Celgene Corporation NEUTRAL ZACKS CONSENSUS ESTIMATES (CELG-NASDAQ) SUMMARY

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1 March 19, 2015 Celgene Corporation NEUTRAL Current Recommendation Prior Recommendation Outperform Date of Last Change 03/11/2012 Current Price (03/18/15) $ Target Price $ SUMMARY (CELG-NASDAQ) Celgene s fourth quarter 2014 adjusted earnings of $0.88 per share were in line with the Zacks Consensus Estimate. Total revenues climbed 19% year over year to $2.1 billion in the fourth quarter. The company expects adjusted earnings for 2015 in the range of $4.60 $4.75 per share (excluding stock-based compensation expenses). We expect Celgene to easily achieve the guidance based on its strong product portfolio. We are pleased with the continued growth in Revlimid sales. Otezla and oncology drug Abraxane also look promising. We are impressed by Celgene s efforts to develop its pipeline. We retain our Neutral recommendation on the stock. SUMMARY DATA 52-Week High $ Week Low $68.45 One-Year Return (%) Beta 1.05 Average Daily Volume (sh) 4,287,901 Shares Outstanding (mil) 801 Market Capitalization ($mil) $98,267 Short Interest Ratio (days) 2.15 Institutional Ownership (%) 81 Insider Ownership (%) 1 Annual Cash Dividend $0.00 Dividend Yield (%) Yr. Historical Growth Rates Sales (%) 21.3 Earnings Per Share (%) 28.5 Dividend (%) N/A P/E using TTM EPS 37.6 P/E using 2015 Estimate 27.3 P/E using 2016 Estimate 20.1 Zacks Rank *: Short Term 1 3 months outlook 3 - Hold * Definition / Disclosure on last page Risk Level * Below Average Type of Stock Large-Growth Industry Med-Biomed/Gene Zacks Industry Rank * 78 out of 267 ZACKS CONSENSUS ESTIMATES Revenue Estimates (In millions of $) Q1 Q2 Q3 Q4 Year (Mar) (Jun) (Sep) (Dec) (Dec) ,465 A 1,599 A 1,674 A 1,756 A 6,494 A ,730 A 1,873 A 1,982 A 2,086 A 7,670 A ,117 E 2,274 E 2,417 E 2,527 E 9,335 E ,476 E Note: Quarterly numbers may not add to annual figures due to rounding off. Earnings Per Share Estimates (EPS is operating earnings before non-recurring items, but including employee stock options expenses) Q1 Q2 Q3 Q4 Year (Mar) (Jun) (Sep) (Dec) (Dec) 2013 $0.63 A $0.70 A $0.69 A $0.67 A $2.68 A 2014 $0.73 A $0.80 A $0.88 A $0.88 A $3.26 A 2015 $0.91 E $0.99 E $1.09 E $1.51 E $4.50 E 2016 $6.09 E Note: Quarterly numbers may not add to annual figures due to rounding off and adjustments. Figures have been adjusted to reflect the two-for-one stock split month effective from Jun Projected EPS Growth - Next 5 Years % Zacks Investment Research, All Rights reserved S. Riverside Plaza, Chicago IL 60606

2 OVERVIEW Celgene Corporation is a biopharmaceutical company engaged in the discovery, development and commercialization of drugs targeting cancer and immune/inflammatory diseases. The company operates in multiple countries the world over. The company s key growth engine is Revlimid. The oncology portfolio at Celgene also includes Vidaza, Istodax, Abraxane, Pomalyst and Thalomid. Otezla gained U.S. approval for the treatment of adult patients with active psoriatic arthritis (Mar 2014) and for the treatment of patients with moderate-tosevere plaque psoriasis who are candidates for phototherapy or systemic therapy (Sep 2014). Celgene also boasts a strong pipeline. Celgene, which reported an 18% year-over-year rise in revenues to $7.7 billion in 2014, should continue to perform well driven by its robust product portfolio. Celgene was founded initially in 1980 as a division of Celanese Corporation. However, after the merger of Celanese Corporation with American Hoechst Corporation in 1986, Celgene became an independent entity. The company is headquartered in Summit, NJ. REASONS TO BUY Strong Product Sales Continue to Aid Revenues: Celgene performed impressively in the last reported quarter. Strong sales of Revlimid and Abraxane boosted the top line. We are encouraged by the growing sales of Pomalyst. The drug gained FDA approval in Feb Newly approved Otezla sales in the fourth quarter were also impressive. The FDA has cleared the drug for the treatment of adult patients with active psoriatic arthritis (Mar 2014) and for the treatment of patients with moderate-to-severe plaque psoriasis who are candidates for phototherapy or systemic therapy (Sep 2014). Prudent Acquisitions Deals: Celgene has been making prudent acquisitions and entering into deals to bolster its pipeline. In Oct 2014, Celgene entered into a strategic collaboration and option deal with Sutro Biopharma, Inc. for the discovery and development of multispecific antibodies and antibody drug conjugates (ADCs). Among other recently inked deals, Celgene entered into a collaboration with Bristol-Myers in Aug 2014 to asses the safety, tolerability and preliminary efficacy of a cocktail therapy including the latter s high potential immuno-oncology drug Opdivo (nivolumab, a PD-1 immune checkpoint inhibitor) and Celgene s Abraxane in a phase I study. Eli Lilly s Gemzar will be added to the above combination in patients with pancreatic adenocarcinoma. Meanwhile, patients suffering from non-small cell lung cancer will be treated with a combination of Opdivo, Abraxane and chemotherapy drug carboplatin. In Apr 2014, Celgene inked a deal with a privately held Irish company, Nogra Pharma Ltd., for the development and subsequent commercialization of GED GED-0301 is being studied for the treatment of moderate-to-severe Crohn s disease and other indications. In Dec 2013, Celgene inked a deal with OncoMed for the joint development and commercialization of up to six anti-cancer stem cell candidates from the latter s biologics pipeline. In Jun 2013, Celgene inked a deal with MorphoSys to co-develop MOR202 on a global basis for treating patients with MM and certain other cancer forms. The company had inked important deals/made prudent acquisitions in the past as well. For example, Celgene completed two important acquisitions in 2010 to bolster its oncology portfolio. In Oct 2010, Celgene purchased Abraxis BioScience Inc. and added cancer injection Abraxane to its portfolio. Abraxane, which is already available for the treatment of breast and lung cancer, gained U.S. approval in Sep 2013 for the third indication advanced pancreatic cancer. Approval for the new indication in the U.S. has boosted Abraxane s sales potential. EU approval of Abraxane for the advanced pancreatic cancer indication came in Jan Abraxane is also being evaluated in other oncology Equity Research CELG Page 2

3 indications including the triple negative breast cancer and adjuvant surgically resected pancreatic cancer indications. The second major acquisition in 2010 was that of Gloucester Pharmaceuticals, which added Istodax to Celgene s cancer portfolio. These acquisitions/deals should drive growth at Celgene. Impressive Pipeline: The U.S. approval of Otezla is a big positive for Celgene. Otezla gained U.S. approval for the treatment of adult patients with active psoriatic arthritis (Mar 2014) and for the treatment of patients with moderate-to-severe plaque psoriasis who are candidates for phototherapy or systemic therapy (Sep 2014). Otezla also gained approval for the treatment of moderate-to-severe chronic plaque psoriasis in adults who failed to respond to or, who have a contraindication to, or are intolerant to other systemic therapy including cyclosporine, methotrexate or psoralen, and ultraviolet-a light (PUVA).The candidate is further being evaluated for treating patients suffering from Behçet s disease, ulcerative colitis and atopic dermatitis. Celgene is also advancing the development of mid and early-stage candidates in its pipeline. We believe that the successful development and commercialization of the pipeline would boost Celgene s top line further. REASONS TO SELL Hiccups in Revlimid Label Expansion Efforts: Celgene has encountered hiccups in its bid to get Revlimid approved in the EU as a front-line maintenance therapy for treating patients suffering from MM. The marketing application was withdrawn by the company in Jun Celgene resubmitted the application to the EMA for the indication in Feb Any further delay/regulatory setback will pull down the stock. Declining Vidaza Sales Concerning: We remain concerned about declining Vidaza sales due to generic competition. Sales of the drug in the U.S. continued to decline in the fourth quarter of Celgene also suffered a setback in its efforts to expand the label of Vidaza, with the drug performing disappointingly in a phase III study (AML-001). The study evaluated the safety and efficacy of Vidaza versus conventional care regimens (CCRs) in newly diagnosed, acute myeloid leukemia, elderly patients (aged at least 65 years). With Vidaza recording declining sales, we believe that the failure of the drug in this phase III study for an additional indication has thrown its future into further uncertainty. Pipeline Setbacks: Celgene has multiple pipeline events lined up in the coming quarters. Any negative news regarding the pipeline would have an adverse impact on the stock. Celgene is no stranger to pipeline setbacks. In Jul 2014, Celgene announced disappointing top-line results from the phase III POSTURE study on Otezla in the ankylosing spondylitis indication. Top-line results from the study revealed that ankylosing spondylitis patients on being treated with Otezla did not show a statistically significant response compared to patients in the placebo arm at week 16, thus missing the trial s primary endpoint. In Jul 2013, the company suffered a setback when it discontinued a phase III study for the evaluation of Revlimid as a first-line therapy in elderly patients suffering from B-Cell chronic lymphocytic leukemia. The decision followed the clinical hold placed by the FDA on the study for safety concerns. Moreover, in the first quarter of 2013, the RESUME study on Pomalyst failed to meet its primary endpoint. The RESUME study compared Pomalyst to placebo in patients suffering from myeloproliferative neoplasm-associated myelofibrosis and severe anemia with RBC-transfusiondependence. In Nov 2011, the MAINSAIL study was discontinued. The MAINSAIL study evaluated Revlimid in patients suffering from castrate-resistant prostate cancer. Similar setbacks in the future will hurt the stock. RECENT NEWS Celgene s Data on Crohn's Disease Candidate Published Mar 18, 2015 Celgene Corporation announced that data from a phase II study (n = 166) on Crohn's disease candidate, GED-0301, were published in The New England Journal of Medicine. The double-blind, placebo- Equity Research CELG Page 3

4 controlled, multicenter phase II study evaluated the use of GED-0301 in patients suffering from moderate-to-severe Crohn's disease with documented inflammatory lesions in the terminal ileum and/or right colon. As per the newly published findings from the phase II study, the use of once daily GED mg (55%) or 160 mg (65%) resulted in a significantly greater proportion of patients with active Crohn's disease achieving the primary endpoint of clinical remission at both day 15 and day 28 as compared to GED mg (12%) or placebo (10%). Additionally, with once daily GED mg, 67% of patients reached glucocorticoid-free remission at day 84 as compared to 11% with placebo. On day 15, day 28 and day 84, clinical remission rates were a respective 67%, 72% and 67% in patients treated with GED mg once daily; 58%, 70% and 63% in patients treated with GED mg once daily; 15%, 29% and 29% in patients treated with GED mg once daily and 21%, 14% and 21% in patients receiving placebo. Celgene's Abraxane Combination Therapy Cleared in the EU Mar 2, 2015 Celgene Corporation s wholly owned subsidiary, Celgene International Sàrl, announced that its oncology drug, Abraxane, was approved in the EU in combination with carboplatin for the first-line treatment of non-small cell lung cancer (NSCLC) in adults who are not eligible for surgery and/or radiation therapy. The European Commission s (EC) decision on the approval of Abraxane does not come as a surprise as, in Jan 2015, the Committee for Medicinal Products for Human Use rendered a positive opinion on Abraxane for this indication. Abraxane is already approved in the U.S. as a first-line combination therapy for treating patients suffering from NSCLC. This potential blockbuster drug is also approved in the U.S. and EU for metastatic breast cancer and advanced pancreatic cancer. The drug was added to Celgene s portfolio through the acquisition of Abraxis BioScience in Oct Last month, Celgene received a positive recommendation from the Scottish Medicines Consortium (SMC) within the National Health Service (NHS) Scotland for Abraxane in combination with Eli Lilly and Company s Gemzar (gemcitabine) for the treatment of metastatic pancreatic cancer. The decision will make Abraxane accessible to all eligible pancreatic cancer patients in Scotland. Abraxane sales in 2014 came in at $848.2 million, up 30.7%. In 2015, Abraxane net sales are expected to be in the range of $1,000 million to $1,250 million, representing an increase of 32.6% year over year based on the mid-point of the guidance range. Moreover, the company expects Abraxane net sales to be in the range of $1,500 million to $2,000 million in We are encouraged by Celgene s progress with Abraxane so far. Celgene Gains on Label Expansion of Revlimid in the EU Feb 20, 2015 Celgene Corporation announced that Revlimid has received approval from the European Commission for the treatment of adults with previously untreated multiple myeloma who are not eligible for transplant. The Committee for Medicinal Products for Human Use had rendered a positive opinion on Revlimid for newly diagnosed multiple myeloma adult patients ineligible for transplantation. We remind investors that this is the second positive regulatory update from the company this month. Last week, Celgene announced that the FDA has expanded the existing indication for Revlimid, which can Equity Research CELG Page 4

5 now be used in combination with dexamethasone for treating patients newly diagnosed with multiple myeloma. Revlimid is approved in many countries across the globe in combination with dexamethasone for treating multiple myeloma patients, who have received at least one prior therapy. Revlimid is also approved in the U.S. in the relapsed refractory mantle cell lymphoma indication. Additionally, Revlimid is available in many countries for treating transfusion-dependent anemia due to low or intermediate-1-risk MDS associated with a deletion 5q cytogenetic abnormality (with or without additional cytogenetic irregularities). In 2014, Revlimid generated revenues of approximately $5 billion, representing an increase of 16%. We believe that the inclusion of newly diagnosed patients with multiple myeloma in Revlimid s label could boost its sales further. Celgene Q4 Earnings & Revenues In Line, Revlimid Sales Up Jan 29, 2015 Celgene Corporation reported fourth-quarter 2014 earnings of $0.88 per share (including stock-based compensation expenses and tax adjustments), in line with the Zacks Consensus Estimate. The company s earnings were $0.64 per share in the year-ago quarter. We note that figures have been adjusted to reflect the two-for-one stock split. Including stock-based compensation expenses, Celgene s earnings climbed 33% year over year to $1.01 per share in the reported quarter. Total revenues climbed 19% year over year to $2.1 billion in the fourth quarter. Revenues were boosted by the impressive performance of Revlimid. Net product sales climbed 19% year over year to $2.05 billion. Revenues were in line with the Zacks Consensus Estimate. The company s full year earnings (including stock-based compensation expense and tax adjustments) were $3.26 per share, up 22.7% year over year and in line with the Zacks Consensus Estimate. Revenues came in at $7.67 billion, up 18% year over year and marginally above the Zacks Consensus Estimate of $7.66 billion. Quarter in Details Net sales of Revlimid, the key growth driver at Celgene, came in at $1.3 billion, reflecting an increase of 16% over the year-ago period. The drug did well both in the U.S. (up 20%) and international markets (up 11%). Market share gains and increased duration of therapy drove sales in the reported quarter. The drug is approved in many countries across the globe in combination with dexamethasone for treating multiple myeloma (MM) patients who have received at least one prior therapy. Revlimid is also approved in the U.S. in the relapsed refractory mantle cell lymphoma indication. Revlimid is also available in many countries for treating transfusion-dependent anemia due to low or intermediate-1-risk myelodysplastic syndrome (MDS) associated with a deletion 5q cytogenetic abnormality (with or without additional cytogenetic irregularities). Celgene is looking to expand the drug s label. For this purpose, it has filed regulatory applications in the U.S. in the newly diagnosed MM indication. The FDA target date is Feb 22, Net sales of another cancer drug, Abraxane, climbed 17% year over year to $236 million. Net sales of Vidaza declined 8% year over year to $154 million. Lackluster U.S. sales (down 67%) due to generic Equity Research CELG Page 5

6 competition hurt results during the quarter. U.S. sales of another oncology drug Pomalyst came in at $132 million, up 11.9% sequentially. The drug gained FDA approval in Feb The approval of the drug (trade name: Imnovid) in the EU was gained in Aug Sales of the drug in international markets were $70 million in the fourth quarter of 2014 compared with $63 million in the preceding quarter. Newly approved Otezla sales in the fourth quarter were $47 million. The FDA has cleared the drug for the treatment of adult patients with active psoriatic arthritis (Mar 2014) and for the treatment of patients with moderate-to-severe plaque psoriasis who are candidates for phototherapy or systemic therapy (Sep 2014). All other product sales (inclusive of Thalomid, Istodax and an authorized generic version of Vidaza in the U.S.) came in at $93 million in the fourth quarter, down 5.1%. Research and development expenses (excluding stock-based compensation and other special items) increased 3.9% to $478 million. Selling, general and administrative (SG&A) expenses (excluding stockbased compensation and other special items) increased 19.8% to $479 million. Costs associated with the launch of Otezla and Abraxane for pancreatic cancer pushed up SG&A costs. Outlook for 2015 Maintained Celgene reaffirmed the guidance provided by it on Jan 12, The company expects adjusted earnings for 2015 in the range of $4.60 $4.75 per share (excluding stock-based compensation expenses). Net product sales for 2015 are expected to be approximately $9 $9.5 billon, up 22.3% year over year. Foreign exchange translations are expected to impact revenues negatively by $100 million. Net sales of oncology drug, Revlimid, the key growth driver at Celgene, are projected in the range of $5.6 $5.7 billion, reflecting an increase of 13.5 % year over year. The Zacks Consensus Estimate for 2015 is $3.26 per share on revenues of approximately $9.3 billion. Celgene expects 2015 to be dominated by news related to its pipeline and label expansion efforts. Celgene maintained its view for 2017 as well. The company continues to expect adjusted earnings for 2017 to be approximately $7.50 per share. Net product sales for 2017 are still forecast in the range of $13 $14 billion. Celgene also provided a detailed outlook for The company projects net product sales of $20 billion for Moreover, adjusted earnings per share for 2020 are expected to be approximately $12.50 per share. Hematology franchise, Oncology franchise and Inflammation & Immunology franchise are expected to generate revenues exceeding $14.8 billion, $2.2 billion and $3 billion, respectively. Otezla Gains EU Approval for Two Indications Jan 16, 2015 Celgene Corporation announced that the European Commission (EC) has granted approval to Otezla, an oral selective inhibitor of phosphodiesterase 4 (PDE4), for two therapeutic indications. Otezla gained approval for the treatment of moderate-to-severe chronic plaque psoriasis in adults who failed to respond to or, who have a contraindication to, or are intolerant to other systemic therapy including cyclosporine, methotrexate or psoralen, and ultraviolet-a light (PUVA). Equity Research CELG Page 6

7 The EC also approved Otezla for the treatment of active psoriatic arthritis in adult patients who have had an inadequate response or who have been intolerant to a prior disease modifying antirheumatic drug (DMARD) therapy either as a monotherapy or in combination with DMARDs. The EU approval of Otezla did not come as a surprise as the company had received a positive opinion on Otezla in Nov 2014 from the European Medicines Agency's Committee for Medicinal Products for Human Use for use in both the above mentioned indications. We note that Otezla is already available in the U.S. The FDA has cleared the drug for the treatment of adult patients with active psoriatic arthritis (Mar 2014) and for the treatment of patients with moderate-tosevere plaque psoriasis who are candidates for phototherapy or systemic therapy (Sep 2014). Celgene's Preliminary Results & 2015 Outlook Encouraging Jan 13, 2015 Celgene Corporation provided encouraging guidance for The company expects adjusted earnings for 2015 in the range of $4.60-$4.75 per share, up 26% over expected earnings of $3.71 per share in While the Zacks Consensus Estimate for 2014 is $3.26 per share, it is $4.29 per share for Net product sales for 2015 are expected to be approximately $9 $9.5 billon, up 22.3% year over year. Foreign exchange translations are expected to impact revenues negatively by $100 million. Net sales of oncology drug, Revlimid, the key growth driver at Celgene, are projected in the range of $5.6 $5.7 billion, reflecting an increase of 13.5 % year over year. Celgene expects 2015 to be dominated by news related to its pipeline and label expansion efforts. Celgene maintained its view for The company continues to expect adjusted earnings for 2017 to be approximately $7.50 per share. Net product sales for 2017 are still forecast in the range of $13 $14 billion. Celgene also provided a rosy outlook for The company projects net product sales of $20 billion for Moreover, adjusted earnings per share for 2020 are expected to be approximately $12.50 per share. Celgene will announce its fourth quarter and full year 2014 results on Jan 29. As per the preliminary results, the company expects adjusted earnings per share for the fourth quarter 2014 of $1.01. The Zacks Consensus Estimate for the quarter currently stands at 88 cents. Net product sales for the fourth quarter are expected to be approximately $2.05 billion, including a negative foreign exchange impact of $25 million. Net product sales are expected to be approximately $7.56 billion, up 19% year over year in Net sales of Revlimid are projected at $4.98 billion, reflecting an increase of 16%. Sales of Abraxane in 2014 are projected to grow at 31% to $848 million. Pomalyst/ Imnovid and Otezla are expected to contribute $680 million and $70 million, respectively, to Celgene s 2014 total revenues. VALUATION Celgene s fourth quarter 2014 adjusted earnings of $0.88 per share were in line with the Zacks Consensus Estimate. Total revenues climbed 19% year over year to $2.1 billion in the fourth quarter. The company expects adjusted earnings for 2015 in the range of $4.60 $4.75 per share (excluding stockbased compensation expenses). Equity Research CELG Page 7

8 We expect Celgene to easily achieve the guidance based on its strong product portfolio. We are pleased with the continued growth in Revlimid sales. Otezla and oncology drug Abraxane also look promising. We are impressed by Celgene s efforts to develop its pipeline. We retain our Neutral recommendation on the stock. Based on the 2015 earnings estimate, the stock is trading at 27.3x. Our target price of $ is based on 28.7x our 2015 earnings per share estimate of $4.50. Key Indicators P/E F1 P/E F2 Est. 5-Yr EPS Gr% P/CF P/E P/E 5-Yr High P/E 5-Yr Low Celgene Corporation (CELG) Industry Average S&P Biogen Idec Inc. (BIIB) Gilead Sciences, Inc. (GILD) Regeneron Pharmaceuticals (REGN) Bio-Rad Laboratories, Inc. (BIO) TTM is trailing 12 months; F1 is 2015 and F2 is 2016, CF is operating cash flow P/B Last Qtr. P/B 5-Yr High P/B 5-Yr Low ROE D/E Last Qtr. Div Yield Last Qtr. EV/EBITDA Celgene Corporation (CELG) Industry Average S&P Equity Research CELG Page 8

9 Earnings Surprise and Estimate Revision History Equity Research CELG Page 9

10 DISCLOSURES & DEFINITIONS The analysts contributing to this report do not hold any shares of CELG. The EPS and revenue forecasts are the Zacks Consensus estimates. Additionally, the analysts contributing to this report certify that the views expressed herein accurately reflect the analysts personal views as to the subject securities and issuers. Zacks certifies that no part of the analysts compensation was, is, or will be, directly or indirectly, related to the specific recommendation or views expressed by the analyst in the report. Additional information on the securities mentioned in this report is available upon request. This report is based on data obtained from sources we believe to be reliable, but is not guaranteed as to accuracy and does not purport to be complete. Because of individual objectives, the report should not be construed as advice designed to meet the particular investment needs of any investor. Any opinions expressed herein are subject to change. This report is not to be construed as an offer or the solicitation of an offer to buy or sell the securities herein mentioned. Zacks or its officers, employees or customers may have a position long or short in the securities mentioned and buy or sell the securities from time to time. Zacks uses the following rating system for the securities it covers. Outperform- Zacks expects that the subject company will outperform the broader U.S. equity market over the next six to twelve months. Neutral- Zacks expects that the company will perform in line with the broader U.S. equity market over the next six to twelve months. Underperform- Zacks expects the company will under perform the broader U.S. Equity market over the next six to twelve months. The current distribution of Zacks Ratings is as follows on the 1108 companies covered: Outperform %, Neutral %, Underperform 4.9%. Data is as of midnight on the business day immediately prior to this publication. Our recommendation for each stock is closely linked to the Zacks Rank, which results from a proprietary quantitative model using trends in earnings estimate revisions. This model is proven most effective for judging the timeliness of a stock over the next 1 to 3 months. The model assigns each stock a rank from 1 through 5. Zacks Rank 1 = Strong Buy. Zacks Rank 2 = Buy. Zacks Rank 3 = Hold. Zacks Rank 4 = Sell. Zacks Rank 5 = Strong Sell. We also provide a Zacks Industry Rank for each company which provides an idea of the near-term attractiveness of a company s industry group. We have 264 industry groups in total. Thus, the Zacks Industry Rank is a number between 1 and 264. In terms of investment attractiveness, the higher the rank the better. Historically, the top half of the industries has outperformed the general market. In determining Risk Level, we rely on a proprietary quantitative model that divides the entire universe of stocks into five groups, based on each stock s historical price volatility. The first group has stocks with the lowest values and are deemed Low Risk, while the 5 th group has the highest values and are designated High Risk. Designations of Below-Average Risk, Average Risk, and Above-Average Risk correspond to the second, third, and fourth groups of stocks, respectively. Analyst editor Lopamudra Bhattacharya Pushpanjali Banerjee Lead Analyst QCA Reason for Update Lopamudra Arpita Dutt 4Q14 Equity Research CELG Page 10