Analyst Conference Summary

conference date: October 25, 2012 @ 6:00 AM Pacific Time
for quarter ending: September 30, 2012 (third quarter, Q3 2012)

Forward-looking statements

Overview: Another quarter of solid growth, and raised guidance.

Basic data (GAAP):

Revenue was $1.42 billion, up 4% sequentially from $1.37 billion and up 14% from $1.25 billion in the year-earlier quarter.

Net income was $424.2 million, up 15% sequentially from $367.4 million and up 14% from $373.0 million year-earlier.

EPS (earnings per share) were $0.97, up 18% sequentially from $0.82 and up 20% from $0.81 year-earlier.

Guidance:

For the full year of 2012, narrowing revenue guidance and raising earnings outlook. Non-GAAP EPS $4.85 to $4.90. Revenue $5.45 to $5.55 billion. Revlimid product sales $3.75 to $3.80 billion.

Quarter Highlights:

In the quarter "Positive results from late-stage studies for Abraxane, apremilast and pomalidomide create a solid path toward significant expansion of our portfolio and vital new options for patients in the future."

Non-GAAP numbers: net income $561 million, up 20% y/y from $469 million, with EPS $1.29, up 26% y/y from $0.81.

Product sales were $1.39 billion, up 4% sequentially from $1.34 billion. U.S. sales were $776 million, international $613 million.

Price reductions in the EU were less than in 2011.

REVLIMID revenues were 970 million, up 4% sequentially from $934 million, and up 18% from year-earlier. U.S. sales were 547 million, international $423 million. Mantle cell lymphoma supplemental new drug application will be submitted by year-end. Still expanding international approvals and reimbursement.

VIDAZA revenues were $220 million, up 9% sequentially from $201 million and 15% from year-earlier. Growth was mostly international. Clinical trial in progress that could expand label to all AML patients and looking at other indications.

ABRAXANE revenues were $106 million , down 4% sequentially from $110 million and down 6% from year-earlier. Abraxane for metastatic melanoma data will be presented November 11; it met primary endpoint for progression free survival. Phase III data in pancreatic cancer should be available later this quarter. Approved by FDA in quarter for non-small cell lung cancer in combination with carboplatin.

THALOMID revenues were $75 million , down 1% sequentially from $76 million and down 10% from year-earlier.

Royalty and collaboration revenue was $31.2 million. But royalty revenue may come under pressure in the future from generics for ritalin and focalin.

Cash and securities balance ended at $3.83 billion. Long term debt ended at $2.8 billion, short term debt at $324 million. $1.5 billion in bonds issued in the quarter. $744 million was spent on share repurchases, and $2.4 billion remains available for that purpose.

Pomalidomide for relapsed and refractory multiple myeloma is a potential blockbuster. Regulatory reviews in U.S. and Europe are moving forward.

Apremilast for psoriatic arthritis and psoriasis. Data from three positive Phase III trials should be ready for FDA submission next quarter. This is going to be a big market that could transform Celgene.

Over 20 compounds are now in pre-clinical or clinical development. See also Celgene product pipeline.

Cost of goods sold was $74.6 million. Research and development expense $441.6 million. Selling, general and administrative expense $354.6 million. Amortization of intangibles $46.2 million. Acquisition related expense $0.7 million. Operating income $501.6 million. Other expense $25.1 million.

Over 140 abstracts to be presented at ASH in December on Celgene products.

Q&A:

MM020 trial? We expect PFS analysis to be on 70% of events, and interim overall survival would accompany that.

Abraxane projected component for 2015? $1 to $1.25 billion. With lung cancer approval we are increasingly confident in reaching that target. Melanoma data is a short term upside.

Revlimid frontline in Europe? At ASH we will see important data on MML15 multiple myeloma resistance. We are projecting, given the event rate, the data won't be in until 2014.

European filing strategy? It is a rich, comprehensive set of data for Revlimid for broad newly diagnosed myeloma label. We can do a series of label expansions, but we need the data first to determine the strategy.

Abraxane for pancreatic cancer bar compared to gemcitabine? What is obvious is this patient population needs new options for life extension. We believe regulatory approval would mean a very big market opportunity.

What give you so much confidence you don't need a statistically significant overall survival in Europe? The comparison is meaningful overall survival. We are confident because we have a very robust result on the primary endpoint, and secondary cancers will not have an impact.

We are going to go into the details of apremilast at ACR. We are confident we are going to have a big opportunity here.

Pomalidomide PFS? We met and exceeded the progression free survival advantage threshold.

Revlimid is maintaining a strong and steady share of the market. Carfilzomib program will be in combination therapy with revlimid in the future.

Are you adding sales reps, planning for apremilast? We are realigning our U.S. sales force for the pomalidimide launch. We have good capacity in the existing team for solid tumors, but could expand it on further FDA approvals.

Apremilast impact on operating margins? We have a lot of leverage for profits in our model. The apremilast program could generate a lot of top line growth, with margins similar to the hematology franchise. At 2015 0.3 to $1.0 billion range for "other," which includes apremilast.

CLL NHL market for Revlimid we see in the multiple billions.

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