EXHIBIT 99.1
Contact:
Robert J. Hugin Brian P. Gill
President and Chief Operating Officer Senior Director of PR/IR
Celgene Corporation Celgene Corporation
(908) 673-9102 (908) 673-9530
CELGENE CORPORATION REPORTS RECORD THIRD QUARTER REVENUE AND OPERATING PROFITS
PRODUCT SALES DRIVE RECORD THIRD QUARTER REVENUE AND PROFITS:
o RECORD NET PRODUCT SALES OF $223.1 MILLION
o REVLIMID ACHIEVED $101.3 MILLION IN NET PRODUCT SALES
o THALOMID NET PRODUCT SALES TOTALED $108.4 MILLION
o RECORD ADJUSTED NET INCOME OF $59.4 MILLION WITH ADJUSTED DILUTED EARNINGS
PER SHARE OF $0.15
FINANCIAL HIGHLIGHTS OF THIRD QUARTER PERFORMANCE YEAR-OVER-YEAR:
o TOTAL REVENUE INCREASED 89.1% TO A RECORD $244.8 MILLION
o ADJUSTED OPERATING INCOME INCREASED 682.1% TO $79.4 MILLION
o ADJUSTED R&D EXPENDITURES INCREASED TO $64.1 MILLION TO SUPPORT CONTINUED
EXPANSION OF BOTH REVLIMID AND PROMISING PIPELINE CLINICAL PROGRAMS
o ADJUSTED SG&A EXPENSES INCREASED TO $67.3 MILLION TO SUPPORT COMMERCIAL
ACTIVITIES FOR MULTIPLE PRODUCT LAUNCHES, INCLUDING PREPARATIONS FOR
INTERNATIONAL LAUNCHES
SUMMIT, NJ - (OCTOBER 26, 2006) - CELGENE CORPORATION (NASDAQ: CELG) announced
adjusted net income of $59.4 million, or adjusted earnings per diluted share of
$0.15 for the quarter ended September 30, 2006. Based on U.S. Generally Accepted
Accounting Principles (GAAP), Celgene reported net income of $20.4 million, or
diluted earnings per share of $0.05 for the quarter ended September 30, 2006,
including share-based employee compensation expense, compared to net income in
the prior year period of $0.7 million. Total revenue was a record $244.8 million
for the quarter ended September 30, 2006, an increase of 89.1% over the same
period in 2005 driven by REVLIMID net sales of $101.3 million, and THALOMID net
sales of $108.4 million, an increase of 9.3% year-over-year. ALKERAN(R) net
sales for the Third Quarter were $12.2 million in 2006 compared to $13.9 million
in 2005. Revenue from Focalin(TM) and the Ritalin(R) family of drugs totaled
$17.9 million for the Third Quarter of 2006 compared to $10.7 million over the
same period last year.
For the nine-month period, total net product sales reached a record $559.7
million, an increase of 76.6% over the same period in 2005. REVLIMID(R) sales
for the nine-month period reached $196.8 million. THALOMID(R) sales for the
nine-month period of 2006 were $322.8 million compared to $282.0 million in
2005, an increase of 14.5% year-over-year. Celgene posted
adjusted net income of $135.7 million or adjusted earnings per diluted share of
$0.35, during the nine-month period of 2006, compared to adjusted net income of
$60.6 million or adjusted earnings per diluted share of $0.17 in the comparable
2005 period. During the nine-month period on a reported basis of 2006, Celgene
announced GAAP net income of $46.1 million or earnings per diluted share of
$0.12, compared to GAAP net income of $59.7 million or earnings of $0.16 per
diluted share in the first nine-months of last year, which did not include
charges for stock option expense.
Adjusted net income and adjusted per share amounts for the three and nine-month
periods ended September 30, 2006, eliminate the effects of charges for
share-based employee compensation expense associated with the application of the
Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004),
"Share-Based Payment", (SFAS 123(R)). The after tax net impact of share-based
employee compensation expense reduced GAAP net income by $15.4 million, or $0.04
per diluted share for the three-month period ended September 30, 2006 and by
$40.6 million, or $0.10 per diluted share for the nine-month period ended
September 30, 2006. Adjusted net income and per share amounts, for the
three-month and nine-month periods ended September 30, 2006 and 2005, excludes
amortization of acquisition intangibles resulting from the acquisition of Penn T
Limited and charges to record our share of equity losses in EntreMed, Inc. Also,
adjusted net income and per share amounts, for the three-month period ended
September 30, 2006 and nine-month periods ended September 30, 2006 and 2005
excludes gains (losses) recorded for changes in the estimated value of our
investment in EntreMed, Inc. warrants. The nine-month periods ended September
30, 2006 and 2005, and the three-month period ended September 30, 2005, also
excludes accelerated depreciation expense related to the Company's corporate
headquarters relocation. Adjusted net income and per share amounts, for the
nine-month period ended September 30, 2006 and 2005 includes adjustments to the
income tax provision to reflect a projected cash tax rate of 32.0% and 28.0%,
respectively.
Adjusted or Non-GAAP financial measures provide investors and management with
supplemental measures of operating performance and trends that facilitate
comparisons between periods before, during and after certain items that would
not otherwise be apparent on a GAAP basis. Certain unusual or non-recurring
items that management does not believe affect the Company's basic operations do
not meet the GAAP definition of unusual non-recurring items. Adjusted earnings
are not, and should not be, viewed as a substitute for GAAP net income. We
define adjusted diluted earnings per share amounts as adjusted net income
divided by the GAAP weighted average number of diluted shares outstanding. Our
definition of adjusted earnings and adjusted diluted earnings per share may
differ from similarly named measures used by others.
In support of the Company's commitment to bring more disease-altering therapies
to patients in need, Celgene continued to advance development of promising
compounds in early-stage, preclinical and discovery programs. The Company
increased R&D investments in multiple Phase II and Phase III programs evaluating
REVLIMID across a broad range of hematological cancers with unmet medical needs
including: multiple myeloma, myelodysplastic syndromes, chronic lymphocyte
leukemia, non-Hodgkin's lymphoma and myelofibrosis. During the third quarter of
2006, the Company incurred adjusted R&D expenses of $64.1 million, representing
an increase of 29.8% compared to the year ago quarter. These R&D expenditures
support ongoing clinical progress in multiple proprietary development programs
for REVLIMID(R) and THALOMID(R) internationally; for other promising
immunomodulatory compounds such as CC-4047, CC-11006
and CC-10015; for our lead anti-inflammatory compounds CC-10004 and CC-11050;
and our kinase and ligase inhibitor programs and placental-derived stem cell
program. On a reported GAAP basis R&D expenses were $66.8 million in the third
quarter of 2006.
Adjusted selling, general and administrative expenses were $67.3 million,
representing an increase of 5.6% over the second quarter of 2006 and an increase
of 44.2% compared to the year ago quarter. Expenses during the third quarter of
2006 were driven primarily by significantly higher marketing and sales expenses
related to REVLIMID and THALOMID product launch activities in the United States,
and continued expansion of Celgene International in 23 countries, including
Europe, Japan, Australia and Canada. On a reported GAAP basis selling, general
and administrative expenses were $89.6 million in the third quarter of 2006.
Celgene reported $872.5 million in cash and marketable securities as of
September 30, 2006, an increase of $148.2 million from December 31, 2005.
"During the third quarter we continued to make significant progress towards our
objective to maximize REVLIMID's full commercial and clinical potential
worldwide," said Celgene Chief Executive Officer Sol J. Barer. "We continue to
build on our strong science capabilities and to invest in our future by
advancing promising compounds through our research and development pipeline."
WEBCAST
Celgene will host a conference call to discuss the results and achievements of
its third quarter 2006 operating and financial performance on October 26, 2006
at 9:00 a.m. EDT. The conference call will be available by webcast at
WWW.CELGENE.COM. An audio replay of the call will be available from noon EDT
October 27, 2006 until midnight EDT November 4, 2006. To access the replay, dial
1-888-203-1112 and enter reservation number 2547910. The Company's fourth
quarter and year-end financial and operational results will be reported on
Thursday, February 1, 2007.
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 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 AND SUBSIDIARIES
Consolidated Statement of Operations
Three Months Ended
(Unaudited)
(In thousands, except per share data)
SEPTEMBER 30, 2006 SEPTEMBER 30, 2005
GAAP ADJUSTMENTS "ADJUSTED" GAAP ADJUSTMENTS "ADJUSTED"
--------- ----------- ---------- --------- ----------- ----------
Net product sales $ 223,105 $ -- $ 223,105 $ 113,900 $ -- $ 113,900
Collaborative agreements and other revenue 4,186 -- 4,186 4,879 -- 4,879
Royalty revenue 17,548 -- 17,548 10,727 -- 10,727
--------- --------- --------- --------- --------- ---------
Total revenue 244,839 -- 244,839 129,506 -- 129,506
Cost of goods sold 34,205 (76)(1)(3) 34,129 23,199 176(3) 23,375
Research and development 66,756 (2,689)(1) 64,067 49,348 -- 49,348
Selling, general and administrative 89,597 (22,309)(1)(2) 67,288 46,941 (304)(2) 46,637
--------- --------- --------- --------- --------- ---------
Total costs and expenses 190,558 (25,074) 165,484 119,488 (128) 119,360
--------- --------- --------- --------- --------- ---------
Operating income 54,281 25,074 79,355 10,018 128 10,146
Equity in losses of associated company 736 (736)(3) -- 980 (980)(3) --
Interest and other income, net 8,031 27(4) 8,058 4,605 -- 4,605
--------- --------- --------- --------- --------- ---------
Income before taxes 61,576 25,837 87,413 13,643 1,108 14,751
Income tax provision (benefit) 41,139 (13,167)(5) 27,972 12,975 (8,845)(5) 4,130
--------- --------- --------- --------- --------- ---------
Net income $ 20,437 $ 39,004 59,441 $ 668 $ 9,953 $ 10,621
========= ========= ========= ========= ========= =========
PER COMMON SHARE:
Net income - basic $ 0.06 $ 0.11 $ 0.17 $ -- $ 0.03 $ 0.03
========= ========= ========= ========= ========= =========
Net income - diluted $ 0.05 $ 0.10 (6) $ 0.15 $ -- $ 0.03 (6) $ 0.03
========= ========= ========= ========= ========= =========
Weighted average shares -basic 351,200 351,200 351,200 336,596 336,596 336,596
========= ========= ========= ========= ========= =========
Weighted average shares -diluted 404,858 404,858 404,858 359,724 359,724 359,724
========= ========= ========= ========= ========= =========
CELGENE CORPORATION AND SUBSIDIARIES
NOTES TO RECONCILIATION OF GAAP EARNINGS TO "ADJUSTED" EARNINGS
THREE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(1) To exclude SFAS 123(R) share-based compensation expense totaling $23,194
related to stock options.
(2) To exclude the amortizaton of acquisition intangibles resulting from the
acquisition of Penn T Limited in the amount of $2,217 in 2006 and $193 in
2005 and to exclude accelerated depreciation expense related to the
relocation of the Company's corporate headquarters in the amount of $111 in
2005.
(3) 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.
(4) To exclude the charge recorded for changes in the estimated value of the
Company's investment in EntreMed, Inc. warrants.
(5) The adjusted income tax provision reflects a projected annual cash tax rate
of 32.0% for 2006 and 28.0% for 2005.
(6) Adjusted diluted per share amounts represent adjusted net income divided by
the GAAP weighted average number of diluted shares outstanding.
CELGENE CORPORATION AND SUBSIDIARIES
Consolidated Statement of Operations
Nine Months Ended
(Unaudited)
(In thousands, except per share data)
SEPTEMBER 30, 2006 SEPTEMBER 30, 2005
GAAP ADJUSTMENTS "ADJUSTED" GAAP ADJUSTMENTS "ADJUSTED"
--------- ----------- ---------- --------- ----------- ----------
Net product sales $ 559,749 $ -- $ 559,749 $ 316,928 $ -- $ 316,928
Collaborative agreements and other revenue 12,032 -- 12,032 35,829 -- 35,829
Royalty revenue 52,138 -- 52,138 34,846 -- 34,846
--------- --------- --------- --------- --------- ---------
Total revenue 623,919 -- 623,919 387,603 -- 387,603
Cost of goods sold 91,148 (995)(1)(3) 90,153 53,999 176(3) 54,175
Research and development 178,298 (10,038)(1) 168,260 138,413 -- 138,413
Selling, general and administrative 239,318 (53,976)(1)(2) 185,342 126,114 (2,953)(2) 123,161
--------- --------- --------- --------- --------- ---------
Total costs and expenses 508,764 (65,009) 443,755 318,526 (2,777) 315,749
--------- --------- --------- --------- --------- ---------
Operating income 115,155 65,009 180,164 69,077 2,777 71,854
Equity in losses of associated company 5,202 (5,202)(3) -- 5,975 (5,975)(3) --
Interest and other income, net 19,032 298(4) 19,330 5,396 6,875(4) 12,271
--------- --------- --------- --------- --------- ---------
Income before taxes 128,985 70,509 199,494 68,498 15,627 84,125
Income tax provision (benefit) 82,916 (19,078)(5) 63,838 8,770 14,785(5) 23,555
--------- --------- --------- --------- --------- ---------
Net income $ 46,069 $ 89,587 135,656 $ 59,728 $ 842 $ 60,570
========= ========= ========= ========= ========= =========
PER COMMON SHARE:
Net income - basic $ 0.13 $ 0.26 $ 0.39 $ 0.18 $ -- $ 0.18
========= ========= ========= ========= ========= =========
Net income - diluted $ 0.12 $ 0.23 (6) $ 0.35 $ 0.16 $ 0.01 (6) $ 0.17
========= ========= ========= ========= ========= =========
Weighted average shares -basic 347,687 347,687 347,687 334,054 334,054 334,054
========= ========= ========= ========= ========= =========
Weighted average shares -diluted 403,092 403,092 403,092 390,004 390,004 390,004
========= ========= ========= ========= ========= =========
CELGENE CORPORATION AND SUBSIDIARIES
NOTES TO RECONCILIATION OF GAAP EARNINGS TO "ADJUSTED" EARNINGS
NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(1) To exclude SFAS 123(R) share-based compensation expense totaling $58,694
related to stock options.
(2) To exclude the amortizaton of acquisition intangibles resulting from the
acquisition of Penn T Limited in the amount of $6,450 in 2006 and $598 in
2005 and to exclude accelerated depreciation expense related to the
relocation of the Company's corporate headquarters in the amount of $202 in
2006 and $2,355 in 2005.
(3) 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.
(4) To exclude the charge recorded for changes in the estimated value of the
Company's investment in EntreMed, Inc. warrants.
(5) The adjusted income tax provision reflects a projected annual cash tax rate
of 32.0% for 2006 and 28.0% for 2005.
(6) Adjusted diluted per share amounts represent adjusted net income divided by
the GAAP weighted average number of diluted shares outstanding.
CELGENE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET DATA
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
SEPTEMBER 30, DECEMBER 31,
2006 2005
------------- ------------
Cash, cash equivalents & marketable
securities $ 872,474 $ 724,260
Total assets 1,526,819 1,246,637
Convertible notes 399,962 399,984
Stockholders' equity 838,278 635,775