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Celgene Corporation reported operating results for the fourth quarter and full year of 2018. For the fourth quarter of 2018, net product sales were $4,036 million, an increase of 16 percent year-over-year. Fourth quarter total revenue increased 16 percent year-over-year to $4,037 million.
Net product sales for the full year of 2018 were $15,265 million, an increase of 18 percent year-over-year. Total revenue for the full year of 2018 was $15,281 million, an increase of 18 percent year-over-year.
Based on U.S. GAAP (Generally Accepted Accounting Principles), Celgene reported net income of $1,073 million and diluted earnings per share (EPS) of $1.50 for the fourth quarter of 2018. For the fourth quarter of 2017, GAAP net loss was $81 million and diluted EPS was ($0.10). Full year GAAP net income for 2018 was $4,046 million and diluted EPS was $5.51. Full year GAAP net income for 2017 was $2,940 million and diluted EPS was $3.64.
Adjusted net income for the fourth quarter of 2018 increased 7 percent to $1,709 million compared to $1,592 million in the fourth quarter of 2017. For the same period, adjusted diluted EPS increased 20 percent to $2.39 from $2.00.
Adjusted net income for the full year of 2018 increased 8 percent to $6,511 million. Adjusted diluted EPS increased 19 percent to $8.87 from $7.44 for the full year of 2017.
“2018 was another year of excellent operating results and significant progress advancing our innovative early-, mid- and late-stage pipeline,” said Mark J. Alles, Chairman and Chief Executive Officer of Celgene Corporation. “With five near-term product launches and many promising assets advancing, we are very optimistic about our potential for long-term growth as part of the new Bristol-Myers Squibb.”
Fourth Quarter and Full Year 2018 Financial Highlights
Unless otherwise stated, all comparisons are for the fourth quarter and full year of 2018 compared to the fourth quarter and full year of 2017. The adjusted operating expense categories presented below exclude share-based employee compensation expense, collaboration-related upfront expense, research and development asset acquisition expense, IPR&D asset impairment charges, clinical trial and development activity wind-down costs and a 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 fourth quarter increased 16 percent to $2,549 million. Fourth quarter U.S. sales of $1,729 million and international sales of $820 million increased 17 percent and 15 percent, respectively. REVLIMID® sales growth was driven by increases in treatment duration and market share. Full year REVLIMID® sales were $9,685 million, an increase of 18 percent year-over-year.
- POMALYST®/IMNOVID® sales for the fourth quarter were $567 million, an increase of 28 percent year-over-year. Fourth quarter U.S. sales of $393 million and international sales of $174 million increased 39 percent and 9 percent, respectively. POMALYST®/IMNOVID® sales growth was driven primarily by increases in treatment duration and market share. Full year POMALYST®/IMNOVID® sales were $2,040 million, an increase of 26% year-over-year.
- OTEZLA® sales in the fourth quarter were $448 million, a 21 percent increase year-over-year. Fourth quarter U.S. sales of $360 million and international sales of $88 million increased 19 percent and 29 percent, respectively. OTEZLA® sales growth in the U.S. was driven by increases in demand. OTEZLA® international sales were driven by launch uptake in key ex-U.S. markets, including Japan. Full year OTEZLA® sales were $1,608 million, an increase of 26 percent year-over-year.
- ABRAXANE® sales for the fourth quarter were $269 million, an increase of 7 percent year-over-year. Fourth quarter U.S. sales of $178 million and international sales of $91 million increased 15 percent and decreased 5 percent, respectively. ABRAXANE® sales growth was driven primarily by demand. Full year ABRAXANE® sales were $1,062 million, an increase of 7 percent year-over-year.
- In the fourth quarter, all other product sales, which include IDHIFA®, THALOMID®, ISTODAX®, VIDAZA® and an authorized generic version of VIDAZA® drug product primarily sold in the U.S., were $203 million compared to $227 million in the fourth quarter of 2017. Full year sales for these products were $870 million compared to $901 million for the full year 2017.
Research and Development (R&D)
On a GAAP basis, R&D expenses were $1,138 million for the fourth quarter of 2018 versus $2,738 million for the same period in 2017. Full year 2018 R&D expenses were $5,673 million compared to $5,915 million for 2017.
Adjusted R&D expenses were $919 million for the fourth quarter of 2018 compared to $766 million for the same period in 2017. For the full year 2018, adjusted R&D expenses were $3,509 million compared to $2,749 million for the full year 2017. Both the fourth quarter and full year 2018 increases in R&D expenses were primarily driven by the inclusion of R&D expenses associated with the acquisition of Juno Therapeutics (Juno) and regulatory submission-related work on multiple programs. Additional R&D expenses (only included on a GAAP basis) decreased in 2018, as outlined in the attached Reconciliation of GAAP to Adjusted Net Income.
Selling, General, and Administrative (SG&A)
On a GAAP basis, SG&A expenses were $850 million for the fourth quarter of 2018 compared to $774 million for the same period in 2017. Full year SG&A expenses were $3,250 million for 2018 compared to $2,941 million for 2017.
Adjusted SG&A expenses were $762 million for the fourth quarter of 2018 compared to $687 million for the same period in 2017. For full year 2018, adjusted SG&A expenses were $2,747 million versus $2,279 million in 2017. Both the fourth quarter and full year 2018 increases in SG&A expenses were primarily driven by the inclusion of SG&A expense associated with the acquisition of Juno and marketing-related expenses. Additional SG&A expenses (only included on a GAAP basis) increased in 2018, as outlined in the attached Reconciliation of GAAP to Adjusted Net Income.
Cash, Cash Equivalents, Marketable Debt Securities and Publicly-Traded Equity Securities
Operating cash flow was $5.2 billion for both 2018 and 2017. Celgene ended the fourth quarter of 2018 with approximately $6.0 billion in cash, cash equivalents, marketable debt securities and publicly-traded equity securities.
About Celgene
Celgene Corporation, headquartered in Summit, New Jersey, is an integrated global biopharmaceutical company engaged primarily in the discovery, development and commercialization of innovative therapies for the treatment of cancer and inflammatory diseases through next-generation solutions in protein homeostasis, immuno-oncology, epigenetics, immunology and neuro-inflammation. For more information, please visit www.celgene.com. Follow Celgene on Social Media: @Celgene, Pinterest, LinkedIn, Facebook and YouTube.
About REVLIMID ®
In the U.S., REVLIMID® (lenalidomide) in combination with dexamethasone is indicated for the treatment of patients with multiple myeloma. REVLIMID® as a single agent is also indicated as a maintenance therapy in patients with multiple myeloma following autologous hematopoietic stem cell transplant. REVLIMID® is indicated for patients with transfusion-dependent anemia due to low- or intermediate-1-risk myelodysplastic syndromes (MDS) associated with a deletion 5q cytogenetic abnormality with or without additional cytogenetic abnormalities. REVLIMID® is approved in the U.S. for the treatment of patients with mantle cell lymphoma (MCL) whose disease has relapsed or progressed after two prior therapies, one of which included bortezomib. Limitations of Use: REVLIMID® is not indicated and is not recommended for the treatment of chronic lymphocytic leukemia (CLL) outside of controlled clinical trials.
About ABRAXANE ®
In the U.S., ABRAXANE® for Injectable Suspension (paclitaxel protein-bound particles for injectable suspension) (albumin-bound) is indicated for the treatment of metastatic breast cancer after failure of combination chemotherapy for metastatic disease or relapse within six months of adjuvant chemotherapy. Prior therapy should have included an anthracycline unless clinically contraindicated. ABRAXANE® is indicated for the first-line treatment of locally advanced or metastatic non-small cell lung cancer, in combination with carboplatin, in patients who are not candidates for curative surgery or radiation therapy. ABRAXANE® is also indicated for the first-line treatment of metastatic adenocarcinoma of the pancreas in combination with gemcitabine.
About POMALYST ®
In the U.S., POMALYST® (pomalidomide) is indicated for patients with multiple myeloma who have received at least two prior therapies including lenalidomide and a proteasome inhibitor and have demonstrated disease progression on or within 60 days of completion of the last therapy.
About OTEZLA ®
In the U.S., OTEZLA® (apremilast) is indicated for the treatment of adult patients with active psoriatic arthritis. OTEZLA® is indicated in the U.S. for the treatment of patients with moderate to severe plaque psoriasis who are candidates for phototherapy or systemic therapy.
