Analyst Conference Summary

conference date: October 28, 2010 @ 6:00 AM Pacific Time
for quarter ending: September 30, 2010 (third quarter)

Forward-looking statements

Overview: Record results, strong growth.

Basic data (GAAP):

Revenue was $910 million, up 7% sequentially from $852.7 million and up 31% from $695.1 in the year-earlier quarter.

Net income was $281.2 million, up 81% sequentially from $155.4 and up 30% from $216.8 million year-earlier.

EPS (earnings per share) were $0.60, up 82% sequentially from $0.33 and up 30% from $0.46 year-earlier.

Comparisons:

Q2 2010 Celgene summary
Q3 2009 Celgene summary

Guidance:

For full 2010, increased guidance, now includes impact of Abraxis acquisition. $2.45 billion Revlimid revenue. Total revenue $3.6 billion, up from $3.4 to 3.45 billion. Non-Gaap diluted EPS $2.78 to $2.80, up from prior guidance of $2.65 to $2.70.

Quarter Highlights:

Completed acquisition of Abraxis BioScience in Q4, a major strategic transaction, giving Celgene a meaningful oncology presence. Poised to capitalize on the R&D of the last decade.

Non-GAAP numbers: revenue $908 million, up 31% y/y; operating income $409 million; net income $350 million, up 35% y/y; EPS $0.75.

Revlimid revenues were $641 million, up 43% y/y. $374 million in U.S. International $267 million, up 51% y/y; launch of product in Japan is on track. Gained market share to 42% in U.S. Trial data supports continuous therapy. 45% market share in 4 major European countries. Expect Russian reimbursement in first half 2011. Reimbursed in Turkey starting in August 2010.

Vidaza revenues were $141 million, up 37% y/y. Shows survival benefit in AML and MDS. Continues to gain share. Initiated Phase III trial for newly diagnosed AML (acute myeloid leukemia).

Thalomid revenues were down 14% y/y to $94 million. Ritalin family revenues were $22.6 million, down 12% y/y.

Abraxane sales in Q4 will have a slight negative impact on overall margins. Investment in R&D will continue to increase. $830 to $840 new annual rate for SG&A expense.

Foreign currency exposure is hedged. Impact of currency was immaterial this quarter.

$3.5 billion cash and marketable securities. Expect to end 2010 at 2.7 billion due to Abraxis acquisition. Made an initial debt offering of $1.25 billion.

Key regulatory trials progressed meaningfully in the quarter. Expects to accelerate sales in breast cancer in 2011. Fifteen pivotal trials ongoing or planned in Hematology, giving potential for 5 to 10 FDA approvals by 2015.

Immunology and inflammation is another growing segment for Celgene; includes apremilast in psoriasis, psoriatic arthritis, now in Phase III trials, and rheumatoid arthritis. PDA-001 in auto-immune diseases including Crohn's disease is now in Phase II trial. PDA-001 to also initiate Phase II trial for cellular therapy in ischemic stroke & phase I trial in multiple sclerosis.

Cost of goods sold was $63.5 million. Research and development expense $253.5 million. Selling, general and administrative expense $228.3 million. Amortization of intangible assets $46.5 million. Acquisition charges $7.5 million. Leaving operating income of $310.7 million. Equity losses $1.4 million. Interest income $20.8 million. Income taxes $49.0 million.

Intends to dispose of Abraxis non-core assets.

A key initiative is to get European regulatory approval for Revlimid for newly diagnosed multiple myeloma. Plans to submit Istodax for peripheral t-cell lymphoma to FDA.

Q&A:

Revlimid growth drive? Balanced geographic growth with duration share gains. Varies by national market. Ultimately duration gains will be important across all markets. Also expanding into CLL and other indications. "We are not near the end of the Revlimid growth story."

Europe gating factor for first line Revlimid? Filing in Europe is dependent on compiling the data. In first line in Europe currently is only in the mid-single digits.

Treatment duration in U.S. and Europe? Revlimid trends were positive, but will not give specific details.

Japan revenue went from zero to what it achieved, not a meaningful amount yet. Building in Japan with a quality organization.

Pomalidimide plans? In myeloma we plan to do Phase III trials, not try to go get FDA approval with Phase II data.

Abraxane in Europe? We are evaluating country by country for metastatic breast cancer; may wait for future data in some countries.

Flat non-GAAP net income in Q4 implied in guidance? Includes impact from Abraxis. We expect underlying growth.

MM-02 enrollment? Going well, confident will be completed by end of 2010.

Abraxane in non-small cell lung cancer subsets? There will be reviews of subsets, we do not know the setting for releasing the data yet.

Revlimid and Rituxan combination trials? Looking closely at lymphoma. Discussing trial design, could start in first half of 2011.

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