquisition related (gains) charges and restructuring, net   140,087     (24,916 )   168,951     (142,346 )
Total costs and expenses   1,126,162     879,166     3,760,271     3,399,317  
 
Operating income 321,248 404,731 1,746,442 1,442,753
 
Other income (expense), net   (30,945 )   (3,069 )   (64,951 )   (23,231 )
 
Income before income taxes 290,303 401,662 1,681,491 1,419,522
 
Income tax (benefit) provision   27,188     (8,516 )   225,311     102,066  
 
Net income 263,115 410,178 1,456,180 1,317,456
 
Non-controlling interest   -     -     -     694  
 
Net income attributable to Celgene $ 263,115   $ 410,178   $ 1,456,180   $ 1,318,150  
 
 
Net income per share attributable to Celgene:
Basic $ 0.62 $ 0.93 $ 3.38 $ 2.89
Diluted $ 0.61 $ 0.91 $ 3.30 $ 2.85
 
Weighted average shares:
Basic 421,592 441,064 430,927 455,348
Diluted 432,310 449,747 440,796 462,748
 
 
 
December 31,
  2012     2011  
Balance sheet items:
Cash, cash equivalents & marketable securities $ 3,900,270 $ 2,648,154
Total assets 11,734,306 10,005,910
Short-term borrowings 308,459 526,684
Long-term debt 2,771,333 1,275,585
Total stockholders' equity 5,694,467 5,512,727
 
                   
Celgene Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Net Income
(In thousands, except per share data)
   
 
Three-Month Periods Ended December 31, Twelve-Month Periods Ended December 31,
  2012     2011     2012     2011  
 
Net income attributable to Celgene - GAAP $ 263,115 $ 410,178 $ 1,456,180 $ 1,318,150
 
Before tax adjustments:
Total revenues:
Sales of products exited or to be exited (1 ) - (1,752 ) - (26,688 )
Abraxis non-core other revenues (2 ) - - - (1,714 )
 
Cost of goods sold (excluding amortization
of acquired intangible assets):
Share-based compensation expense (3 ) 3,240 2,708 12,413 9,762
Abraxis inventory step-up (4 ) - - 90,278
Products exited or to be exited (2 ) 441 3,744 (1,553 ) 23,032
 
Research and development:
Share-based compensation expense (3 ) 26,555 24,705 102,413 104,704
Abraxis non-core activities (2 ) - - - 8,728
IPR&D impairments (5 ) 69,156 - 122,509 118,000
Upfront collaboration payments (6 ) 59,500 62,497 189,500 128,479
 
Selling, general and administrative:
Share-based compensation expense (3 ) 30,207 26,831 116,217 102,736
Abraxis non-core activities (2 ) - - - 15,065
Canadian pricing settlement (7 ) - 9,814 - 9,814
 
Amortization of acquired intangible assets (8 ) 62,434 75,045 194,499 289,226
 
Acquisition related (gains) charges and restructuring, net:
Change in fair value of contingent consideration (9 ) 140,087 (24,916 ) 166,374 (147,463 )
Acquisition and restructuring costs (9 ) - - 2,577 5,117
 
Other income (expense), net
EntreMed, Inc. equity method loss (10 ) - 102 - 644
Abraxis non-core activities (2 ) - - - 2,036
Gain on divestment of non-core activities (11 ) - - - (2,931 )
 
Non-controlling interest -Abraxis (2 ) - - - (694 )
 
Net income tax adjustments (12 )   (82,521 )   (115,898 )   (198,643 )   (293,373 )
 
Net income attributable to Celgene - Adjusted $ 572,214   $ 473,058   $ 2,162,486   $ 1,752,908  
 
 
Net income per share attributable to Celgene -Adjusted:
Basic $ 1.36 $ 1.07 $ 5.02 $ 3.85
Diluted $ 1.32 $ 1.05 $ 4.91 $ 3.79
 

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 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.

 
Celgene Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted 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 $60,002 for the three-month period ended December 31, 2012 and $54,244 for the three-month period ended December 31, 2011. Exclude share-based compensation expense totaling $231,043 for the twelve-month period ended December 31, 2012 and $217,202 for the twelve-month period ended December 31, 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, impairments recorded as a result of changes in estimated probability-weighted cash flows.
(6) Exclude upfront payments for research and development collaboration arrangements and purchases of intellectual property for unapproved products.
(7) Exclude 2011 pricing settlement with the Patented Medicine Prices Review Board of Canada related to sales of THALOMID.
(8) 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.
(9) Exclude acquisition related charges and restructuring, including changes in the fair value of contingent consideration, related to the acquisitions of Gloucester, Abraxis and Avila.
(10) Exclude the Company's share of EntreMed, Inc. equity losses in 2011.
(11) Exclude the 2011 gain recognized on divestment of non-core activities obtained in the acquisition of Abraxis.
(12) 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 2013 Projected GAAP to Adjusted Net Income
(In thousands, except per share data)
     
 
Range
Low High
 
Projected net income - GAAP (1 ) $ 2,006,000 $ 2,058,000
 
Before tax adjustments:
Cost of goods sold (excluding amortization
of acquired intangible assets):
Share-based compensation expense 14,000 14,000
 
Research and development:
Share-based compensation expense 119,000 114,000
 
Selling, general and administrative:
Share-based compensation expense 135,000 130,000
 
Amortization of acquired intangible assets 265,000 263,000
 
Acquisition related (gains) charges and restructuring, net:
Change in fair value of contingent consideration 11,000 11,000
 
Net income tax adjustments (185,000 ) (182,000 )
   
Projected net income - Adjusted $ 2,365,000   $ 2,408,000  
 
Projected net income per diluted common share - GAAP $ 4.67 $ 4.79
 
Projected net income per diluted common share - Adjusted $ 5.50 $ 5.60
 
Projected weighted average diluted shares   430,000     430,000  
 
(1)   Our projected earnings do not include the effect of any 2013 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.




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