Celgene (CELG)

Q2 2010 Earnings Call

July 29, 2010 9:00 am ET


Robert Hugin - President, Chief Operating Officer, Secretary and Director

David Gryska - Chief Financial Officer and Senior Vice President

Tim Smith - Director of Investor Relations


Brian Abrahams - Oppenheimer & Co. Inc.

Geoffrey Porges - Bernstein Research

Thomas Wei - Jefferies & Company, Inc.

Charles Duncan - JMP Securities LLC

Yaron Werber - Citigroup Inc

Howard Liang - Leerink Swann LLC

Jason Zhang - BMO Capital Markets U.S.

Christopher Raymond - Robert W. Baird & Co. Incorporated

Eric Schmidt - Cowen and Company, LLC

Rachel McMinn - BofA Merrill Lynch

Alain Sethi - Center for Financial Research & Analysis, Inc.

Geoffrey Meacham - JP Morgan Chase & Co



Good day, ladies and gentlemen, welcome to the Celgene's Second Quarter Earnings Call. [Operator Instructions] I would now like to turn the conference over to Tim Smith, Director of Investor Relations at Celgene Corporation. Tim?

Tim Smith

Good morning, everyone, and thanks for joining us this morning. I'd like to welcome you to Celgene's Second Quarter 2010 Conference Call. The press release reporting our second quarter financial and operating results was issued earlier this morning, and is also available on our corporate website. In addition, today's conference call webcast will include a presentation, which you can access by going to the Investor Relations section of our website at www.celgene.com. Joining me this morning are David Gryska, our Chief Financial Officer; Bob Hugin, our Chief Executive Officer; and Dr. Sol Barer, our Executive Chairman.

Before we start, we want to remind you that our discussions during this conference call will include forward-looking statements. All such forward-looking statements exclude the effects of the proposed acquisition of Abraxis BioScience unless noted. Our 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 our forward-looking statements are discussed in our filings with the Securities and Exchange Commission, such as our Form 10-K, 10-Q and 8-K reports. Given these risks and uncertainties, you are cautioned not to place undue reliance on our forward-looking statements.

Also, our discussions during this conference call will include certain non-GAAP financial measures. 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. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures are available as part of our earnings releases on Celgene's website at www.celgene.com in the Investor Relations section.

I will now turn the call over to our Chief Executive Officer, Bob Hugin.

Robert Hugin

Thank you, Tim. The second quarter was an outstanding quarter for Celgene across all functions and geographies. Our exceptional global team produced full of excellent operating results and achieved multiple significant milestones that has a potential to create meaningful benefits for patients and strong returns for shareholders for years to come. Early this morning, we announced record-financial results with total revenue growing 36% year-over-year to $850 million and non-GAAP earnings per share increasing 50% year-over-year to $0.69.

Before we review the specific operating and financial results of the quarter, I'd like to highlight several of the key strategic developments of the last three months. Though not yet completed, the announcement of Abraxis BioScience acquisition broadens our therapeutic focus into the solid tumor market. Their lead product, ABRAXANE, which is approved for the treatment of metastatic breast cancer in the United States and international markets, has also shown significant promise in pancreatic and non-small cell lung cancer clinical trials. The transaction provides the opportunity for us to leverage our global, commercial, clinical and regulatory organizations and further strengthens our pipeline, which multiple candidates from the Abraxis' proprietary Nab Technology portfolio.

Advancing our hematology pipeline is also a strategic imperative. At the American Society of Clinical Oncology and European Hematology meetings in June, there were many presentations that highlighted important new data supporting our key products and programs. Perhaps the most significant data were results from three Phase III studies, demonstrating the substantial benefit achieved by multiple myeloma patients receiving continuous REVLIMID therapy.

Our international expansion strategy continues to be an important growth driver for our products. On June 25, REVLIMID was approved in Japan for the treatment of second-line multiple myeloma. Governmental reimbursement was achieved in less than a month following approval, actually reflecting the importance of REVLIMID therapy in myeloma and a validation of the quality of the planning and execution of the Celgene team in Japan.

We are now in the early stages of a thoughtfully-planned commercial launch in this, the second largest oncology market in the world. The investments we have made in Japan and in other international markets will enable us to capture the full value of REVLIMID and the many other opportunities in our pipeline in all major markets.

During the quarter, substantial progress was achieved in advancing multiple pipeline programs, highlighted by the initiation of our first pivotal Phase III trial for our lead anti-inflammatory product, apremilast, in psoriatic arthritis, and the initiation of our Phase I cancer clinical study of our novel dual mTOR Kinase Inhibitor CC-223, a product of our research labs in San Diego. The significant progress in this quarter further strengthens our belief that sustained long-term growth comes best through an unwavering commitment to invest in multiple programs designed to produce breakthrough therapies for patients with serious unmet medical needs. I'd like now to hand the call over to Dave Gryska, our Chief Financial Officer, who will review our second quarter financial results. Dave?

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