August 1, 2019 PR-M08-19-NI-003
SUMMIT, N.J.--(BUSINESS WIRE)-- Celgene Corporation (NASDAQ: CELG) reported second quarter 2019 total revenue of $4,400 million, a 15 percent increase compared to $3,814 million in the second quarter of 2018.
Based on U.S. GAAP (Generally Accepted Accounting Principles), Celgene reported net income of $1,571 million and diluted earnings per share (EPS) of $2.16 for the second quarter of 2019. For the second quarter of 2018, GAAP net income was $1,045 million and diluted EPS was $1.43.
Adjusted net income for the second quarter of 2019 increased 31 percent to $2,079 million compared to $1,585 million in the second quarter of 2018. For the same period, adjusted diluted EPS increased 32 percent to $2.86 from $2.16.
“Outstanding operating performance in the second quarter supports raising our full-year financial guidance,” said Mark J. Alles, Chairman and Chief Executive Officer of Celgene Corporation. “In parallel, we achieved multiple regulatory and clinical milestones expected to generate even more business momentum into the close of our transaction with Bristol-Myers Squibb.”
Second Quarter 2019 Financial Highlights
Unless otherwise stated, all comparisons are for the second quarter of 2019 compared to the second quarter of 2018. The adjusted operating expense categories presented below exclude share-based employee compensation expense and collaboration-related upfront expense. Please see the attached Use of Non-GAAP Financial Measures and Reconciliation of GAAP to Adjusted Net Income for further information relevant to the interpretation of adjusted financial measures and reconciliations of these adjusted financial measures to the most comparable GAAP measures, respectively.
Net Product Sales Performance
Research and Development (R&D)
On a GAAP basis, R&D expenses were $1,100 million for the second quarter of 2019 compared to $1,251 million for the same period in 2018. Adjusted R&D expenses were $935 million for the second quarter of 2019 compared to $948 million for the second quarter of 2018. The decrease was driven by a reduction in expenses related to certain collaboration arrangements and regulatory submission-related work on multiple programs almost fully offset by increased investments in ongoing late-stage pipeline programs. Additional R&D expenses (only included on a GAAP basis) decreased in 2019, as outlined in the attached Reconciliation of GAAP to Adjusted Net Income.
Selling, General and Administrative (SG&A)
On a GAAP basis, SG&A expenses were $793 million for the second quarter of 2019 compared to $790 million for the same period in 2018. Adjusted SG&A expenses were $693 million for the second quarter of 2019 compared to $672 million for the second quarter of 2018. The increase was driven primarily by increased pre-launch marketing related expenses partially offset by a decrease in expense related to technology investments completed in 2018. Additional SG&A expense (only included on a GAAP basis) decreased in 2019, as outlined in the attached Reconciliation of GAAP to Adjusted Net Income.
Cash, Cash Equivalents, Marketable Debt Securities and Publicly-Traded Equity Securities
Operating cash flow was $2.2 billion in the second quarter of 2019, compared to $1.2 billion for the second quarter of 2018. Celgene ended the quarter with approximately $9.3 billion in cash, cash equivalents, marketable debt securities and publicly-traded equity securities.
2019 Total Revenue Guidance Raised; Reaffirming 2020 Outlook*
|
January 2019 Guidance |
July 2019 Guidance |
Total Revenue |
$17.0B - $17.2B |
$17.2B - $17.4B |
REVLIMID® Net Product Sales |
~ $10.8B |
Unchanged |
POMALYST®/IMNOVID® Net Product Sales |
~ $2.4B |
~ $2.5B |
OTEZLA® Net Product Sales |
~ $1.9B |
Unchanged |
ABRAXANE® Net Product Sales |
~ $1.1B |
~ $1.2B |
GAAP Operating Margin |
~ 49.0% |
~48.0% |
Adjusted Operating Margin |
~57.5% |
~58.0% |
Adjusted Tax Rate |
~17.0% |
~16.75% |
GAAP Diluted EPS |
$8.90 - $9.63 |
$8.71 - $9.44 |
Adjusted Diluted EPS |
$10.60 - $10.80 |
$10.65 - $10.85 |
Weighted average diluted shares |
~715M |
~730M |
* Company reaffirms 2020 outlook: Total revenue of $19.0-$20.0 billion and adjusted diluted EPS of >$12.50 on a standalone basis. Due to pending Bristol-Myers Squibb transaction, Celgene does not anticipate providing any additional updates on our 2020 outlook going forward.
Portfolio Updates
Transaction Update
On July 29, 2019, Bristol-Myers Squibb Company (NYSE: BMY) announced that the EC has granted unconditional approval of Bristol-Myers Squibb’s pending acquisition of Celgene. In June, Bristol-Myers Squibb announced the planned divestiture of OTEZLA® (apremilast) in light of concerns raised by the U.S. Federal Trade Commission (“FTC”).The divestiture would be conditioned upon the closing of the pending transaction between Bristol-Myers Squibb and Celgene. Subject to the satisfaction of customary closing conditions and receipt of regulatory approvals, Bristol-Myers Squibb and Celgene intend to close the pending transaction at the earliest possible date, which the parties currently expect to be at the end of 2019 or the beginning of 2020.
Second Quarter 2019 Earnings Information
Due to the pending transaction with Bristol-Myers Squibb, Celgene is not hosting a conference call in conjunction with its second-quarter 2019 earnings release and does not expect to do so for future quarters. Please direct any questions regarding this press release to Celgene Investor Relations or Celgene Communications.
About REVLIMID®
In the U.S., REVLIMID® (lenalidomide) in combination with dexamethasone is indicated for the treatment of adult patients with multiple myeloma. REVLIMID® as a single agent is also indicated as a maintenance therapy in adult patients with multiple myeloma following autologous hematopoietic stem cell transplant. REVLIMID® is indicated for patients with transfusion-dependent anemia due to low- or intermediate-1-risk myelodysplastic syndromes 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. REVLIMID® is approved in the U.S. in combination with a rituximab product for the treatment of adult patients with previously treated follicular lymphoma or marginal zone lymphoma. Limitations of Use: REVLIMID® is not indicated and is not recommended for the treatment of chronic lymphocytic leukemia (CLL) outside of controlled clinical trials.
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 months 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, in combination with dexamethasone, for patients with multiple myeloma who have received at least two prior therapies including lenalidomide and a proteasome inhibitor and have demonstrated disease progression on or within 60 days of completion of the last therapy.
About OTEZLA®
In the U.S., OTEZLA® (apremilast) is indicated for the treatment of adult patients with active psoriatic arthritis. OTEZLA® is indicated in the U.S. for the treatment of patients with moderate to severe plaque psoriasis who are candidates for phototherapy or systemic therapy. OTEZLA® is indicated in the U.S. for the treatment of adult patients with oral ulcers associated with Behçet’s Disease.
Forward-Looking Statement
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, including factors related to the proposed transaction between Bristol-Myers Squibb and Celgene, such as, but not limited to, the risks that: management’s time and attention is diverted on transaction related issues, including the planned divestiture of OTEZLA®; disruption from the proposed transaction makes it more difficult to maintain business, contractual and operational relationships; legal proceedings are instituted against Bristol-Myers Squibb, Celgene or the combined company; and Bristol-Myers Squibb, Celgene or the combined company is unable to retain key personnel.
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Celgene Corporation, headquartered in Summit, New Jersey, is an integrated global biopharmaceutical company engaged primarily in the discovery, development and commercialization of innovative therapies for the treatment of cancer and inflammatory diseases through next-generation solutions in protein homeostasis, immuno-oncology, epigenetics, immunology and neuro-inflammation.