conference date: July 24, 2008 @ 6:00 AM Pacific Time
for quarter ending: June 30, 2008 (2nd quarter)
Overview: Continues strong revenue and earnings growth.
Basic data (GAAP):
Revenues $571 million, up 34% sequentially from $462.6 million and up 64% from $348 million year-earlier.
Net income was $120 million, up sequentially from negative $1.64 billion (due to losses from Pharmion merger), and up 118% from $55 million year earlier.
EPS (earnings per share) were $0.26, up sequentially from negative $3.98 and up 100% from $0.13 year-earlier.
$2.2 billion full 2008 revenue. Non-GAAP EPS $1.50.
Expects to expand significantly in coming years. Flow of clinical data is critical; over 100 abstracts of Celgene products were presented in the quarter. Revlimid represents a pipeline in an of itself, but we also have a deep and diverse portfolio in hematology, oncology and inflammation. Vidaza is poised for significant growth based on recent survival data in MDS.
Non-GAAP numbers: revenue $567 million, operating income $207 million, net income $173 million, EPS $0.37. Share based compensation expense excluded was $26 million.
Product revenues were $543 million, collaborative agreements $3 million, and royalty revenue $25 million. Cost of goods sold was $75 million. R&D expense $145 million. Sales, general and administrative expense $176 million. Amortization of acquired assets $35 million. GAAP operating income $140 million. Other income $22 million. Income taxes $39 million.
Revlimid revenues were $325.8 million.
Thalomid/Thalidomide revenues were $131.6 million.
Vidaza revenues were $59.7 million.
Alkeran revenues were $26 million.
Cash and equivalents ended at $2.26 billion.
Received clearance to open a manufacturing facility in Switzerland.
ECOG E4A03 study of Revlimid plus Dexamethasone for newly diagnosed multiple myeloma (NDMM) had a 93% two year survival rate and an overall response rate of 89%.
A Vidaza for higher myelodysplastic syndromes (MDS) Phase III study reported 2 year survivals nearly doubling conventional care regimens. For 2008 a goal is to achieve approval for VIDAZA(R) in High-Risk MDS with European and other international regulatory agencies and gain FDA approval to relaunch it with an expanded label.
Thalidomide Pharmion was approved in Europe and Australia for NDMM.
Many other pipeline advances were made or are underway.
Revlimid growth in U.S., drivers? Was also strong outside U.S. Trends are continuation of last 6 to 9 months. Increased market share in previously treated segment of myeloma with steady progress in duration of treatment.
EU rollouts? Around turn of year we should get some feedback from Nice, which could make the U. K. a major market. Good progress is being made on the peripheral, small countries; should see results in next one to two years.
Filings for Revlimid for frontline myeloma and NHL in U.S.? Making good progress on frontline myeloma, but need at least a couple of months to find out if we can use the data because they were cooperative trials, not designed for regulatory approval. In NHL we will need Phase III trials we are starting now. In CLL we are seeing multiple publications including recommended starting doses for CLL.
SG&A expenses going forward? Flat for next 2 quarters. It was up due to expense of Europe launch and relaunch of Vidaza in the U.S.
Vidaza timeline? Expect review in Europe to be finalized by early winter with outcome by end of year; the data is quite strong. In the U.S. we are seeing positive market share trends, but significant improvement will depend on getting the label itself later this year. Fidufa date is in the next month or two. Sales team is working on both myeloma and MDS. Gains will come mainly from new patients and those whose current therapy
Ten thousand four trials? Apremilast (CC-10004) has a variety of trials are underway or planned in psoriasis and psoriatic arthritis. Enrolled about three-quarters of psoriatic arthritis trial patients, should have results in 2009. We also have some small validating trials in other indications.
Asian filing for Revlimid for myeloma? On track in Japan to file by end of year for Del 5Q MDS, then another year for review. Myeloma also. Commercial launch in Australia in 2009. China is a long term attractive market for Revlimid, but still looking at regulatory strategies. You will hear a lot more about Asia over next 12 to 18 months.
Guidance raised to $2.2 billion for year, more specific about "ifs" in guidance? Our hedges were because the future is hard to predict. Last year Q3 had seasonal pressure in Europe; hopefully our team will minimize those this year. We face reimbursement challenges in all markets. Things don't always go the way you want, and we will see pricing challenges over time. We would not have raised guidance if we were not optimistic about sales.
Most use of Revlimid in Europe is in third-line, but seeing some second-line and first-line use. The main challenge in Europe is reimbursement. There is a lot of potential in Europe for more market share.
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