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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Celgene Corporation | NASDAQ:CELG | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 108.24 | 109.30 | 109.37 | 0 | 01:00:00 |
CELGENE CORPORATION
|
(Exact name of registrant as specified in its charter)
|
Delaware
|
|
22-2711928
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification Number)
|
|
|
|
86 Morris Avenue, Summit, NJ
|
|
07901
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
(908) 673-9000
|
|
|
|
|
(Registrant’s telephone number, including area code)
|
|
|
|
Yes
|
X
|
|
No
|
|
|
|
Yes
|
X
|
|
No
|
|
|
Large accelerated filer
|
X
|
|
Accelerated filer
|
|
|
|
|
|
|
Non-accelerated filer (Do not check if a
smaller reporting company)
|
|
|
Smaller reporting company
|
|
|
Yes
|
|
|
No
|
X
|
|
|
|
Page No.
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Consolidated Statements of Operations - Three-Month and Nine-Month Periods Ended September 30, 2016 and 2015
|
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Consolidated Statements of Comprehensive Income (Loss) - Three-Month and Nine-Month Periods Ended September 30, 2016 and 2015
|
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|
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||
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|
|
Three-Month Periods Ended September 30,
|
|
Nine-Month Periods Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Net product sales
|
$
|
2,968.6
|
|
|
$
|
2,312.6
|
|
|
$
|
8,207.8
|
|
|
$
|
6,621.9
|
|
Other revenue
|
14.2
|
|
|
21.5
|
|
|
40.9
|
|
|
70.8
|
|
||||
Total revenue
|
2,982.8
|
|
|
2,334.1
|
|
|
8,248.7
|
|
|
6,692.7
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of goods sold (excluding amortization of acquired intangible assets)
|
107.7
|
|
|
109.9
|
|
|
324.5
|
|
|
314.7
|
|
||||
Research and development
|
1,653.5
|
|
|
1,304.5
|
|
|
3,335.4
|
|
|
2,920.5
|
|
||||
Selling, general and administrative
|
698.0
|
|
|
550.3
|
|
|
1,973.1
|
|
|
1,696.3
|
|
||||
Amortization of acquired intangible assets
|
87.1
|
|
|
63.6
|
|
|
353.7
|
|
|
190.9
|
|
||||
Acquisition related charges and restructuring, net
|
25.0
|
|
|
226.2
|
|
|
25.3
|
|
|
215.9
|
|
||||
Total costs and expenses
|
2,571.3
|
|
|
2,254.5
|
|
|
6,012.0
|
|
|
5,338.3
|
|
||||
Operating income
|
411.5
|
|
|
79.6
|
|
|
2,236.7
|
|
|
1,354.4
|
|
||||
Other income and (expense):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest and investment income, net
|
7.3
|
|
|
8.6
|
|
|
21.3
|
|
|
26.4
|
|
||||
Interest (expense)
|
(127.8
|
)
|
|
(88.5
|
)
|
|
(373.0
|
)
|
|
(186.0
|
)
|
||||
Other income (expense), net
|
(34.2
|
)
|
|
(19.6
|
)
|
|
(11.5
|
)
|
|
83.2
|
|
||||
Income (loss) before income taxes
|
256.8
|
|
|
(19.9
|
)
|
|
1,873.5
|
|
|
1,278.0
|
|
||||
Income tax provision
|
85.4
|
|
|
14.2
|
|
|
303.2
|
|
|
237.0
|
|
||||
Net income (loss)
|
$
|
171.4
|
|
|
$
|
(34.1
|
)
|
|
$
|
1,570.3
|
|
|
$
|
1,041.0
|
|
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
0.22
|
|
|
$
|
(0.04
|
)
|
|
$
|
2.02
|
|
|
$
|
1.31
|
|
Diluted
|
$
|
0.21
|
|
|
$
|
(0.04
|
)
|
|
$
|
1.95
|
|
|
$
|
1.26
|
|
Weighted average shares:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
775.8
|
|
|
791.1
|
|
|
777.3
|
|
|
794.3
|
|
||||
Diluted
|
801.5
|
|
|
791.1
|
|
|
803.7
|
|
|
827.7
|
|
|
Three-Month Periods Ended September 30,
|
|
Nine-Month Periods Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss)
|
$
|
171.4
|
|
|
$
|
(34.1
|
)
|
|
$
|
1,570.3
|
|
|
$
|
1,041.0
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
3.9
|
|
|
(4.2
|
)
|
|
6.6
|
|
|
(11.9
|
)
|
||||
Pension liability adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.6
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net unrealized gains (losses) related to cash flow hedges:
|
|
|
|
|
|
|
|
||||||||
Unrealized holding gains (losses)
|
(53.4
|
)
|
|
(67.1
|
)
|
|
(243.7
|
)
|
|
277.0
|
|
||||
Tax benefit (expense)
|
(0.6
|
)
|
|
29.9
|
|
|
17.8
|
|
|
8.3
|
|
||||
Unrealized holding gains (losses), net of tax
|
(54.0
|
)
|
|
(37.2
|
)
|
|
(225.9
|
)
|
|
285.3
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Reclassification adjustment for (gains) included in net income (loss)
|
(69.4
|
)
|
|
(91.4
|
)
|
|
(216.0
|
)
|
|
(249.6
|
)
|
||||
Tax (benefit)
|
(0.6
|
)
|
|
(0.5
|
)
|
|
(1.9
|
)
|
|
(1.5
|
)
|
||||
Reclassification adjustment for (gains) included in net income (loss), net of tax
|
(70.0
|
)
|
|
(91.9
|
)
|
|
(217.9
|
)
|
|
(251.1
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net unrealized gains (losses) on marketable securities available for sale:
|
|
|
|
|
|
|
|
||||||||
Unrealized holding (losses)
|
(7.7
|
)
|
|
(426.3
|
)
|
|
(361.0
|
)
|
|
(434.6
|
)
|
||||
Tax benefit
|
2.1
|
|
|
133.7
|
|
|
129.4
|
|
|
136.8
|
|
||||
Unrealized holding (losses), net of tax
|
(5.6
|
)
|
|
(292.6
|
)
|
|
(231.6
|
)
|
|
(297.8
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Reclassification adjustment for losses included in net income (loss)
|
30.7
|
|
|
10.9
|
|
|
71.2
|
|
|
11.6
|
|
||||
Tax (benefit)
|
(10.9
|
)
|
|
(3.9
|
)
|
|
(25.0
|
)
|
|
(4.1
|
)
|
||||
Reclassification adjustment for losses included in net income (loss), net of tax
|
19.8
|
|
|
7.0
|
|
|
46.2
|
|
|
7.5
|
|
||||
Total other comprehensive (loss)
|
(105.9
|
)
|
|
(418.9
|
)
|
|
(622.6
|
)
|
|
(275.6
|
)
|
||||
Comprehensive income (loss)
|
$
|
65.5
|
|
|
$
|
(453.0
|
)
|
|
$
|
947.7
|
|
|
$
|
765.4
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
5,522.6
|
|
|
$
|
4,880.3
|
|
Marketable securities available for sale
|
1,346.0
|
|
|
1,671.6
|
|
||
Accounts receivable, net of allowances of $32.1 and $30.3 at September 30, 2016 and December 31, 2015, respectively
|
1,586.3
|
|
|
1,420.9
|
|
||
Inventory
|
507.9
|
|
|
443.4
|
|
||
Other current assets
|
612.8
|
|
|
984.7
|
|
||
Total current assets
|
9,575.6
|
|
|
9,400.9
|
|
||
Property, plant and equipment, net
|
891.3
|
|
|
814.1
|
|
||
Intangible assets, net
|
10,498.9
|
|
|
10,858.1
|
|
||
Goodwill
|
4,865.8
|
|
|
4,879.0
|
|
||
Other assets
|
922.1
|
|
|
1,012.3
|
|
||
Total assets
|
$
|
26,753.7
|
|
|
$
|
26,964.4
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Short-term borrowings and current portion of long-term debt
|
501.0
|
|
|
—
|
|
||
Accounts payable
|
235.4
|
|
|
240.8
|
|
||
Accrued expenses and other current liabilities
|
1,847.1
|
|
|
1,647.7
|
|
||
Income taxes payable
|
3.8
|
|
|
19.8
|
|
||
Current portion of deferred revenue
|
62.1
|
|
|
60.6
|
|
||
Total current liabilities
|
2,649.4
|
|
|
1,968.9
|
|
||
Deferred revenue, net of current portion
|
28.4
|
|
|
30.0
|
|
||
Income taxes payable
|
370.1
|
|
|
324.2
|
|
||
Other non-current tax liabilities
|
2,519.2
|
|
|
2,519.2
|
|
||
Other non-current liabilities
|
1,733.8
|
|
|
2,041.7
|
|
||
Long-term debt, net of discount
|
13,802.5
|
|
|
14,161.4
|
|
||
Total liabilities
|
21,103.4
|
|
|
21,045.4
|
|
||
Commitments and Contingencies (Note 15)
|
|
|
|
|
|
||
Stockholders’ Equity:
|
|
|
|
|
|
||
Preferred stock, $.01 par value per share, 5.0 million shares authorized; none outstanding at September 30, 2016 and December 31, 2015, respectively
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value per share, 1,150.0 million shares authorized; issued 949.4 million and 940.1 million shares at September 30, 2016 and December 31, 2015, respectively
|
9.5
|
|
|
9.4
|
|
||
Common stock in treasury, at cost; 174.0 million and 153.5 million shares at September 30, 2016 and December 31, 2015, respectively
|
(16,130.2
|
)
|
|
(14,051.8
|
)
|
||
Additional paid-in capital
|
11,981.2
|
|
|
11,119.3
|
|
||
Retained earnings
|
9,644.7
|
|
|
8,074.4
|
|
||
Accumulated other comprehensive income
|
145.1
|
|
|
767.7
|
|
||
Total stockholders’ equity
|
5,650.3
|
|
|
5,919.0
|
|
||
Total liabilities and stockholders’ equity
|
$
|
26,753.7
|
|
|
$
|
26,964.4
|
|
|
Nine-Month Periods Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
1,570.3
|
|
|
$
|
1,041.0
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation
|
89.6
|
|
|
86.6
|
|
||
Amortization
|
276.9
|
|
|
193.8
|
|
||
Deferred income taxes
|
(256.8
|
)
|
|
(413.1
|
)
|
||
Impairment charges
|
187.1
|
|
|
26.6
|
|
||
Change in value of contingent consideration
|
12.2
|
|
|
(17.2
|
)
|
||
Gain on sale of business
|
(37.5
|
)
|
|
—
|
|
||
Net (gain) on sale of investments
|
(7.2
|
)
|
|
(84.1
|
)
|
||
Share-based compensation expense
|
451.7
|
|
|
426.4
|
|
||
Share-based employee benefit plan expense
|
28.7
|
|
|
24.1
|
|
||
Derivative instruments
|
193.2
|
|
|
(33.8
|
)
|
||
Other, net
|
(9.3
|
)
|
|
22.6
|
|
||
Change in current assets and liabilities, excluding the effect of acquisitions:
|
|
|
|
|
|
||
Accounts receivable
|
(143.8
|
)
|
|
(145.8
|
)
|
||
Inventory
|
(62.3
|
)
|
|
(27.1
|
)
|
||
Other operating assets
|
137.2
|
|
|
(17.6
|
)
|
||
Accounts payable and other operating liabilities
|
163.9
|
|
|
250.2
|
|
||
Income tax payable
|
27.9
|
|
|
43.9
|
|
||
Deferred revenue
|
11.6
|
|
|
49.3
|
|
||
Net cash provided by operating activities
|
2,633.4
|
|
|
1,425.8
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Proceeds from sales of marketable securities available for sale
|
541.7
|
|
|
3,661.7
|
|
||
Purchases of marketable securities available for sale
|
(560.1
|
)
|
|
(1,699.4
|
)
|
||
Payments for acquisition of businesses, net of cash acquired
|
—
|
|
|
(7,579.3
|
)
|
||
Capital expenditures
|
(169.8
|
)
|
|
(145.5
|
)
|
||
Proceeds from sales of investment securities
|
13.1
|
|
|
85.5
|
|
||
Purchases of investment securities
|
(122.3
|
)
|
|
(216.3
|
)
|
||
Other
|
(0.6
|
)
|
|
(4.5
|
)
|
||
Net cash (used in) investing activities
|
(298.0
|
)
|
|
(5,897.8
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Payment for treasury shares
|
(2,026.4
|
)
|
|
(2,574.1
|
)
|
||
Proceeds from short-term borrowing
|
—
|
|
|
2,230.9
|
|
||
Principal repayments on short-term borrowing
|
—
|
|
|
(1,630.8
|
)
|
||
Proceeds from issuance of long-term debt
|
—
|
|
|
7,913.3
|
|
||
Net proceeds from common equity put options
|
7.6
|
|
|
10.2
|
|
||
Net proceeds from share-based compensation arrangements
|
190.8
|
|
|
204.2
|
|
||
Excess tax benefit from share-based compensation arrangements
|
129.8
|
|
|
243.7
|
|
||
Net cash (used in) provided by financing activities
|
(1,698.2
|
)
|
|
6,397.4
|
|
||
Effect of currency rate changes on cash and cash equivalents
|
5.1
|
|
|
(30.5
|
)
|
||
Net increase in cash and cash equivalents
|
642.3
|
|
|
1,894.9
|
|
||
Cash and cash equivalents at beginning of period
|
4,880.3
|
|
|
4,121.6
|
|
||
Cash and cash equivalents at end of period
|
$
|
5,522.6
|
|
|
$
|
6,016.5
|
|
|
Nine-Month Periods Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Supplemental schedule of non-cash investing and financing activity:
|
|
|
|
|
|
||
Change in net unrealized loss on marketable securities available for sale
|
$
|
361.0
|
|
|
$
|
434.6
|
|
Investment in Human Longevity, Inc. common stock
|
$
|
39.6
|
|
|
$
|
—
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||
Interest paid
|
$
|
463.3
|
|
|
$
|
171.1
|
|
Income taxes paid
|
$
|
345.1
|
|
|
$
|
345.6
|
|
|
Total Consideration
|
||
Cash paid for outstanding common stock
|
$
|
7,311.3
|
|
Cash for equity compensation attributable to pre-combination service
|
314.9
|
|
|
Total consideration
|
$
|
7,626.2
|
|
|
Amounts Recognized as of the Acquisition Date
|
||
Working capital
1
|
$
|
479.2
|
|
Property, plant and equipment
|
5.0
|
|
|
In-process research and development product rights
|
6,842.0
|
|
|
Current deferred tax assets
2
|
241.3
|
|
|
Other non-current assets
|
7.9
|
|
|
Non-current deferred tax liabilities
3
|
(2,519.2
|
)
|
|
Total identifiable net assets
|
5,056.2
|
|
|
Goodwill
|
2,570.0
|
|
|
Total net assets acquired
|
$
|
7,626.2
|
|
|
|
Three-Month Period Ended September 30, 2015
|
|
Nine-Month Period Ended September 30, 2015
|
||||
Total revenue
|
|
$
|
2,334.1
|
|
|
$
|
6,692.7
|
|
Net income
|
|
$
|
107.3
|
|
|
$
|
1,029.8
|
|
Net income per common share: basic
|
|
$
|
0.14
|
|
|
$
|
1.30
|
|
Net income per common share: diluted
|
|
$
|
0.13
|
|
|
$
|
1.24
|
|
|
Fair Value at October 19, 2015 (as adjusted)
|
||
Cash
|
$
|
95.9
|
|
Fair value of pre-existing equity ownership
|
11.4
|
|
|
Contingent consideration
|
155.3
|
|
|
Total fair value of consideration
|
$
|
262.6
|
|
|
Fair Value at October 19, 2015 (as adjusted)
|
||
Working capital
1
|
$
|
7.0
|
|
Property, plant and equipment
|
1.9
|
|
|
Other non-current assets
|
0.8
|
|
|
Technology platform intangible asset
2
|
232.0
|
|
|
Debt obligations
|
(13.9
|
)
|
|
Non-current deferred tax liabilities
|
(72.3
|
)
|
|
Total identifiable net assets
|
155.5
|
|
|
Goodwill
|
107.1
|
|
|
Total net assets acquired
|
$
|
262.6
|
|
|
Three-Month Periods Ended September 30,
|
|
Nine-Month Periods Ended September 30,
|
||||||||||||
(Amounts in millions, except per share)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss)
|
$
|
171.4
|
|
|
$
|
(34.1
|
)
|
|
$
|
1,570.3
|
|
|
$
|
1,041.0
|
|
Weighted-average shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
775.8
|
|
|
791.1
|
|
|
777.3
|
|
|
794.3
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Options, restricted stock units, performance-based restricted stock units and other
|
25.7
|
|
|
—
|
|
|
26.4
|
|
|
33.4
|
|
||||
Diluted
|
801.5
|
|
|
791.1
|
|
|
803.7
|
|
|
827.7
|
|
||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.22
|
|
|
$
|
(0.04
|
)
|
|
$
|
2.02
|
|
|
$
|
1.31
|
|
Diluted
|
$
|
0.21
|
|
|
$
|
(0.04
|
)
|
|
$
|
1.95
|
|
|
$
|
1.26
|
|
|
Three-Month Periods Ended September 30,
|
|
Nine-Month Periods Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Gain (loss) from sale of put options
|
$
|
—
|
|
|
$
|
(18.8
|
)
|
|
$
|
7.6
|
|
|
$
|
(9.9
|
)
|
|
Pension
Liability
|
|
Net Unrealized
Gains (Losses) From
Marketable Securities
|
|
Net Unrealized
Gains (Losses)
From Hedges
|
|
Foreign
Currency
Translation
Adjustment
|
|
Total
Accumulated
Other
Comprehensive
Income (Loss)
|
||||||||||
Balance December 31, 2015
|
$
|
(13.9
|
)
|
|
$
|
271.5
|
|
|
$
|
586.4
|
|
|
$
|
(76.3
|
)
|
|
$
|
767.7
|
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
(231.6
|
)
|
|
(225.9
|
)
|
|
6.6
|
|
|
(450.9
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
46.2
|
|
|
(217.9
|
)
|
|
—
|
|
|
(171.7
|
)
|
|||||
Net current-period other comprehensive income (loss)
|
—
|
|
|
(185.4
|
)
|
|
(443.8
|
)
|
|
6.6
|
|
|
(622.6
|
)
|
|||||
Balance September 30, 2016
|
$
|
(13.9
|
)
|
|
$
|
86.1
|
|
|
$
|
142.6
|
|
|
$
|
(69.7
|
)
|
|
$
|
145.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance December 31, 2014
|
$
|
(15.5
|
)
|
|
$
|
460.9
|
|
|
$
|
519.6
|
|
|
$
|
(50.2
|
)
|
|
$
|
914.8
|
|
Other comprehensive income (loss) before reclassifications
|
(7.6
|
)
|
|
(297.8
|
)
|
|
285.3
|
|
|
(11.9
|
)
|
|
(32.0
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
7.5
|
|
|
(251.1
|
)
|
|
—
|
|
|
(243.6
|
)
|
|||||
Net current-period other comprehensive income (loss)
|
(7.6
|
)
|
|
(290.3
|
)
|
|
34.2
|
|
|
(11.9
|
)
|
|
(275.6
|
)
|
|||||
Balance September 30, 2015
|
$
|
(23.1
|
)
|
|
$
|
170.6
|
|
|
$
|
553.8
|
|
|
$
|
(62.1
|
)
|
|
$
|
639.2
|
|
|
|
|
|
Gains (Losses) Reclassified Out of Accumulated
Other Comprehensive Income
|
||||||||||||||
Accumulated Other Comprehensive Income Components
|
|
Affected Line Item in the Consolidated Statements of Operations
|
|
Three-Month Periods Ended September 30,
|
|
Nine-Month Periods Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||
Gains (losses) from cash-flow hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
|
Net product sales
|
|
$
|
71.0
|
|
|
$
|
92.9
|
|
|
$
|
221.0
|
|
|
$
|
253.6
|
|
Treasury rate lock agreements
|
|
Interest (expense)
|
|
(1.3
|
)
|
|
(1.1
|
)
|
|
(3.9
|
)
|
|
(2.9
|
)
|
||||
Interest rate swap agreements
|
|
Interest (expense)
|
|
(0.3
|
)
|
|
(0.4
|
)
|
|
(1.1
|
)
|
|
(1.1
|
)
|
||||
|
|
Income tax provision
|
|
0.6
|
|
|
0.5
|
|
|
1.9
|
|
|
1.5
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gains (losses) from available-for-sale marketable securities:
|
|
|
|
|
|
|
|
|
||||||||||
Realized income (loss) on sales of marketable securities
|
|
Interest and investment income, net
|
|
(30.7
|
)
|
|
(10.9
|
)
|
|
(71.2
|
)
|
|
(11.6
|
)
|
||||
|
|
Income tax provision
|
|
10.9
|
|
|
3.9
|
|
|
25.0
|
|
|
4.1
|
|
||||
Total reclassification, net of tax
|
|
|
|
$
|
50.2
|
|
|
$
|
84.9
|
|
|
$
|
171.7
|
|
|
$
|
243.6
|
|
•
|
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Our level 1 assets consist of marketable equity securities. Our level 1 liability relates to our publicly traded Contingent Value Rights (CVRs). See Note 18 of Notes to Consolidated Financial Statements included in our
2015
Annual Report on Form 10-K for a description of the CVRs.
|
•
|
Level 2 inputs utilize observable quoted prices for similar assets and liabilities in active markets and observable quoted prices for identical or similar assets in markets that are not very active. Our level 2 assets consist primarily of U.S. Treasury securities, U.S. government-sponsored agency mortgage-backed (MBS) securities, global corporate debt securities, asset backed securities, foreign currency forward contracts, purchased foreign currency options and interest rate swap contracts. Our level 2 liabilities relate to written foreign currency options, foreign currency forward contracts and interest rate swap contracts.
|
•
|
Level 3 inputs utilize unobservable inputs and include valuations of assets or liabilities for which there is little, if any, market activity. We do not have any level 3 assets. Our level 3 liabilities consist of contingent consideration related to undeveloped product rights and technology platforms resulting from the acquisitions of Gloucester Pharmaceuticals, Inc. (Gloucester), Nogra Pharma Limited (Nogra), Avila Therapeutics, Inc. (Avila) and Quanticel.
|
Inputs
|
Ranges (weighted average) utilized as of:
|
|
September 30, 2016
|
December 31, 2015
|
|
Discount rate
|
0.8% to 12.0% (8.6%)
|
0.8% to 12.0% (8.8%)
|
Probability of payment
|
0% to 95% (42%)
|
0% to 95% (53%)
|
Projected year of payment for development and regulatory milestones
|
2016 to 2029 (2019)
|
2016 to 2029 (2019)
|
Projected year of payment for sales-based milestones and other amounts calculated as a percentage of annual sales
|
2019 to 2033 (2024)
|
2019 to 2033 (2024)
|
|
Balance at
September 30, 2016
|
|
Quoted Price in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant
Other Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities
|
$
|
1,346.0
|
|
|
$
|
1,002.3
|
|
|
$
|
343.7
|
|
|
$
|
—
|
|
Forward currency contracts
|
217.9
|
|
|
—
|
|
|
217.9
|
|
|
—
|
|
||||
Purchased currency options
|
45.3
|
|
|
—
|
|
|
45.3
|
|
|
—
|
|
||||
Total assets
|
$
|
1,609.2
|
|
|
$
|
1,002.3
|
|
|
$
|
606.9
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent value rights
|
$
|
(45.0
|
)
|
|
$
|
(45.0
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swaps
|
(43.1
|
)
|
|
—
|
|
|
(43.1
|
)
|
|
—
|
|
||||
Written currency options
|
(44.0
|
)
|
|
—
|
|
|
(44.0
|
)
|
|
—
|
|
||||
Other acquisition related contingent consideration
|
(1,480.1
|
)
|
|
—
|
|
|
—
|
|
|
(1,480.1
|
)
|
||||
Total liabilities
|
$
|
(1,612.2
|
)
|
|
$
|
(45.0
|
)
|
|
$
|
(87.1
|
)
|
|
$
|
(1,480.1
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
Balance at
December 31, 2015
|
|
Quoted Price in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant
Other Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available-for-sale securities
|
$
|
1,671.6
|
|
|
$
|
1,235.9
|
|
|
$
|
435.7
|
|
|
$
|
—
|
|
Forward currency contracts
|
606.0
|
|
|
—
|
|
|
606.0
|
|
|
—
|
|
||||
Purchased currency options
|
46.7
|
|
|
—
|
|
|
46.7
|
|
|
—
|
|
||||
Interest rate swaps
|
52.5
|
|
|
—
|
|
|
52.5
|
|
|
—
|
|
||||
Total assets
|
$
|
2,376.8
|
|
|
$
|
1,235.9
|
|
|
$
|
1,140.9
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent value rights
|
$
|
(51.9
|
)
|
|
$
|
(51.9
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Written currency options
|
(19.1
|
)
|
|
—
|
|
|
(19.1
|
)
|
|
—
|
|
||||
Other acquisition related contingent consideration
|
(1,521.5
|
)
|
|
—
|
|
|
—
|
|
|
(1,521.5
|
)
|
||||
Total liabilities
|
$
|
(1,592.5
|
)
|
|
$
|
(51.9
|
)
|
|
$
|
(19.1
|
)
|
|
$
|
(1,521.5
|
)
|
|
Three-Month Periods Ended September 30,
|
|
Nine-Month Periods Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
$
|
(1,469.5
|
)
|
|
$
|
(1,315.0
|
)
|
|
$
|
(1,521.5
|
)
|
|
$
|
(1,279.0
|
)
|
Amounts acquired or issued, including measurement period adjustments
|
10.7
|
|
|
—
|
|
|
10.7
|
|
|
—
|
|
||||
Net change in fair value
|
(41.1
|
)
|
|
(13.5
|
)
|
|
(19.1
|
)
|
|
(49.5
|
)
|
||||
Settlements, including transfers to Accrued expenses and other current liabilities
|
19.8
|
|
|
—
|
|
|
49.8
|
|
|
—
|
|
||||
Transfers in and/or out of level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at end of period
|
$
|
(1,480.1
|
)
|
|
$
|
(1,328.5
|
)
|
|
$
|
(1,480.1
|
)
|
|
$
|
(1,328.5
|
)
|
|
|
Notional Amount
|
||||||
Foreign Currency
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Australian Dollar
|
|
$
|
53.3
|
|
|
$
|
45.1
|
|
British Pound
|
|
188.2
|
|
|
289.3
|
|
||
Canadian Dollar
|
|
164.8
|
|
|
135.9
|
|
||
Euro
|
|
1,936.9
|
|
|
2,934.3
|
|
||
Japanese Yen
|
|
719.8
|
|
|
510.4
|
|
||
Swedish Krona
|
|
3.0
|
|
|
—
|
|
||
Total
|
|
$
|
3,066.0
|
|
|
$
|
3,915.0
|
|
|
Notional Amount
1
|
||||||
|
September 30, 2016
|
|
December 31, 2015
|
||||
Foreign currency option contracts designated as hedging activity:
|
|
|
|
||||
Purchased Put
|
$
|
1,016.6
|
|
|
$
|
641.5
|
|
Written Call
|
$
|
1,126.9
|
|
|
$
|
690.0
|
|
|
Notional Amount
|
||||||
|
September 30, 2016
|
|
December 31, 2015
|
||||
Forward starting interest rate swap contracts:
|
|
|
|
||||
Forward starting swaps with effective dates in 2017
|
$
|
500.0
|
|
|
$
|
200.0
|
|
Forward starting swaps with effective dates in 2018
|
$
|
500.0
|
|
|
$
|
—
|
|
|
|
|
|
September 30, 2016
|
||||||
|
|
|
|
Fair Value
|
||||||
Instrument
|
|
Balance Sheet
Location
|
|
Asset
Derivatives
|
|
Liability Derivatives
|
||||
Derivatives designated as hedging instruments:
|
|
|||||||||
Foreign exchange contracts
1
|
|
Other current assets
|
|
$
|
244.6
|
|
|
$
|
40.3
|
|
|
|
Other non-current assets
|
|
53.1
|
|
|
30.4
|
|
||
|
|
Accrued expenses and other current liabilities
|
|
1.4
|
|
|
5.7
|
|
||
|
|
Other non-current liabilities
|
|
40.1
|
|
|
64.8
|
|
||
Interest rate swap agreements
|
|
Other non-current liabilities
|
|
0.1
|
|
|
44.1
|
|
||
Derivatives not designated as hedging instruments:
|
|
|||||||||
Foreign exchange contracts
1
|
|
Other current assets
|
|
30.8
|
|
|
6.5
|
|
||
|
|
Accrued expenses and other current liabilities
|
|
0.9
|
|
|
4.0
|
|
||
Interest rate swap agreements
|
|
Other current assets
|
|
0.6
|
|
|
0.6
|
|
||
|
|
Other non-current assets
|
|
5.2
|
|
|
4.3
|
|
||
Total
|
|
|
|
$
|
376.8
|
|
|
$
|
200.7
|
|
|
|
|
|
December 31, 2015
|
||||||
|
|
|
|
Fair Value
|
||||||
Instrument
|
|
Balance Sheet
Location
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||
Derivatives designated as hedging instruments:
|
|
|||||||||
Foreign exchange contracts
1
|
|
Other current assets
|
|
$
|
356.2
|
|
|
$
|
18.0
|
|
|
|
Other non-current assets
|
|
287.8
|
|
|
28.0
|
|
||
Interest rate swap agreements
|
|
Other current assets
|
|
30.7
|
|
|
—
|
|
||
|
|
Other non-current assets
|
|
26.1
|
|
|
4.7
|
|
||
|
|
Other non-current liabilities
|
|
0.2
|
|
|
0.9
|
|
||
Derivatives not designated as hedging instruments:
|
|
|||||||||
Foreign exchange contracts
1
|
|
Other current assets
|
|
46.0
|
|
|
5.9
|
|
||
|
|
Accrued expenses and other current liabilities
|
|
2.9
|
|
|
7.4
|
|
||
Interest rate swap agreements
|
|
Other current assets
|
|
2.4
|
|
|
2.3
|
|
||
|
|
Other non-current assets
|
|
2.4
|
|
|
1.4
|
|
||
Total
|
|
|
|
$
|
754.7
|
|
|
$
|
68.6
|
|
|
Three-Month Period Ended September 30, 2016
|
|
|
||||||||||||||
|
(Effective Portion)
|
|
(Ineffective Portion and Amount Excluded From Effectiveness Testing)
|
|
|
||||||||||||
Instrument
|
Amount of
Gain/(Loss) Recognized in OCI on Derivative 1 |
|
Location of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Amount of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Location of
Gain/(Loss) Recognized in Income on Derivative |
|
Amount of
Gain/(Loss) Recognized in Income on Derivative |
|
|
||||||
Foreign exchange contracts
|
$
|
(55.2
|
)
|
|
Net product sales
|
|
$
|
71.0
|
|
|
Other income (expense), net
|
|
$
|
0.2
|
|
|
2
|
Treasury rate lock agreements
|
$
|
—
|
|
|
Interest (expense)
|
|
$
|
(1.3
|
)
|
|
Other income (expense), net
|
|
$
|
—
|
|
|
|
Interest rate swap agreements
|
$
|
1.8
|
|
|
Interest (expense)
|
|
$
|
(0.3
|
)
|
|
Other income (expense), net
|
|
$
|
—
|
|
|
|
|
Three-Month Period Ended September 30, 2015
|
|
|
||||||||||||||
|
(Effective Portion)
|
|
(Ineffective Portion and Amount Excluded From Effectiveness Testing)
|
|
|
||||||||||||
Instrument
|
Amount of
Gain/(Loss) Recognized in OCI on Derivative |
|
Location of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Amount of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Location of
Gain/(Loss) Recognized in Income on Derivative |
|
Amount of
Gain/(Loss) Recognized in Income on Derivative |
|
|
||||||
Foreign exchange contracts
|
$
|
10.8
|
|
|
Net product sales
|
|
$
|
92.9
|
|
|
Other income (expense), net
|
|
$
|
14.8
|
|
|
1
|
Treasury rate lock agreements
|
$
|
(27.9
|
)
|
|
Interest (expense)
|
|
$
|
(1.1
|
)
|
|
Other income (expense), net
|
|
$
|
(0.2
|
)
|
|
2
|
Interest rate swap agreements
|
$
|
(50.0
|
)
|
|
Interest (expense)
|
|
$
|
(0.4
|
)
|
|
Other income (expense), net
|
|
$
|
0.3
|
|
|
2
|
|
Nine-Month Period Ended September 30, 2016
|
|
|
||||||||||||||
|
(Effective Portion)
|
|
(Ineffective Portion and Amount Excluded From Effectiveness Testing)
|
|
|
||||||||||||
Instrument
|
Amount of
Gain/(Loss) Recognized in OCI on Derivative 1 |
|
Location of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Amount of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Location of
Gain/(Loss) Recognized in Income on Derivative |
|
Amount of
Gain/(Loss) Recognized in Income on Derivative |
|
|
||||||
Foreign exchange contracts
|
$
|
(197.2
|
)
|
|
Net product sales
|
|
$
|
221.0
|
|
|
Other income (expense), net
|
|
$
|
23.1
|
|
|
2
|
Treasury rate lock agreements
|
$
|
—
|
|
|
Interest (expense)
|
|
$
|
(3.9
|
)
|
|
Other income (expense), net
|
|
$
|
—
|
|
|
|
Interest rate swap agreements
|
$
|
(46.5
|
)
|
|
Interest (expense)
|
|
$
|
(1.1
|
)
|
|
Other income (expense), net
|
|
$
|
—
|
|
|
|
|
Nine-Month Period Ended September 30, 2015
|
|
|
||||||||||||||
|
(Effective Portion)
|
|
(Ineffective Portion and Amount Excluded From Effectiveness Testing)
|
|
|
||||||||||||
Instrument
|
Amount of
Gain/(Loss) Recognized in OCI on Derivative |
|
Location of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Amount of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Location of
Gain/(Loss) Recognized in Income on Derivative |
|
Amount of
Gain/(Loss) Recognized in Income on Derivative |
|
|
||||||
Foreign exchange contracts
|
$
|
298.7
|
|
|
Net product sales
|
|
$
|
253.6
|
|
|
Other income (expense), net
|
|
$
|
32.2
|
|
|
1
|
Treasury rate lock agreements
|
$
|
(27.9
|
)
|
|
Interest (expense)
|
|
$
|
(2.9
|
)
|
|
Other income (expense), net
|
|
$
|
(0.2
|
)
|
|
2
|
Interest rate swap agreements
|
$
|
6.2
|
|
|
Interest (expense)
|
|
$
|
(1.1
|
)
|
|
Other income (expense), net
|
|
$
|
0.3
|
|
|
2
|
|
|
|
|
Amount of Gain Recognized in
Income on Derivative
|
||||||||||||||
|
|
Location of Gain Recognized in Income on Derivative
|
|
Three-Month Periods Ended September 30,
|
|
Nine-Month Periods Ended
September 30,
|
||||||||||||
Instrument
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||
Interest rate swap agreements
|
|
Interest (expense)
|
|
$
|
9.4
|
|
|
$
|
16.2
|
|
|
$
|
35.7
|
|
|
$
|
45.5
|
|
|
|
|
|
Amount of Gain (Loss) Recognized in
Income on Derivative
|
||||||||||||||
|
|
Location of Gain (Loss) Recognized in Income on Derivative
|
|
Three-Month Periods Ended September 30,
|
|
Nine-Month Periods Ended September 30,
|
||||||||||||
Instrument
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||
Foreign exchange contracts
|
|
Other income (expense), net
|
|
$
|
(11.9
|
)
|
|
$
|
14.4
|
|
|
$
|
(39.1
|
)
|
|
$
|
69.3
|
|
Put options on our common stock
|
|
Other income (expense), net
|
|
$
|
—
|
|
|
$
|
(18.8
|
)
|
|
$
|
7.6
|
|
|
$
|
(9.9
|
)
|
September 30, 2016
|
|
Amortized Cost
|
|
Gross Unrealized Gain
|
|
Gross Unrealized Loss
|
|
Estimated Fair Value
|
||||||||
U.S. Treasury securities
|
|
$
|
112.7
|
|
|
$
|
0.1
|
|
|
$
|
(0.1
|
)
|
|
$
|
112.7
|
|
U.S. government-sponsored agency securities
|
|
3.5
|
|
|
—
|
|
|
—
|
|
|
3.5
|
|
||||
U.S. government-sponsored agency MBS
|
|
28.4
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
28.4
|
|
||||
Corporate debt - global
|
|
171.5
|
|
|
0.8
|
|
|
—
|
|
|
172.3
|
|
||||
Asset backed securities
|
|
26.7
|
|
|
0.1
|
|
|
—
|
|
|
26.8
|
|
||||
Marketable equity securities
|
|
870.9
|
|
|
293.7
|
|
|
(162.3
|
)
|
|
1,002.3
|
|
||||
Total available-for-sale marketable securities
|
|
$
|
1,213.7
|
|
|
$
|
294.8
|
|
|
$
|
(162.5
|
)
|
|
$
|
1,346.0
|
|
December 31, 2015
|
|
Amortized Cost
|
|
Gross Unrealized Gain
|
|
Gross Unrealized Loss
|
|
Estimated Fair Value
|
||||||||
U.S. Treasury securities
|
|
$
|
153.0
|
|
|
$
|
—
|
|
|
$
|
(0.4
|
)
|
|
$
|
152.6
|
|
U.S. government-sponsored agency MBS
|
|
29.8
|
|
|
0.1
|
|
|
(0.4
|
)
|
|
29.5
|
|
||||
Corporate debt - global
|
|
219.7
|
|
|
—
|
|
|
(1.6
|
)
|
|
218.1
|
|
||||
Asset backed securities
|
|
35.6
|
|
|
—
|
|
|
(0.1
|
)
|
|
35.5
|
|
||||
Marketable equity securities
|
|
811.5
|
|
|
468.1
|
|
|
(43.7
|
)
|
|
1,235.9
|
|
||||
Total available-for-sale marketable securities
|
|
$
|
1,249.6
|
|
|
$
|
468.2
|
|
|
$
|
(46.2
|
)
|
|
$
|
1,671.6
|
|
|
|
Amortized
Cost
|
|
Fair
Value
|
||||
Duration of one year or less
|
|
$
|
60.8
|
|
|
$
|
61.0
|
|
Duration of one through three years
|
|
270.4
|
|
|
271.0
|
|
||
Duration of three through five years
|
|
11.6
|
|
|
11.7
|
|
||
Total
|
|
$
|
342.8
|
|
|
$
|
343.7
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Raw materials
|
$
|
270.3
|
|
|
$
|
201.3
|
|
Work in process
|
103.8
|
|
|
120.0
|
|
||
Finished goods
|
133.8
|
|
|
122.1
|
|
||
Total
|
$
|
507.9
|
|
|
$
|
443.4
|
|
September 30, 2016
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Intangible Assets, Net
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|||
Acquired developed product rights
|
|
$
|
3,405.9
|
|
|
$
|
(1,632.3
|
)
|
|
$
|
1,773.6
|
|
Technology
|
|
482.6
|
|
|
(282.5
|
)
|
|
200.1
|
|
|||
Licenses
|
|
66.9
|
|
|
(25.5
|
)
|
|
41.4
|
|
|||
Other
|
|
43.4
|
|
|
(30.2
|
)
|
|
13.2
|
|
|||
|
|
3,998.8
|
|
|
(1,970.5
|
)
|
|
2,028.3
|
|
|||
Non-amortized intangible assets:
|
|
|
|
|
|
|
|
|
|
|||
Acquired IPR&D product rights
|
|
8,470.6
|
|
|
—
|
|
|
8,470.6
|
|
|||
Total intangible assets
|
|
$
|
12,469.4
|
|
|
$
|
(1,970.5
|
)
|
|
$
|
10,498.9
|
|
|
|
|
|
|
|
|
||||||
December 31, 2015
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Intangible Assets, Net
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|||
Acquired developed product rights
|
|
$
|
3,405.9
|
|
|
$
|
(1,448.3
|
)
|
|
$
|
1,957.6
|
|
Technology
|
|
565.7
|
|
|
(197.1
|
)
|
|
368.6
|
|
|||
Licenses
|
|
66.7
|
|
|
(22.3
|
)
|
|
44.4
|
|
|||
Other
|
|
44.0
|
|
|
(27.1
|
)
|
|
16.9
|
|
|||
|
|
4,082.3
|
|
|
(1,694.8
|
)
|
|
2,387.5
|
|
|||
Non-amortized intangible assets:
|
|
|
|
|
|
|
|
|
|
|||
Acquired IPR&D product rights
|
|
8,470.6
|
|
|
—
|
|
|
8,470.6
|
|
|||
Total intangible assets
|
|
$
|
12,552.9
|
|
|
$
|
(1,694.8
|
)
|
|
$
|
10,858.1
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
1.900% senior notes due 2017
|
|
$
|
501.0
|
|
|
$
|
—
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
1.900% senior notes due 2017
|
$
|
—
|
|
|
$
|
499.9
|
|
2.125% senior notes due 2018
|
997.6
|
|
|
996.7
|
|
||
2.300% senior notes due 2018
|
402.2
|
|
|
400.2
|
|
||
2.250% senior notes due 2019
|
510.3
|
|
|
502.6
|
|
||
2.875% senior notes due 2020
|
1,492.3
|
|
|
1,490.9
|
|
||
3.950% senior notes due 2020
|
519.7
|
|
|
504.9
|
|
||
3.250% senior notes due 2022
|
1,055.9
|
|
|
1,010.5
|
|
||
3.550% senior notes due 2022
|
993.2
|
|
|
992.4
|
|
||
4.000% senior notes due 2023
|
745.2
|
|
|
706.0
|
|
||
3.625% senior notes due 2024
|
1,001.1
|
|
|
994.9
|
|
||
3.875% senior notes due 2025
|
2,483.8
|
|
|
2,461.8
|
|
||
5.700% senior notes due 2040
|
247.2
|
|
|
247.2
|
|
||
5.250% senior notes due 2043
|
392.9
|
|
|
392.8
|
|
||
4.625% senior notes due 2044
|
986.8
|
|
|
986.6
|
|
||
5.000% senior notes due 2045
|
1,974.3
|
|
|
1,974.0
|
|
||
Total long-term debt
|
$
|
13,802.5
|
|
|
$
|
14,161.4
|
|
|
Three-Month Periods Ended September 30,
|
|
Nine-Month Periods Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Cost of goods sold (excluding amortization of acquired intangible assets)
|
$
|
7.4
|
|
|
$
|
8.5
|
|
|
$
|
25.0
|
|
|
$
|
23.3
|
|
Research and development
|
63.0
|
|
|
65.2
|
|
|
189.1
|
|
|
185.0
|
|
||||
Selling, general and administrative
|
77.3
|
|
|
76.2
|
|
|
237.6
|
|
|
218.1
|
|
||||
Total share-based compensation expense
|
147.7
|
|
|
149.9
|
|
|
451.7
|
|
|
426.4
|
|
||||
Tax benefit related to share-based compensation expense
|
40.6
|
|
|
42.8
|
|
|
124.7
|
|
|
124.0
|
|
||||
Reduction in income
|
$
|
107.1
|
|
|
$
|
107.1
|
|
|
$
|
327.0
|
|
|
$
|
302.4
|
|
|
Stock
Options
|
|
Restricted Stock
Units
|
|
Performance-
Based Restricted Stock Units
(in thousands)
|
|||
Outstanding at December 31, 2015
|
75.7
|
|
|
7.7
|
|
|
334
|
|
Changes during the Year:
|
|
|
|
|
|
|
|
|
Granted
|
8.3
|
|
|
1.4
|
|
|
203
|
|
Exercised / Released
|
(6.6
|
)
|
|
(2.7
|
)
|
|
(72
|
)
|
Forfeited
|
(1.9
|
)
|
|
(0.3
|
)
|
|
(29
|
)
|
Outstanding at September 30, 2016
|
75.5
|
|
|
6.1
|
|
|
436
|
|
|
Stock
Options
|
|
Restricted Stock
Units
|
|
Performance-
Based Restricted
Stock Units
|
||||||
Unrecognized compensation cost
|
$
|
605.3
|
|
|
$
|
287.4
|
|
|
$
|
26.9
|
|
Expected weighted-average period in years of compensation cost to be recognized
|
2.0
|
|
|
1.4
|
|
|
1.8
|
|
|
|
Three-Month Periods Ended September 30,
|
||||||||
|
|
Research and Development Expense
|
|
|
||||||
|
|
Upfront Fees
|
|
Milestones
|
|
Extension/Termination of Agreements
|
|
Amortization of Prepaid Research and Development
|
|
Equity Investments Made During Period
|
Agios
|
2016
|
$—
|
|
$—
|
|
$—
|
|
$0.3
|
|
$—
|
bluebird
|
2016
|
—
|
|
—
|
|
—
|
|
2.1
|
|
—
|
|
2015
|
—
|
|
—
|
|
—
|
|
2.1
|
|
—
|
Jounce
|
2016
|
237.6
|
|
—
|
|
—
|
|
—
|
|
23.6
|
Juno
3
|
2016
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2015
|
575.1
|
|
—
|
|
—
|
|
—
|
|
424.9
|
Nurix
|
2016
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2015
|
149.8
|
|
—
|
|
—
|
|
—
|
|
17.0
|
Other Collaboration Arrangements
|
2016
|
86.0
|
|
—
|
|
8.8
|
|
10.4
|
|
15.0
|
|
2015
|
26.9
|
|
—
|
|
10.0
|
|
6.8
|
|
—
|
|
|
Nine-Month Periods Ended September 30,
|
||||||||
|
|
Research and Development Expense
|
|
|
||||||
|
|
Upfront Fees
|
|
Milestones
|
|
Extension/Termination of Agreements
|
|
Amortization of Prepaid Research and Development
|
|
Equity Investments Made During Period
|
Agios
|
2016
|
$200.0
|
|
$25.0
|
|
$—
|
|
$0.5
|
|
$—
|
|
2015
|
9.0
|
|
—
|
|
—
|
|
—
|
|
—
|
AstraZeneca
|
2016
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2015
|
450.0
|
|
—
|
|
—
|
|
—
|
|
—
|
bluebird
|
2016
|
10.0
|
|
—
|
|
—
|
|
6.3
|
|
—
|
|
2015
|
—
|
|
—
|
|
—
|
|
2.8
|
|
—
|
Jounce
|
2016
|
237.6
|
|
—
|
|
—
|
|
—
|
|
23.6
|
Juno
3
|
2016
|
50.0
|
|
—
|
|
—
|
|
—
|
|
41.0
|
|
2015
|
575.1
|
|
—
|
|
—
|
|
—
|
|
424.9
|
Lycera
|
2016
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2015
|
69.5
|
|
—
|
|
—
|
|
—
|
|
10.0
|
Nurix
|
2016
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2015
|
149.8
|
|
—
|
|
—
|
|
—
|
|
17.0
|
Other Collaboration Arrangements
|
2016
|
190.0
|
|
50.5
|
|
8.8
|
|
15.8
|
|
52.0
|
|
2015
|
86.9
|
|
8.0
|
|
18.1
|
|
18.9
|
|
50.0
|
|
Balances as of:
|
|
Intangible Asset Balance
|
|
Equity Investment Balance
|
|
Percentage of Outstanding Equity
|
Acceleron
|
September 30, 2016
|
|
$—
|
|
$195.9
|
|
14%
|
|
December 31, 2015
|
|
—
|
|
224.9
|
|
14%
|
Agios
|
September 30, 2016
|
|
0.5
|
|
276.9
|
|
13%
|
|
December 31, 2015
|
|
1.0
|
|
340.4
|
|
13%
|
bluebird
|
September 30, 2016
|
|
13.9
|
|
N/A
|
|
N/A
|
|
December 31, 2015
|
|
20.2
|
|
N/A
|
|
N/A
|
Jounce
|
September 30, 2016
|
|
—
|
|
23.6
|
|
11%
|
|
December 31, 2015
|
|
—
|
|
N/A
|
|
N/A
|
Juno
|
September 30, 2016
|
|
—
|
|
308.4
|
|
10%
|
|
December 31, 2015
|
|
—
|
|
401.8
|
|
9%
|
Lycera
|
September 30, 2016
|
|
3.0
|
|
10.0
|
|
8%
|
|
December 31, 2015
|
|
3.0
|
|
10.0
|
|
8%
|
Nurix
|
September 30, 2016
|
|
0.2
|
|
17.0
|
|
11%
|
|
December 31, 2015
|
|
0.2
|
|
17.0
|
|
11%
|
Other Collaboration Arrangements
|
September 30, 2016
|
|
32.3
|
|
210.1
|
|
N/A
|
|
December 31, 2015
|
|
48.2
|
|
335.0
|
|
N/A
|
1
|
Activity and balances are presented specifically for notable new collaborations and for those collaborations which we have described in detail in our
2015
Annual Report on Form 10-K if there has been new significant activity during the periods presented. Amounts related to collaborations that are not specifically presented are included in the aggregate as Other Collaboration Arrangements.
|
2
|
In addition to the expenses noted in the tables above, we may also incur expenses for collaboration agreement related activities that are managed or funded by us.
|
3
|
Our equity investment in Juno made in the first quarter of 2016 was transacted at a price per share that exceeded the market value of Juno's publicly traded common stock on the transaction closing date, resulting in an expense for the premium of
$6.0 million
that was recorded in the Consolidated Statements of Operations as Other income (expense), net in the first quarter of 2016.
|
Disease
|
Geographic Approvals
|
Breast Cancer
|
|
Metastatic breast cancer, after failure of combination chemotherapy for metastatic disease or relapse within six months of adjuvant chemotherapy. Prior therapy should have included an anthracycline unless clinically contraindicated.
|
- United States
- Other international markets
|
Metastatic breast cancer in adult patients who have failed first-line treatment for metastatic disease for whom standard, anthracycline containing therapy is not indicated
|
- European Union
|
Breast cancer
|
- Japan
|
Non-Small Cell Lung Cancer (NSCLC)
|
|
Locally advanced or metastatic NSCLC, as first-line treatment in combination with carboplatin, in patients who are not candidates for curative surgery or radiation therapy
|
- United States
- European Union
- Other international markets
|
NSCLC
|
- Japan
|
Pancreatic Cancer
|
|
Metastatic adenocarcinoma of the pancreas, a form of pancreatic cancer, as first line treatment in combination with gemcitabine
|
- United States
- European Union
- Other international markets
|
Unresectable pancreatic cancer
|
- Japan
|
Gastric Cancer
|
- Japan
|
Disease
|
Geographic Approvals
|
Psoriatic arthritis
|
|
Adult patients with active psoriatic arthritis
|
- United States
|
Adult patients with active psoriatic arthritis who have had an inadequate response or who have been intolerant to a prior DMARD therapy
|
- European Union
|
Psoriasis
|
|
Patients with moderate to severe plaque psoriasis who are candidates for phototherapy or systemic therapy
|
- United States
- Other international markets
|
Adult patients with moderate to severe chronic plaque psoriasis 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
|
- European Union
|
Disease
|
Geographic Approvals
|
Multiple myeloma
|
|
Newly diagnosed multiple myeloma, in combination with dexamethasone
|
- United States
|
Thalomid in combination with dexamethasone is indicated for induction therapy prior to high dose chemotherapy with autologous stem cell rescue, for the treatment of patients with untreated multiple myeloma
|
- Other international markets
|
Multiple myeloma after failure of standard therapies (relapsed or refractory)
|
- Other international markets
|
Thalidomide Celgene
TM
in combination with melphalan and prednisone as a first line treatment for patients with untreated multiple myeloma who are aged sixty-five years of age or older or ineligible for high dose chemotherapy
|
- European Union
- Other international markets |
Erythema nodosum leprosum
|
|
Cutaneous manifestations of moderate to severe erythema nodosum leprosum (ENL), an inflammatory complication of leprosy
|
- United States
- Other international markets |
Maintenance therapy for prevention and suppression of the cutaneous manifestation of ENL recurrence
|
- United States
- Other international markets |
|
Three-Month Periods Ended September 30,
|
|
Increase
|
|
Percent Change
|
|||||||||
|
2016
|
|
2015
|
|
|
|||||||||
Total revenue
|
$
|
2,982.8
|
|
|
$
|
2,334.1
|
|
|
$
|
648.7
|
|
|
27.8
|
%
|
Net income (loss)
|
$
|
171.4
|
|
|
$
|
(34.1
|
)
|
|
$
|
205.5
|
|
|
N/A
|
|
Diluted earnings (loss) per share
|
$
|
0.21
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.25
|
|
|
N/A
|
|
|
Nine-Month Periods Ended September 30,
|
|
Increase
|
|
Percent Change
|
|||||||||
|
2016
|
|
2015
|
|
|
|||||||||
Total revenue
|
$
|
8,248.7
|
|
|
$
|
6,692.7
|
|
|
$
|
1,556.0
|
|
|
23.2
|
%
|
Net income
|
$
|
1,570.3
|
|
|
$
|
1,041.0
|
|
|
$
|
529.3
|
|
|
50.8
|
%
|
Diluted earnings per share
|
$
|
1.95
|
|
|
$
|
1.26
|
|
|
$
|
0.69
|
|
|
54.8
|
%
|
|
Three-Month Periods Ended September 30,
|
|
Increase (Decrease)
|
|
Percent Change
|
|||||||||
|
2016
|
|
2015
|
|
|
|||||||||
Net product sales:
|
|
|
|
|
|
|
|
|
|
|
|
|||
REVLIMID
®
|
$
|
1,891.1
|
|
|
$
|
1,453.5
|
|
|
$
|
437.6
|
|
|
30.1
|
%
|
POMALYST
®
/IMNOVID
®
|
341.1
|
|
|
256.5
|
|
|
84.6
|
|
|
33.0
|
%
|
|||
OTEZLA
®
|
274.6
|
|
|
138.7
|
|
|
135.9
|
|
|
98.0
|
%
|
|||
ABRAXANE
®
|
233.3
|
|
|
229.9
|
|
|
3.4
|
|
|
1.5
|
%
|
|||
VIDAZA
®
|
154.7
|
|
|
147.6
|
|
|
7.1
|
|
|
4.8
|
%
|
|||
azacitidine for injection
|
15.3
|
|
|
21.3
|
|
|
(6.0
|
)
|
|
(28.2
|
)%
|
|||
THALOMID
®
|
38.3
|
|
|
45.1
|
|
|
(6.8
|
)
|
|
(15.1
|
)%
|
|||
ISTODAX
®
|
19.4
|
|
|
17.3
|
|
|
2.1
|
|
|
12.1
|
%
|
|||
Other
|
0.8
|
|
|
2.7
|
|
|
(1.9
|
)
|
|
(70.4
|
)%
|
|||
Total net product sales
|
$
|
2,968.6
|
|
|
$
|
2,312.6
|
|
|
$
|
656.0
|
|
|
28.4
|
%
|
Other revenue
|
14.2
|
|
|
21.5
|
|
|
(7.3
|
)
|
|
(34.0
|
)%
|
|||
Total revenue
|
$
|
2,982.8
|
|
|
$
|
2,334.1
|
|
|
$
|
648.7
|
|
|
27.8
|
%
|
|
Sales Returns
|
|
Discounts
|
|
Government
Rebates
|
|
Chargebacks
and Distributor
Service Fees
|
|
Total
|
||||||||||
Balance at June 30, 2016
|
$
|
14.4
|
|
|
$
|
14.6
|
|
|
$
|
326.8
|
|
|
$
|
165.8
|
|
|
$
|
521.6
|
|
Allowances for sales during prior periods
|
(0.7
|
)
|
|
—
|
|
|
3.1
|
|
|
(7.0
|
)
|
|
(4.6
|
)
|
|||||
Allowances for sales during 2016
|
2.8
|
|
|
40.3
|
|
|
164.1
|
|
|
191.1
|
|
|
398.3
|
|
|||||
Credits/deductions issued for prior year sales
|
(1.7
|
)
|
|
—
|
|
|
(67.6
|
)
|
|
—
|
|
|
(69.3
|
)
|
|||||
Credits/deductions issued for sales during 2016
|
(1.2
|
)
|
|
(39.8
|
)
|
|
(83.9
|
)
|
|
(184.1
|
)
|
|
(309.0
|
)
|
|||||
Balance at September 30, 2016
|
$
|
13.6
|
|
|
$
|
15.1
|
|
|
$
|
342.5
|
|
|
$
|
165.8
|
|
|
$
|
537.0
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at June 30, 2015
|
$
|
12.3
|
|
|
$
|
12.4
|
|
|
$
|
169.6
|
|
|
$
|
119.7
|
|
|
$
|
314.0
|
|
Allowances for sales during prior periods
|
—
|
|
|
—
|
|
|
9.2
|
|
|
—
|
|
|
9.2
|
|
|||||
Allowances for sales during 2015
|
2.7
|
|
|
30.5
|
|
|
89.5
|
|
|
125.3
|
|
|
248.0
|
|
|||||
Credits/deductions issued for prior year sales
|
(1.2
|
)
|
|
—
|
|
|
(3.5
|
)
|
|
(0.1
|
)
|
|
(4.8
|
)
|
|||||
Credits/deductions issued for sales during 2015
|
(1.8
|
)
|
|
(31.4
|
)
|
|
(57.9
|
)
|
|
(127.6
|
)
|
|
(218.7
|
)
|
|||||
Balance at September 30, 2015
|
$
|
12.0
|
|
|
$
|
11.5
|
|
|
$
|
206.9
|
|
|
$
|
117.3
|
|
|
$
|
347.7
|
|
|
Three-Month Periods Ended September 30,
|
|
Increase (Decrease)
|
|
Percent Change
|
|||||||||
|
2016
|
|
2015
|
|
|
|||||||||
Cost of goods sold (excluding amortization of acquired intangible assets)
|
$
|
107.7
|
|
|
$
|
109.9
|
|
|
$
|
(2.2
|
)
|
|
(2.0
|
)%
|
Percent of net product sales
|
3.6
|
%
|
|
4.8
|
%
|
|
|
|
|
|
|
|||
Research and development
|
$
|
1,653.5
|
|
|
$
|
1,304.5
|
|
|
$
|
349.0
|
|
|
26.8
|
%
|
Percent of total revenue
|
55.4
|
%
|
|
55.9
|
%
|
|
|
|
|
|
|
|||
Selling, general and administrative
|
$
|
698.0
|
|
|
$
|
550.3
|
|
|
$
|
147.7
|
|
|
26.8
|
%
|
Percent of total revenue
|
23.4
|
%
|
|
23.6
|
%
|
|
|
|
|
|
|
|||
Amortization of acquired intangible assets
|
$
|
87.1
|
|
|
$
|
63.6
|
|
|
$
|
23.5
|
|
|
36.9
|
%
|
Acquisition related charges and restructuring, net
|
$
|
25.0
|
|
|
$
|
226.2
|
|
|
$
|
(201.2
|
)
|
|
(88.9
|
)%
|
|
Three-Month Periods Ended September 30,
|
|
Increase (Decrease)
|
||||||||
|
2016
|
|
2015
|
|
|||||||
Human pharmaceutical clinical programs
|
$
|
282.4
|
|
|
$
|
263.7
|
|
|
$
|
18.7
|
|
Other pharmaceutical programs
|
201.2
|
|
|
170.9
|
|
|
30.3
|
|
|||
Drug discovery and development
|
195.0
|
|
|
94.4
|
|
|
100.6
|
|
|||
Collaboration arrangements
|
345.2
|
|
|
770.7
|
|
|
(425.5
|
)
|
|||
Research and development asset acquisition expenses
|
623.3
|
|
|
—
|
|
|
623.3
|
|
|||
Cellular therapy
|
6.4
|
|
|
4.8
|
|
|
1.6
|
|
|||
Total
|
$
|
1,653.5
|
|
|
$
|
1,304.5
|
|
|
$
|
349.0
|
|
Product
|
|
Disease Indication
|
|
Major
Market
|
|
Regulatory
Agency
|
|
Date of Submission or Filing
|
REVLIMID
®
|
|
Newly diagnosed multiple myeloma maintenance after receiving an autologous stem-cell transplant
|
|
U.S.
|
|
FDA
|
|
Q3 2016 (filed)
|
ISTODAX
®
|
|
Peripheral T-cell lymphoma
|
|
Japan
|
|
PMDA
1
|
|
Q3 2016 (submitted)
|
enasidenib (AG-221)
|
|
Relapsed or refractory acute myeloid leukemia with isocitrate dehydrogenase-2 (IDH2) mutation
|
|
U.S.
|
|
FDA
|
|
Q4 2016 (expected submission)
|
Product
|
|
Disease Indication
|
|
Major
Market
|
|
Regulatory
Agency
|
|
Action
|
REVLIMID
®
|
|
Relapsed or refractory mantle cell lymphoma
|
|
EU
|
|
EC
|
|
Approval
|
|
|
Three-Month Periods Ended September 30,
|
||||||
Acquisitions
|
|
2016
|
|
2015
|
||||
Abraxis
|
|
$
|
37.9
|
|
|
$
|
38.0
|
|
Avila
|
|
7.2
|
|
|
11.8
|
|
||
Gloucester
|
|
22.9
|
|
|
12.8
|
|
||
Pharmion
|
|
1.0
|
|
|
1.0
|
|
||
Quanticel
|
|
18.1
|
|
|
—
|
|
||
Total amortization
|
|
$
|
87.1
|
|
|
$
|
63.6
|
|
|
|
Three-Month Periods Ended September 30,
|
|
|
||||||||
|
|
2016
|
|
2015
|
|
Change
|
||||||
Foreign exchange gains (losses), including foreign exchange derivative instruments not designated as hedging instruments
|
|
$
|
(0.4
|
)
|
|
$
|
(3.2
|
)
|
|
$
|
2.8
|
|
Fair value adjustments of forward point amounts
|
|
(0.1
|
)
|
|
14.7
|
|
|
(14.8
|
)
|
|||
(Loss) from sale of put options
|
|
—
|
|
|
(18.8
|
)
|
|
18.8
|
|
|||
Impairment charges
|
|
(45.5
|
)
|
|
(21.5
|
)
|
|
(24.0
|
)
|
|||
Milestones received
|
|
—
|
|
|
12.0
|
|
|
(12.0
|
)
|
|||
Other
|
|
11.8
|
|
|
(2.8
|
)
|
|
14.6
|
|
|||
Total Other income (expense), net
|
|
$
|
(34.2
|
)
|
|
$
|
(19.6
|
)
|
|
$
|
(14.6
|
)
|
|
Nine-Month Periods Ended September 30,
|
|
Increase (Decrease)
|
|
Percent Change
|
|||||||||
|
2016
|
|
2015
|
|
|
|||||||||
Net product sales:
|
|
|
|
|
|
|
|
|
|
|
|
|||
REVLIMID
®
|
$
|
5,165.5
|
|
|
$
|
4,240.4
|
|
|
$
|
925.1
|
|
|
21.8
|
%
|
POMALYST
®
/IMNOVID
®
|
932.8
|
|
|
689.5
|
|
|
243.3
|
|
|
35.3
|
%
|
|||
OTEZLA
®
|
712.1
|
|
|
288.7
|
|
|
423.4
|
|
|
146.7
|
%
|
|||
ABRAXANE
®
|
707.3
|
|
|
697.5
|
|
|
9.8
|
|
|
1.4
|
%
|
|||
VIDAZA
®
|
455.5
|
|
|
443.3
|
|
|
12.2
|
|
|
2.8
|
%
|
|||
azacitidine for injection
|
55.5
|
|
|
64.2
|
|
|
(8.7
|
)
|
|
(13.6
|
)%
|
|||
THALOMID
®
|
117.0
|
|
|
139.9
|
|
|
(22.9
|
)
|
|
(16.4
|
)%
|
|||
ISTODAX
®
|
58.6
|
|
|
51.7
|
|
|
6.9
|
|
|
13.3
|
%
|
|||
Other
|
3.5
|
|
|
6.7
|
|
|
(3.2
|
)
|
|
(47.8
|
)%
|
|||
Total net product sales
|
$
|
8,207.8
|
|
|
$
|
6,621.9
|
|
|
$
|
1,585.9
|
|
|
23.9
|
%
|
Other revenue
|
40.9
|
|
|
70.8
|
|
|
(29.9
|
)
|
|
(42.2
|
)%
|
|||
Total revenue
|
$
|
8,248.7
|
|
|
$
|
6,692.7
|
|
|
$
|
1,556.0
|
|
|
23.2
|
%
|
|
Sales Returns
|
|
Discounts
|
|
Government
Rebates
|
|
Chargebacks
and Distributor
Service Fees
|
|
Total
|
||||||||||
Balance at December 31, 2015
|
$
|
17.4
|
|
|
$
|
12.2
|
|
|
$
|
225.1
|
|
|
$
|
141.7
|
|
|
$
|
396.4
|
|
Allowances for sales during prior periods
|
(5.1
|
)
|
|
—
|
|
|
17.0
|
|
|
(12.7
|
)
|
|
(0.8
|
)
|
|||||
Allowances for sales during 2016
|
9.0
|
|
|
112.1
|
|
|
482.7
|
|
|
547.8
|
|
|
1,151.6
|
|
|||||
Credits/deductions issued for prior year sales
|
(4.6
|
)
|
|
(10.5
|
)
|
|
(157.2
|
)
|
|
(56.4
|
)
|
|
(228.7
|
)
|
|||||
Credits/deductions issued for sales during 2016
|
(3.1
|
)
|
|
(98.7
|
)
|
|
(225.1
|
)
|
|
(454.6
|
)
|
|
(781.5
|
)
|
|||||
Balance at September 30, 2016
|
$
|
13.6
|
|
|
$
|
15.1
|
|
|
$
|
342.5
|
|
|
$
|
165.8
|
|
|
$
|
537.0
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2014
|
$
|
10.2
|
|
|
$
|
11.5
|
|
|
$
|
138.5
|
|
|
$
|
94.4
|
|
|
$
|
254.6
|
|
Allowances for sales during prior periods
|
1.1
|
|
|
—
|
|
|
1.8
|
|
|
(3.1
|
)
|
|
(0.2
|
)
|
|||||
Allowances for sales during 2015
|
7.5
|
|
|
84.0
|
|
|
294.5
|
|
|
381.5
|
|
|
767.5
|
|
|||||
Credits/deductions issued for prior year sales
|
(3.9
|
)
|
|
(8.2
|
)
|
|
(70.5
|
)
|
|
(50.6
|
)
|
|
(133.2
|
)
|
|||||
Credits/deductions issued for sales during 2015
|
(2.9
|
)
|
|
(75.8
|
)
|
|
(157.4
|
)
|
|
(304.9
|
)
|
|
(541.0
|
)
|
|||||
Balance at September 30, 2015
|
$
|
12.0
|
|
|
$
|
11.5
|
|
|
$
|
206.9
|
|
|
$
|
117.3
|
|
|
$
|
347.7
|
|
|
Nine-Month Periods Ended September 30,
|
|
Increase (Decrease)
|
|
Percent Change
|
|||||||||
|
2016
|
|
2015
|
|
|
|||||||||
Cost of goods sold (excluding amortization of acquired intangible assets)
|
$
|
324.5
|
|
|
$
|
314.7
|
|
|
$
|
9.8
|
|
|
3.1
|
%
|
Percent of net product sales
|
4.0
|
%
|
|
4.8
|
%
|
|
|
|
|
|
|
|||
Research and development
|
$
|
3,335.4
|
|
|
$
|
2,920.5
|
|
|
$
|
414.9
|
|
|
14.2
|
%
|
Percent of total revenue
|
40.4
|
%
|
|
43.6
|
%
|
|
|
|
|
|
|
|||
Selling, general and administrative
|
$
|
1,973.1
|
|
|
$
|
1,696.3
|
|
|
$
|
276.8
|
|
|
16.3
|
%
|
Percent of total revenue
|
23.9
|
%
|
|
25.3
|
%
|
|
|
|
|
|
|
|||
Amortization of acquired intangible assets
|
$
|
353.7
|
|
|
$
|
190.9
|
|
|
$
|
162.8
|
|
|
85.3
|
%
|
Acquisition related charges and restructuring, net
|
$
|
25.3
|
|
|
$
|
215.9
|
|
|
$
|
(190.6
|
)
|
|
(88.3
|
)%
|
|
Nine-Month Periods Ended September 30,
|
|
Increase (Decrease)
|
||||||||
|
2016
|
|
2015
|
|
|||||||
Human pharmaceutical clinical programs
|
$
|
838.9
|
|
|
$
|
716.3
|
|
|
$
|
122.6
|
|
Other pharmaceutical programs
|
575.7
|
|
|
518.9
|
|
|
56.8
|
|
|||
Drug discovery and development
|
486.2
|
|
|
279.2
|
|
|
207.0
|
|
|||
Collaboration arrangements
|
794.5
|
|
|
1,388.1
|
|
|
(593.6
|
)
|
|||
Research and development asset acquisition expenses
|
623.3
|
|
|
—
|
|
|
623.3
|
|
|||
Cellular therapy
|
16.8
|
|
|
18.0
|
|
|
(1.2
|
)
|
|||
Total
|
$
|
3,335.4
|
|
|
$
|
2,920.5
|
|
|
$
|
414.9
|
|
|
|
Nine-Month Periods Ended September 30,
|
||||||
Acquisitions
|
|
2016
|
|
2015
|
||||
Abraxis
|
|
$
|
113.8
|
|
|
$
|
113.9
|
|
Avila
|
|
113.9
|
|
|
35.4
|
|
||
Gloucester
|
|
68.6
|
|
|
38.6
|
|
||
Pharmion
|
|
3.0
|
|
|
3.0
|
|
||
Quanticel
|
|
54.4
|
|
|
—
|
|
||
Total amortization
|
|
$
|
353.7
|
|
|
$
|
190.9
|
|
|
|
Nine-Month Periods Ended September 30,
|
|
|
||||||||
|
|
2016
|
|
2015
|
|
Change
|
||||||
Foreign exchange gains (losses), including foreign exchange derivative instruments not designated as hedging instruments
|
|
$
|
3.9
|
|
|
$
|
(4.7
|
)
|
|
$
|
8.6
|
|
Premium paid on equity investment
|
|
(6.0
|
)
|
|
—
|
|
|
(6.0
|
)
|
|||
Fair value adjustments of forward point amounts
|
|
21.0
|
|
|
35.5
|
|
|
(14.5
|
)
|
|||
Gain (loss) from sale of put options
|
|
7.6
|
|
|
(9.9
|
)
|
|
17.5
|
|
|||
Impairment charges
|
|
(92.8
|
)
|
|
(27.3
|
)
|
|
(65.5
|
)
|
|||
Gain on sale of LifebankUSA business
|
|
37.5
|
|
|
—
|
|
|
37.5
|
|
|||
Gain on sale of equity investment in Flexus Biosciences, Inc.
|
|
7.1
|
|
|
85.9
|
|
|
(78.8
|
)
|
|||
Milestones received
|
|
—
|
|
|
12.0
|
|
|
(12.0
|
)
|
|||
Other
|
|
10.2
|
|
|
(8.3
|
)
|
|
18.5
|
|
|||
Total Other income (expense), net
|
|
$
|
(11.5
|
)
|
|
$
|
83.2
|
|
|
$
|
(94.7
|
)
|
|
September 30, 2016
|
|
December 31, 2015
|
|
Increase (Decrease)
|
||||||
Financial assets:
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
5,522.6
|
|
|
$
|
4,880.3
|
|
|
$
|
642.3
|
|
Marketable securities available for sale
|
1,346.0
|
|
|
1,671.6
|
|
|
(325.6
|
)
|
|||
Total financial assets
|
$
|
6,868.6
|
|
|
$
|
6,551.9
|
|
|
$
|
316.7
|
|
Debt:
|
|
|
|
|
|
|
|
|
|||
Short-term borrowings and current portion of long-term debt
|
$
|
501.0
|
|
|
$
|
—
|
|
|
$
|
501.0
|
|
Long-term debt, net of discount
|
13,802.5
|
|
|
14,161.4
|
|
|
(358.9
|
)
|
|||
Total debt
|
$
|
14,303.5
|
|
|
$
|
14,161.4
|
|
|
$
|
142.1
|
|
|
|
|
|
|
|
||||||
Working capital
1
|
$
|
6,988.3
|
|
|
$
|
7,492.6
|
|
|
$
|
(504.3
|
)
|
1
|
Includes Cash and cash equivalents, Marketable securities available for sale, Accounts receivable, net of allowances, Inventory and Other current assets, less Short-term borrowings and current portion of long-term debt, Accounts payable, Accrued expenses and other current liabilities, and the current portion of Income taxes payable.
|
|
Nine-Month Periods Ended September 30,
|
|
|
||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
Net cash provided by operating activities
|
$
|
2,633.4
|
|
|
$
|
1,425.8
|
|
|
$
|
1,207.6
|
|
Net cash (used in) investing activities
|
$
|
(298.0
|
)
|
|
$
|
(5,897.8
|
)
|
|
$
|
5,599.8
|
|
Net cash (used in) provided by financing activities
|
$
|
(1,698.2
|
)
|
|
$
|
6,397.4
|
|
|
$
|
(8,095.6
|
)
|
|
Duration
|
||||||||||||||
|
Less Than
1 Year
|
|
1 to 3 Years
|
|
3 to 5 Years
|
|
Total
|
||||||||
Principal amount
|
$
|
60.5
|
|
|
$
|
268.8
|
|
|
$
|
11.3
|
|
|
$
|
340.6
|
|
Fair value
|
$
|
61.0
|
|
|
$
|
271.0
|
|
|
$
|
11.7
|
|
|
$
|
343.7
|
|
Weighted average interest rate
|
1.1
|
%
|
|
1.2
|
%
|
|
1.9
|
%
|
|
1.2
|
%
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
1.900% senior notes due 2017
|
|
$
|
501.0
|
|
|
$
|
—
|
|
|
Principal
Amount
|
|
Carrying
Value
|
||||
2.125% senior notes due 2018
|
$
|
1,000.0
|
|
|
$
|
997.6
|
|
2.300% senior notes due 2018
|
400.0
|
|
|
402.2
|
|
||
2.250% senior notes due 2019
|
500.0
|
|
|
510.3
|
|
||
2.875% senior notes due 2020
|
1,500.0
|
|
|
1,492.3
|
|
||
3.950% senior notes due 2020
|
500.0
|
|
|
519.7
|
|
||
3.250% senior notes due 2022
|
1,000.0
|
|
|
1,055.9
|
|
||
3.550% senior notes due 2022
|
1,000.0
|
|
|
993.2
|
|
||
4.000% senior notes due 2023
|
700.0
|
|
|
745.2
|
|
||
3.625% senior notes due 2024
|
1,000.0
|
|
|
1,001.1
|
|
||
3.875% senior notes due 2025
|
2,500.0
|
|
|
2,483.8
|
|
||
5.700% senior notes due 2040
|
250.0
|
|
|
247.2
|
|
||
5.250% senior notes due 2043
|
400.0
|
|
|
392.9
|
|
||
4.625% senior notes due 2044
|
1,000.0
|
|
|
986.8
|
|
||
5.000% senior notes due 2045
|
2,000.0
|
|
|
1,974.3
|
|
||
Total long-term debt
|
$
|
13,750.0
|
|
|
$
|
13,802.5
|
|
|
|
Notional Amount
|
||||||
Foreign Currency
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Australian Dollar
|
|
$
|
53.3
|
|
|
$
|
45.1
|
|
British Pound
|
|
188.2
|
|
|
289.3
|
|
||
Canadian Dollar
|
|
164.8
|
|
|
135.9
|
|
||
Euro
|
|
1,936.9
|
|
|
2,934.3
|
|
||
Japanese Yen
|
|
719.8
|
|
|
510.4
|
|
||
Swedish Krona
|
|
3.0
|
|
|
—
|
|
||
Total
|
|
$
|
3,066.0
|
|
|
$
|
3,915.0
|
|
|
Notional Amount
1
|
||||||
|
September 30, 2016
|
|
December 31, 2015
|
||||
Foreign currency option contracts designated as hedging activity:
|
|
|
|
||||
Purchased Put
|
$
|
1,016.6
|
|
|
$
|
641.5
|
|
Written Call
|
$
|
1,126.9
|
|
|
$
|
690.0
|
|
|
Notional Amount
|
||||||
|
September 30, 2016
|
|
December 31, 2015
|
||||
Forward starting interest rate swap contracts:
|
|
|
|
||||
Forward starting swaps with effective dates in 2017
|
$
|
500.0
|
|
|
$
|
200.0
|
|
Forward starting swaps with effective dates in 2018
|
$
|
500.0
|
|
|
$
|
—
|
|
•
|
In general, preclinical tests and clinical trials can take many years and require the expenditure of substantial resources, and the data obtained from these tests and trials may not lead to regulatory approval;
|
•
|
Delays or rejections may be encountered during any stage of the regulatory process if the clinical or other data fails to demonstrate compliance with a regulatory agency’s requirements for safety, efficacy and quality;
|
•
|
Requirements for approval may become more stringent due to changes in regulatory agency policy or the adoption of new regulations or legislation;
|
•
|
Even if a product is approved, the scope of the approval may significantly limit the indicated uses or the patient population for which the product may be marketed and may impose significant limitations in the nature of warnings, precautions and contra-indications that could materially affect the sales and profitability of the product;
|
•
|
After a product is approved, the FDA or similar bodies in other countries may withdraw or modify an approval in a significant manner or request that we perform additional clinical trials or change the labeling of the product due to a number of reasons, including safety concerns, adverse events and side effects;
|
•
|
Products, such as REVLIMID
®
and POMALYST
®
/IMNOVID
®
, that receive accelerated approval can be subject to an expedited withdrawal if post-marketing restrictions are not adhered to or are shown to be inadequate to assure safe use, or if the drug is shown to be unsafe or ineffective under its conditions of use;
|
•
|
Guidelines and recommendations published by various governmental and non-governmental organizations can reduce the use of our approved products;
|
•
|
Approved products, as well as their manufacturers, are subject to continuing and ongoing review by regulatory agencies, and the discovery of previously unknown problems with these products or the failure to comply with manufacturing or quality control requirements may result in restrictions on the manufacture, sale or use of a product or its withdrawal from the market; and
|
•
|
Changes in regulatory agency policy or the adoption of new regulations or legislation could impose restrictions on the sale or marketing of our approved products.
|
•
|
protection of the environment, privacy, healthcare reimbursement programs, and competition;
|
•
|
parallel importation of prescription drugs from outside the United States at prices that are regulated by the governments of various foreign countries; and
|
•
|
mandated disclosures of clinical trial or other data, such as the EMA’s policy on publication of clinical data.
|
•
|
Hematology and Oncology: AbbVie, Amgen, AstraZeneca, Bristol-Myers-Squibb, Eisai, Gilead, Johnson & Johnson, Merck, Novartis, Roche/Genentech, Sanofi and Takeda; and
|
•
|
Inflammation and Immunology: AbbVie, Amgen, Biogen, Eisai, Eli Lilly, Johnson & Johnson, Merck, Novartis, Pfizer and UCB S.A.
|
•
|
significant damage awards, fines, penalties or other payments, and administrative remedies, such as exclusion and/or debarment from government programs, or other rulings that preclude us from operating our business in a certain manner;
|
•
|
changes and additional costs to our business operations to avoid risks associated with such litigation or investigations;
|
•
|
product recalls;
|
•
|
reputational damage and decreased demand for our products; and
|
•
|
expenditure of significant time and resources that would otherwise be available for operating our business.
|
•
|
the failure of the product candidate in preclinical or clinical studies;
|
•
|
adverse patient reactions to the product candidate or indications of other safety concerns;
|
•
|
insufficient clinical trial data to support the effectiveness or superiority of the product candidate;
|
•
|
our inability to manufacture sufficient quantities of the product candidate for development or commercialization activities in a timely and cost-efficient manner;
|
•
|
our failure to obtain, or delays in obtaining, the required regulatory approvals for the product candidate, the facilities or the process used to manufacture the product candidate;
|
•
|
changes in the regulatory environment, including pricing and reimbursement, that make development of a new product or of an existing product for a new indication no longer attractive;
|
•
|
the failure to obtain or maintain satisfactory drug reimbursement rates by governmental or third-party payers; and
|
•
|
the development of a competitive product or therapy.
|
•
|
increased management, travel, infrastructure and legal compliance costs;
|
•
|
longer payment and reimbursement cycles;
|
•
|
difficulties in enforcing contracts and collecting accounts receivable;
|
•
|
local marketing and promotional challenges;
|
•
|
lack of consistency, and unexpected changes, in foreign regulatory requirements and practices;
|
•
|
increased risk of governmental and regulatory scrutiny and investigations;
|
•
|
increased exposure to fluctuations in currency exchange rates;
|
•
|
the burdens of complying with a wide variety of foreign laws and legal standards;
|
•
|
operating in locations with a higher incidence of corruption and fraudulent business practices;
|
•
|
difficulties in staffing and managing foreign sales and development operations;
|
•
|
import and export requirements, tariffs, taxes and other trade barriers;
|
•
|
weak or no protection of intellectual property rights;
|
•
|
possible enactment of laws regarding the management of and access to data and public networks and websites;
|
•
|
possible future limitations on foreign-owned businesses;
|
•
|
increased financial accounting and reporting burdens and complexities; and
|
•
|
other factors beyond our control, including political, social and economic instability, popular uprisings, war, terrorist attacks and security concerns in general.
|
•
|
demands on management related to the increase in our size after an acquisition;
|
•
|
the diversion of management’s attention from daily operations to the integration of acquired businesses and personnel;
|
•
|
higher than anticipated integration costs;
|
•
|
failure to achieve expected synergies and costs savings;
|
•
|
difficulties in the assimilation and retention of employees;
|
•
|
difficulties in the assimilation of different cultures and practices, as well as in the assimilation of broad and geographically dispersed personnel and operations; and
|
•
|
difficulties in the integration of departments, systems, including accounting systems, technologies, books and records and procedures, as well as in maintaining uniform standards and controls, including internal control over financial reporting, and related procedures and policies.
|
•
|
results of our clinical trials or adverse events associated with our marketed products;
|
•
|
fluctuations in our commercial and operating results;
|
•
|
announcements of technical or product developments by us or our competitors;
|
•
|
market conditions for pharmaceutical and biotechnology stocks in particular;
|
•
|
changes in laws and governmental regulations, including changes in tax, healthcare, environmental, competition and patent laws;
|
•
|
new accounting pronouncements or regulatory rulings;
|
•
|
public announcements regarding medical advances in the treatment of the disease states that we are targeting;
|
•
|
patent or proprietary rights developments;
|
•
|
changes in pricing and third-party reimbursement policies for our products;
|
•
|
the outcome of litigation involving our products, processes or intellectual property;
|
•
|
the existence and outcome of governmental investigations and proceedings;
|
•
|
regulatory actions that may impact our products or potential products;
|
•
|
disruptions in our manufacturing processes or supply chain;
|
•
|
failure of our collaboration partners to successfully develop potential drug candidates;
|
•
|
competition; and
|
•
|
investor reaction to announcements regarding business or product acquisitions.
|
•
|
restructuring or refinancing our debt;
|
•
|
seeking additional debt or equity capital;
|
•
|
reducing or delaying our business activities, acquisitions, investments or capital expenditures, including research and development expenditures; or
|
•
|
selling assets, businesses, products or other potential revenue streams.
|
•
|
an active public market for the CVRs may not continue to exist or the CVRs may trade at low volumes, both of which could have an adverse effect on the market price of the CVRs;
|
•
|
if the clinical approval milestones or net sales targets specified in the CVR Agreement are not achieved within the time periods specified, no payment will be made and the CVRs will expire valueless;
|
•
|
since the U.S. federal income tax treatment of the CVRs is unclear, any part of a CVR payment could be treated as ordinary income and the tax thereon may be required to be paid prior to the receipt of the CVR payment;
|
•
|
any payments in respect of the CVRs are subordinated to the right of payment of certain of our other indebtedness;
|
•
|
we may under certain circumstances redeem the CVRs; and
|
•
|
upon expiration of our obligations under the CVR Agreement to continue to commercialize ABRAXANE
®
or any of the other Abraxis pipeline products, we may discontinue such efforts, which would have an adverse effect on the value of the CVRs.
|
Period
|
|
Total Number of
Shares Purchased
|
|
Average Price Paid
per Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced Plans or Programs
|
|
Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs
|
||||||
July 1 - July 31
|
|
61,928
|
|
|
$
|
110.56
|
|
|
61,928
|
|
|
$
|
5,131,342,751
|
|
August 1 - August 31
|
|
1,257,298
|
|
|
$
|
111.82
|
|
|
1,257,298
|
|
|
$
|
4,990,756,603
|
|
September 1 - September 30
|
|
1,179,741
|
|
|
$
|
106.72
|
|
|
1,179,741
|
|
|
$
|
4,864,855,147
|
|
Total
|
|
2,498,967
|
|
|
$
|
109.38
|
|
|
2,498,967
|
|
|
|
|
|
|
CELGENE CORPORATION
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
October 27, 2016
|
By:
|
/s/Peter N. Kellogg
|
|
|
|
|
Peter N. Kellogg
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
(principal financial and accounting officer)
|
1 Year Celgene Chart |
1 Month Celgene Chart |
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