On April 25, 2019 Celgene Corporation (NASDAQ:CELG) reported net product sales of $4,024 million for the first quarter of 2019, a 14 percent increase from the same period in 2018 (Press release, Celgene, APR 25, 2019, View Source [SID1234535404]). Celgene reported first quarter 2019 total revenue of $4,025 million, a 14 percent increase compared to $3,538 million in the first quarter of 2018.
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Based on U.S. GAAP (Generally Accepted Accounting Principles), Celgene reported net income of $1,545 million and diluted earnings per share (EPS) of $2.14 for the first quarter of 2019. For the first quarter of 2018, GAAP net income was $846 million and diluted EPS was $1.10.
Adjusted net income for the first quarter of 2019 increased 17 percent to $1,834 million compared to $1,572 million in the first quarter of 2018. For the same period, adjusted diluted EPS increased 24 percent to $2.55 from $2.05.
"In the first quarter, we delivered strong top- and bottom-line growth while advancing our innovative pipeline with multiple regulatory submissions in the U.S. and EU," said Mark J. Alles, Chairman and Chief Executive Officer of Celgene Corporation. "Our excellent operating performance continues to generate positive momentum into the expected closing of the Bristol-Myers Squibb transaction during the third quarter of 2019."
First Quarter 2019 Financial Highlights
Unless otherwise stated, all comparisons are for the first quarter of 2019 compared to the first quarter of 2018. The adjusted operating expense categories presented below exclude share-based employee compensation expense, collaboration-related upfront expense, research and development asset acquisition expense and a benefit associated with the adjustment to clinical trial and development activity wind-down costs. 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 first quarter were $2,577 million, an increase of 15 percent year-over-year. U.S. sales of $1,686 million and international sales of $891 million increased 13 percent and 19 percent year-over-year, respectively. REVLIMID sales growth was driven by increases in treatment duration and market share
POMALYST/IMNOVID sales for the first quarter were $557 million, an increase of 23 percent year-over-year. U.S. sales were $390 million and international sales were $167 million, an increase of 30 percent and 9 percent year-over-year, respectively. POMALYST/IMNOVID sales growth was driven primarily by increases in treatment duration and market share
OTEZLA sales for the first quarter were $389 million, a 10 percent increase year-over-year. U.S. sales of $301 million and international sales of $88 million increased 9 percent and 14 percent year-over-year, respectively. OTEZLA sales growth in the U.S. was driven by increases in demand, while international sales were driven by continued expansion in key ex-U.S. markets.
ABRAXANE sales for the first quarter were $286 million, a 9 percent increase year-over-year. U.S. sales were $196 million and international sales were $90 million, an increase of 23 percent and a decrease of 13 percent year-over-year, respectively. ABRAXANE sales growth was driven primarily by increases in demand and customer buying patterns.
In the first 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 $215 million compared to $229 million in the first quarter of 2018.
Research and Development (R&D)
On a GAAP basis, R&D expenses were $1,216 million for the first quarter of 2019 compared to $2,203 million for the same period in 2018. Adjusted R&D expenses were $874 million for the first quarter of 2019 compared to $694 million for the first quarter of 2018. The current period included an increase in R&D expense associated with the acquisition of Juno Therapeutics and regulatory submission-related work on multiple programs. Additional R&D expenses (only included on a GAAP basis) decreased in 2019, 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 $773 million for the first quarter of 2019 compared to $864 million for the same period in 2018. Adjusted SG&A expenses were $654 million for the first quarter of 2019 compared to $671 million for the first quarter of 2018. Additional SG&A expense (only included on a GAAP basis) decreased in 2019, 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 $1.5 billion in the first quarter of 2019, compared to $(325) million for the first quarter of 2018. Celgene ended the quarter with approximately $7.7 billion in cash, cash equivalents, marketable debt securities and publicly-traded equity securities.
2019 Product Sales and Earnings Guidance Reaffirmed
**Not meaningful as the 2019 measures exclude the impact of any strategic transactions, impairments, loss contingencies, changes in the fair value of equity investments, costs associated with the Bristol-Myers Squibb Company (Bristol-Myers Squibb) and Celgene transaction and non-operating tax adjustments that have not yet occurred.
Portfolio Updates
At the upcoming 2019 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting, select oral data presentations include:
First clinical data from the phase I/II trial evaluating CELMoD agent iberdomide (CC-220) in patients with relapsed and/or refractory multiple myeloma (RRMM);
Updated data, including minimal residual disease (MRD) response, from the phase I TRANSCEND CLL-004 trial evaluating liso-cel in patients with relapsed and/or refractory chronic lymphocytic leukemia (CLL). Liso-cel recently received Regenerative Medicine Advanced Therapy (RMAT) designation in this setting. In addition, the Biologics License Application (BLA) submission to the U.S. Food and Drug Administration (FDA) for liso-cel in non-Hodgkin lymphoma (NHL) remains on-track for the second half of 2019;
Data from the phase III apact trial evaluating ABRAXANE as adjuvant therapy in patients with surgically resected pancreatic cancer. In March, Celgene announced that the phase III apact trial did not achieve the primary endpoint of improvement in disease-free survival, compared to gemcitabine alone. Overall survival, a secondary endpoint of the study, was improved, reaching nominal statistical significance, with ABRAXANE in combination with gemcitabine compared to gemcitabine alone. The safety profile observed in the apact study was consistent with previously reported studies of ABRAXANE.
Celgene reported top-line results from the phase III ROBUST trial evaluating REVLIMID plus rituximab, cyclophosphamide, doxorubicin, vincristine and prednisone (R-CHOP) chemotherapy (R2-CHOP) in patients with previously untreated activated B-cell (ABC) subtype diffuse large B-cell lymphoma (DLBCL). The trial did not meet the primary endpoint of demonstrating superiority in progression-free survival (PFS) compared to placebo plus R-CHOP. The safety profile of R2-CHOP was consistent with the known safety profiles of the individual medicines, and no new safety signals were identified with the combination.
In April, Celgene and Acceleron Pharma announced the submission of a BLA to the U.S. FDA for luspatercept, an erythroid maturation agent, for the treatment of adult patients with very low to intermediate risk myelodysplastic syndromes (MDS)-associated anemia who have ring sideroblasts and require red blood cell (RBC) transfusions and for the treatment of adult patients with beta-thalassemia-associated anemia who require RBC transfusions. In addition, Celgene plans to submit a marketing application for both indications to the European Medicines Agency (EMA) in April 2019.
In March, Celgene announced that the EMA Committee for Medicinal Products for Human Use (CHMP) adopted positive opinions for REVLIMID in combination with bortezomib and dexamethasone (RVd) in adult patients with previously untreated multiple myeloma who are not eligible for transplant and for POMALYST/IMNOVID in combination with bortezomib and dexamethasone (PVd) for the treatment of adult patients with multiple myeloma who have received at least one prior treatment regimen including REVLIMID.
In March, Celgene announced the submission of a New Drug Application (NDA) to the U.S. FDA for ozanimod in patients with relapsing forms of multiple sclerosis (RMS) and the submission of a Marketing Authorization Application (MAA) to the EMA for ozanimod in relapsing-remitting multiple sclerosis (RRMS). In addition, the phase III TRUE NORTH trial evaluating ozanimod in patients with ulcerative colitis (UC) completed enrollment in April.
In March, Celgene announced that the U.S. FDA granted Priority Review designation for the NDA for fedratinib in patients with myelofibrosis. The Prescription Drug User Fee Act (PDUFA) date for the submission is September 3, 2019. The EU MAA submission is now planned by year-end 2019.
In March, Roche announced the accelerated approval of TECENTRIQ (atezolizumab) in combination with ABRAXANE for the treatment of adult patients with unresectable locally advanced or metastatic triple-negative breast cancer (TNBC) whose tumors express PD-L1 as determined by an FDA approved test. This accelerated approval is based on results from the phase III IMpassion130 study.
In February, Celgene announced that the FDA granted Priority Review designation for the supplemental New Drug Application (sNDA) for REVLIMID in combination with rituximab (R²) in patients with relapsed and/or refractory indolent NHL. The PDUFA date for the submission is June 27, 2019.
Business Updates
On April 12, 2019, the stockholders of Celgene voted to adopt the proposed merger and the stockholders of Bristol-Myers Squibb voted to approve the issuance of shares of Bristol-Myers Squibb common stock in connection with the proposed merger. The parties continue to expect the transaction to close in the third quarter of 2019, subject to customary closing conditions and regulatory approvals.
First Quarter 2019 Earnings Information
Due to the pending transaction with Bristol-Myers Squibb, Celgene is not hosting a conference call in conjunction with its first-quarter 2019 earnings release and does not expect to do so for future quarters. Please direct any questions regarding this press release to Celgene Investor Relations or Celgene Communications.