Celgene Reports Record Fourth Quarter and Full Year 2008 Product Sales and Operating Profits

--
REVLIMID(R) #1 Therapy in Multiple
Myeloma Worldwide

--
European Launch of VIDAZA(R)
Commencing

--
REVLIMID U.S. Duration of Therapy Increased Greater Than 25
Percent Year-Over-Year to More Than 10 Months

--
Global Expansion from Nearly 30 to More Than 65 Countries

2008 Fourth Quarter Financial Results
Year-Over-Year:

--
Non-GAAP Total Revenue Increased More Than 50 Percent to $623
Million; GAAP Total Revenue $628 Million

--
REVLIMID Net Product Sales Increased 49 Percent to $369 Million

--
Global THALOMID(R) / Thalidomide Net Product
Sales $127 Million

--
VIDAZA Net Product Sales Increased to $70 Million

--
Non-GAAP Operating Income Increased Over 45 Percent to $228
Million; GAAP Operating Loss $134 Million (Includes VIDAZA Royalty Buy
Back)

--
Non-GAAP Net Income Increased to $201 Million; GAAP Net Loss $149
Million

--
Non-GAAP Earnings Per Share Increased to $0.43 Per Diluted Share;
GAAP Loss $0.33 Per Diluted Share

2008 Full Year Financial Results
Year-Over-Year:

--
Non-GAAP Total Revenue Increased 59 Percent to $2.238 Billion; GAAP
Total Revenue $2.255 Billion

--
REVLIMID Net Product Sales Increased 71 Percent to $1.325 Billion

--
Global THALOMID / Thalidomide Net Product Sales Reached $505 Million

--
VIDAZA Net Product Sales Since the Acquisition of Pharmion in March
2008 Reached $207 Million

--
Non-GAAP Operating Income Increased More Than 60 Percent to $848
Million; GAAP Operating Loss $1.464 Billion (Includes Pharmion
Acquisition and VIDAZA Royalty Buy Back)

--
Non-GAAP Net Income Increased to $719 Million; GAAP Net Loss $1.534
Billion

--
Non-GAAP Diluted Earnings Per Share Increased to $1.56; GAAP Loss
$3.46 Per Diluted Share

2009 Financial Outlook Year-Over-Year:

--
Non-GAAP Total Revenue Expected to Increase Approximately 20
Percent to a Range of $2.6 Billion to $2.7 Billion

--
REVLIMID(R) Net Product Sales Anticipated to
Increase About 28 Percent to Approximately $1.7 Billion

--
VIDAZA(R) Net Product Sales Anticipated to
Nearly Double to Approximately $400 Million

--
Non-GAAP Diluted Earnings Per Share Expected to Increase
Approximately 35 Percent to a Range of $2.05 to $2.15

Recent Developments and Highlights:

--
European Commercial Rollout of VIDAZA Underway with Initial Launch
in Germany

--
The U.S. Patent and Trademark Office Granted New REVLIMID
Composition of Matter Patent with Term to 2026 - Added to Orange Book

--
REVLIMID Now Compendia Listed for Chronic Lymphocytic Leukemia
(CLL) in the United States

--
The U.S. Patent and Trademark Office Granted New Thalidomide Patent
- THALOMID(R) in Combination with Dexamethasone
for Blood-Borne Cancers with Term to 2017 - Added to Orange Book

--
Initiated Phase II Special Protocol Assessment (SPA) EMERGE Trial
in Relapsed/Refractory Mantle Cell Lymphoma (MCL)

--
Received Approval for Two REVLIMID Phase III SPA Trials in CLL

--
The U.S. Patent and Trademark Office Granted Celgene Cellular
Therapeutics a Composition of Matter Patent With Broad Claims to
Celgene for Placenta-Derived Adherent Cells (PDAC)

--
More Than 325 Abstracts and 379 Peer-Reviewed Publications on
REVLIMID, THALOMID, VIDAZA and Pomalidomide Worldwide

--
REVLIMID and Standard-Dose Dexamethasone Following Stem Cell
Transplant Resulted in Unprecedented 92 Percent Three-Year Survival
Rate - Presented at the American Society of Hematology Meeting

--
Premier Lymphoma International Cooperative Group GELA Selected
REVLIMID for Phase III Maintenance Trial in Diffuse Large B-Cell
Lymphoma After First Line Therapy

--
Advanced Inflammation Franchise Initiative Through Planning or
Initiation of More Than 20 Clinical Trials Worldwide Including
Initiation of Phase II International Study of Apremilast, Our Lead
Oral Inflammation Candidate, in Behcet's Disease

--
ACE-011 Results Published in the Journal of Bone and Mineral
Research Highlighting Unique Mechanism of Action of Activin
Biology and the Broad Clinical Potential of ACE-011 in a Variety of
Diseases Involving Bone Loss, Published Online December 1, 2008

2009 Selected Corporate Objectives:

--
Maximize the Clinical, Regulatory, and Commercial Potential of
REVLIMID(R), VIDAZA(R),
Global THALOMID(R)/Thalidomide and Pomalidomide
in Nearly 75 Countries

--
Execute Launch of VIDAZA in Higher-Risk Myelodysplastic Syndromes
(MDS) and Acute Myeloid Leukemia (AML) in the Rest of the European
Union

--
Submit REVLIMID Regulatory Filing for MM and Del 5Q MDS in Japan

--
Gain REVLIMID Reimbursement Approvals in UK, Canada, Australia and
Other Countries

--
Submit Data to FDA to Evaluate REVLIMID as Treatment for Newly
Diagnosed Multiple Myeloma

--
Advance REVLIMID Lymphoma Initiative Through More Than 46 Clinical
Trials Worldwide Including Initiation of Non-Hodgkin's Lymphoma (NHL)
Phase III SPA Trial in MCL Maintenance Study, as well as Pivotal Phase
II SPRINT Trial in Relapsed/Refractory MCL Study

--
Advance REVLIMID Leukemia Initiative Through More Than 35 Clinical
Trials Worldwide Including Initiation of Phase III SPA ORIGIN
Trial (CLL-008) in Untreated, Elderly Patients, the Largest Patient
Population in CLL, and Advancing Phase III SPA CONTINUUM Trial
in Maintenance CLL

--
Advance Lead Solid Tumor Candidate Amrubicin Phase III Clinical
Study in Small Cell Lung Cancer

--
Expand IMiDs(R) Pipeline by Advancing
Pomalidomide Clinical and Regulatory Strategies as Treatment in MM and
First-Line Myelofibrosis

--
Advance Global Strategies for Oral Anti-Inflammatory Compound
Apremilast in Psoriasis, Psoriatic Arthritis and Ankylosing
Spondylitis by Completing Phase IIb Clinical Trial (PSOR 005) in
Moderate-to-Severe Psoriasis as well as Phase II Dosing Study
(PSA-001) in Psoriatic Arthritis

--
Leverage Clinical Potential of Activin Biology by Completing
Celgene/Acceleron Phase II Study of ACE-011 in MM Patients With
Cancer-Related Bone Loss, as well as Initiating Phase II Study of
ACE-011 in Metastatic Breast Cancer

--
Complete First-in-Class JNK Inhibitor CC-930 Phase Ib Multiple Dose
Study in Healthy Volunteers Leading to Clinical Development Programs
in Serious Fibrotic Diseases

--
Complete Phase I Proof-of-Principle Study for Proprietary PDA-001
Placenta-Derived Stem Cells in Crohn's Disease

Celgene Corporation (NASDAQ: CELG | Quote | Chart | News | PowerRating) announced non-GAAP (Generally
Accepted Accounting Principles) net income of $200.9 million, or
non-GAAP earnings per diluted share of $0.43 for the quarter ended
December 31, 2008. Based on U.S. GAAP, Celgene reported a net loss of
$149.3 million, or a loss per diluted share of $0.33 for the quarter
ended December 31, 2008, including the after-tax impact of share-based
employee compensation expense of $24.3 million. GAAP net income for the
fourth quarter of 2007 was $75.3 million, or earnings per diluted share
of $0.18, including the after-tax impact of share-based employee
compensation expense of $15.3 million.

Non-GAAP total revenue was $623.4 million for the quarter ended December
31, 2008, an increase of more than 50 percent from 2007. GAAP total
revenue was $628.3 million. The increase in total revenue was driven by
global market share gains and increased duration of therapy of REVLIMID(R).
This resulted in REVLIMID net sales of $369.4 million, an increase of
more than 49 percent over the same period in 2007. Global THALOMID(R)/Thalidomide
and VIDAZA(R) net sales reached $126.8 million and $69.7
million, respectively. ALKERAN(R) net sales for the fourth
quarter of 2008 were $24.4 million compared to $20.0 million in the
fourth quarter of 2007. As of March 31, 2009, ALKERAN will no longer be
commercialized by Celgene as we conclude the ALKERAN license agreement
with GlaxoSmithKline. Revenue from Focalin(R) and the Ritalin(R)
family of drugs totaled $27.9 million for the fourth quarter of 2008
compared to $28.4 million over the same period last year.

For the full year of 2008, non-GAAP total revenue was a record $2.238
billion, an increase of 59 percent year-over-year. GAAP total revenue
was $2.255 billion. Total non-GAAP net product sales reached a record
$2.121 billion, an increase of 63 percent year-over-year. REVLIMID net
sales for the full year 2008 reached $1.325 billion compared to $773.9
million in 2007. Global THALOMID/Thalidomide net sales for the full year
2008 were $504.7 million. VIDAZA net sales for the full year 2008
reached $206.7 million. Celgene posted non-GAAP net income of $718.8
million or non-GAAP earnings per diluted share of $1.56 during the full
year 2008. For the full year of 2008, on a GAAP basis, Celgene reported
a net loss of $1.534 billion or a loss per diluted share of $3.46,
compared to GAAP net income of $226.4 million or earnings per diluted
share of $0.54 in 2007.

To support clinical development and to advance global regulatory
filings, the company increased R&D investments in multiple international
clinical programs around a deepened and diversified pipeline. For the
fourth quarter of 2008, non-GAAP R&D expenses were $153.8 million
compared to $93.6 million for the fourth quarter of 2007. These R&D
expenditures continue to support ongoing clinical progress in multiple
proprietary development programs for REVLIMID, pomalidomide and other
IMiDs compounds; VIDAZA; amrubicin, our lead compound for small cell
lung cancer; apremilast and our oral anti-inflammatory compounds; as
well as our kinase inhibitor programs; our Activin inhibitor program and
placenta-derived stem cell programs. On a GAAP basis, R&D expenses were
$468.6 million for the fourth quarter of 2008, including share-based
employee compensation expense and the purchase of the VIDAZA royalty
obligation.

Non-GAAP selling, general and administrative expenses were $181.7
million for the fourth quarter of 2008 compared to $119.3 million for
the fourth quarter of 2007. The increase is due to marketing and sales
expenses related to product launch activities in Western Europe, the
re-launch of VIDAZA in the U.S. as a result of the expanded survival
label and continued expansion of the international operations of Celgene
in over 65 countries and regions including Eastern Europe, Japan,
Australia, Canada, Russia, Southeast Asia, and Latin America. On a GAAP
basis, selling, general and administrative expenses were $200.2 million
for the fourth quarter of 2008, including share-based employee
compensation expense.

For the quarter ended December 31, 2008, interest and other income, net,
increased to $34.9 million compared to $28.1 million in the same period
in 2007.

Celgene reported $2.222 billion in cash, cash equivalents, and
marketable securities as of December 31, 2008, a decrease of $517
million over the year ended December 31, 2007. This reflects the net
cash component related to the acquisition of Pharmion of $747 million
and the purchase of a previous royalty obligation for VIDAZA for all
future periods of $425 million, partly offset by cash generated from
operations during the year.

"2008 was an exceptional year for Celgene as we continued to build a
major global biopharmaceutical company," said Celgene Chairman and Chief
Executive Officer Sol J. Barer, Ph.D. "We delivered impressive financial
results. We strengthened our global business franchise in hematology. We
significantly advanced our clinical programs, and strengthened our
pipeline of early stage compounds. We have never been more optimistic
about our prospects, and we look forward to exceptional growth over the
next five years, and beyond."

See the attached Reconciliation of GAAP to Non-GAAP Net Income (Loss)
for an explanation of the amounts excluded and included to arrive at
non-GAAP net income and non-GAAP earnings per share amounts for the
three-month and full year periods ended December 31, 2008 and 2007.
Non-GAAP financial measures provide investors and management with
supplemental measures of operating performance and trends that
facilitate comparisons between periods before, during and after certain
items that would not otherwise be apparent on a GAAP basis. Certain
unusual or non-recurring items that management does not believe affect
the company's basic operations do not meet the GAAP definition of
unusual or non-recurring items. Non-GAAP net income and non-GAAP
earnings per share are not, and should not be viewed as a substitute for
similar GAAP items. We define non-GAAP diluted earnings per share
amounts as non-GAAP net income divided by the weighted average number of
diluted shares outstanding. Our definition of non-GAAP net income and
non-GAAP diluted earnings per share may differ from similarly named
measures used by others.

Corporate Developments

Jerome B. Zeldis, M.D., Ph.D. has been appointed Chief Executive Officer
of Celgene Global Health, a newly created group that will apply
Celgene's science, technology, resources and expertise towards
developing solutions for major health problems in underdeveloped
countries. Dr. Zeldis will retain his title as Chief Medical Officer of
Celgene Corporation.

Celgene's Global Clinical Research and Development in hematology and
oncology will be led by Jean-Pierre Bizzari, M.D., Senior VP of
Oncology/Hematology, who will report to Sol J. Barer, Ph.D, Chairman and
Chief Executive Officer of Celgene Corporation. Dr. Bizzari brings to
Celgene significant global experience in the successful clinical
development of multiple cancer therapies. Dr. Bizzari joined Celgene
from sanofi-aventis where he was Vice President for Clinical Development
Oncology.

Webcast

Celgene will host a conference call to discuss the results and
achievements of its fourth quarter 2008 and full year 2008 operating and
financial performance on January 29, 2009, at 9 a.m. EST. The conference
call will be available by webcast at www.celgene.com.
An audio replay of the call will be available from noon January 29,
2009, until midnight EST February 5, 2009. To access the replay, in the
U.S. dial 1-888-203-1112; outside the U.S. dial 1-719-457-0820; and
enter reservation number 1175478. The Company's first quarter 2009
financial and operational results will be reported in late April 2009.

About Celgene

Celgene Corporation, headquartered in Summit, New Jersey, is an
integrated global biopharmaceutical company engaged primarily in the
discovery, development and commercialization of novel therapies for the
treatment of cancer and inflammatory diseases through gene and protein
regulation. For more information, please visit the Company's Web site at www.celgene.com.

This release contains certain forward-looking statements which
involve known and unknown risks, delays, uncertainties and other factors
not under the Company's control, which may cause actual results,
performance or achievements of the Company to be materially different
from the results, performance or other expectations implied by these
forward-looking statements. These factors include results of current or
pending research and development activities, actions by the FDA and
other regulatory authorities, and those factors detailed in the
Company's filings with the Securities and Exchange Commission such as
Form 10-K, 10-Q and 8-K reports.

Celgene Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
Net product sales $ 596,122 $ 380,531 $ 2,137,678 $ 1,300,441
Collaborative agreements and other revenue 4,986 5,589 14,945 20,109
Royalty revenue 27,147 28,470 102,158 85,270
Total revenue 628,255 414,590 2,254,781 1,405,820
Cost of goods sold (excluding amortization expense) 67,814 45,371 258,267 130,211
Research and development 468,568 99,114 931,218 400,456
Selling, general and administrative 200,203 130,294 685,547 440,962
Amortization of acquired intangible assets 26,125 2,315 103,967 9,070
Acquired in-process research and development - - 1,740,000 -
Total costs and expenses 762,710 277,094 3,718,999 980,699
Operating income (loss) (134,455 ) 137,496 (1,464,218 ) 425,121
Equity in losses of affiliated companies 966 1,150 9,727 4,488
Interest and other income, net 34,850 28,148 105,120 96,336
Income (loss) before income taxes (100,571 ) 164,494 (1,368,825 ) 516,969
Income tax provision 48,690 89,172 164,828 290,536
Net income (loss) $ (149,261 ) $ 75,322 $ (1,533,653 ) $ 226,433
Per common Share:
Net income (loss) - basic $ (0.33 ) $ 0.19 $ (3.46 ) $ 0.59
Net income (loss) - diluted $ (0.33 ) $ 0.18 $ (3.46 ) $ 0.54
Weighted average shares - basic 458,742 390,301 442,620 383,225
Weighted average shares - diluted 458,742 433,850 442,620 431,858
December 31, December 31,
2008 2007
Balance sheet items:
Cash, cash equivalents & marketable securities $ 2,222,091 $ 2,738,918
Total assets 4,445,270 3,611,284
Convertible notes - 196,555
Stockholders' equity 3,491,328 2,843,944

Celgene Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Net Income (Loss)
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
Net income (loss) - GAAP $ (149,261 ) $ 75,322 $ (1,533,653 ) $ 226,433
Before tax adjustments:
Net product sales:
Pharmion products to be divested (1 ) (4,812 ) - (16,965 ) -
Cost of goods sold (excluding amortization expense):
Share-based compensation expense (2 ) 706 681 2,535 2,061
Pharmion inventory step-up (3 ) 5,977 - 24,646 -
Pharmion products to be divested (1 ) 1,934 - 6,950 -
EntreMed intercompany royalty (4 ) (444 ) (482 ) (843 ) (910 )
Research and development:
Share-based compensation expense (2 ) 11,742 5,520 44,007 16,685
Upfront collaboration payment (5 ) - - 45,000 41,050
Purchase of VIDAZA royalty obligation (6 ) 303,069 - 303,069 -
Selling, general and administrative:
Share-based compensation expense (2 ) 18,480 10,993 60,036 35,963
Amortization of acquired intangible assets (7 ) 26,125 2,315 103,967 9,070
Acquired in-process research and development (8 ) - - 1,740,000 -
Equity in losses of affiliated companies:
Equity in losses of EntreMed (9 ) 750 947 3,571 3,978
Interest and other income, net
Share-based compensation expense (2 ) - - - 4,116
Income tax adjustment (10 ) (13,367 ) (697 ) (63,559 ) (32,812 )
Net income - non-GAAP $ 200,899 $ 94,599 $ 718,761 $ 305,634
Per common share as adjusted:
Net income - basic $ 0.44 $ 0.24 $ 1.62 $ 0.80
Net income - diluted (11 ) $ 0.43 $ 0.22 $ 1.56 $ 0.72

Explanation of adjustments:
(1) Exclude sales and cost of sales related to former non-core Pharmion
Corp. products to be divested.
(2) Exclude SFAS 123R share-based compensation expense for the fourth
quarter totaling $30,928 in 2008 and $17,194 in 2007. The after
tax net impact reduced GAAP net income for the fourth quarter by
$24,251, or $0.05 per diluted share in 2008 and $15,332, or $0.04
per diluted share in 2007. Exclude SFAS 123R share-based
compensation expense for the twelve-month period totaling $106,578
in 2008 and $58,825 in 2007. The after tax net impact reduced GAAP
net income for the twelve-month period by $85,051, or $0.19 per
diluted share in 2008 and $48,605, or $0.11 per diluted share in
2007.
(3) Exclude acquisition related Pharmion Corp. inventory step-up
adjustment to fair value expensed during the period.
(4) Exclude the Company's share of THALOMID royalties payable to
EntreMed, Inc.
(5) Exclude upfront payment for research and development collaboration
arrangement with Acceleron Pharma, Inc. for the twelve-month
period in 2008 and exclude a combined $41,050 in upfront payments
for collaborative research and development arrangements with Array
Bio Pharma Inc. and PTC Therapeutics for the twelve-month period
in 2007.
(6) Exclude the purchase of VIDAZA royalty obligations related to
unapproved forms.
(7) Exclude amortization of acquired intangible assets for the fourth
quarter resulting from the acquisitions of Pharmion Corp. of
$26,125 in 2008 and Penn T of $2,315 in 2007. Exclude amortization
for the twelve-month period from the acquisitions of Pharmion
Corp. and Penn T of $102,331 and $1,636, respectively, in 2008 and
Penn T of $9,070 in 2007.
(8) Exclude the in-process research and development write-off related to
the acquisition of Pharmion Corp.
(9) Exclude the Company's share of equity losses in EntreMed, Inc.
(10) The income tax adjustment reflects the tax effect of the above
adjustments.
(11) Diluted net income per share for the three- and twelve-month
periods ended December 31, 2008 was determined using diluted
weighted average shares of 468,477 and 461,626, respectively.

Non-GAAP net income and earnings per share on both a basic and
diluted basis have been revised for the three- and twelve-month
periods ended December 31, 2007 to conform to the current year's
presentation basis. Amounts reported in the previous year for the
three-month period were $132,796, $0.34 and $0.31, respectively.
Amounts reported in the previous year for the twelve-month period
were $452,940, $1.18 and $1.06, respectively. The current year
basis eliminates certain immaterial adjustments and revises the
method for determining the tax impact of non-GAAP adjustments. The
2007 adjusted income tax provision previously reported reflected a
non-GAAP annual income tax rate of 28.0%.

SOURCE: Celgene Corporation

Celgene Corporation
David Gryska, 908-673-9059
Sr. Vice President and
Chief Financial Officer
or
Brian P. Gill, 908-673-9530
Vice President, Corporate Communications

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