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Celgene Reports Strong Third Quarter 2013 Operating And Financial Results

Stocks in this article: CELG

A New Drug Application (NDA) to the U.S. FDA for apremilast in psoriasis, in addition to a combined psoriatic arthritis and psoriasis Marketing Authorization Application in Europe are on-track for the fourth quarter of 2013. The Company previously announced it submitted a separate NDA for psoriatic arthritis in the U.S. and a New Drug Submission (NDS) in Canada in the first quarter of 2013 and the second quarter of 2013, respectively. The PDUFA date for the U.S. psoriatic arthritis submission is March 21, 2014.

American College of Rheumatology/Association of Rheumatology Health Professionals Meeting

At the 2013 American College of Rheumatology/Association of Rheumatology Health Professionals (ACR/ARHP) annual meeting in late October, data presentations on apremilast will include:

  • 52-week data from the PALACE 4 trial in DMARD-naïve psoriatic arthritis (PsA) – Late Breaker
  • 52-week data of the phase III PALACE 2 trial in PsA
  • 52-week data of the phase III PALACE 3 trial in PsA
  • Pooled safety data from the PALACE 1-3 trials in PsA
  • Pooled data from the secondary endpoints enthesitis/dactylitis, HAQ-DI and tender and swollen joints from the PALACE 1-3 trials in PsA
  • Data from the phase II trial in patients with Behçet's disease with active oral ulcers – Plenary Session

Third Quarter 2013 Conference Call and Webcast Information

Celgene will host a conference call to discuss the third quarter of 2013 operating and financial performance on Thursday, October 24, 2013, 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 October 24, 2013, until midnight ET October 31, 2013. To access the replay, in the U.S. dial (855) 859-2056 or for outside the U.S. dial (404) 537-3406. The participant pass code is 22908643. The Company’s fourth quarter of 2013 and full year 2013 financial and operational results are expected to be reported on January 30, 2014.

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. 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.

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 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 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 bortezomib and have demonstrated disease progression on or within 60 days of completion of the last therapy. Approval is based on response rate. Clinical benefit such as improvement in survival or symptoms has not been verified.

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 about Celgene and the Company’s products, please visit 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 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 Adjusted Net Income and Adjusted Earnings per Share amounts for the three-and nine-month periods ended September 30, 2013 and 2012, and for the projected amounts for the year ending December 31, 2013.

               
Celgene Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
(In millions, except per share data)
 
 
Three-Month Periods Ended Nine-Month Periods Ended
September 30, September 30,
2013 2012 2013 2012
 
Net product sales $ 1,644.0 $ 1,388.0 $ 4,637.4 $ 3,970.1
Other revenue   30.4     31.2     100.6     89.2  
Total revenue   1,674.4     1,419.2     4,738.0     4,059.3  
 
Cost of goods sold (excluding amortization of
acquired intangible assets) 86.2 74.6 247.6 219.0
Research and development 584.5 441.5 1,495.0 1,250.7
Selling, general and administrative 448.7 354.6 1,235.8 1,003.4
Amortization of acquired intangible assets 65.7 46.2 197.1 132.1
Acquisition related charges and restructuring, net   33.7     0.7     79.4     28.9  
Total costs and expenses   1,218.8     917.6     3,254.9     2,634.1  
 
Operating income 455.6 501.6 1,483.1 1,425.2
 
Other income (expense), net   (13.6 )   (25.1 )   (34.9 )   (34.0 )
 
Income before income taxes 442.0 476.5 1,448.2 1,391.2
 
Income tax provision   69.5     52.3     212.7     198.1  
 
Net income $ 372.5   $ 424.2   $ 1,235.5   $ 1,193.1  
 
 
Net income per common share:
Basic $ 0.90 $ 0.99 $ 2.98 $ 2.75
Diluted $ 0.87 $ 0.97 $ 2.87 $ 2.69
 
Weighted average shares:
Basic 412.3 427.2 414.7 434.1
Diluted 428.8 436.3 430.5 443.4
 
 
September 30, December 31,
2013 2012
Balance sheet items:
Cash, cash equivalents & marketable securities $ 5,847.3 $ 3,900.3
Total assets 13,629.1 11,734.3
Short-term borrowings 405.9 308.5
Long-term debt 4,228.3 2,771.3
Total stockholders' equity 5,894.7 5,694.5
 
 
Celgene Corporation and Subsidiaries
Reconciliation of GAAP to Adjusted Net Income
(In millions, except per share data)
                 
Three-Month Periods Ended Nine-Month Periods Ended
September 30, September 30,
2013 2012 2013 2012
 
Net income - GAAP $ 372.5 $ 424.2 $ 1,235.5 $ 1,193.1
 
Before tax adjustments:
Cost of goods sold (excluding amortization
of acquired intangible assets):
Products exited or to be exited -Pharmion (1 ) - - - (2.0 )
Share-based compensation expense (2 ) 6.1 3.3 12.6 9.2
 
Research and development:
Share-based compensation expense (2 ) 41.7 27.2 100.5 75.8
IPR&D impairments (3 ) - 31.2 - 53.4
Upfront collaboration payments (4 ) 171.3 55.0 348.8 130.0
 
Selling, general and administrative:
Share-based compensation expense (2 ) 44.2 32.0 114.3 85.9
 
Amortization of acquired intangible assets (5 ) 65.7 46.2 197.1 132.1
 
Acquisition related charges and restructuring, net:
Change in fair value of contingent consideration (6 ) 33.7 0.7 79.4 26.3
Acquisition and restructuring costs (6 ) - - - 2.6
 
Net income tax adjustments (7 )   (65.7 )   (58.5 )   (174.1 )   (116.1 )
Net income - Adjusted $ 669.5   $ 561.3   $ 1,914.1   $ 1,590.3  
 
Net income per common share - Adjusted
Basic $ 1.62 $ 1.31 $ 4.62 $ 3.66
Diluted $ 1.56 $ 1.29 $ 4.45 $ 3.59
 

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 the net (benefit) cost of activities arising from the acquisition of Pharmion Corp. (Pharmion) that are planned to be exited.
(2)

Exclude share-based compensation expense totaling $92.0 for the three-month period ended September 30, 2013 and $62.5 for the three-month period ended September 30, 2012. Exclude share-based compensation expense totaling $227.4 for the nine-month period ended September 30, 2013 and $170.9 for the nine-month period ended September 30, 2012.

(3) Exclude in-process research and development impairments recorded as a result of changes in estimated probability-weighted cash flows.
(4) Exclude upfront payments for research and development collaboration arrangements.
(5) Exclude amortization of intangible assets acquired in the acquisitions of Pharmion, Gloucester Pharmaceuticals, Inc. (Gloucester), Abraxis BioScience Inc. (Abraxis) and Celgene Avilomics Research, Inc. (formerly known as Avila Therapeutics)(Avila).

(6)

Exclude acquisition related charges and restructuring, including changes in the fair value of contingent consideration, related to the acquisitions of Gloucester, Abraxis and Avila.
(7) 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 acquisition related matters, adjustments 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 millions, except per share data)
         
 
Range
Low High
 
Projected net income - GAAP (1 ) $ 1,619.0 $ 1,676.6
 
Before tax adjustments:
Cost of goods sold (excluding amortization
of acquired intangible assets):
Share-based compensation expense 15.5 14.9
 
Research and development:
Share-based compensation expense 140.0 134.6
Upfront collaboration payments 410.3 410.3
 
Selling, general and administrative:
Share-based compensation expense 167.0 160.4
 
Amortization of acquired intangible assets 265.4 262.8
 
Acquisition related charges and restructuring, net:
Change in fair value of contingent consideration 142.5 131.5
 
Net income tax adjustments (222.7 ) (232.6 )
   
Projected net income - Adjusted $ 2,537.0   $ 2,558.5  
 
Projected net income per diluted common share - GAAP $ 3.77 $ 3.90
 
Projected net income per diluted common share - Adjusted $ 5.90 $ 5.95
 
Projected weighted average diluted shares   430.0     430.0  
 
(1)    

Our projected 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.





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