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Celgene Reports Second Quarter 2017 Operating and Financial Results

SUMMIT, N.J.--(BUSINESS WIRE)--

Celgene Corporation (CELG) reported net product sales of $3,256 million for the second quarter of 2017, a 19 percent increase from the same period in 2016. Celgene reported second quarter of 2017 total revenue of $3,268 million, a 19 percent increase compared to $2,754 million in the second quarter of 2016.

Based on U.S. GAAP (Generally Accepted Accounting Principles), Celgene reported net income of $1,061 million and diluted earnings per share (EPS) of $1.31 for the second quarter of 2017. For the second quarter of 2016, GAAP net income was $598 million and diluted EPS was $0.75.

Adjusted net income for the second quarter of 2017 increased 28 percent to $1,474 million compared to $1,152 million in the second quarter of 2016. For the same period, adjusted diluted EPS increased 26 percent to $1.82 from $1.44.

“We delivered outstanding second quarter results and significantly advanced our high-potential pipeline,” said Mark J. Alles, Celgene’s Chief Executive Officer. “Exceptional execution of key strategic initiatives strengthened and expanded our opportunities for long-term growth.”

Unless otherwise stated, all comparisons are for the second quarter of 2017 compared to the second quarter of 2016. The adjusted operating expense categories presented below exclude share-based employee compensation expense, collaboration-related upfront expense and litigation-related loss contingency accrual expense. Please see the attached Use of Non-GAAP Financial Measures and Reconciliation of GAAP to Adjusted Net Income for further information relevant to the interpretation of adjusted financial measures and reconciliations of these adjusted financial measures to the most comparable GAAP measures, respectively.

Net Product Sales Performance

  • REVLIMID® sales for the second quarter increased 20 percent to $2,034 million. Sales growth was driven primarily by increased volume as a result of increases in duration of treatment and market share gains. U.S. sales of $1,358 million and international sales of $676 million increased 26 percent and 9 percent year-over-year, respectively. REVLIMID® sales for the second quarter of 2016 were favorably impacted by a Russian tender.
  • POMALYST®/IMNOVID® sales for the second quarter were $391 million, an increase of 23 percent year-over-year. U.S. sales were $241 million and international sales were $150 million, an increase of 30 percent and 13 percent year-over-year, respectively. POMALYST®/IMNOVID® sales grew due to increased volume driven by duration gains.
  • OTEZLA® sales for the second quarter were $358 million, a 49 percent increase year-over-year. Second quarter U.S. sales of $306 million and international sales of $52 million increased 41 percent and 117 percent, respectively. Sales were driven by increased prescriber adoption and market share gains in the U.S. with increasing contribution from early launch markets in Europe and Japan.
  • ABRAXANE® sales for the second quarter were $254 million, a 2 percent increase year-over-year. U.S. sales were $161 million and international sales were $93 million, a decrease of 7 percent and an increase of 24 percent, respectively. ABRAXANE® market shares in the U.S. for pancreatic cancer, first-line advanced non-squamous lung cancer and metastatic breast cancer remain stable. Growth in Europe was driven by market share gains for ABRAXANE® in pancreatic cancer.
  • In the second quarter, all other product sales, which include THALOMID®, ISTODAX®, VIDAZA® and an authorized generic version of VIDAZA® drug product in the U.S., were $219 million compared to $236 million in the second quarter of 2016.
  • Total net product sales for the second quarter of 2017 increased 19 percent year-over-year, driven by operational growth which includes the impact from both volume and price. Net product sales growth also includes a 0.7 percent negative impact from currency exchange effects.

Research and Development (R&D)

On a GAAP basis, R&D expenses were $835 million for the second quarter of 2017 versus $949 million for the same period in 2016. The second quarter decrease was due to a reduction in collaboration-related upfront expense.

Adjusted R&D expenses were $690 million for the second quarter of 2017 compared to $601 million for the second quarter of 2016. The second quarter increase was due to increased spending related to clinical trial and drug discovery activity.

Selling, General, and Administrative (SG&A)

On a GAAP basis, SG&A expenses were $939 million for the second quarter of 2017 compared to $732 million for the same period in 2016. The increase in SG&A expenses was primarily due to higher litigation-related loss contingency accrual expense as a result of the recently announced civil litigation settlement.

Adjusted SG&A expenses were $532 million for the second quarter of 2017 compared to $547 million for the second quarter of 2016.

Operating cash flow was $1.6 billion in the second quarter of 2017, compared to $1.0 billion for the second quarter of 2016. In the second quarter, Celgene purchased approximately 4.2 million of its shares at a total cost of approximately $507 million. As of June 30, 2017, the Company had approximately $3.9 billion remaining under its stock repurchase program. Celgene ended the quarter with approximately $10.1 billion in cash, cash equivalents and marketable securities.

Previous 2017 Guidance

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