Q1 2018 Conference Call...May 04, 2018 · Q1 2018 Conference Call Mark Alles, Chairman & Chief...

Q1 2018 Conference CallMay 4, 2018

CHANGING THE COURSE OFHUMAN HEALTH THROUGH BOLD

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Q1 2018 Conference Call

Mark Alles, Chairman & Chief Executive Officer

Jay Backstrom, MD, Chief Medical Officer

Nadim Ahmed, President, Hematology & Oncology

Q&A

Terrie Curran, President, I&I

Peter Kellogg, Chief Financial Officer

2

Forward-Looking Statements and Adjusted Financial Information

3

This presentation contains forward-looking statements, which are generally statements that are not historical facts.Forward-looking statements can be identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,”“plans,” “will,” “outlook,” “targets” and similar expressions. Forward-looking statements are based on management’scurrent plans, estimates, assumptions and projections, and speak only as of the date they are made. We undertakeno obligation to update any forward-looking statement in light of new information or future events, except as otherwiserequired by law. Forward-looking statements involve inherent risks and uncertainties, most of which are difficult topredict and are generally beyond our control. Actual results or outcomes may differ materially from those implied bythe forward-looking statements as a result of the impact of a number of factors, many of which are discussed in moredetail in our Annual Report on Form 10-K and our other reports filed with the Securities and Exchange Commission.

In addition to unaudited financial information prepared in accordance with U.S. GAAP, this presentation also contains adjusted financial measures. Further information relevant to the interpretation of adjusted financial measures, and reconciliations of these adjusted financial measures to the most comparable GAAP measures, may be found in the Appendix and on our website at www.Celgene.com in the “Investor Relations” section.

Mark AllesChairman & Chief Executive Officer


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Q1 2018: Creating Long-Term ValueQ1 2018: Creating Long-Term Value

Delivering Exceptional Financial Results− Strong performance across the portfolio and geographies

− Growth driven primarily by volume and favorable market dynamics

Advancing the Late-Stage Pipeline− Defined regulatory path forward for ozanimod in relapsing multiple sclerosis in U.S. and Europe

− Significant clinical and regulatory inflection points over next 12-18 months

Strengthening the Organization− Adding critical expertise to Board of Directors− Aligned management organization to enhance communication, accountability and focus

5

Peter KelloggChief Financial Officer


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Q1 2018 Financial HighlightsQ1 2018 Financial Highlights

Exceptional Operating Results − Net product sales grew 20% Y/Y− Adjusted diluted EPS $2.10 (+26% Y/Y) excluding dilution from Juno acquisition;

$2.05 (+23% Y/Y) with dilution

2018 Revenue Guidance Raised; Adjusted EPS Updated for Acquisition− Total revenue raised to the higher end of the range of $14.4B-$14.8B; REVLIMID® net sales raised

from ~$9.4B to ~$9.5B; POMALYST® net sales raised from ~$1.9B to ~$2B − 2018 adjusted diluted EPS raised to ~$8.95 excluding acquisition dilution;

~$8.45 inclusive of Juno dilution7

Strong Product Performance− Strong year-over-year product sales growth across the portfolio− 15 of the 20 percentage points of net sales growth from volume

Strategic and Balanced Capital Deployment to Support Future Growth− Completed Impact Biomedicines and Juno Therapeutics acquisitions− $2.7B in shares repurchased in Q1:18

Q1 2018 Total Net Product Sales

Q1:16 Q1:17 Q1:18

$ M

illio

ns ↑21% ↑18% ↑20%

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

Q1:17 Volume Price FX/Hedge Q1:18

↑19.6%↑0.2%↑15.5% ↑3.9%

Contribution to Q1:18 Total Net Product Sales Growth

$ M

illio

ns

Total Net Product Sales

Growth Rates = Growth vs. Prior Year Period8

$2,495

$2,952

$3,531

Q1 2018 Adjusted Diluted Earnings Per Share

Q1:16 Q1:17 Q1:18

↑23% ↑27%

Dol

lars

Per

Sha

re

↑23%

Q1:17 Oper. Income

OIE Tax Rate

Share Count

Q1:18

Dol

lars

Per

Sha

re

$2.05$0.34$1.67 ($0.02) $0.11($0.05)

9

Contribution to Q1:18 Adjusted Diluted EPSAdjusted Diluted EPS

$1.32

$1.67

$2.05

Growth Rates = Growth vs. Prior Year Period

As previously disclosed, during the third quarter of 2017, we adopted ASU 2017-12 with an initial application date of January 1, 2017. Prior to the adoption of ASU 2017-12, we recognized all changes in the fair value of the excluded component of a hedge in Other income net in the Consolidated Statements of Income under a mark-to-market approach. Pursuant to the provisions of ASU 2017-12, we no longer recognize the adjustments to the fair value of the excluded component in Other income net but we instead recognize the initial value of the excluded component using an amortization approach over the life of the hedging instrument. As such, our results for the quarterly period ended March 31, 2017 have been recast to reflect the adoption of ASU 2017-12.

Key P&L Line Items (Adjusted)

Q1:18 ∆ vs.Q1:17

∆ vs.Q4:17

Product Gross Margin 96.4% - ↓ 40 bps

R&D Expenses% of revenue

$694M19.6% ↓ 50 bps ↓ 240 bps

SG&A Expenses% of revenue

$671M19.0% ↑ 80 bps ↓ 70 bps

Operating Margin 57.9% ↓ 20 bps ↑ 280 bps

Effective Tax Rate 17.3% ↑ 80 bps ↑ 330 bps

10

Capital Allocation in Q1 2018Capital Allocation in Q1 2018

Cash flow from operations was approximately $(325)M– Primarily impacted by $1.1B upfront cash payment to acquire Impact Biomedicines

Deployed $10B of cash for two strategic acquisitions: Impact Biomedicines and Juno Therapeutics

Issued aggregate of $4.5B in unsecured notes

Purchased $2.7B of shares– Authorized additional $5B; $3.1B remaining under stock repurchase program as of 3/31/18

(in $ Billions) 12/31/17 3/31/18

Cash, Cash Equivalents, Marketable Debt Securities and Publicly-Traded Equity Securities

$12.04 $4.74

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2018 Guidance

Previous*Updated w/o Dilution from

Juno

Updated w/ Dilution from

Juno

Total Revenue $14.4B-$14.8B ~$14.8B ~$14.8B

REVLIMID® Net Sales ~$9.4B ~$9.5B ~$9.5B

POMALYST®/IMNOVID® Net Sales ~$1.9B ~$2.0B ~$2.0B

OTEZLA® Net Sales ~$1.5B Unchanged Unchanged

ABRAXANE® Net Sales ~$1.0B Unchanged Unchanged

Adjusted Operating Margin ~60.0% Unchanged ~56.0%

Adjusted Tax Rate ~18% ~17.5% ~17%

Adjusted Diluted EPS $8.70-$8.90 ~$8.95 ~$8.45

Weighted Average Diluted Shares ~775M ~755M ~755M12

* Previous 2018 guidance did not include the impact of our acquisition of Juno, which was expected to be dilutive to adjusted diluted EPS by approximately $0.50.

Terrie CurranPresident, I&I


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Q1 2018 I&I Franchise Results

Solid OTEZLA® Net Product Sales and Operating Momentum – Q1:18 sales growth +46% Y/Y and volume growth +46% Y/Y– Sales performance driven by market share gains in the U.S. and international markets

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Executing on Path Forward for Ozanimod in MS– U.S. NDA resubmission expected in Q1:19– European MAA submission expected in Q1:19

Portfolio Optimization and Expansion Underway– Executing multiple OTEZLA® lifecycle opportunities– Progressing phase III trial enrollment with ozanimod in UC– Advancing development of early- and mid-stage pipeline assets– Discontinued GED-0301 development in UC

Net Sales ($M)

$175 $199

$276

$21 $43

$77

Q1:15 Q1:16 Q1:17 Q1:18

U.S. ROW

$60

$196

$242

Q1 2018 OTEZLA® Net Sales Summary

15

Current Results & Potential Future Growth Drivers

• Q1:18 sales $353M, +46% Y/Y; Volume growth +46% Y/Y

• International sales +79% Y/Y

• Accelerating OTEZLA® growth with strong volume gains as demand and pull-through continues to improve

– U.S. TRx gains supported by improved access and further market expansion

– Increasing adoption in key ex-U.S. markets• Potential future growth drivers

– Completed enrollment in scalp psoriasis Ph III– Development of new indications, QD formulation

and label enhancement opportunities to expand OTEZLA® clinical profile and utilization

Certain prior year amounts have been rounded +/- $1M to conform to the current year rounding convention; volume measured in 30-day equivalent units

$353

19% 16% 16% 16% 16% 16% 15% 13% 13% 12% 11% 10% 12%

10%10% 11% 11% 11% 12% 11% 11% 10% 9% 9% 10% 10%

49% 51% 51% 50% 50% 49% 51% 51% 52% 52% 53% 53% 52%

22% 23% 23% 23% 23% 23% 23% 24% 25% 27% 27% 27% 26%

0%

20%

40%

60%

80%

100%

Jan'17 Feb'17 Mar'17 Apr'17 May'17 Jun'17 Jul'17 Aug'17 Sep'17 Oct'17 Nov'17 Dec'17 Jan'18

Biologics Oral Systemics Topicals No Treatment

Expanding the U.S. Pre-Biologic Market Opportunity

16Source: SHS claims data through January 2018, last updated 5 April 2018, 60 day grace period; Symphony prescriber-level data through 30 March 2018

OTEZLA® Plaque Psoriasis Source of Business (Most Intense Treatment – 12 month lookback, 3-month rolling view)

OTEZLA®

21.9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

ENBREL STELARA HUMIRA COSENTYX

OTEZLA TALTZ TREMFYA

Psoriasis Market Share(Branded Market Basket)

Japan: Psoriasis Market Share(Full Market Basket)France: Launch-Aligned New Patient Starts

In France and Japan, OTEZLA® Patient Uptake Continuing to Accelerate

Source: Gers; IMS JPM 17

3% 11% 15%

June 2017 September 2017 December 2017

Other

Biologics

TIGASON

NEORAL

Topicals

OTEZLA0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

m1 m2 m3 m4 m5 m6 m7 m8 m9 m10 m11 m12 m13 m14 m15

Cosentyx Stelara Taltz OtezlaCOSENTYX STELARA TALTZ OTEZLA

New

Pat

ient

Sta

rts

2018 I&I Franchise Outlook

Expand OTEZLA® Opportunity in Dermatology and Rheumatology Realize pre-biologic market opportunity for appropriate patients Data expected from Ph III trial in scalp psoriasis; Ph III in mild to moderate PSOR expected to initiate FDA decision on once-daily formulation; U.S. and Japan NDA submissions for Behçet’s disease

Maximize Ozanimod Opportunity in MS Incorporate supplemental nonclinical and clinical pharmacology data into NDA for resubmission Prepare U.S. and Europe registration dossiers

Advance Future Growth Drivers Advance Ph II development of CC-220 in SLE and CC-90001 in IPF Multiple assets entering early-stage clinical development

18

Evolve IBD Development Portfolio Complete enrollment of ozanimod Ph III TRUE NORTHTM trial in moderate to severe UC

expected by mid-2019 Begin Ph III trial initiation activities for OTEZLA® in mild to moderate UC

Jay Backstrom, MDChief Medical Officer


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0.3500.241 0.181

0.000

0.100

0.200

0.300

0.400

0.500

0.600

1

Adj

uste

d A

RR

(±95

% C

I)

0.276 0.218 0.1720

0.1

0.2

0.3

0.4

0.5

0.6

1

Adj

uste

d A

RR

(±95

% C

I)

Ozanimod Regulatory Filings Supported by Clinical Efficacy & Safety Data from Two Phase III Trials in Patients with RMS

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SUNBEAMTM – Over 1 year

448 451 447n

31% reductionP=0.0013

48% reductionP<0.0001

IFN β-1a 30 µg

(n= 885)

Ozanimod 0.5 mg

(n = 892)

Ozanimod 1.0 mg

(n = 882)

Any AE701

(79.2%)585

(65.6%)592

(67.1%)

Serious AE39

(4.4%)47

(5.3%)41

(4.6%)AE Leading to Study Drug Discontinuation

34(3.8%)

21(2.4%)

26 (2.9%)

Death on study** 01

(0.1%)0RADIANCETM PART B – Over 2 years

SUNBEAMTM and RADIANCETM PART B PooledSummary of Adverse Events

21% reductionP=0.0167 38% reduction

P<0.0001

441 439 433n

**Drowning, unrelated to treatment, on study day 637

• No subjects had a 2nd degree or higher AV block• Infection risk with ozanimod was comparable to

treatment with IFN β-1a (Avonex®) • Ozanimod resulted in low levels of liver enzyme

elevations

IFN β-1a Ozanimod 1.0 mgOzanimod 0.5 mg

Data from AAN 2018: Cree, et. al. #006 and Kappos, et.al, #005Based on the Poisson regression model, adjusted for region (Eastern Europe vs rest of world), age at baseline, and baseline number of gadolinium-enhancing lesions. Natural log transformation of time on study included as an offset term. ARR, annualized relapse rate; CI, confidence interval; IFN β-1a, interferon β-1a; ITT, intent-to-treat.

IFN β-1a Ozanimod 1.0 mgOzanimod 0.5 mg

U.S. & EU Ozanimod Regulatory Submissions Expected in Q1:19

21

Ozanimod and CC-112273 Profile

• Ozanimod is metabolized in humans to form one major active metabolite (CC-112273) and other minor active metabolites

• Characteristics of CC-112273 include:• Accounts for the majority of the total

activity of ozanimod in humans• Minor metabolite in animal species• Structurally similar to ozanimod• Similar potency and selectivity to

ozanimod for S1P1 and S1P5 • Tmax of 6-10 hours • Half-life of 10-13 days

Regulatory Path Forward

Following the Type A meeting with FDA in early April, our resubmission plan includes:– Bridging non-clinical studies– Utilizing existing PK/PD data

Additional human clinical efficacy and safety studies not needed

U.S. NDA resubmission expected in Q1:19

EU MAA submission expected in Q1:19

Nadim AhmedPresident, Hematology & Oncology


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Q1 2018 Hematology & Oncology Franchise ResultsQ1 2018 Hematology & Oncology Franchise Results

Strong Net Product Sales and Operating Momentum into 2018− Q1:18 net product sales: $3.2B, +17% Y/Y− Sales performance driven by strong demand across geographies and brands

Growth Drivers On Track− REVLIMID® continues to grow across geographies with NSCT and post-ASCT maintenance launches− POMALYST®/IMNOVID® growth continues through gains in market share and duration− Ph III data expected on luspatercept in MDS and beta-thalassemia, REVLIMID® in R/R FL,

ABRAXANE® in adjuvant pancreatic cancer

Advancement and Expansion of Innovative Pipeline− Advancing cellular immunotherapy leadership; Updated data on liso-cel (JCAR017) and bb2121

expected at ASCO. Completed enrollment in pivotal liso-cel TRANSCEND U.S. trial− Expansion of myeloid portfolio through the fedratinib acquisition− Advanced new MM assets JCARH125 (BCMA CAR T), CC-93269 (BCMA T cell engager) and CC-92480

(new CELMoD® compound) into the clinic

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$811$997

$1,234$1,487

$532

$577

$650

$747

Q1:15 Q1:16 Q1:17 Q1:18

U.S. ROW


Q1 2018 REVLIMID® Net Sales Summary Q1 2018 REVLIMID® Net Sales Summary

• Q1:18 sales $2,234M, +19% Y/Y• Strong front line launch momentum; market

share continues to grow ex-U.S.– REVLIMID® NSCT share growth continues ex-U.S.– Duration continues to grow globally

– Post-ASCT maintenance adoption in early launch markets

• Adoption of triplet combinations leading to increased duration and continuous treatment

• Potential future growth drivers Ph III AUGMENTTM study in relapsed indolent lymphoma

expected to read out in 2018

Ph III ROBUST® study in 1st line diffuse large B-cell lymphoma (event-driven)

REVLIMID®-based triplet regimen Ph III data readouts expected in NDMM during 2018

24

Net Sales ($M)

Certain prior year amounts have been rounded +/- $1M to conform to the current year rounding convention.

$1,343

$1,574

$1,884

$2,234


Q1 2018 POMALYST®/IMNOVID® Net Sales SummaryQ1 2018 POMALYST®/IMNOVID® Net Sales Summary

$129$171

$216

$300$70

$103

$148

$153

Q1:15 Q1:16 Q1:17 Q1:18

U.S. ROW

$274

$453

• Q1:18 sales $453M, +24% Y/Y• POMALYST®/IMNOVID® growth continues

– Strong momentum in the U.S. continues for POMALYST®

in combination with daratumumab and dex in RRMM– Share and duration trends increasing through the use of

triplet regimens • Potential future growth drivers

Ph III OPTIMISMM® trial of PVd in 2nd line+ MM (oral presentation at ASCO)

Newer triplet regimens expected to increase share and duration for POMALYST®/IMNOVID®

Net Sales ($M)

25Certain prior year amounts have been rounded +/- $1M to conform to the current year rounding convention.

$364

$199


Q1 2018 ABRAXANE® Net Sales SummaryQ1 2018 ABRAXANE® Net Sales Summary

$159 $144 $142 $159

$64 $81 $94$103

Q1:15 Q1:16 Q1:17 Q1:18

U.S. ROW

$223 $225$236

$262

Net Sales ($M)

26

• Q1:18 sales $262M, +11% Y/Y• Positive Q1 growth included impact of buying

patterns• Potential future growth drivers

Ph III apact® of ABRAXANE® in adjuvant pancreatic cancer data readout expected in 2018

Ph III I/O combination trials reporting out in 2018:IMpower131* squamous NSCLC IMpower130* non-squamous NSCLC IMpassion130* triple negative breast cancer

*IMpower130, IMpower131 and IMpassion130 are Genentech, a member of the Roche Group, sponsored clinical trials.Certain prior year amounts have been rounded +/- $1M to conform to the current year rounding convention.

Expected Data Presentations at ASCO 2018Expected Data Presentations at ASCO 2018

27

Ph III OPTIMISMM® trial with POMALYST® in combination with bortezomib and dexamethasone (PVd) in 2nd line+ MM

Ph III RELEVANCE® trial with REVLIMID® in combination with rituximab (R²) in patients with previously untreated FL

Ph III IMpower131* trial with ABRAXANE® in combination with atezolizumab in squamous NSCLC

Updated data from Ph I trial with bb2121 in RRMM Updated data from pivotal TRANSCEND U.S. trial with liso-

cel (JCAR017) in relapsed or refractory DLBCL

* IMpower131 is a Genentech, a member of the Roche Group, sponsored clinical trial.

2018 Hematology & Oncology Franchise Outlook2018 Hematology & Oncology Franchise Outlook

28

Commercial Portfolio On Track to Deliver Robust Results in 2018− Strong momentum continues for REVLIMID® and POMALYST®/IMNOVID®

− REVLIMID® positioned for continued growth in NSCT and post-ASCT maintenance settings − POMALYST®/IMNOVID® share and duration growth continues in RRMM

Positioned for Near-Term Growth with Upcoming Milestones− Ph III readout for AUGMENTTM (REVLIMID® in R/R FL)− Ph III readout for MEDALISTTM (luspatercept in MDS) and BELIEVETM (luspatercept in

beta-thalassemia)− Ph III readout for apact® (ABRAXANE® in adjuvant PanC)− Fedratinib U.S. NDA submission

Mid- and Late-Stage Pipeline Advancing− Advancing MM programs through two major campaigns: BCMA (bb2121, CC-93269), CELMoD®

compounds (CC-220, CC-92480) − Advancing leadership in lymphoma: liso-cel (JCAR017), CC-122− Additional pivotal programs advancing: tislelizumab (BGB-A317), marizomib, luspatercept

Q1 2018 Conference CallMay 4, 2018


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Use of Non-GAAP Financial Measures and

Reconciliation Tables


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Use of Non-GAAP Financial Measures

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In addition to financial information prepared in accordance with U.S. GAAP, this document also contains certain non-GAAP financial measures based on management’s view ofperformance including:

Adjusted research and development expense Adjusted selling, general and administrative expense Adjusted operating margin Adjusted net income Adjusted earnings per share

Management uses such measures internally for planning and forecasting purposes and to measure the performance of the Company. We believe these adjusted financial measuresprovide useful and meaningful information to us and investors because they enhance investors’ understanding of the continuing operating performance of our business andfacilitate the comparison of performance between past and future periods. These adjusted financial measures are non-GAAP measures and should be considered in addition to, butnot as a substitute for, the information prepared in accordance with U.S. GAAP. When preparing these supplemental non-GAAP financial measures we typically exclude certainGAAP items that management does not consider to be normal, recurring, cash operating expenses but that may not meet the definition of unusual or non-recurring items. Othercompanies may define these measures in different ways. The following categories of items are excluded from adjusted financial results:

Acquisition and Divestiture-Related Costs: We exclude the impact of certain amounts recorded in connection with business combinations and divestitures from our adjustedfinancial results that are either non-cash or not normal, recurring operating expenses due to their nature, variability of amounts, and lack of predictability as to occurrence and/ortiming. These amounts may include non-cash items such as the amortization of acquired intangible assets, amortization of purchase accounting adjustments to inventories,intangible asset impairment charges and expense or income related to changes in the estimated fair value measurement of contingent consideration and success payments. We alsoexclude transaction and certain other cash costs associated with business acquisitions and divestitures that are not normal recurring operating expenses, including severance costswhich are not part of a formal restructuring program.


32

Share-based Compensation Expense: We exclude share-based compensation from our adjusted financial results because share-based compensation expense, which is non-cash,fluctuates from period to period based on factors that are not within our control, such as our stock price on the dates share-based grants are issued.

Collaboration-related Upfront Expenses: We exclude collaboration-related upfront expenses from our adjusted financial results because we do not consider them to be normal,recurring operating expenses due to their nature, variability of amounts, and lack of predictability as to occurrence and/or timing. Upfront payments to collaboration partners aremade at the commencement of a relationship anticipated to continue for a multi-year period and provide us with intellectual property rights, option rights and other rights withrespect to particular programs. The variability of amounts and lack of predictability of collaboration-related upfront expenses makes the identification of trends in our ongoingresearch and development activities more difficult. We believe the presentation of adjusted research and development, which does not include collaboration-related upfront expenses,provides useful and meaningful information about our ongoing research and development activities by enhancing investors’ understanding of our normal, recurring operatingresearch and development expenses and facilitates comparisons between periods and with respect to projected performance. All expenses incurred subsequent to the initiation of thecollaboration arrangement, such as research and development cost-sharing expenses/reimbursements and milestone payments up to the point of regulatory approval are considered tobe normal, recurring operating expenses and are included in our adjusted financial results.

Research and Development Asset Acquisition Expense: We exclude costs associated with acquiring rights to pre-commercial compounds because we do not consider such costs to be normal, recurring operating expenses due to their nature, variability of amounts, and lack of predictability as to occurrence and/or timing. Research and development asset acquisition expenses includes expenses to acquire rights to pre-commercial compounds from a collaboration partner when there will be no further participation from the collaboration partner or other parties. The variability of amounts and lack of predictability of research and development asset acquisition expenses makes the identification of trends in our ongoing research and development activities more difficult. We believe the presentation of adjusted research and development, which does not include research and development asset acquisition expenses, provides useful and meaningful information about our ongoing research and development activities by enhancing investors’ understanding of our normal, recurring operating research and development expenses and facilitates comparisons between periods and with respect to projected performance.

Restructuring Costs: We exclude costs associated with restructuring initiatives from our adjusted financial results. These costs include amounts associated with facilities to be closed, employee separation costs and costs to move operations from one location to another. We do not frequently undertake restructuring initiatives and therefore do not consider such costs to be normal, recurring operating expenses.


33

Certain Other Items: We exclude certain other significant items that may occur occasionally and are not normal, recurring, cash operating expenses from our adjustedfinancial results. Such items are evaluated on an individual basis based on both the quantitative and the qualitative aspect of their nature and generally represent items that,either as a result of their nature or magnitude, we would not anticipate occurring as part of our normal business on a regular basis. While not all-inclusive, examples of certainother significant items excluded from adjusted financial results would be: significant litigation-related loss contingency accruals and expenses to settle other disputed mattersand, effective for fiscal year 2018, changes in the fair value of our equity securities upon the adoption of ASU 2016-01 (Financial Instruments-Overall: Recognition andMeasurement of Financial Assets and Financial Liabilities).

Estimated Tax Impact From Above Adjustments: We exclude the net income tax impact of the non-tax adjustments described above from our adjusted financial results. The netincome tax impact of the non-tax adjustments includes the impact on both current and deferred income taxes and is based on the taxability of the adjustment under local taxlaw and the statutory tax rate in the tax jurisdiction where the adjustment was incurred.

Non-Operating Tax Adjustments: We exclude the net income tax impact of certain other significant income tax items, which are not associated with our normal, recurringoperations (“Non-Operating Tax Items”), from our adjusted financial results. Non-Operating Tax Items include items which may occur occasionally and are not normal,recurring operating expenses (or benefits), including adjustments related to acquisitions, divestitures, collaborations, certain adjustments to the amount of unrecognized taxbenefits related to prior year tax positions, the impact of tax reform legislation commonly referred to as the Tax Cuts and Jobs Act (2017 Tax Act), and other similar items. Wealso exclude excess tax benefits and tax deficiencies that arise upon vesting or exercise of share-based payments recognized as income tax benefits or expenses due to theirnature, variability of amounts, and lack of predictability as to occurrence and/or timing.

See the attached Reconciliations of GAAP to Adjusted Net Income for explanations of the amounts excluded and included to arrive at the adjusted measures for the three-month periods ended March 31, 2018 and 2017, and for the projected amounts for the twelve-month period ending December 31, 2018.


34

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nded

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urin

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ted

ASU

201

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with

an

initi

al a

pplic

atio

n da

te o

f Jan

uary

1, 2

017.

Prio

r to

the

adop

tion

of A

SU 2

017-

12,

we

reco

gnize

d al

l cha

nges

in th

e fa

ir va

lue

of th

e ex

clud

ed c

ompo

nent

of a

hed

ge in

Oth

er in

com

e, n

et in

the

Con

solid

ated

Sta

tem

ents

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ncom

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k-to

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ket a

ppro

ach.

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suan

t to

the

prov

ision

s of

ASU

201

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, we

no lo

nger

reco

gnize

the

adju

stm

ents

to th

e fa

ir va

lue

of th

e ex

clud

ed c

ompo

nent

in O

ther

inco

me,

net

but

we

inst

ead

reco

gnize

the

initi

al v

alue

of t

he e

xclu

ded

com

pone

nt u

sing

an a

mor

tizat

ion

appr

oach

ove

r th

e lif

e of

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hedg

ing

inst

rum

ent.

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lts fo

r the

qua

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ende

d M

arch

31,

201

7 ha

ve b

een

reca

st to

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ct th

e ad

optio

n of

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201

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. The

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d M

arch

31,

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ater

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ously

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arch

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35

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nclu

ding

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0 re

late

d to

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o Th

erap

eutic

s, In

c. (J

uno)

, for

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thre

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end

thr

ee-m

onth

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ende

d M

arch

31,

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7.(2

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clud

e up

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men

t exp

ense

for r

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rch

and

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lopm

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tion

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.(3

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sear

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nd d

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linic

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nd d

evel

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ctiv

ity w

ind-

dow

n ch

arge

ass

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ted

with

the

disc

ontin

uanc

e of

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1 cl

inic

al tr

ials

in C

(5)

Excl

ude

amor

tizat

ion

of in

tang

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ass

ets

acqu

ired

in th

e ac

quisi

tions

of P

harm

ion

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p., G

louc

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r Pha

rmac

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la),

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ntic

el P

harm

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tical

s, In

c. (Q

uant

icel

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e ch

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nt c

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ion

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ted

to th

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quisi

tions

of G

louc

este

r, A

brax

is, A

vila

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ra P

harm

a Li

mite

d (N

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hang

es in

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o's

succ

ess

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ents

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quisi

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cost

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late

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ue to

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tion

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rum

ents

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ct o

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r non

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x Pr

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r ASU

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ted

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initi

al a

pplic

atio

n da

te o

f Jan

uary

1, 2

017.

Prio

r to

the

adop

tion

of A

SU 2

017-

12,

we

reco

gnize

d al

l cha

nges

in th

e fa

ir va

lue

of th

e ex

clud

ed c

ompo

nent

of a

hed

ge in

Oth

er in

com

e, n

et in

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solid

ated

Sta

tem

ents

of I

ncom

e un

der a

mar

k-to

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ket a

ppro

ach.

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suan

t to

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prov

ision

s of

ASU

201

7-12

, we

no lo

nger

reco

gnize

the

adju

stm

ents

to th

e fa

ir va

lue

of th

e ex

clud

ed c

ompo

nent

in O

ther

inco

me,

net

but

we

inst

ead

reco

gnize

the

initi

al v

alue

of t

he e

xclu

ded

com

pone

nt u

sing

an a

mor

tizat

ion

appr

oach

ove

r th

e lif

e of

the

hedg

ing

inst

rum

ent.

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resu

lts fo

r the

qua

rterly

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iod

ende

d M

arch

31,

201

7 ha

ve b

een

reca

st to

refle

ct th

e ad

optio

n of

ASU

201

7-12

. The

thre

e-m

onth

per

iod

ende

d M

arch

31,

201

7 in

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es th

e fo

llow

ing

imm

ater

ial r

evisi

ons

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revi

ously

issu

ed fi

nanc

ial r

esul

ts:

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e-M

onth

Per

iod

Ende

dM

arch

31,

201

7

Mar

ch 3

1,


36

Upd

ated

w

ithou

t Dilu

tion

from

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o

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ated

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ilutio

n fr

om

Juno

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ecte

d ne

t inc

ome

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AP

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6$

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of a

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red

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s):

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257

257

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tmen

t to

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ical

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l and

dev

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t act

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win

d-do

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ge(6

0)

(6

0)

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g, g

ener

al a

nd a

dmin

istra

tive:

Shar

e-ba

sed

com

pens

atio

n ex

pens

e 34

7

51

1

Am

ortiz

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n of

acq

uire

d in

tang

ible

ass

ets

257

319

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uisit

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ted

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ges

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ruct

urin

g, n

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nge

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ir va

lue

of c

ontin

gent

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n an

d su

cces

s pa

ymen

ts(3

0)

(1

6)

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cqui

sitio

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d ch

arge

s-

61

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er in

com

e, n

et:

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nges

in fa

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lue

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quity

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ents

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)

(950

)

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me

tax

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ision

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timat

ed ta

x im

pact

from

abo

ve a

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tmen

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3)

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on-o

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ents

(11)

(11)

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ecte

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t inc

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uste

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t inc

ome

per d

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~8.

95$

~

8.45

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eigh

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ted

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es75

5.0

75

5.0

(1)

Our

pro

ject

ed 2

018

earn

ings

do

not i

nclu

de th

e ef

fect

of a

ny b

usin

ess

com

bina

tions

, col

labo

ratio

n ag

reem

ents

, ass

et

acqu

isitio

ns, a

sset

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irmen

ts, l

itiga

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ted

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con

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ncy

accr

uals,

cha

nges

in th

e fa

ir va

lue

of o

ur C

VR

s iss

ued

as

part

of th

e ac

quisi

tion

of A

brax

is, c

hang

es in

the

fair

valu

e of

equ

ity in

vest

men

ts a

s pe

r ASU

201

6-01

(Fin

anci

al In

stru

men

ts-

Ove

rall:

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ogni

tion

and

Mea

sure

men

t of F

inan

cial

Ass

ets

and

Fina

ncia

l Lia

bilit

ies)

or n

on-o

pera

ting

tax

adju

stm

ents

that

m

ay o

ccur

afte

r the

day

prio

r to

the

date

of t

his

pres

s re

leas

e.

Cel

gene

Cor

pora

tion

and

Subs

idia

ries

Rec

onci

liatio

n of

Ful

l-Yea

r 20

18 P

roje

cted

GA

AP

to A

djus

ted

Net

Inco

me

(In m

illio

ns, e

xcep

t per

sha

re d

ata)

Appendix


PURSUITS IN SCIENCE


PURSUITS IN SCIENCE

1. Original guidance provided on January 2018 did not include the impact of our acquisition of Juno, which was expected to be dilutive to adjusted diluted EPS by approximately $0.50.2. Updated guidance May 2018

2018 Milestones2018 Milestones

Financial Performance Total revenue $14.4B-$14.8B1 Total revenue ~$14.8B2

REVLIMID® net sales ~$9.4B1 REVLIMID® net sales ~$9.5B2

POMALYST® net sales ~$1.9B1 POMALYST® net sales ~$2.0B2

OTEZLA® net sales ~$1.5B1

ABRAXANE® net sales ~$1B1

Adj. operating margin ~60%1 Adj. operating margin ~56%2

Adj. diluted EPS $8.70 to $8.901 Adj. diluted EPS ~$8.452

Clinical Data Ph III AUGMENTTM – REVLIMID® in R/R FL Ph III ROBUST ® – REVLIMID® in 1st Line ABC-subtype DLBCL Ph III apact® – ABRAXANE® in adjuvant PanC

Ph III OPTIMISMM® trial – POMALYST® in 2nd Line MM Ph III OTEZLA® in scalp PSOR Ph III QUAZAR® AML-001 – CC-486 in AML maintenance Ph III MEDALISTTM – Luspatercept in RS+ MDS Ph III BELIEVETM – Luspatercept in beta-thalassemia

Ph II OTEZLA ® in UC Trial EnrollmentComplete enrollment in Ph III TRUE NORTHTM – Ozanimod in UC– Ph III TRUE NORTHTM Moved to mid-2019

Complete enrollment in pivotal KarMMaTM trial – bb2121 in RRMM Complete enrolment in TRANSCEND WORLD – JCAR017 in DLBCL

Regulatory Submissions/Decisions Submit sNDA for RVd in NDMM Submit NDA for Fedratinib in myelofibrosis

FDA decision on Ozanimod in RMS FDA decision on OTEZLA ® once-daily formulation Submit sNDA for OTEZLA® in Behçet’s disease

Submit a Marketing Authorization Application (MAA) for Ozanimod in RMS

Trial Initiations Initiate the pivotal program with CC-122 in NHL Initiate Ph III with OTEZLA® in UC Initiate the pivotal program with BGB-A317 in NSCLC Initiate Ph III with OTEZLA® in mild-to-moderate PSOR Initiate Ph III trial with bb2121 in 3rd Line+ MM Initiate Ph III trial with JCAR017 in TE 2nd line DLBCL Initiate Ph III COMMANDSTM with Luspatercept in 1st line, lower-risk MDS Initiate Ph III trial with Ozanimod in SPMS

R&ED File at least 5 IND’s

38

X

X

X

REVLIMID®

Del 5q MDS

VIDAZA®

MDS, AML

IDHIFA®

IDH2 RRAML

CC-486 MDS, AML Luspatercept

MDS, Beta-thalassemia

CC-90002AML

CC-90009RRAML

FT-1101MDS, AML

MyeloidDisease

11

Inflammation& Immunology

12

OzanimodMS

OTEZLA®

PSOR, PSA

OTEZLA®

Behçet’s, Scalp PSOR

RPC-4046EoE

OTEZLA®

UC

CC-220SLE

CC-90001 IPF

CC-90006PSOR

FT-4101NASH

LYC-30937UC, PSOR

MarketPh I

L E G E N D

REVLIMID®

MCL

ISTODAX®

PTCL, CTCL

REVLIMID®

NHL

CC-122NHL, CLL

JCAR017NHL

CC-486NHL

Lymphoma& Leukemia

10

LuspaterceptMF

CC-90002NHL

Advancing a High Quality Pipeline with Significant Potential

Celgene has an exclusive option to license JTX-2011, navicixizumab, OMP-313M32, FT-1101, FT-4101, AG-881 and an option to acquire LYC-55716, LYC-30937and MSC-1.

CC-90010NHL

bb21217RRMM

REVLIMID®

NDMM, RRMM

POMALYST®

RRMM

THALOMID®

NDMM, RRMM

CC-220RRMM

bb2121RRMM

CC-92480RRMM

MultipleMyeloma

9

MarizomibGBM

CC-122HCC

CC-90002Solid Tumors


ABRAXANE®

PanC, NSCLC, mBC

AG-881Glioma

SolidTumors

14OMP-313M32

Solid Tumors

navicixizumabSolid Tumors

LYC-55716Solid Tumors

JTX-2011Solid Tumors


BGB-A317Solid Tumors

OzanimodUC

OzanimodCD

FedratinibMF

FT-1101NHLCC-93269

RRMM

JCARH125RRMM MSC-1

Solid Tumors

JCAR017CLL

GEM333AML

AG-270Solid Tumors

Return On Invested Capital (ROIC): Focused on Efficient Growth

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1:18 (TTM)

Capital Base Excluding Cash* Capital Base ROIC Excluding Cash* ROIC

Aver

age

Inve

sted

Cap

ital

$ B

illio

n

ROIC

*For purposes of this calculation, cash includes cash and cash equivalents and marketable debt securities and publicly-traded equity securities.

Footnote: Financial performance is based on GAAP operating income adjusted to reflect amortization of certain charges excluded from 2008 calculation and tax impact. Calculation for 2015 includes expenses driven by the Juno Therapeutics and AstraZeneca collaborations and expenses incurred in connection with the acquisition of Receptos as well as the impact of the August 2015 debt issuance on the capital base. Refer to reconciliation tables for complete calculation methodology. Calculation revised in 2015 for all prior periods to reflect amortization of certain charges excluded from 2008 calculation. 40

Multiple Myeloma Late-Stage/Pivotal Programs

Patient Population RRMM RRMM

Molecule POMALYST®/IMNOVID® bb2121

Trial NameMM-007

OPTIMISMM®

BB2121-MM-001KarMMaTM

Phase III II

Target Enrollment 559 94

Design

Arm A: POMALYST®/IMNOVID®

(4mg) + bortezomib (1.3 mg/m2 IV) + low-dose dexamethasone to

disease progressionArm B: Bortezomib (1.3 mg/m2 IV)

+ low-dose dexamethasone to disease progression

bb2121 autologous CAR T cells (infused at a dose ranging from 15 -30 x 107 CAR T cells after receiving

lymphodepleting chemotherapy)

Primary Endpoint Progression Free Survival ORR

StatusPrimary endpoint met

Data to be presented at ASCO 2018

Trial enrolling

41

MDS/AML/MF Late-Stage/Pivotal Programs

Patient Population Low risk/INT-1 transfusion-dependent MDS Post induction AML Maintenance

MoleculeCC-486

(Oral Azacitidine)CC-486

(oral azacitidine)

Trial Name AZA-MDS-003 CC-486-AML-001

Phase III III


DesignArm A: CC-486 (300mg daily D1-21 of a 28-D cycle) +

best supportive careArm B: Placebo + best supportive care

Arm A: CC-486 (300mg D1-14 of 28-D cycle)Arm B: Best supportive care

Primary Endpoint RBC-transfusion independence for more than 12 weeks Overall Survival

Status Trial enrollingEnrollment complete

Data expected in 2018

42


Patient Population Anemia in to Very Low-, Low-, or Intermediate-Risk MDS

Red Blood Cell Transfusion Dependent Beta-Thalassemia

Molecule Luspatercept Luspatercept

Trial Name MEDALISTTM BELIEVETM

Phase III III


DesignArm A: Luspatercept (starting dose of 1.0 mg/kg

subcutaneous injection every 3 weeks)Arm B: Placebo (subcutaneous injection every 3

weeks)

Arm A: Luspatercept (1 mg/kg) + best supportive care

Arm B: Placebo + best supportive care

Primary Endpoint Red Blood Cell Transfusion Independence (RBC-TI) ≥ 8 weeks

Proportion of subjects with hematological improvement from Week 13 to Week 24 compared to

12-week prior to randomization

StatusEnrollment complete

Data expected in mid-2018Enrollment complete

Data expected in mid-2018

43


Patient Population IDH2 Mutant AML

Molecule IDHIFA®

Trial Name IDHENTIFYTM

Phase III

Target Enrollment 316

DesignArm A: IDHIFA® (100 mg daily, 28-D cycle) + best

supportive careArm B: Best supportive care

Primary Endpoint Overall Survival

Status Trial enrolling

44

Lymphoma Late-Stage/Pivotal Programs

Patient Population Relapsed or Refractory Follicular Lymphoma

Newly Diagnosed Follicular Lymphoma

Untreated Activated B-Cell DLBCL

Molecule REVLIMID® REVLIMID® REVLIMID®

Trial NameAUGMENTTM

NHL-007RELEVANCE®

ROBUST®

DLC-002

Phase III III III

Target Enrollment 358 1,031 570

Design

Arm A: REVLIMID® (10-20mg, D1-21) + rituximab (375 mg/m2 weekly for cycle 1

then D1 of cycles 2-5 for 5 28-day cycles)

Arm B: Placebo (D1-21) + rituximab (375 mg/m2 weekly for cycle 1 then D1

of cycles 2-5 for 5 28-day cycles)

Arm A: REVLIMID® (starting dose 20mg,

D2-22 for up to 18 28-day cycles) + rituximab (starting dose 375 mg/m2

weekly for up to 12 28-day cycles)Arm B: Physician’s choice of

Rituximab-CHOP, Rituximab-CVP or Rituximab-bendamustine

Arm a: REVLIMID® (15mg, D1-14) + R-CHOP21 (6 21-day cycles)Arm B: Placebo + R-CHOP21

(6 21-day cycles)

Primary Endpoint Progression Free Survival Complete Response Rate and Progression Free Survival Progression Free Survival


Data in H1:18E

Trial did not achieve superiority in co-primary endpoints

Data to be presented at ASCO 2018

Trial enrollingEvent-driven trial

45


Patient Population Relapsed or Refractory Indolent Lymphoma TRANSCEND

Molecule REVLIMID®JCAR017

(lisocabtagene maraleucel; liso-cel)

Trial NameMAGNIFYTM

NHL-008TRANSCENDTM

Phase III I


Design

Arm A: REVLIMID® (10-20mg, D1-21) + rituximab (375 mg/m2

weekly for cycle 1 then D1 of cycles 3, 5,7,9 and 11 for 12 28-day cycles) followed by REVLIMID® (10mg, D1-21) + rituximab (375

mg/m2 D1 of cycles 13,15,17,19,21,23,25,27 and 29 for 18 28-day cycles) followed by REVLIMID® (10mg, D1-21 until disease

progression, 28 day cycle)Arm B: REVLIMID® (10-20mg, D1-21) + rituximab (375 mg/m2

weekly for cycle 1 then D1 of cycles 3, 5,7,9 and 11 for 12 28-day cycles) followed by REVLIMID® (10mg, D1-21) + rituximab (375

mg/m2 D1 of cycles 13,15,17,19,21,23,25,27 and 29 for 18 28-day cycles)

Arm A: JCAR017 single-dose scheduleArm B: JCAR017 2-dose schedule

Primary Endpoint Progression Free Survival Objective Response Rate; Safety

StatusTrial enrolling

Data expected in 2020Enrollment complete

46


Patient Population Aggressive Relapsed or Refractory B-Cell Lymphoma

MoleculeJCAR017

(lisocabtagene maraleucel; liso-cel)

Trial Name TRANSCEND WORLDTM

Phase II

Target Enrollment 124

DesignArm A: JCAR017 (1 x 108 positive transfected viable T cells on D

1; 2 to 7 days after completion of lymphodepleting chemotherapy).

Primary Endpoint Overall Response Rate

Status Trial not yet enrolling

47

Solid Tumor Late-Stage/Pivotal Programs

Patient Population Adjuvant Therapy in Surgically Resected Pancreatic Cancer Newly Diagnosed Glioblastoma

Molecule ABRAXANE® Marizomib

Trial NamePANC-003

apact®EORTC-BTG-1709

Phase III III


Design

Arm A: ABRAXANE® (125 mg/m2); Gemcitabine (1000 mg/m2) D1,8,15 for 6 28-

day cyclesArm B: Gemcitabine (1000 mg/m2) D1,8,15

for 6 28-day cycles

Arm A: Radiotherapy + temozolomide + marizomib followed by adjuvant

temozolomide + marizomib

Arm B: Radiotherapy + temozolomide followed by adjuvant temozolomide

Primary Endpoint Disease Free Survival Overall Survival


Data expected in 2018Trial not yet enrolling

48

I&I Late-Stage/Pivotal Programs

Patient Population Active Behçet’s Disease Scalp Psoriasis

Molecule OTEZLA® OTEZLA®

Trial NameBCT-002RELIEF®

SPSO-001STYLETM

Phase III III


DesignArm A: Placebo (for 12 weeks) followed by OTEZLA® (30mg twice daily for 52 weeks)Arm B: OTEZLA® (30mg twice daily for 64

weeks)

Arm A: Placebo (for 16 weeks) followed by OTEZLA® (30mg twice daily for 16 weeks)

Arm B: Placebo (for 32 weeks)

Primary Endpoint Area under the curve (AUC) for the number of oral ulcers from baseline through week 12

Proportion of subjects with ScPGA score of clear (0) or almost clear (1) with at least a 2-

point reduction from baseline at Week 16

StatusMet primary endpoint

Data presented at AAD 2018Regulatory submissions planned

Trial enrolling

49

I&I Late Stage Programs

Patient Population Moderate to Severe Ulcerative Colitis

Moderately to Severely Active Crohn's Disease

Moderately to Severely Active Crohn's Disease

Molecule Ozanimod Ozanimod Ozanimod

Trial Name TRUE NORTHTM RPC01-3201 RPC01-3202

Phase III III III

Target Enrollment 900 600 600

DesignArm A: Ozanimod (1mg daily) for

induction and maintenanceArm B: Placebo induction and

maintenance

Arm A: Ozanimod (0.92 mg daily) with a 7-day dose escalation

Arm B: Placebo

Arm A: Ozanimod (0.92 mg daily) with a 7-day dose escalation

Arm B: Placebo

Primary EndpointClinical remission assessed by Mayo component sub-scores at week 10

Clinical remission assessed by Mayo component sub-scores at week 52

Proportion of subjects with a CDAI score < 150 at Week 12

Proportion of subjects with a CDAI score < 150 at Week 12

Status Enrollment expected to complete by mid-2019 Trial enrolling Trial enrolling

50

I&I Late Stage Programs

Patient Population

Maintenance for Moderately to Severely Active Crohn's Disease

Relapsing Multiple Sclerosis Relapsing Multiple Sclerosis

Molecule Ozanimod Ozanimod Ozanimod

Trial Name RPC01-3203 SUNBEAMTM RADIANCETM

Phase III III III

Target Enrollment 485 ~1,300 ~1,300

DesignArm A: Ozanimod (0.92 mg daily

for 40 weeks)Arm B: Placebo (daily for 40

weeks)

Arm A: Ozanimod (0.5mg daily) + placebo IM weekly

Arm B: Ozanimod (1mg daily) + placebo IM weekly

Arm C: Placebo (daily) + beta-interferon IM weekly

Arm A: Ozanimod (0.5mg daily) + placebo IM weekly

Arm B: Ozanimod (1mg daily) + placebo IM weekly

Arm C: Placebo (daily) + beta-interferon IM weekly

Primary Endpoint

Proportion of subjects with a CDAI score of < 150 at week 40

Proportion of subjects with a (SES-CD) score decrease from baseline of ≥ 50% at week 40

Annualized relapse rate at month 12 Annualized relapse rate at month 24

Status Trial not yet enrolling

Data presented at ECTRIMS 2017 and AAN 2018

NDA expected to be resubmitted in Q1:19; MAA expected to be submitted in

Q1:19

Data presented at ECTRIMS 2017 and AAN 2018

NDA expected to be resubmitted in Q1:19; MAA expected to be submitted in Q1:19

51

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