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Celgene Reports Second Quarter 2014 Operating And Financial Results

Celgene Corporation (NASDAQ:CELG) reported net product sales of $1,845 million for the second quarter of 2014, an 18 percent increase from the same period in 2013. Second quarter total revenue increased 17 percent to $1,873 million compared to $1,599 million in the second quarter of 2013. Adjusted net income for the second quarter of 2014 increased 15 percent to $748 million compared to $653 million in the second quarter of 2013. For the same period, adjusted diluted earnings per share (EPS) increased 18 percent to $0.90 from $0.76, on a split-adjusted basis.

Based on U.S. GAAP (Generally Accepted Accounting Principles), Celgene reported second quarter of 2014 net income of $598 million or $0.72 per diluted share. For the second quarter of 2013, net income was $478 million or $0.56 per diluted share, on a split-adjusted basis.

“Strong second quarter operating and financial results demonstrate the significant momentum of our portfolio and support raising our 2014 guidance,” said Bob Hugin, Chairman and Chief Executive Officer of Celgene Corporation. “We look forward to multiple milestones in the second half of the year, including the expansion of OTEZLA ® into psoriasis and the further advancement of our pipeline.”

Second Quarter 2014 Financial Highlights

Unless otherwise stated, all comparisons are for the second quarter of 2014 compared to the second quarter of 2013. The adjusted operating expense categories presented below exclude share-based employee compensation expense and upfront collaboration payments. In June 2014, Celgene effected a two-for-one split of the Company’s common stock. Adjusted diluted EPS, GAAP EPS and share counts for all periods are split-adjusted. Please see the attached Reconciliation of GAAP to Adjusted Net Income for further information.

Net Product Sales Performance
  • REVLIMID ® sales for the second quarter increased 15 percent to $1,214 million and were driven by volume in both the U.S. and International markets, increased duration of therapy and continued market share leadership in multiple myeloma. U.S. sales of $716 million and International sales of $498 million increased 15 percent and 17 percent, respectively.
  • ABRAXANE ® sales for the second quarter were $215 million, a 39 percent increase. U.S. sales of $160 million and International sales of $55 million increased 33 percent and 58 percent, respectively. The increase in sales reflects the impact of the ongoing U.S. launch in pancreatic cancer and early launch success for pancreatic cancer in Europe.
  • VIDAZA ® second quarter sales decreased 28 percent to $152 million, reflecting the year-over-year impact of the entry of generic azacitidine in the U.S. market. U.S. sales decreased 89 percent to $10 million. International sales were $142 million, an increase of 12 percent. International sales were driven by increased demand in Europe and Japan.
  • POMALYST ®/IMNOVID ® sales were $161 million, an increase of 143%. U.S. sales were $104 million and International sales were $57 million, an increase of 81% and 567%, respectively. POMALYST ®/IMNOVID ® sales were driven by market share gains in the U.S. and the strong commercial launch in Europe following the August 5, 2013 approval.
  • OTEZLA ® sales were $5 million. After launching the product for psoriatic arthritis in early April, underlying demand grew steadily and OTEZLA ® ended the quarter sharing the market share lead for new patient starts. The overall market access position is favorable and trending ahead of expectations. During the quarter, patients initiating therapy received a two-week sample titration pack and almost half of the patients obtained an additional two weeks of free product until they gained authorization for reimbursement.
  • All other product sales, which include THALOMID ®, ISTODAX ® and an authorized generic of VIDAZA ® drug product in the U.S., were $98 million in the second quarter of 2014 compared to $80 million for the second quarter of 2013.

Research and Development (R&D)

Adjusted R&D expenses were $397 million for the second quarter of 2014 compared to $345 million for the second quarter of 2013. The increase was primarily due to an increase in clinical trial activity. On a GAAP basis, R&D expenses were $457 million for the second quarter of 2014 and $458 million for the same period in 2013 reflecting the increased clinical trial activity which was offset by lower upfront collaboration expense.

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