Analyst Conference Summary


conference date: May 3, 2007 @ 6:00 AM Pacific Time
for quarter ending: March 31, 2007 (1st quarter)

Forward-looking statements

Overview: Continuing rapid growth, but missed some analysts' wildly bullish guesses.

Basic data:

Revenues were $293.4 million, up 6.7% sequentially from $275 million and up 61% from year-earlier.

GAAP net income was $57.4 million or $0.14 per diluted share, up 259% from $16 million year-earlier.

Non-GAAP net income was $85.6 million, up 154% from year-earlier. Non-GAAP EPS were $0.20, up 122% from year-earlier.

Cash ended at $2.1 billion, up $133 million sequentially.


Total revenue in 2007 in $1.3 billion range (up 43% over 2006). Non-GAAP earnings $1.00 per diluted share.

Conference Highlights:

Share based compensation expense was $7.8 million.

Product sales were $270 milion, up 68% from year-earlier.

Revlimid sales $146.2 million, up 18% sequentially and 351% from year-earlier. Prescriptions increased 24% sequentially. Duration of treatment is increasing.

Thalomid sales $106 million, slightly down from year-earlier. Expect some further decline as Revlimid use expands.

Alkeran sales $16 million, down 13% from $18.3 million year-earlier.

Focalin and Ritalin drug family revenues were $19.8 million, up 2% from year-earlier.

Net interest and other income was $23.1 million.

European Medicines Agency gave positive opinion on Revlimid in combination with dexamethasone for multiple myeloma. New study shows Revlimid with lower doses of dexamethasone has higher survival rate than with standard dexamethasone dose. Other positive data results were reported. Expanding research to expand franchise (for instance, to CLL and NHL); over 70 trials are underway or will be started this year.

R&D spending was up to support filings and clinical development: adjusted expense was $77.0 million. SG&A increased to $98.6 million non-GAAP or $107.4 GAAP, driven by marketing expense for international expansion.

Gross margin was up 5% sequentially and up over 10% from year-earlier.


After European approval mix of revenues will skew to international from current 90% U.S.

Non-profit donations for copays, level of? Part of SG&A expenses and Q1 donations would be the highest due to calendar nature of plans. Was a significant contribution to MDS and myeloma foundations. Expect SG&A general expense to go up in Q2 and Q3, but still confident in EPS guidance.

Japan? Has begun trials for bridging studies. Will enrole patients this summer.

Margin increases? Production efficiency has increased. Revlimid has a higher margin than thalomid. Will be within about a 2% band of Q1 for rest of year.

CLL and NHL programs? Want to do rigorous Phase III trials. No definite time line yet, but later in 2007 will have a better idea. Highest priority to do this.

Market share? We looking at rolling 12 month data. Went from 3 to 4% total share to mid-teens.

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Disclaimer: Our analyst summaries may include both our condensations of statements made by company representatives and our own analysis. They are not covered by any warranty. We cannot guarantee anything said by company representatives is true. We try not to make errors, but it is possible. Before making or terminating an investment you should always verify any factual basis of your decision.

Copyright 2007 William P. Meyers