Celgene 4Q net slumps on charges, higher spending

Biotech drugmaker Celgene Inc. said Thursday that its fourth-quarter profit fell 36 percent as acquisition and restructuring costs, plus increased spending on research, marketing and administration, offset higher medicine sales.

The maker of Revlimid, for the bone marrow cancer multiple myeloma and certain anemia patients, said net income was $263.1 million, or 61 cents per share. That was down from $410.2 million, or 91 cents per share, in 2011's last quarter.

Excluding one-time charges totaling 71 cents per share, net income would have been $572 million, or $1.32 per share. That matched the earnings per share forecast of analysts surveyed by FactSet.

The charges include restructuring, write-downs on acquired assets and unsuccessful research, collaboration payments and staff stock compensation.

Celgene, based in Summit, N.J., said its revenue climbed 14 percent to $1.42 billion, just shy of the $1.46 billion analysts expected.

Sales were led by Revlimid, with revenue up 17 percent to $1 billion, followed by $216 million from Vidaza, for certain subtypes of myelodysplastic syndrome, a group of incurable disorders caused by dysfunctional or misshapen blood cells. Two other drugs, Abraxane for advanced breast or non-small cell lung cancer, and Thalomid for multiple myeloma and leprosy, brought in a combined $179 million.

Celgene CEO Bob Hugin said in a statement that the 2012 results "reflect strong operating momentum and execution worldwide."

"The achievements of 2012 and our outlook for 2013 position us for our next phase of growth," Hugin added.

The company noted it is running more than 10 late-stage patient studies testing experimental drugs or additional uses for medicines already on the market. Those expensive late-stage studies, plus costs to prepare for the launch of two medicines, pushed up research and marketing costs.

Celgene said Revlimid could get U.S approval this year for treating mantle cell lymphoma, a blood cancer. A new drug, Pomalyst for relapsed multiple myeloma, could get U.S. approval in February and European Union approval later this year. Abraxane could get approved this year in Japan, Australia and New Zealand, and Celgene plans to apply sometime after June for U.S. and EU approval of apremilast, a medicine for psoriasis and psoriatic arthritis.

In a note to investors, UBS Securities analyst Matthew Roden wrote that "better-than-expected R&D costs helped offset lower total revenue" than what analysts expected. He added that Celgene's forecast for 2013 sales of Revlimid — which accounts for nearly 70 percent of the company's total revenue — is $100 million to $200 million below the $4.3 billion analysts expect.

The company confirmed its recent profit forecast for 2013, saying it expects revenue to climb 11 percent to roughly $6 billion, with adjusted earnings per share of $5.50 to $5.60. Analysts are expecting earnings per share of $5.62, on revenue of $6.07 billion.

In midday trading, Celgene shares were down 20 cents at $98.07.

For the full year, Celgene posted net income of $1.46 billion, or $3.30 per share, up 10 percent from $1.32 billion, or $2.85 per share, in 2011. The company reported revenue of $5.39 billion, up nearly 15 percent from 2011.

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Linda A. Johnson can be followed at http://twitter.com/LindaJ_onPharma.