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  • Q1 2016 Conference Call

    April 28, 2016p ,

  • Attendees

    Bob Hugin, Executive Chairman

    Mark Alles, Chief Executive Officer

    Peter Kellogg Chief Financial OfficerPeter Kellogg, Chief Financial Officer

    Jackie Fouse, President & Chief Operating Officer

    Scott Smith, President, Global I&I

    2

    Q&A

  • Forward Looking Statements and Adjusted Financial Information

    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” and similar expressions Forward-looking statements are based on management’s current plans estimates assumptions and projections and speakexpressions. Forward-looking statements are based on management s current plans, estimates, assumptions and projections, and speak only as of the date they are made. We undertake no obligation to update any forward-looking statement in light of new information or future events, except as otherwise required by law. Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and are generally beyond our control. Actual results or outcomes may differ materially from those implied by the forward- looking statements as a result of the impact of a number of factors, many of which are discussed in more detail 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 that we believe provide investors and management with supplemental information relating to operating performance and trends that facilitate comparisons between periods and with respect to projected information These adjusted measures are non GAAP andthat facilitate comparisons between periods and with respect to projected information. These adjusted measures are non-GAAP and should be considered in addition to, but not as a substitute for, the information prepared in accordance with U.S. GAAP. We typically exclude certain GAAP items that management does not believe affect our basic operations and that do not meet the GAAP definition of unusual or non-recurring items. Other companies may define these measures in different ways. 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 on our website at www.Celgene.com in the “Investor Relations” section.

    3

  • Mark Alles

  • Q1 2016: An Exceptional Start to the Year

    – Net product sales 21% Y/Y growth; Adjusted diluted EPS 23% Y/Y growth

    Maximizing the Potential of Our Commercial Portfolio Maximizing the Potential of Our Commercial Portfolio

    – Growth driven by strong volume and market dynamics

    Continuing to Generate Industry Leading GrowthContinuing to Generate Industry Leading Growth – 2016: Raising the lower ranges of net product sales and adjusted diluted EPS guidance – 2017: Targeting 18% Y/Y net product sales and 22% Y/Y adjusted diluted EPS growth; long-term

    targets on-track

    g y gg y g

    – Entered two-year period with data expected from 18 Ph III trials Ad i l th i t d th li i I d i ibilit i t l d id t

    Advancing Our Robust, Innovative PipelineAdvancing Our Robust, Innovative Pipeline

    5

    – Advancing novel therapies toward the clinic; Increased visibility into our early- and mid-stage programs

  • Peter Kellogg

  • Strong Q1 Operating Results

     Q1:16 year-over-year product sales grew 21% and adjusted diluted EPS grew 23%  Adjusted operating margins improved by 160 bps

    Financial HighlightsFinancial Highlights

     Strong product growth across all franchises Investments in R&D while achieving meaningful SG&A leverage

    Excellent Performance on Operating MetricsExcellent Performance on Operating Metrics

     $1 4B in shares repurchased in Q1:16

    Adding Value with Financial DriversAdding Value with Financial Drivers

     Investments in R&D while achieving meaningful SG&A leverage

    $1.4B in shares repurchased in Q1:16  Strong financial flexibility

    2016 Guidance and Long-term Targets Updated2016 Guidance and Long-term Targets Updated

    7

     2016 adjusted diluted EPS -- bottom-end of the range raised from $5.50-$5.70 to $5.60-$5.70  2017 targets updated; 2020 targets on-track

  • Total Net Product Sales (Growth Rates = Growth vs. Prior Year Period)

    $2,495

    $1,708

    $2,055

    $2,495

    ill io

    ns $

    M

    ↑19% ↑20% ↑21%↑19% ↑20% ↑21%

    Q1:14 Q1:15 Q1:16

    8

  • Volume Drove Q1 2016 Net Product Sales Growth

    Contribution to Q1:16 Net Product Sales Growth (Growth Rates = Growth vs. Prior Year Period)

    $2 000

    $2,500 ↑21.4%↓1.5%↑19.2% ↑3.7%

    $

    $1,500

    $2,000

    M ill

    io ns

    $500

    $1,000

    $0 Q1:15 Volume Price Fx / Hedge Q1:16

    9

  • Adjusted Diluted Earnings Per Share (Growth Rate = Growth vs. Prior Year Period)

    $1.32

    $0.83

    $1.07

    Sh ar

    e

    ↑22% ↑29%Do lla

    rs P

    er S

    ↑23%↑ % ↑ %D ↑ %

    Q1:14 Q1:15 Q1:16

    10

    Footnote: Adjusted EPS is split-adjusted for Q1:14

  • Key P&L Line Items (Adjusted)

    Q1:16 ∆ vs.Q1:15 ∆ vs. Q4:15

    Product Gross Margin 96.1% ↑80 bps ↓10 bps

    R&D expenses % of revenue

    $591M 23.5% ↑280 bps ↓180 bps

    SG&A expenses % of revenue

    $468M 18.6% ↓370 bps ↓220 bps

    Operating Margin 54.0% ↑160 bps ↑390 bps

    Effective Tax Rate 16.6% ↑90 bps ↑170 bps

    11

  • Q1 2016 Adjusted Diluted EPS Growth Driven by Increased Operating Income

    $1.32$0.27$1.07 ($0.01) $0.04

    Contribution to Q1:16 Adjusted Diluted EPS

    ($0.05)

    e ar

    s Pe

    r S ha

    re D

    ol la

    Q1:15 Operating Income

    Financial Income / Expense

    Tax Rate Share Count Q1:16

    12

  • Cash and Marketable Securities

    (in Billions) 3/31/16 12/31/15

    Cash and Marketable Securities $5.71 $6.55

    • Cash flow from operations was approximately $975M during Q1:16 • In Q1:16, purchased $1.4B of shares

    • $2 5B remaining under existing stock repurchase program• $2.5B remaining under existing stock repurchase program

    13

  • Updating 2016 Guidance

    Previous 2016 Guidance Updated 2016 Guidance

    REVLIMID® $6 6B $6 7B $6 7BREVLIMID® $6.6B - $6.7B $6.7B

    POMALYST® $1B+ $1B+

    ABRAXANE® $1B+ $950M-$1BABRAXANE $1B+ $950M-$1B

    OTEZLA® $1B+ $1B+

    Total Net Product Sales $10.5B - $11.0B $10.75B - $11.0B

    Adjusted Operating Margin ~53.5% ~53.5%

    Adjusted Diluted EPS $5.50 - $5.70 $5.60 - $5.70

    14

    Note: Updated 2016 guidance assumes weighted average diluted share count of 811M

  • Sustained High-Growth Momentum Expected

    2016 Updated Guidance

    2017 Updated Targets

    2020 TargetsUpdated Guidance

    Y/Y Growth Updated Targets

    Y/Y Growth Targets

    CAGR (’15-’20)

    Total Net Prod ct Sales 19% 18% 18%Total Net Product Sales 19% 18% 18%

    Adjusted Diluted EPS 20% 22% 23%Adjusted Diluted EPS 20% 22% 23%

    15

    Note: At current currency exchange rates Growth calculations at the mid-point of the range

  • Updated 2017 Financial Targets

    Updated 2016 Guidance

    Updated 2017 Targets ∆ vs. 2016

    1

    REVLIMID® $6 7B ~$8B +19%REVLIMID® $6.7B ~$8B +19%

    ABRAXANE® $950M-$1B ~$1B +3%

    Total Net Product Sales $10.75B - $11.0B $12.7B - $13.0B +18%

    Adjusted Diluted EPS $5.60 - $5.70 $6.75 - $7.00 +22%

    Weighted Avg. Diluted Shares 811M 825M2

    16

    1. Calculated using the mid-point of the range 2. Reflects accounting standard change effective 1/1/2017 which eliminates a favorable adjustment currently provided in diluted share count under existing accounting guidance. Note: At current currency exchange rates

  • 2020 Targets On-Track at Current F/X Rates

    Net Product Sales ($B)

    Adjusted EPS ($)

    >$21 >$13.0023%18% CAGR

    >$21 23% CAGR

    $23% CAGR

    $9.2 $4.71

    2015 2020E 2015 2020E

    17

    Note: At current currency exchange rates

  • Jackie Fouse

  • Q1 2016 Hematology & Oncology Franchise Results

    – Q1:16 net sales growth of +15% Y/Y, +17% excluding negative F/X Leading myeloma portfolio globally

    Strong Net Product Sales and Franchise Operating MomentumStrong Net Product Sales and Franchise Operating Momentum

    – Leading myeloma portfolio globally – NDMM launch continues in Europe and Japan

    2016 Product Growth Drivers On-Track2016 Product Growth Drivers On-Track

    – Duration and market share trends continue to grow – Adoption of clinical data supporting the backbone role of REVLIMID® and POMALYST® in MM – Global NDMM reimbursemen

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