Analyst Conference Summary

conference date: October 23, 2008 @ 6:00 AM Pacific Time
for quarter ending: September 30, 2008 (3rd quarter)

Forward-looking statements

Overview: Continues rapid growth, with profits growing much faster than revenues. Increased guidance for full 2008.

Basic data (GAAP):

Revenues were $592 million, up 4% sequentially from $571 million and up 69% from $350 million year-earlier.

Net income was $137 million, up 14% sequentially from $120 million and up 251% from $39 million year-earlier.

EPS (earnings per share) were $0.29, up 11.5% sequentially from $0.26 and up 222% from $0.09 year-earlier.

Guidance:

Expect gross margins to be near 90% for remainder of year. Cash will be near $2.2 billion at end of year due to Vidaza royalty transaction.

For full 2008, revenue to exceed $2.2 billion. Over $1.50 non-GAAP EPS. Both above prior guidance.

Conference Highlights:

Very pleased with results [and they should be]. Record revenue and earnings. Believes Revlimid has the potential for multi-billions of dollars in global sales. Hopes to continue 60% annual revenue growth. Negative foreign exchange sequential impact of about 1% of revenue; now hedging exposures to Euro product sales.

Non-GAAP numbers: revenues $587 million; operating income $225; net income $186 million; EPS $0.40

Overall penetration of current drugs continued to expand geograrphically and to broader indications, while pipeline progress of current and novel drugs continued.

Revlimid sales were $343 million, up 72% y/y. Primarily for multiple myeloma, but in trials expanding into solid tumors and blood malignancies, as well as label expansion to earlier disease stages.

Thalomid sales were $132 million up 19% y/y.

Vidaza sales were $64 million, up 50% y/y. The label was expended for MDS (myelodysplastic syndromes). The future royalty obligation was purchased from Pfizer in October for $425 million, of which $325 million will be expensed in Q4. Believes this represents over $1 billion in savings on royalties over next 10 years. International launch of Vidaza should take place in Q1 2009.

Alkeran revenues were $22 million, up 16% y/y.

Focalin and Ritalin drug revenues were $24 million, up 50% y/y.

Collaborative agreements revenues were $2 million. Royalty revenue $23 million. Interest income $22 million.

Apremilast for psoriasis Phase II study began.

The company aims to sell Revlimid, Vidaza and Thalomid in nearly 100 nations over the next five years. By the end of 2009 Celgene hopes to achieve a compendia listing in Revlimid in NHL (non-Hodgkins lymphoma); advance the Phase III trial of Amrubicin for small cell lung cancer; advance its Apremilast and CC11050 compounds for inflammatory diseases, among other pipeline goals.

Cash and equivalents ended at $2.45 billion. No risky securities are held.

R&D spending was increased in line with increased pipeline and regulatory activity. Selling , general and administrative expenses decreased due to near competion of Pharmion integration. Cost of goods sold was $71 million, R&D expense $161 million, selling general and administrative expense $167 million, amortization $33 million. GAAP operating income was $160 million. Loss from equity in affiliated companies was $2 million. Income taxes $42 million.

Has the money to be opportunistic about acquiring or partnering for new therapies, which helps to diversify pipeline. Has taken equity positions in companies with potential blockbuster compounds.

Q&A:

Vidaza royalty stream buy? $325 million is expensed because it is for international rights, where the drug has not been approved. Going forward the royalties won't be in costs of goods sold, so it increases gross margins to 90%+ range. We were able to use our international cash for this.

Rollout plans for Vidaza? Will be similar to Revlimid rollout, but MDS is a less-developed market in Europe, so education of physicians will be critical.

Revlimid long-term market potential? In the U.S. we can further penetrate the market and significant duration of treatment gains. Internationally we are still in the rollout stage in many markets. Japan next year, Canada recently, applying in Russia, etc. Phase III programs in CLL and NHL are seeing good progress too.

Macroeconomics? So far we are not seeing anything negative, but we are prepared to make our case as a value proposition to reimbursers.

Can operating margins be maintained? Once we take out the $30 million one-time Pharmion merger costs, we see the leverage we thought was their. The Vidaza launch in Europe should provide even more leverage.

Are Revlimid and Vidaza just cutting into Thalidomide and Thalomid? There are many competing drugs on the market and we are picking up share as a whole. As Revlimid moves to earlier phase of treatment, believes Thalomid will be used in later stages of treatment.

Revlimid percent of international sales? Will exit year with roughly one-third of revenues outside U.S.

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