Celgene's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Celgene (CELG)

Q1 2012 Earnings Call

April 26, 2012 9:00 am ET

Executives

Patrick E. Flanigan III -

Robert J. Hugin - Chairman, Chief Executive Officer, President, Secretary and Chairman of Executive Committee

Jacqualyn A. Fouse - Chief Financial Officer and Senior Vice President

Mark J. Alles - Chief Commercial Officer and Executive Vice President

Analysts

Geoffrey C. Meacham - JP Morgan Chase & Co, Research Division

Marshall Urist - Morgan Stanley, Research Division

Mark J. Schoenebaum - ISI Group Inc., Research Division

Navdeep Singh - Deutsche Bank AG, Research Division

Eric Schmidt - Cowen and Company, LLC, Research Division

Gene Mack - Mizuho Securities USA Inc., Research Division

Sapna Srivastava - Goldman Sachs Group Inc., Research Division

Brian Abrahams - Wells Fargo Securities, LLC, Research Division

Aleksandr Rabodzey

Rachel L. McMinn - BofA Merrill Lynch, Research Division

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

Yaron Werber - Citigroup Inc, Research Division

Christopher J. Raymond - Robert W. Baird & Co. Incorporated, Research Division

Nicholas Abbott - BMO Capital Markets U.S.

Ravi Mehrotra - Crédit Suisse AG, Research Division

Michael G. King - Rodman & Renshaw, LLC, Research Division

Matthew Roden - UBS Investment Bank, Research Division

Presentation

Operator

Good day, ladies and gentlemen, and welcome to the Celgene Corporation First Quarter 2012 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Patrick Flanigan, Vice President of Investor Relations. Please go ahead.

Patrick E. Flanigan III

Thanks, Stephanie, and welcome, everyone, to Celgene Corporation's First Quarter Earnings Conference Call. The press release reporting our first quarter results, in addition to the presentation for today's webcast, can be accessed by going to the Investor Relations section of the corporate website at www.celgene.com.

Joining me in the room today are Bob Hugin, our Chairman and Chief Executive Officer; Jackie Fouse, our Chief Financial Officer; and Mark Alles, who is our Chief Commercial Officer.

As a reminder, during today's call, we will be making forward-looking statements regarding our financial outlook in addition to regulatory and product development plan. These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these risks can be found in our most recent 10-K on file with the SEC. These statements speak only as of today's date, and we undertake no duty to update or revise them. Finally, a reconciliation of any non-GAAP financial measure to the most comparable GAAP measure is available as part of our earnings release.

I would now like to turn the call over to Bob.

Robert J. Hugin

Thanks, Patrick, and thank you, everyone, for joining us this morning. I appreciate the opportunity to review the results of the first quarter and our outlook for the full year. 2012 is a year of multiple important milestones with a potential to transform Celgene. I'll share with you our significant progress towards achieving these milestones and advancing key programs.

Before I review these major inflection points, let me provide my perspective on our financial results. The first quarter results demonstrated strong annual growth of 17% in product sales and 30% growth in non-GAAP earnings. These financial results were at the low end of our expectations. Our global businesses had a slower-than-anticipated January. Importantly, though, across geographies, positive momentum built during February and March, and this trajectory is continuing into April. This positive momentum was partially offset by some end-of-quarter customer inventory reductions primarily in the United States. Given our current trajectory and outlook for the full year, we are reaffirming our 2012 guidance of 15% revenue and 25% earnings per share growth. Our teams are focused and well positioned to achieve these targets, and Jackie and Mark will provide greater detail in a few minutes.

Let me now turn to our key strategic initiatives designed to enhance our growth well into the future. Maximizing REVLIMID's full potential is an important growth driver for 2012 and beyond. During the quarter, we advanced a number of initiatives positioning REVLIMID for continued strong growth. In February, we submitted our REVLIMID marketing application for del 5q MDS in Europe, with the potential for a regulatory decision by year end. And in terms of our newly diagnosed multiple myeloma application in Europe, we submitted our responses to the 180-day questions and are on track for a CHMP recommendation by the end of this quarter. The benefits of growth from geographic expansion are quite clear, and progress has been achieved during the quarter in advancing our relapsed/refractory myeloma applications in Mexico, Brazil and China, all with the potential for a regulatory or reimbursement action during the year. Myeloma is an important growth driver for REVLIMID, and we are equally committed to realizing its full potential to benefit patients across other hematological malignancies.

The REVLIMID program in the lymphomas and leukemia are progressing rapidly. We've completed the accrual in our special protocol assessment mantle cell lymphoma trial and are planning for a regulatory submission within the next 9 to 12 months. Based on positive results in our DCL-001 REVLIMID relapsed/refractory diffuse large B-cell lymphoma study, we're advancing into the Phase III portion of the trial. We also continue to accrue patients in our other 2 Phase III lymphoma studies in DLBCL maintenance and follicular lymphoma.

In chronic lymphocytic leukemia, we expect to complete enrollment in our Phase III first-line study in elderly patients by year end. With the addition of AVL-292 from the Avila acquisition, we're accelerating combination studies with this Btk inhibitor and REVLIMID CLL and lymphomas.

One of our most important achievements of the past few months is the submission to the FDA of our New Drug Application for pomalidomide, our next-generation immunomodulatory therapy for heavily pre-treated multiple myeloma patients. This submission is a major step forward in broadening our product portfolio and strengthening our myeloma franchise.

At the same time, we're accelerating our regulatory progress in Europe. We're on track to submit our marketing application during this quarter. As the potential impact of this product on both myeloma patients and Celgene is significant, we'll update you on our progress navigating the regulatory processes, including acceptance of filings and the type and timing of reviews. I should note that our international Phase III multiple myeloma study, MM-003, is expected to complete accrual later this quarter. Additionally, during this quarter, we completed accrual of our Phase III myelofibrosis study, MF-002, and are initiating a Phase II pomalidomide study in systemic sclerosis.

Our hematology/oncology portfolio was also strengthened by clinical and regulatory progress achieved with ABRAXANE. Our supplemental New Drug Application for ABRAXANE in non-small cell lung cancer has been filed with the FDA and has an October PDUFA date. During the quarter, we completed enrollment in the Phase III ABRAXANE trial in metastatic pancreatic cancer. The trial enrolled over 800 patients and will answer the question whether the addition of ABRAXANE to gemcitabine meaningfully improves overall survival. If the data are consistent with Phase II filings, and we'll know that in the next 9 to 12 months, we believe that ABRAXANE would have a transformative impact on the treatment of the disease. I should also note that we'll see Phase III data in melanoma for ABRAXANE in the coming 3 to 4 months, excellent progress.

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