42% Increase in Total Revenue For 2005 Versus Prior Year
35% Annual Increase in Total Product Sales For 2005
100% Increase in Adjusted Operating Income Year-Over-Year
Fourth Quarter Highlights:
* REVLIMID(R) NDA Granted FDA Approval for MDS Deletion 5q
* REVLIMID sNDA Submitted to FDA for Relapsed or Refractory Multiple
Myeloma
* REVLIMID MAA Filing Under Review at EMEA for MDS Deletion 5q
* REVLIMID MAA Submitted to Switzerland for MDS Deletion 5q
* More Than 100 Abstracts at ASH 2005; 23 Oral Presentations Including
Survival Data for REVLIMID and THALOMID(R)
* Celgene Completed Response to THALOMID sNDA Approvable Letter for Newly
Diagnosed Multiple Myeloma; FDA Action Expected 1H2006
* THALOMID Pivotal Phase III Multiple Myeloma Trial Reached Pre-Specified
Interim Endpoint
2005 Financial Results:
* Celgene Reported Third Consecutive Full-Year of Profitability
* Full-Year Revenue Increased 42.2% to $536.9 Million Versus Prior Year
* R&D Expenditures Increased 18.6% to $190.8 Million Supporting Late-
Stage Regulatory Programs
* Adjusted Selling, General and Administrative Expenses Increased 57% to
$179.3 Million Including $40 Million to Support REVLIMID Pre-Launch
Activities
* Adjusted Full-Year Earnings Per Share Increased to $0.38 Per Diluted
Share Excluding Impact of Unusual and Non-Recurring Charges of $4.5
Million or $0.03 Per Diluted Share
2006 Financial Outlook:
* Celgene Forecasts Strong Operational Performance in 2006
* Research and Development Expense Expected to Increase Approximately 20
to 25%, Year-Over-Year
* Selling, General and Administrative Expenses are Targeted to Increase
Approximately 10 to 15%, Year-Over-Year
* International Selling, General and Administrative Expenses Targeted to
a Range of $30 to $35 Million
* Earnings Per Share in 2006 Subject to REVLIMID(R) U.S. and EMEA
Regulatory Approvals and Launch Timelines
2006 Milestones:
* REVLIMID Submission to EMEA for Relapsed or Refractory Multiple Myeloma
* Expected in First Quarter 2006
* Expand REVLIMID International Regulatory Submissions
* Advance REVLIMID Phase II NHL Trials
* Initiate REVLIMID CLL Registration Program
* Advance REVLIMID Newly Diagnosed Multiple Myeloma Trials
* Continue REVLIMID Broad Phase II Hematology and Oncology Clinical
Programs
* Initiate Potential Regulatory Studies in CC-4047 in Sickle Cell Anemia
and Myelofibrosis
* Initiate and Advance CC-10004 Trials in Psoriasis and Other Pilot
Studies
* Complete CC-11006 Phase I Study; Initiate CC-10015 Phase I Trial
* Advance JNK-401 Clinical Program
* Advance Cellular Therapeutics Biomaterials and Stem Cell Products
* Advance Pre-Clinical Ligase and Kinase Inhibitor Programs
SUMMIT, N.J., Jan. 26 - Celgene Corporation (Nasdaq: CELG) announced adjusted net income of $68.1 million, or adjusted earnings per diluted share of $0.38, for the full-year. On a reported basis, under U.S. Generally Accepted Accounting Principles (GAAP), Celgene reported net income of $63.7 million, or diluted earnings per share of $0.35, compared to net income of $52.8 million, or diluted earnings per share of $0.31 in the comparable 2004 period. Total revenue was a record $536.9 million, an increase of 42% over the same period in 2004. THALOMID(R) net sales for the full-year were $387.8 million, compared to $308.6 million in 2004, an increase of 25% year-over-year. Revenue from the Ritalin(R) family of drugs totaled $72.8 million for the year, including a milestone payment of $20 million, an increase of 89% versus prior year.
Total revenue for the fourth quarter increased 42% to $149.3 million from $105.4 million for the prior-year quarter. THALOMID net sales in the fourth quarter of 2005 increased 23% to $105.8 million from $86.1 million in the fourth quarter of 2004. Celgene posted fourth quarter adjusted net income of $8.0 million, or adjusted earnings per diluted share of $0.04 compared to adjusted net income of $17.4 million or adjusted earnings per diluted share of $0.10 in the fourth quarter of 2004. Sequentially, total revenue increased approximately 15% to $149.3 million in the fourth quarter from $129.5 million in the third quarter of 2005, with THALOMID sales rising approximately 7% quarter-over-quarter to $105.8 million from $99.1 million. On a reported basis, under U.S. GAAP, Celgene reported earnings per diluted share of $0.02 in the fourth quarter of 2005 versus $0.13 in the same quarter of 2004.
Adjusted net income and per share amounts for the three and twelve-month periods ended December 31, 2005, eliminate the effects of charges for accelerated depreciation expense related to the Company's corporate headquarters relocation, charges to record our share of equity losses in EntreMed, Inc. and to adjust the income tax provision to reflect cash taxes. Adjusted net income and per share amounts for the twelve-month period ended December 31, 2005 also excludes a charge recorded for changes in the estimated value of our investment in EntreMed, Inc. warrants prior to our March 31, 2005 exercise. Adjusted net income and per share amounts for the three and twelve- month periods ended December 31, 2004 excludes charges recorded for changes in the estimated value of our investment in EntreMed, Inc. warrants and to adjust the income tax provision to reflect cash taxes.
To further accelerate the progress of key late-stage regulatory programs, Celgene increased R&D expenditures in REVLIMID(R) Phase II and Phase III regulatory programs in myelodysplastic syndromes and multiple myeloma, including the ongoing pivotal Phase III MDS deletion 5q trial to support the Company's MAA seeking approval to market REVLIMID in Europe. Celgene incurred R&D expenses of $52.4 million in the fourth quarter of 2005, representing an increase of 19% compared to the year ago quarter. These R&D expenditures continue to support ongoing clinical progress in multiple proprietary development programs for THALOMID(R), REVLIMID, and for other immunomodulatory drugs such as CC-4047, CC-11006 and CC-10050, as well as in the TNF alpha, kinase and ligase inhibitor programs and stem cell program.
Celgene reported $724.3 million in cash and marketable securities as of December 31, 2005.
"In 2005, we made great strides across all areas of Celgene, and in 2006, we will continue to prepare for an incredibly promising future," said Celgene Chairman and Chief Executive Officer John W. Jackson. " We believe that the REVLIMID transformation is well on its way."
2005 COMPANY HIGHLIGHTS:
Clinical, Regulatory and Drug Discovery Achievements:
* The U.S. Food and Drug Administration (FDA) granted approval of REVLIMID
for the treatment of 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 now available through an
Education and Prescribing Safety Program, called RevAssist(SM) via
specialty pharmacies.
* The FDA granted approval for FOCALIN XR (dexmethylphenidate HCl)
extended-release capsules for the treatment of Attention-
Deficit/Hyperactivity Disorder (ADHD) in adults, adolescents and
children. The approval of FOCALIN XR for the treatment of ADHD was based
on efficacy and safety data from clinical trials involving approximately
320 adults, adolescents and children diagnosed with ADHD.
* The European Medicines Agency (EMEA) accepted for review the Company's
Marketing Authorization Application (MAA) for REVLIMID(R). The
application is based on the same clinical data, from an open-label Phase
II trial, evaluated by the FDA to support its decision to approve
REVLIMID as a treatment for 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.
* Celgene submitted its Supplemental New Drug Application (sNDA) for
REVLIMID to the Division of Oncology Drug Products at the FDA seeking
approval to market REVLIMID as a treatment for relapsed or refractory
multiple myeloma.
* Celgene submitted its MAA for REVLIMID to the Swiss Intercantonal
Medicines Control Office seeking approval to market REVLIMID as a
treatment for 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.
* The FDA issued an approvable letter in response to the Company's sNDA
seeking approval to market THALOMID as a treatment for multiple myeloma
(MM). The FDA requested revised product labeling with the specific
indication of newly diagnosed multiple myeloma and updated safety
information, as well as some additional patient information to finalize
its review. The Company has completed its response, and anticipates an
action by the FDA in the first half of 2006.
* The Company announced that an external Independent Data Monitoring
Committee analysis of the multi-centered, randomized, placebo-controlled
phase III study (MM-003) evaluating combination thalidomide plus
dexamethasone versus dexamethasone alone as induction therapy for
previously untreated multiple myeloma met the pre-specified p<0.0015
value for stopping the trial. The IDMC found time to disease progression
-- the primary endpoint of this Phase III trial -- of 75.7 weeks versus
27.9 weeks (p=0.000065), plus progression-free survival of 55.7 weeks
versus 24.3 weeks (p=0.0003) in patients receiving THALOMID plus
dexamethasone compared to patients receiving dexamethasone alone.
* At The 47TH American Society of Hematology Meeting (ASH), clinical
investigators from leading cancer research centers presented data from
recent and on-going clinical trials of THALOMID, and REVLIMID in broad
indications, including survival data in multiple myeloma. The
presentations included 30 abstracts clinically evaluating REVLIMID in
both oral and poster sessions, including a plenary session, across a
broad range of disease indications, as well as 77 abstracts clinically
evaluating THALOMID in both oral and poster sessions.
* At the ASH plenary session, updated clinical data were presented on two
Phase III pivotal studies evaluating REVLIMID plus dexamethasone in
previously treated multiple myeloma patients. The updated clinical data
from the pivotal International Phase III trial (MM-010), demonstrated
that the combination of REVLIMID plus dexamethasone led to a
statistically significant improvement in median time to disease
progression (p=0.001). The updated clinical data from the pivotal North
American Phase III trial (MM-009), reported that the combination of
REVLIMID(R) plus dexamethasone led to a statistically significant
improvement in overall survival in addition to a statistically
significant improvement in median time to disease progression. As of
June 2005, median overall survival in patients treated with REVLIMID
plus dexamethasone has not been reached as compared to 104 weeks with
dexamethasone plus placebo (p=0.013).
* At ASH, clinical data from two phase III studies evaluating oral
combination THALOMID(R) reported survival advantage for elderly newly
diagnosed multiple myeloma patients. The Italian study reported a
statistically significant difference in event-free survival of 68
percent versus 32 percent (p<0.001) after twenty-six months of treatment
with melphalan, prednisone and thalidomide (MPT) versus melphalan and
prednisone (MP) alone. The French study reported a significant
difference in progression-free survival of 73 percent versus 55 percent
(p=0.0001) after treatment with MPT versus melphalan and autologous stem
cell transplant. Importantly, the study reported a significant
difference in overall survival that has not been reached after 55
months.
* At the XXIII Chemotherapy Foundation Symposium, preliminary clinical
data evaluating THALOMID as an oral combination therapy for the
treatment of recurrent epithelial ovarian cancer in patients who had
received prior treatments reported 50% of patients achieved overall
response in median progression free survival.
2005 Corporate and Commercial Achievements:
* Celgene announced that its Chairman and Chief Executive Officer John W.
Jackson will retire as Chief Executive Officer on May 1, 2006. Mr.
Jackson will continue as Chairman of the Board of Directors and stand
for re-election at the Company's annual meeting on June 15, 2006. On
May 1st, Sol J. Barer will assume responsibility as the Company's Chief
Executive Officer. At the same time, Robert J. Hugin will assume Dr.
Barer's current role as President and Chief Operating Officer.
* The Board of Directors of Celgene approved a two-for-one stock split,
payable in the form of a 100 percent stock dividend. The stock split is
subject to stockholder's approval to increase the number of authorized
shares of common stock from 280,000,000 to 580,000,000, an action that
will be voted on at a Special Meeting of the Stockholders on February
16, 2006.
* Celgene expanded its international infrastructure through investments in
ongoing commercial, manufacturing, clinical and regulatory activities in
Europe to support the potential launch of REVLIMID for the treatment of
MDS associated with a deletion 5q cytogenetic abnormality, as well as
preparations for the potential launch of REVLIMID as a treatment for
relapsed or refractory multiple myeloma.
* Celgene was added to the Nasdaq-100 Index(R), and included in the
Nasdaq-100 Index Tracking Stock (Nasdaq: QQQQ). In 2005, Celgene was
reported as the best performing stock in the Nasdaq-100.
Webcast
Celgene will host a conference call to discuss the results and achievements of its fourth quarter and 2005 fiscal year operating and financial performance on January 26, 2005 at 9:00 a.m. EST. The conference call will be available by webcast at http://www.celgene.com. An audio replay of the call will be available from noon EST January 26, 2006 until midnight EST February 3, 2006. To access the replay, dial 1-800-642-1687 and enter Reservation Number 4306926.
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, please visit the Company's website at http://www.celgene.com.
This release contains certain forward-looking statements which involve known and unknown risks, delays, uncertainties and other factors not under the Company's control, which may cause actual results, performance or achievements of the Company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include results of current or pending research and development activities, actions by the FDA and other regulatory authorities, and those factors detailed in the Company's filings with the Securities and Exchange Commission such as 10K, 10Q and 8K reports.
Celgene Corporation
Consolidated Statement of Operations
Three Months Ended
(Unaudited)
(In thousands, except per share data)
December 31, 2005
GAAP Adjustments "Adjusted"
Net product sales $128,697 $ -- $128,697
Collaborative agreements and other
revenue 5,505 -- 5,505
Royalty revenue 15,136 -- 15,136
Total revenue 149,338 -- 149,338
Cost of goods sold 26,728 511 (2) 27,239
Research and development 52,421 -- 52,421
Selling, general and administrative 55,682 (101)(1) 55,581
Total costs and expenses 134,831 410 135,241
Operating income 14,507 (410) 14,097
Equity in losses of associated company 948 (948)(2) --
Interest and other income (expense), net 2,155 2,155
Income before taxes 15,714 538 16,252
Income tax provision 11,786 (3,515)(4) 8,271
Net income $3,928 $4,053 $7,981
Per common share - basic and diluted
Net income - basic $0.02 $0.03 $0.05
Net income - diluted $0.02 $0.02 $0.04
Weighted average shares outstanding -
basic 169,919 169,919 169,919
Weighted average shares outstanding-
diluted 179,999 179,999 179,999
December 31, 2004
GAAP Adjustments "Adjusted"
Net product sales $91,638 $ -- $91,638
Collaborative agreements and other
revenue 4,592 -- 4,592
Royalty revenue 9,178 -- 9,178
Total revenue 105,408 -- 105,408
Cost of goods sold 16,071 -- 16,071
Research and development 44,332 -- 44,332
Selling, general and administrative 34,788 34,788
Total costs and expenses 95,191 -- 95,191
Operating income 10,217 -- 10,217
Equity in losses of associated company -- -- --
Interest and other income (expense), net 18,506 (9,879)(3) 8,627
Income before taxes 28,723 (9,879) 18,844
Income tax provision 6,484 (5,018)(4) 1,466
Net income $22,239 $(4,861) $17,378
Per common share - basic and diluted
Net income - basic $0.13 $(0.03) $0.10
Net income - diluted $0.13 $(0.03) $0.10
Weighted average shares outstanding-
basic 164,749 164,749 164,749
Weighted average shares outstanding-
diluted 173,669 173,669 173,669
Celgene Corporation
Notes to Reconciliation of GAAP Earnings to "Adjusted" Earnings
Three Months Ended December 31, 2005 and 2004
(Unaudited)
(In thousands, except per share data)
(1) To exclude accelerated depreciation expense related to the relocation
of the Company's corporate headquarters.
(2) To exclude the Company's share of equity losses in EntreMed, Inc. and
to adjust for our share of THALOMID royalties payable to EntreMed,
Inc.
(3) To exclude the charge recorded for changes in the estimated value of
the Company's investment in EntreMed, Inc. warrants prior to our March
31, 2005 exercise.
(4) To adjust the income tax provision to cash taxes, net of federal
refunds and payments. The projected cash taxes differs from the GAAP
provision due primarily to (i) The recognition of deferred tax assets
in the first quarter of 2005 that decreased the tax provision but not
cash taxes, (ii) the exercise of employee stock options in the current
year that reduce cash taxes, but not the tax provision, and (iii) the
payment in the current year of prior year taxes, that increase cash
taxes, but not the tax provision.
Celgene Corporation
Consolidated Statement of Operations
Twelve Months Ended
(Unaudited)
(In thousands, except per share data)
December 31, 2005
GAAP Adjustments "Adjusted"
Net product sales $445,625 $ -- $445,625
Collaborative agreements and other
revenue 41,334 -- 41,334
Royalty revenue 49,982 -- 49,982
Total revenue 536,941 536,941
Cost of goods sold 80,727 687 (2) 81,414
Research and development 190,834 -- 190,834
Selling, general and administrative 181,796 (2,456)(1) 179,340
Total costs and expenses 453,357 (1,769) 451,588
Operating income 83,584 1,769 85,353
Equity in losses of associated company 6,923 (6,923)(2) --
Interest and other income (expense), net 7,551 6,875 (3) 14,426
Income before taxes 84,212 15,567 99,779
Income tax provision 20,556 11,102 (4) 31,658
Net income $63,656 $4,465 $68,121
Per common share - basic and diluted
Net income - basic $0.38 $0.03 $0.41
Net income - diluted $0.35 $0.03 $0.38
Weighted average
shares outstanding-
basic 167,756 167,756 167,756
Weighted average
shares outstanding-
diluted 195,292 195,292 195,292
December 31, 2004
GAAP Adjustments "Adjusted"
Net product sales $330,571 $ -- $330,571
Collaborative agreements and other
revenue 20,012 -- 20,012
Royalty revenue 26,919 -- 26,919
Total revenue 377,502 -- 377,502
Cost of goods sold 59,726 -- 59,726
Research and development 160,852 -- 160,852
Selling, general and administrative 114,196 -- 114,196
Total costs and expenses 334,774 -- 334,774
Operating income 42,728 -- 42,728
Equity in losses of associated
company -- -- --
Interest and other income (expense), net 20,443 1,922 (3) 22,365
Income before taxes 63,171 1,922 65,093
Income tax provision 10,415 (4,925)(4) 5,490
Net income $52,756 $6,847 $59,603
Per common share - basic and diluted
Net income - basic $0.32 $0.04 $0.36
Net income - diluted $0.31 $0.03 $0.34
Weighted average shares outstanding-
basic 163,869 163,869 163,869
Weighted average shares outstanding-
diluted 172,855 172,855 172,855
Celgene Corporation
Notes to Reconciliation of GAAP Earnings to "Adjusted" Earnings
Twelve Months Ended December 31, 2005 and 2004
(Unaudited)
(In thousands, except per share data)
(1) To exclude accelerated depreciation expense related to the relocation
of the Company's corporate headquarters.
(2) To exclude the Company's share of equity losses in EntreMed, Inc. and
to adjust for our share of THALOMID royalties payable to EntreMed,
Inc.
(3) To exclude the charge recorded for changes in the estimated value of
the Company's investment in EntreMed, Inc. warrants prior to our March
31, 2005 exercise.
(4) To adjust the income tax provision to cash taxes, net of federal
refunds and payments. The projected cash taxes differs from the GAAP
provision due primarily to (i) The recognition of deferred tax assets
in the first quarter of 2005 that decreased the tax provision but not
cash taxes, (ii) the exercise of employee stock options in the current
year that reduce cash taxes, but not the tax provision, and (iii) the
payment in the current year of prior year taxes, that increase cash
taxes, but not the tax provision.
Celgene Corporation
Consolidated Balance Sheet Data
(Unaudited)
(In thousands, except per share data)
December 31, December 31,
2005 2004
Cash, cash equivalents & marketable
securities $724,260 $748,537
Total assets 1,246,637 1,107,293
Convertible notes 399,984 400,000
Stockholders' equity 635,775 477,444
