Event Brief of Q2 2004 Celgene Corp. Earnings Conference Call - Final.

Publication: The America's Intelligence Wire

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COPYRIGHT 2004 Financial Times Ltd.

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CORPORATE PARTICIPANTS . Bob Hugin, Celgene Corp., CFO & SVP . John Jackson, Celgene Corp., Chairman & CEO . Sol Barer, Celgene Corp., President & COO OVERVIEW CELG reported 2Q04 total revenue of $87.8m, up over 30% YoverY. Thalomid sales increased 36% YoverY and almost 8% sequentially. Net income totaled $12.4m or $0.14 per diluted share; $0.03 above consensus. CELG is raising its full year EPS target to $0.50-0.60 per diluted share, with full year Thalomid targets raised to $295-305m. CELG is also raising its total FY04 revenue targets to $370-390m. Q&A Focus: Clinical trial data, FDA approvals, guidance. FINANCIAL DATA A. Key Data From Call 1. 2Q04 total revenue =$87.8m, up 30% over 2Q03. 2. Thalomid sales = $74.6m. 3. Alkeran sales = $3.1m. 4. Revenues from Ritalin family of drugs = $7m. 5. 2Q04 R&D = $38.6m. 6. Cash and marketable securities =$737m. 7. FY04 EPS guidance = $0.50-0.60. 8. FY04 revenue guidance = $370-390m. PRESENTATION SUMMARY S1. 2Q04 Financial Results (B.H.) 1. 2Q04 Financial Results: 1. Highlights: 1. Total revenue = $87.8m, up over 30% YoverY. 2. Thalomid sales increased 36% YoverY and almost 8% sequentially. 3. Thalomid sales = $74.6m. 4. Alkeran sales = $3.1m. 5. Revenues from Ritalin family of drugs = $7m. 6. R&D = $38.6m, close to 44% of total revenue, up 27% YoverY. 7. Net income = $12.4m or $0.14 per diluted share; $0.03 above consensus. 8. Sixth consecutive quarter of increasing profits. 9. Co. believes results provide solid foundation to achieve or surpass FY04 objectives. 2. Balance Sheet: 1. Cash and marketable securities = $737m. 1. Includes: $1.2m share in Pharmeon [phonetic] Corp. 2. Does not include: potential value of 800,000 Pharmeon warrents, Entremed [phonetic] equity stake. 3. Outlook: 1. Raising FY04 EPS target to $0.50-0.60 per diluted share, from $0.42-0.52. 2. FY04 Thalomid targets raised to $295-305m, from prior guidance of $285-295m. 3. Targets will be reviewed again at the end of 3Q04. 1. Guidance assumes small benefit from potential label expansion later in the year, and from Medicare prescription drug demonstration project. 2. Beginning 1/06, co. expects significant benefits from the new Medicare reimbursement under Medicare Modernization Act. 4. CELG is raising total FY04 revenue targets to $370-390m, from $365-385m. 5. Co. reports it is on track to achieve key 2004 objectives. 6. Not making any other changes to financial guidance for FY04. S2. Product Performance (J.J.) 1. Product Performance: 1. Thalomid: 1. Thalomid continues to be key short term driver of performance. 2. Co. believes it is well positioned to continue to build on these results. 3. Co. reports it is pleased with quality of data presented at ASCO on CELG products, particularly ECOG Phase III data in newly diagnosed multiple myeloma. 4. Clinical studies of this caliber potentially support expanded usage of Thalomid and underscore clinical potential of next generation drugs. 2. Revlimid: 1. Co. continues to make progress in accelerating clinical and regulatory development of Revlimid. 2. Important progress in pivotal Phase III multiple myeloma trials. 3. Accelerated regulatory Phase II trials in MDS and multiple myeloma. 4. Data from these trials support regulatory approval. 5. Co. believes Revlimid can transform CELG in many ways. 6. Strategy: leverage research into a broad and deep pipeline designed to produce promising drug candidates for the next decade and beyond. 7. Thalomid has been included in oral oncology reimbursement test for treatment of multiple myeloma. 3. Medicare benefits: 1. Longer term positive value of Medicare prescription drug benefit is significant. 2. Co. currently provides Thalomid at no cost to one of every five patients. 3. Co. believes full coverage starting in 1/06 will have a major positive impact for patients and for CELG revenues. 4. Focalin: 1. Novartis has successfully completed its Phase III trial for Focalin Long Acting. 2. Positive results in both adults and children. 3. On track to submit NDA in 3Q04. 4. Potential approval and product launch of Focalin LA in 3Q05. 5. Each event triggers a...

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