Analyst Conference Summary


conference date: October 22, 2009 @ 6:00 AM Pacific Time
for quarter ending: September 30, 2009 (third quarter)

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Forward-looking statements

Overview: Record revenues and profits.

Basic data (GAAP):

Revenue was $695.1 million, up 10% sequentially from $629 million and up 17% from $592.5 million in the year-earlier quarter.

Net income was $216.8 million, up 52% from $143 million and up 58% from $136.8 million year-earlier.

EPS (earnings per share) were $0.46, up 48% from $0.31 and up 59% from $0.29 year-earlier.


2009 non-GAAP earnings 2.05 to $2.10. $2.6 to $2.7 billion non-GAAP revenues.

Conference Highlights:

Execution was exceptional for the quarter. Record results were from market share gains, increased duration of therapy, and new reimbursement approvals.

Revlimid revenues $449.6 million up 31% y/y. Multiple Myeloma (MM) launches in Great Britain and Canada. 39% of revenue was outside the U.S. 34% market share, up from 31% last quarter. Average duration increased (to?) over 11 months. Australia and Japan launches planned.

Thalomid revenues were $110.0 million down 17% from year-earlier. But sequential growth of 5% due to launch outside of U.S.

Vidaza (for MDS) revenues $103.1 million, up 62% y/y. Now the market leader in the U.S. European launch well underway; expects reimbursement approval in most countries this year.

Focalin and Ritalin revenues $25.8 million, up 5% y/y.

Non-GAAP numbers: revenue $692 million. Net income $260 million. EPS $0.56, up 40% y/y.

92.7% gross margin.

Cost of goods sold was $52.1 million. Research and development $193.4 million. Selling general and administrative $192.5 million. Amortization $21.1 million. Leaving operating income of $236.1 million. Interest and other $34.9 million. Income tax provision $53.9 million.

$2.8 billion in cash and marketable securities. Repurchased 1 million shares in quarter.

Pipeline products for hematology, oncology (cancer) and inflamation. MM-015 Revlimid Phase III trial for new diagnosed myeloma data interim analysis scheduled for presentation at ASH; it had excellent results. ACE-011 for anemia induced by chemotherapy Phase II trial initiated. Revlimid Phase III trials are underway for multiple cancer types. Amrubicin for small cell lung cancer trial is accruing. Apremilast for psoriasis showed good efficacy and safety; Phase III program to begin in 2010.


Revenue growth strategy? Consistent with past. Geographic expansion will continue for a couple of years. Market share growth based on clinical data. Revlimid continuous treatment and expansion into new indications.

Revlimid duration of therapy, U.S. v. Europe? We launched in Europe later than U.S., and have more frontline market share in U.S. Data is better for U.S. as well. But trend is positive outside the U.S. for continuous treatment.

Sustainability of revenue growth? We are optimistic and committed to achieving high growth for a long period of time. But it is not a straight line, especially quarter-to-quarter. We believe the steady flow of data, and frontline approval in Europe, will be very important.

Filing timing based on MM-015? 2010. The data supports the continous use of Revlimid. Regulatory filing would have more data than will be presented at ASH.

Revlimid market share? 31% to 34%. Very significant. A big part is moving to earlier treatment in multiple myeloma. Thalomid is moving from frontline to third line setting. The other part of market share gain is increased length of use.

Charitable support costs? There is no direct correlation between copays and top line revenue. Fourth quarter tends to be seasonally heavy, with some acceleration into Q3 this year.

Revlimid for NHL regulatory strategy? We are excited about what we are seeing in NHL and CLL. Timing is difficult to estimate. We are doing exploratory studies in solid cancers.

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Copyright 2008 William P. Meyers