Q Conference Call

Transcription

1 CHANGING THE COURSE OF HUMAN HEALTH THROUGH BOLD PURSUITS IN SCIENCE Q Conference Call July 27, 2017

2 Q Conference Call Mark Alles, Chief Executive Officer Peter Kellogg, Chief Financial Officer Michael Pehl, President, Hematology/Oncology Terrie Curran, President, I&I Scott Smith, President & Chief Operating Officer Q&A 2

3 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, targets and similar expressions. 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 forwardlooking 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. 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 in the Investor Relations section. 3

4 CHANGING THE COURSE OF HUMAN HEALTH THROUGH BOLD PURSUITS IN SCIENCE Mark Alles Chief Executive Officer

5 Strong H Driven by Execution and Portfolio Momentum Momentum from Commercial and Clinical Portfolio Operational excellence across functions and geographies Advanced clinical portfolio; 5 Ph III trials completed enrollment in Q2:17 Significant Pipeline Catalysts in Place Ozanimod Ph III RMS data presentation in H2:17 Top-line data from 3 Ph III trials by YE:17: AUGMENT TM, RELEVANCE and apact Adding Strategic Opportunities for Growth Beyond 2020 Positive ozanimod Ph III trials in RMS anchors emerging neuroscience platform Collaboration with BeiGene for BGB-A317 expands and complements existing I/O platform 5

6 CHANGING THE COURSE OF HUMAN HEALTH THROUGH BOLD PURSUITS IN SCIENCE Peter Kellogg Chief Financial Officer

7 Q Financial Highlights Exceptional Operating Results Q2:17 year-over-year net product sales grew 19% and adjusted diluted EPS grew 26% Adjusted operating margins improved by 490 bps Y/Y Strong Execution on Marketed Portfolio Robust Q2 performance across the portfolio; OTEZLA up 49% Y/Y, 48% Q/Q Growth continues from volume; 16 of the 19 percentage points of net product sales growth Balanced Capital Deployment $507M in shares repurchased in Q2:17 Expanded oncology focus with BeiGene collaboration 2017 Adjusted EPS and Operating Margin Updated 2017 adjusted diluted EPS raised from $7.15-$7.30 to $7.25-$7.35 Adjusted operating margin raised from ~57% to ~57.5%, +50 bps 7

8 Q Total Net Product Sales Total Net Product Sales $3,256 $2,744 $2,254 Contribution to Q2:17 Total Net Product Sales Growth 15.9% 3.5% 0.7% 18.7% $3,000 $2,500 $ Millions 22% 22% 19% $ Millions $2,000 $1,500 $1,000 $500 Q2:15 Q2:16 Q2:17 Footnote: Growth Rates = Growth vs. Prior Year Period Certain prior year amounts have been rounded +/- $1M to conform to the current year rounding convention. $0 Q2:16 Volume Price Fx / Hedge Q2:17 8

9 Q Adjusted Diluted Earnings Per Share Adjusted Diluted EPS $1.82 Contribution to Q2:17 Adjusted Diluted EPS $1.44 $1.44 $0.46 ($0.05) ($0.01) ($0.02) $1.82 $1.23 Dollars Per Share 37% 17% 26% Dollars Per Share Q2:15 Q2:16 Q2:17 Q2:16 Oper. Income OIE Tax Rate Share Count Q2:17 Footnote: Growth Rates = Growth vs. Prior Year Period 9

10 Key P&L Line Items (Adjusted) Q2:17 vs. Q2:16 vs. Q1:17 Product Gross Margin 96.8% 50 bps 40 bps R&D expenses % of revenue $690M 21.1% 70 bps 100 bps SG&A expenses % of revenue $532M 16.3% 360 bps 190 bps Operating Margin 59.5% 490 bps 140 bps Effective Tax Rate 16.5% 30 bps NC 10

11 Cash and Marketable Securities (in Billions) 6/30/17 12/31/16 Cash and Marketable Securities $10.14 $7.97 Cash flow from operations was approximately $1.6B during Q2:17 In Q2:17, purchased $507M of shares $3.9B remaining under existing stock repurchase program 11

12 Return On Invested Capital (ROIC): Focused on Efficient Growth ROIC $ Billion $25.0 $20.0 $15.0 $10.0 $5.0 $0.0 Average Invested Capital Q (TTM) Capital Base Excluding Cash* Capital Base ROIC Excluding Cash* ROIC 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% *For purposes of this calculation, cash includes cash and cash equivalents and marketable securities available for sale. 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. 12

13 Updating 2017 Guidance Previous Updated Net Product Sales REVLIMID $8.0B-$8.3B Unchanged POMALYST /IMNOVID ~$1.6B Unchanged OTEZLA $1.5B-$1.7B Unchanged ABRAXANE ~$1.0B Unchanged Total Revenue $13.0B-$13.4B Unchanged Adjusted Operating Margin ~57% ~57.5% Adjusted Diluted EPS $7.15-$7.30 $7.25-$7.35 Weighted Average Diluted Shares ~815M Unchanged 13

14 CHANGING THE COURSE OF HUMAN HEALTH THROUGH BOLD PURSUITS IN SCIENCE Michael Pehl President, Hematology/Oncology

15 Q Hematology/Oncology Franchise Results Strong Net Product Sales and Operating Momentum Q2:17 net product sales growth of +16% Y/Y Sales performance driven by strong uptake in key markets 2017 Growth Drivers On Track Ongoing REVLIMID NDMM NSCT launch and increasing use of approved triplets driving share and duration around the globe U.S. regulatory decision for IDHIFA (enasidenib) in IDH2 mutant rraml expected in August Ph III data on REVLIMID in indolent lymphoma and ABRAXANE in adjuvant PanC by YE:17 Transformational Pipeline Advancing with Future Growth Drivers Collaboration with BeiGene for BGB-A317 expands immuno-oncology portfolio Early- and mid-stage pipeline continues to advance with pivotal programs beginning by YE:17 15

16 Q REVLIMID Net Sales Summary Current Results & Potential Future Growth Drivers Net Sales ($M) $2,034 Q2:17 net sales $2,034M; +20% Y/Y, +8% Q/Q Ongoing NDMM launch continues to advance REVLIMID NDMM NSCT reimbursed in 22 countries NDMM NSCT reimbursement in France now expected in Q3: growth drivers on-track Maintenance post-asct reimbursed in 7 countries; Market share in EU continues to grow Increased adoption of triplet combinations in RRMM Potential future growth drivers advancing Ph III AUGMENT TM & RELEVANCE data expected YE:17 Ph III ROBUST trial completed enrollment; Data expected in 2018 U.S. regulatory submission for RVd in 1 st line transplant and non-transplant candidates moved to Q1:18 $1,700 $676 $1,444 $1,213 $621 $572 $497 $1,358 $1,079 $716 $872 Q2:14 Q2:15 Q2:16 Q2:17 U.S. ROW Certain prior year amounts have been rounded +/- $1M to conform to the current year rounding convention. 16

17 REVLIMID Continues Uptake in 1st Line Non-Stem Cell Transplant Eligible Patients in Europe 35% 30% 1 st Line NSCT REVLIMID New Patient Share EU4 (France, Germany, Spain, Italy) EU4 New Patient Share 25% 20% 15% 10% 5% Germany Reimbursement Spain Reimbursement Italy Reimbursement 24% EU4 (FR, GER, SP, IT) France Reimbursement Publication Expected Q3:17 0% Q1:15 Q2:15 Q3:15 Q4:15 Q1:16 Q2:16 Q3:16 Q4:16 Q1:17 Source: EU Q2:17 MM Patient Chart tracker topline shares 17

18 Q REVLIMID Net Sales Summary Current Results & Potential Future Growth Drivers Net Sales ($M) $2,034 Q2:17 net sales $2,034M; +20% Y/Y, +8% Q/Q Ongoing NDMM launch continues to advance REVLIMID NDMM NSCT reimbursed in 22 countries NDMM NSCT reimbursement in France now expected in Q3: growth drivers on-track Maintenance post-asct reimbursed in 7 countries; Market share in EU continues to grow Increased adoption of triplet combinations in RRMM Potential future growth drivers advancing Ph III AUGMENT TM & RELEVANCE data expected YE:17 Ph III ROBUST trial completed enrollment; Data expected in 2018 U.S. regulatory submission for RVd in 1 st line transplant and non-transplant candidates moved to Q1:18 $1,700 $676 $1,444 $1,213 $621 $572 $497 $1,358 $1,079 $716 $872 Q2:14 Q2:15 Q2:16 Q2:17 U.S. ROW Certain prior year amounts have been rounded +/- $1M to conform to the current year rounding convention. 18

19 Q POMALYST /IMNOVID Net Sales Summary Current Results & Potential Future Growth Drivers Net Sales ($M) $391 Q2:17 net sales $391M; +23% Y/Y, +7% Q/Q POMALYST /IMNOVID continues to be a backbone of therapy in 3 rd line+ POMALYST /IMNOVID has leading 3 rd line share in U.S. and EU POMALYST has leading 3 rd line+ share in Japan 2017 growth drivers Duration trends increasing across all geographies FDA approval for daratumumab/pomalyst combination in RRMM Potential future growth drivers advancing Enrollment completed in Ph III OPTIMISMM trial with POMALYST in 2nd line+ MM; Data expected in 2018 POMALYST /IMNOVID combinations with other novel agents advancing $318 $150 $234 $133 $161 $91 $57 $241 $185 $143 $104 Q2:14 Q2:15 Q2:16 Q2:17 U.S. ROW Certain prior year amounts have been rounded +/- $1M to conform to the current year rounding convention. 19

20 Q ABRAXANE Net Sales Summary Current Results & Potential Future Growth Drivers Q2:17 net sales $254M; +2% Y/Y, +8% Q/Q 2017 growth drivers Maintain leadership in first-line metastatic pancreatic cancer in U.S. Continued share gains in metastatic pancreatic in EU Potential future growth drivers advancing Ph III apact data for ABRAXANE in adjuvant pancreatic cancer by YE:17 I/O combination trials in NSCLC, TNBC in 2018 Ongoing trials in support of potential label expansions in pancreatic cancer, lung and breast cancer Net Sales ($M) $245 $249 $254 $215 $75 $75 $93 $56 $159 $170 $174 $161 Q2:14 Q2:15 Q2:16 Q2:17 U.S. ROW Certain prior year amounts have been rounded +/- $1M to conform to the current year rounding convention. 20

21 BGB-A317 Expands a Robust I/O Portfolio For Hematology and Oncology Hematologic Malignancies Preclinical Phase I Phase II Phase III Marketed Solid Tumors Preclinical Phase I Phase II Phase III Marketed T Cell Checkpoint T Cell Checkpoint BGB-A317 (anti-pd-1) CAR-T Cells Bi-Specific T Engager Immune Modulation Phagocytosis Macrophage Tri-Specific NK Engager CC (CD3xBCMA) Novel T-cell engagers CC (CELMoD ) Selected AML and MM Targets JCAR017 (CD19) bb2121 (BCMA) CC (anti-cd47) CC-122 CC-220 (CELMoD ) CAR-T Cells T Cell Modulation T Reg Depletion Immune Modulation Phagocytosis Macrophage Immune Metabolism Selected ST Targets MSC-1 (anti-lif) Novel Targets JTX-2011 (anti-icos) OMP-313M32 (anti-tigit) LYC (ROR Agonist) CC (anti-cd47) CC-122 (CELMoD ) Celgene has an exclusive option to license JTX-2011, LYC and OMP-313M32. IMNFINZI TM is approved for solid tumors. 21

22 2017 Hematology/Oncology Franchise Outlook Commercial Portfolio On Track to Deliver REVLIMID continues to show strong uptake and duration trends POMALYST /IMNOVID momentum continues ABRAXANE in first-line metastatic PanC is the standard of care Regulatory Catalysts and Late-Stage Trials Anchor Near-term Growth REVLIMID as maintenance therapy post-asct approved in U.S. and EU U.S. regulatory decision for IDHIFA (enasidenib) in IDH2 mutant rraml expected in August On track for Ph III readouts for AUGMENT TM, RELEVANCE and apact in H2:17 Mid- and Late-Stage Pipeline Advancing Completed enrollment in ROBUST, QUAZAR, MEDALIST TM and BELIEVE TM On-track for marizomib, bb2121, JCAR017, CC-122 and durvalumab pivotal programs by YE:17 BeiGene collaboration for solid tumor anti-pd-1 22

23 CHANGING THE COURSE OF HUMAN HEALTH THROUGH BOLD PURSUITS IN SCIENCE Terrie Curran President, I&I

24 Q I&I Franchise Results Strong OTEZLA Performance and Future Growth Drivers Advancing OTEZLA adoption increased significantly as global demand and access continue to strengthen Launches underway in major European markets and Japan Strengthening of U.S. leadership position in new-to-brand shares for both psoriasis and PsA Completed enrollment of key lifecycle studies Ozanimod Moving Forward Preparing for regulatory submission to the FDA by YE:17 Advancing differentiated efficacy and safety profile Robust life cycle plan in development Advancing Development of the I&I Pipeline Positive results from Ph II ozanimod trial in CD; pivotal trial plans in development Strong execution of Ph III IBD trials: ozanimod in UC, and GED-0301 in CD 24

25 Q OTEZLA Net Sales Summary Current Results & Potential Future Growth Drivers Net Sales ($M) Q2:17 net sales $358M; +49% Y/Y, +48% Q/Q 2017 growth drivers $358 $52 - Substantial growth in OTEZLA utilization in the U.S. and international markets $241 - In France and Japan, uptake surpassing benchmarks Potential future growth drivers advancing $24 - Ph III scalp psoriasis trial enrolling - Ph III RELIEF trial in Behçet's completed enrollment - Ph II POC data in UC expected by YE: OTEZLA net sales guidance - $1.5B-$1.7B $5 $5 $90 $85 $217 $306 Q2:14 Q2:15 Q2:16 Q2:17 U.S. ROW Certain prior year amounts have been rounded +/- $1M to conform to the current year rounding convention. 25

26 Brand Fundamentals and Market Growth Driving Pickup of U.S. OTEZLA Sales New-to-Brand Share Psoriasis (Normalized Patient Equivalents) U.S. Psoriasis Market Share 45% 40% 35% 30% 25% 20% 15% OTEZLA 40.3% 40% 35% 30% 25% 20% 15% OTEZLA 21.7% 10% 10% 5% 5% 0% 0% Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 ENBREL STELARA HUMIRA COSENTYX OTEZLA TALTZ Acitretin Methotrexate Cyclosporine ENBREL STELARA HUMIRA COSENTYX OTEZLA TALTZ Source: SHS claims data through March 2017, last updated 26 May 2017; Symphony prescriber-level data through June 30, 2017 Note: Symphony data subject to restatement; NTB includes patients initiating titration and bridge for OTEZLA 26

27 OTEZLA Demonstrating Rapid Uptake in Recently Launched Markets France: Launch-Aligned New Patient Starts Japan: New-to-Brand Switch (GP Derm Segment) 3,500 New Patient Starts 3,000 2,500 2,000 1,500 1,000 3,003 2,115 1,020 7% 8% 8% 8% 69% OTEZLA Launch 3% 8% 4% 8% OTEZLA 38% 40% m1 m2 m3 m4 m5 m6 m7 Topical Only OTEZLA NEORAL Stelara Taltz Cosentyx Otezla TIGASON Biologics Others Source: Gers; Competitor IMS JPM, Otezla Ex-W/S data; Apremilast KPI tracking survey, April

28 The Global MS Market is Valued at ~$22B However, Significant Unmet Needs and Opportunity Remain Unmet Needs in RMS 2016 MS Market G7* Improved disease control Safe and well-tolerated oral options Infusions 11% Therapies appropriate for long-term use Potential to halt and/or reverse disability Orals 37% Injectables 52% Source: Decision Resources. Pharmacor. 2016, EvaluatePharma, Company Earnings Reports *G7 includes U.S., Germany, France, Spain, Italy, UK and Japan 28

29 Emerging Ozanimod Profile Targets Significant Unmet Needs in RMS Reduction in GdE lesions Reduced Annualized Relapse Rate Favorable Cardiac Profile (HR, QTc) Once-daily Oral Dosing Ozanimod Rapid Lymphocyte Recovery Generally Well Tolerated Favorable Hepatotox Reduction in Brain Atrophy Disability Progression vs. AVONEX Ozanimod is an investigational compound that is not approved for use in any country. 29

30 2017 I&I Franchise Outlook Maximize the OTEZLA PSOR/PsA Opportunity Strong brand fundamentals to drive continued positive momentum with increasing contribution from international markets Continue to realize benefits of global access expansion Complete U.S. snda filing of QD formulation by YE:17 Accelerate enrollment of OTEZLA Ph III trial in scalp psoriasis Optimize the Ozanimod Opportunity File ozanimod U.S. NDA in RMS by YE:17 Continue launch-readiness activities Complete enrollment of Ph III trial in UC Prepare to initiate Ph III in CD Advance Next Stage of Future Growth Catalysts Ph II trial readouts from OTEZLA in UC and GED-0301 in UC by YE:17 Continue to execute on the GED-0301 pivotal program in CD Advance Ph II development of CC-220 in SLE and CC in IPF 30

31 CHANGING THE COURSE OF HUMAN HEALTH THROUGH BOLD PURSUITS IN SCIENCE Scott Smith President and Chief Operating Officer

32 2017 Milestones Financial Performance Total Revenue $13.0B-$13.4B REVLIMID net sales $8.0B-$8.3B POMALYST net sales ~$1.6B OTEZLA net sales $1.5B-$1.7B ABRAXANE net sales ~$1.0B Adj. operating margin ~57.0% 1 Adj operating margin ~57.5% 2 Adj. EPS $7.15-$ Adj EPS $7.25 to $ Regulatory Submissions/Decisions FDA decision of REVLIMID in post-asct maintenance EU decision of REVLIMID in post-asct maintenance Submit snda for RVd in NDMM Moved to Q1:18 FDA decision on IDHIFA in IDH2-mutated AML Submit snda for OTEZLA once-daily formulation Submit NDA for Ozanimod in RMS Trial Initiations Initiate pivotal trial with CC-122 in DLBCL Initiate pivotal trial with bb2121 in RRMM Initiate pivotal program with JCAR017 in DLBCL Initiate Ph III trial with OTEZLA in scalp PSOR Initiate Ph III trial with OTEZLA in AS Moved to 2018 X Initiate Ph III trial with RPC4046 in EoE Initiate pivotal trial with Marizomib in GBM Initiate Ph II trial with Luspatercept in myelofibrosis 1. Updated April Updated July 2017 Clinical Data Ph III apact ABRAXANE in adjuvant PanC Ph III RELEVANCE REVLIMID in 1 st line FL Ph III AUGMENT TM REVLIMID in RR FL Ph III Ozanimod in multiple sclerosis (SUNBEAM TM and RADIANCE TM ) X Ph II CC-486 with fulvestrant in ER+ HER2- mbc X Ph II Demcizumab in NSCLC (DENALI) X Ph II Demcizumab in PanC (YOSEMITE) Ph II OTEZLA in UC Ph II GED-0301 in UC Ph II STEPSTONE TM - Ozanimod in CD Ph I/II Durvalumab in RRMM and 1 st Line MDS and AML Trial Enrollment Complete enrollment in Ph III CD-002 GED-0301 in CD Complete enrollment in Ph III OPTIMISSM trial POMALYST in 2 nd Line MM Complete enrollment in Ph III ROBUST - REVLIMID in DLBCL Complete enrollment in Ph III QUAZAR - CC-486 in AML Complete enrollment in Ph III MEDALIST TM Luspatercept in MDS Complete enrollment in Ph III BELIEVE TM Luspatercept in beta-thalassemia Complete enrollment in Ph III RELIEF OTEZLA in Behçet s Complete enrollment in Ph III TRUE NORTH TM Ozanimod in UC R&ED File at least 8 IND s 32

33 Strong Momentum. Approaching Inflection Point. Investing to Drive Growth Beyond Financial Performance Total Revenue $13.0B-$13.4B REVLIMID net sales $8.0B-$8.3B POMALYST net sales ~$1.6B OTEZLA net sales $1.5B-$1.7B ABRAXANE net sales ~$1.0B Adj. operating margin Strong ~57.0% OTEZLA 1 performance Adj operating margin ~57.5% 2 Adj. EPS $7.15-$ Adj EPS $7.25 to $ Regulatory Submissions/Decisions FDA decision of REVLIMID in post-asct maintenance EU decision of REVLIMID in post-asct maintenance Submit snda for RVd in NDMM Moved to Q1:18 FDA decision on IDHIFA in IDH2-mutated AML Submit snda for OTEZLA once-daily formulation Preparing for IDHIFA Submit NDA for Ozanimod in RMS launch Trial Initiations Initiate pivotal trial with CC-122 in DLBCL Initiate pivotal trial with bb2121 in RRMM Initiate pivotal program with JCAR017 in DLBCL Initiate Ph III trial with OTEZLA in scalp PSOR Initiate Ph III trial with OTEZLA in AS Moved to 2018 X Initiate Ph III trial with RPC4046 in EoE Initiate pivotal trial with Marizomib in GBM Initiate Ph II trial with Luspatercept in myelofibrosis 1. Updated April Updated July 2017 Increasing Momentum from Commercial Portfolio Volume driven growth across the portfolio REVLIMID reaches quarterly sales of $2B Clinical Data Ph III apact ABRAXANE in adjuvant PanC Ph III RELEVANCE REVLIMID in 1 st line FL Ph III AUGMENT REVLIMID in RR FL Ph III Ozanimod in multiple sclerosis (SUNBEAM and RADIANCE) X Ph II CC-486 with fulvestrant in ER+ HER2- mbc X Ph II Demcizumab in NSCLC (DENALI) X Ph II Demcizumab in PanC (YOSEMITE) Ph II OTEZLA in UC Ph II GED-0301 in UC Ph II STEPSTONE - Ozanimod in CD Ph I/II Durvalumab in RRMM and 1 st Line MDS and AML 2017 Adjusted EPS and operating margin updated to reflect operational excellence Inflection Points with Multiple Value Drivers Delivering Ozanimod positive top-line data in RMS; Advancing towards FDA filing by YE:17 Data from REVLIMID lymphoma trials expected by YE:17 Trial Enrollment Complete enrollment in Ph III CD-002 GED-0301 in CD Complete enrollment in Ph III OPTIMISSM trial POMALYST in 2 nd Line MM Complete enrollment in Ph III ROBUST - REVLIMID in DLBCL Complete enrollment in Ph III QUAZAR - CC-486 in AML Complete enrollment in Ph III MEDALIST TM Luspatercept in MDS Complete enrollment in Ph III BELIEVE TM Luspatercept in beta-thalassemia Complete enrollment in Ph III RELIEF OTEZLA in Behçet s Complete enrollment in Ph III TRUE NORTH Ozanimod in UC Positioned for Growth Beyond 2020 from Distributed Research Model Strategic collaboration for BeiGene augments I/O platform Positive data with ozanimod in CD; Pivotal program in development Pivotal programs for bb2121, JCAR017 and CC-122 advancing R&ED File at least 8 IND s 33

34 CHANGING THE COURSE OF HUMAN HEALTH THROUGH BOLD PURSUITS IN SCIENCE Q Conference Call July 27, 2017

35 CHANGING THE COURSE OF HUMAN HEALTH THROUGH BOLD PURSUITS IN SCIENCE Reconciliation Tables

36 Reconciliation Tables Use of Non-GAAP Financial Measures 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 of performance 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 measures provide useful and meaningful information to us and investors because they enhance investors understanding of the continuing operating performance of our business and facilitate the comparison of performance between past and future periods. These adjusted financial measures are non-gaap measures and should be considered in addition to, but not as a substitute for, the information prepared in accordance with U.S. GAAP. When preparing these supplemental non-gaap financial measures we typically exclude certain GAAP 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. Other companies 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 adjusted financial 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/or timing. 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. We also exclude transaction and certain other cash costs associated with business acquisitions and divestitures that are not normal recurring operating expenses, including severance costs which are not part of a formal restructuring program. 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. 36

37 Reconciliation Tables 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 are made 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 with respect to particular programs. The variability of amounts and lack of predictability of collaboration-related upfront 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 collaboration-related upfront 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. All expenses incurred subsequent to the initiation of the collaboration arrangement, such as research and development cost-sharing expenses/reimbursements and milestone payments up to the point of regulatory approval are considered to be 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. Certain Other Items: We exclude certain other significant items that may occur occasionally and are not normal, recurring, cash operating expenses from our adjusted financial 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 certain other significant items excluded from adjusted financial results would be: expenses for significant fair value adjustments to equity investments, significant litigation-related loss contingency accruals and expenses to settle other disputed matters. 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 net income 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 tax law and the statutory tax rate in the tax jurisdiction where the adjustment was incurred. 37

38 Reconciliation Tables 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, recurring operations ( 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 tax benefits related to prior year tax positions, and other similar items. We also 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 their nature, 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- and six-month periods ended June 30, 2017 and 2016, and for the projected amounts for the twelve-month period ending December 31,

39 Reconciliation Tables 39

40 Reconciliation Tables 40

41 Reconciliation Tables 41

42 Reconciliation Tables 42

43 Reconciliation Tables 43

44 Return on Invested Capital Calculation 44

45 CHANGING THE COURSE OF HUMAN HEALTH THROUGH BOLD PURSUITS IN SCIENCE Appendix

46 Advancing a High Quality Pipeline with Significant Potential POMALYST RRMM THALOMID NDMM, RRMM CC-122 RRMM Ph I REVLIMID NDMM, RRMM CC-220 RRMM LEGEND Market Multiple Myeloma 11 CC-486 RRMM IMFINZI NDMM, RRMM VIDAZA MDS, AML IDHIFA IDH2 AML ACY-241 RRMM CC-486 MDS, AML Marizomib RRMM bb2121 RRMM REVLIMID Del 5q MDS Luspatercept MDS, Beta-thalassemia Myeloid Disease 9 ISTODAX PTCL, CTCL REVLIMID NHL FT-1101 MDS, AML IMFINZI MDS, AML REVLIMID MCL IMFINZI NHL, CLL CC AML CC AML Luspatercept MF Lymphoma & Leukemia 7 CC NHL CC-122 NHL, CLL OTEZLA PSOR, PSA OTEZLA Behçet's, AS Scalp PSOR GED-0301 IBD Ozanimod IBD, MS CC-486 NHL JCAR017 NHL RPC-4046 EoE OTEZLA UC Inflammation & Immunology 12 ABRAXANE PanC, NSCLC, mbc Marizomib GBM CC-486 NSCLC, mbc FT-4101 NASH CC-220 SLE CC-122 HCC AG-881 Glioma CC PSOR CC IPF CC Solid Tumors ABX-1431 Neuro, Pain LYC UC, PSOR Solid Tumors 12 JTX-2011 Solid Tumors CC Solid Tumors LYC Solid Tumors Rosmantuzumab Solid Tumors Navicixizumab Solid Tumors OMP-313M32 Solid Tumors Celgene has an exclusive option to license JTX-2011, LYC-55716, LYC-30937, rosmantuzumab, navicixizumab, OMP-313M32 and FT

47 REVLIMID Multiple Myeloma Late Stage Programs Patient Population Induction and Maintenance in ASCT Eligible Trial Name MYELOMA XI Phase III Target Enrollment 4,420 Arm A: Cyclophosphamide (500mg) D1,8,15; THALOMID (100mg) D1-21 then 200mg daily; Dexamethasone (40mg) D1-4,12-15 for minimum of 4 21-day cycle Arm B: REVLIMID (25mg) D1-21; Cyclophosphamide (500mg) D1,8; Dexamethasone (40mg) D1-4,12-15 for minimum of 4 28-day cycles Arm C: Cyclophosphamide (500mg) D1,8; Carfilzomib (20 mg/m 2 ) D1,2 cycle 1 then (36 mg/m 2 ) D1,2,8,9,15,16; REVLIMID (25mg) D1-21; Dexamethasone (40mg) D1-4,8,9,15,16 for 4 21-day cycles Patients with no change, progressive disease, PR or MR randomized to: Design Arm A: Bortezomib (1.3mg/m 2 ) D1,4,8,11; Cyclophosphamide (500mg) D1,8,15; Dexamethasone (20mg) D1,2,4,5,8,9,11,12 for max of 8 21-day cycles Arm B: No treatment All patients go to SCT After SCT randomization to: Arm A: REVLIMID (10mg) D1-21 for 28-day cycle to disease progression Arm B: No maintenance Primary Endpoint Overall Survival and Progression Free Survival Status Interim data presented at ASH

48 POMALYST /IMNOVID Multiple Myeloma Late Stage Programs Patient Population Trial Name Phase RRMM MM-007 OPTIMISMM III Target Enrollment 558 Design Arm A: POMALYST /IMNOVID (4mg); Bortezomib (1.3 mg/m 2 IV); Low-dose dexamethasone to disease progression Arm B: Bortezomib (1.3 mg/m 2 IV); Low-dose dexamethasone to disease progression Primary Endpoint Status Progression Free Survival Enrollment complete Data in 2018E 48

49 MDS/AML/MF Late Stage Programs Patient Population Low risk/int-1 transfusion-dependent MDS Post induction AML Maintenance Molecule CC-486 (Oral Azacitidine) CC-486 (oral azacitidine) Trial Name AZA-MDS-003 CC-486-AML-001 Phase III III Target Enrollment Design Arm A: CC-486 (150mg or 200mg) Arm B: Placebo Arm A: CC-486 (150mg or 200mg) Arm B: Best Supportive Care Primary Endpoint RBC-transfusion independence for more than 12 weeks Overall Survival Status Trial enrolling Enrollment complete Data expected in 2018E 49

50 MDS/AML/MF Late Stage Programs Patient Population Anemia in to Very Low-, Low-, or Intermediate-Risk MDS Red Blood Cell Transfusion Dependent Beta-Thalassemia Molecule Luspatercept Luspatercept Trial Name MEDALIST TM BELIEVE TM Phase III III Target Enrollment Design Arm 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 (1mg/kg plus Best Supportive Care) Arm B: Placebo plus Best Supportive Care Primary Endpoint Status Red Blood Cell Transfusion Independence (RBC-TI) 8 weeks Enrollment complete Data expected in 2018E Proportion of subjects with hematological improvement from Week 13 to Week 24 compared to 12-week prior to randomization Hematological improvement from Week 13 to Week 24 compared to the 12-week. Enrollment complete Data expected in 2018E 50

51 MDS/AML/MF Late Stage Programs Patient Population Molecule Trial Name Phase IDH2 Mutant AML IDHIFA (enasidenib, AG-221) IDHENTIFY TM III Target Enrollment 280 Design Primary Endpoint Status Arm A: IDHIFA (100 mg daily) 28-day cycle; Best Supportive Care Arm B: Best Supportive Care Overall survival Trial enrolling 51

52 REVLIMID Lymphoma Late Stage Programs Patient Population Relapsed or Refractory Follicular Lymphoma Newly Diagnosed Follicular Lymphoma Untreated Activated B-Cell DLBCL Trial Name AUGMENT TM NHL-007 RELEVANCE ROBUST DLC-002 Phase III III III Target Enrollment 357 1, Design Arm A: REVLIMID (10-20mg) D1-21; Rituximab 375 mg/m 2 weekly for cycle 1 then D1 of cycles 2-5 for 5 28-day cycles Arm B: Placebo d1-21; Rituximab 375 mg/m 2 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 day cycles; Rituximab (starting dose 375 mg/m 2 ) weekly for up to day cycles Arm B: Physician s choice of Rituximab-CHOP, Rituximab-CVP or Rituximab-bendamustine Arm a: REVLIMID (15mg) D1-14; R- CHOP21 for 6 21-day cycles Arm B: Placebo; R-CHOP21 for 6 cycles Primary Endpoint Progression Free Survival Complete Response Rate and Progression Free Survival Progression Free Survival Status Enrollment complete Data in 2017E Enrollment complete Data in 2017E Trial enrolling Data in 2018E 52

53 REVLIMID Lymphoma Late Stage Programs Patient Population Relapsed or Refractory Indolent Lymphoma Trial Name Phase MAGNIFY TM NHL-008 III Target Enrollment 278 Design Arm A: REVLIMID (10-20mg) D1-21; Rituximab 375 mg/m 2 weekly for cycle 1 then D of cycles 3, 5,7,9 and 11 for day cycles followed by REVLIMID (10mg) D1-21; Rituximab 375 mg/m 2 D1 of cycles 13,15,17,19,21,23,25,27 and 29 for day cycles followed by REVLIMID (10mg) D1-21 until disease progression; 28 day cycle Arm B: REVLIMID (10-20mg) D1-21; Rituximab 375 mg/m 2 weekly for cycle 1 then D1 of cycles 3, 5,7,9 and 11 for day cycles followed by REVLIMID (10mg) D1-21; Rituximab 375 mg/m 2 D1 of cycles 13,15,17,19,21,23,25,27 and 29 for day cycles Primary Endpoint Progression Free Survival Status Trial enrolling Data in 2020E 53

54 ABRAXANE Solid Tumor Late Stage Programs Patient Population Trial Name Phase Adjuvant Therapy in Surgically Resected Pancreatic Cancer PANC-003 apact III Target Enrollment 866 Design Arm A: ABRAXANE (125 mg/m 2 ); Gemcitabine (1000 mg/m 2 ) D1,8,15 for 6 28-day cycles Arm B: Gemcitabine (1000 mg/m 2 ) D1,8,15 for day cycles Primary Endpoint Disease Free Survival Status Enrollment complete Data in 2017E 54

55 I&I Late Stage Programs Patient Population Active Behçet s Disease Scalp Psoriasis Molecule OTEZLA OTEZLA Trial Name BCT-002 SPSO-001 RELIEF STYLE TM Phase III III Target Enrollment Design Primary Endpoint Arm A: Placebo for 12 weeks followed by 30mg OTEZLA twice daily for 52 weeks Arm B: 30mg OTEZLA twice daily for 64 weeks Area under the curve (AUC) for the number of oral ulcers from baseline through week 12 Arm A: Placebo for 16 weeks followed by 30mg OTEZLA twice daily for 16 weeks Arm B: Placebo for 32 weeks 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 Status Enrollment complete Data in 2017E Initiated; Not yet enrolling 55

56 I&I Late Stage Programs Patient Population Active Crohn s Disease Active Crohn s Disease Molecule GED-0301 GED-0301 Trial Name CD-002 CD-004 Phase III III Target Enrollment 1,300 1,300 Design Arm A: GED-0301 (160mg) daily for 12 weeks followed by GED-0301 (40mg) daily for 40 weeks Arm B: GED-0301 (160mg) daily for 12 weeks followed by GED-0301 (40mg) daily for 4 weeks on/4 weeks off for 40 weeks Arm C: GED-0301 (160mg) daily for 12 weeks followed by GED-0301 (160mg) daily for 4 weeks on/4 weeks off for 40 weeks Arm A: GED-0301 (160mg) daily for 12 weeks followed by GED-0301 (40mg) daily for 40 weeks Arm B: GED-0301 (160mg) daily for 12 weeks followed by GED-0301 (40mg) daily for 4 weeks on/4 weeks off for 40 weeks Arm C: GED-0301 (160mg) daily for 12 weeks followed by GED-0301 (160mg) daily for 4 weeks on/4 weeks off for 40 weeks Primary Endpoint Clinical remission defined by Crohn's Disease Activity Index (CDAI) Safety Status Enrolling Data in 2018E Enrolling 56

57 I&I Late Stage Programs Patient Population Active Crohn s Disease Moderate to Severe Ulcerative Colitis Molecule GED-0301 Ozanimod Trial Name CD-003 TRUE NORTH TM Phase III III Target Enrollment Design Arm A: GED-0301 (160mg) daily Arm B: GED-0301 (4x40mg) daily Arm C: Placebo Arm A: Ozanimod (1mg) daily for induction and maintenance Arm B: Placebo induction and maintenance Primary Endpoint Proportion of subjects achieving clinical remission at Week 12 Clinical remission assessed by Mayo component sub-scores at week 10 Clinical remission assessed by Mayo component sub-scores at week 52 Status Initiated Not yet enrolling Enrolling Data in 2018E 57

58 I&I Late Stage Programs Patient Population Relapsing Multiple Sclerosis Relapsing Multiple Sclerosis Molecule Ozanimod Ozanimod Trial Name SUNBEAM TM RADIANCE TM Phase III II/III Target Enrollment ~1300 ~1300 Design Arm A: Ozanimod (0.5mg) daily; Placebo IM weekly Arm B: Ozanimod (1mg) daily; Placebo IM weekly Arm C: Oral placebo daily; Beta-interferon IM weekly Phase II Arm A: Ozanimod (0.5mg) daily Arm B: Ozanimod (1mg) daily Arm C: Placebo daily Phase III Arm A: Ozanimod (0.5mg) daily; Placebo IM weekly Arm B: Ozanimod (1mg) daily; Placebo IM weekly Arm C: Oral placebo daily; Beta-interferon IM weekly Primary Endpoint Annualized relapse rate at month 12 Annualized relapse rate at month 24 Status Data top-lined Full data expected in H2:17 Data top-lined Full data expected in H2:17 58