Despite what has been described as a series of missteps in the last year, Celgene’s second-quarter financial report was promising.
Despite what has been described as a series of missteps in the last year, Celgene’s second-quarter financial report was promising.
The company reported total revenue of $3.814 billion for the quarter compared to $3.271 billion in the same quarter in 2017. Net income for the quarter was $1.045 billion, however, compared to $1.101 billion in the second quarter of 2017.
Revlimid sales grew 21 percent in the second quarter to $2.453 billion. U.S. sales for the cancer drug were $1.586 billion with international sales of $867 million, an increase of 17 percent and 28 percent, respectively. The company’s Pomalyst/Imnovid sales for the quarter were up 30 percent year-over-year, to $867 million. U.S. sales were $341 million and international sales were $84 million, an increase of 41 percent and 11 percent year-over-year, respectively.
Celgene’s Otezla sales for the quarter were $375 million, a 5 percent increase year-over-year. The company indicated that the 5 percent increase in the U.S. to $291 million was mostly driven by increasing demand via continued access pull-through in contracted health plans, which were offset by lower customer inventory levels at the end of the quarter.
Abraxane sales were $243 million and other product sales, which include Idhifa, Thalomid, Istodax, Vidaza and a generic version of Vidaza brought in $230 million in the second quarter.
“We continued to deliver strong operating performance in the second quarter, leading us to update our 2018 financial guidance,” said Mark Alles, Celgene’s chairman and chief executive officer, in a statement. “Our next innovation cycle is underway. We are meaningfully advancing our pipeline, while strengthening the organization to maximize future growth opportunities.”
This appears to be a return to business-as-usual after some rough patches, some of which go along with the business and at least one that was unexpected in a company of Celgene’s size and experience. The rough patch was related to ditching a late-stage Crohn’s disease drug and two clinical trials associated with it in late 2017. These sorts of things happen—even successful companies have failed clinical trials and abandoned programs.
A bigger and more troubling issue was when the U.S. Food and Drug Administration (FDA) issued a Refusal to File letter over its New Drug Application (NDA) for its multiple sclerosis drug ozanimod. Celgene’s president of hematology and oncology, Nadim Ahmed, indicated the FDA was “actually quite surprised” when it received the insufficient application, which it expects to resubmit in 2019. Although Ahmed and Celgene took the blame, he also threw its California subsidiary, Receptos, under the bus for that snafu, saying, “I think that 99 percent of folks at Celgene wouldn’t have submitted, but we had Receptos out on the West Coast and, for whatever reason, the decision was made to submit.”
However, that doesn’t seem to have hurt the company overall, which reported an adjusted profit of $2.16 per share in its earnings report, compared to last year’s adjusted earnings of $1.82 per share. Analysts had projected $2.10 per share.
The company’s operating cash flow was $1.2 billion in the second quarter, which was down from $1.6 billion in the same period last year. In May 2018, Celgene announced an accelerated share repurchase deal to buy an aggregate of $2 billion of its common stock. During the second quarter, Celgene purchased 32.8 million shares for $3.3 billion, including the $2 billion paid for the accelerated share repurchase.
As of June 30, the company reported $3.4 billion in cash, cash equivalents, marketable debt securities and publicly-traded equity securities.
