Analyst Conference Summary

conference date: July 26, 2007 @ 6:00 AM Pacific Time
for quarter ending: June 30, 2007 (2nd quarter)

Forward-looking statements

Overview: Revenues increasing rapidly, but GAAP EPS down slightly sequentially. Rapid profit growth on annual basis.

Basic data:

Revenues $347.9 million, up 18.6% sequentially from $293.4 million and up 76.4% from year-earlier.

GAAP net income was $54.9 million, down 4% sequentially from $57.4 million but up from $9.6 million year-earlier.

GAAP EPS were $0.13, down sequentially from $0.14, but up from $0.03 year-earlier.

Non-GAAP net income was $110 million, up 28.5% sequentially from $85.6 million and up 160% from year-earlier. Non-GAAP EPS was $0.26.

$2.3 billion cash and equivalents at end of quarter, up $207 million sequentially.

Guidance:

For 2007 increased revenue estimate to $1.4 billion range and adjusted (non-GAAP) EPS to $1.00 to $1.05.

Conference Highlights:

Product sales were $319 million, up 81% from year-earlier.

Revlimid revenue was $181 million, up 24% sequentially and up 187% from year-earlier. Recently granted authorization in Europe in combination with dexamethasone for secondary treatment of multiple myeloma patients. Growing U.S. market share as moved to first and second line treatment. Continued good clinical results and papers published. Unprecedented overall suvival data. European income to start coming in this fall and accelerate in 2008. Seeking to extend label.

Thalomid revenue was $118 milion. Up from $107 yar-earlier. Slight decline in prescriptions, offset by prior price increases. But expect continued decline for multiple myeloma.

Focalin and Ritalin drug family revenues $24.8 million up 40% from $17.7 million year-earlier.

Alkeran sales $18.7 million, up from $4.5 million year-earlier.

Other, mainly interest, income was $23.6 million.

After-tax share compensation expense was $12.7 million.

$87 million spent on research and development. Adjusted SG&A $103 million, up because of international expansion; expect this to be run rate for rest of year.

Extensive clinical trials for current and pipeline drugs, including imid class, continue. Over 100 trials involving Revlimid alone. Building new anti-inflamatory franchise.

Adjusted operating income was $130 million, up 143%.

Q&A:

Revlimid just cutting into Thalimid? No, clearly overall growth, as shown by independent market researchers.

Regulatory timeline for CLL? Moving forward on several trials, therapies and combinations, certainly several years away from approval.

Frontline myeloma? We have multiple strategies depending on marketplace. In Europe we are several years off, with some potential upsides. In U.S. Ecog data is significant for first line treatment, we will have a better understanding later this year.

Revlimid US v. International? Revenues are mostly U.S.

Revlimid myeloma v. MDS? Myeloma is 80%, MDS 20%.

Extension beyond Europe & U.S.? Launch in Europe needs to be quality, same for other nations, while trying to watch SG&A to keep profits up. Expect continued strong EPS growth for next few years. SG&A should top out at about $400 million this year.

MDS by Revlimid in Europe? Trial is fully accrued, question of how they will treat it. Decision probably by end of year. Question of how to interpret open-label, uncontrolled data. They tend not to approve this way, but we are having a good dialog.

Revlimid market share? Third party research for myeloma overall shows strong growth especially in first and second line indications.

CLL dosing? More of an issue than in NHL. Extraordinary biological activity with very low doses showing complete responses in some patients. Found can avoid side effects by starting with low doses.

Compelling response for Revlimid for CLL? Most trials are single-agent, but not combining with other entities including antibodies. Responses are high in percentages for single agent, waiting for more data, and no specific target for compelling results.

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