Celgene Reports Record Third Quarter 2008 Product Sales and Operating Profits

SUMMIT, N.J.--(Business Wire)--
2008 Third Quarter Financial Results Year-Over-Year

-- Non-GAAP Total Revenue Increased 68 Percent to $587 Million;
GAAP Total Revenue $592 Million

-- REVLIMID(R) Net Product Sales Increased 72 Percent to $343
Million

-- Global THALOMID(R)/Thalidomide Net Product Sales Reached $132
Million

-- VIDAZA(R) Net Product Sales Achieved $64 Million, an Increase
of 50 Percent Versus $42 Million in Q3 2007 VIDAZA Sales by
Pharmion

-- Non-GAAP Operating Income Increased 54 Percent to $225
Million; GAAP Operating Income $160 Million

-- Non-GAAP Net Income Increased to $186 Million; GAAP Net Income
$137 Million

-- Non-GAAP Earnings Per Share Increased to $0.40 Per Diluted
Share; GAAP Earnings $0.29 Per Diluted Share

Recent Developments/Highlights

-- VIDAZA Label Expanded to Include Data on Overall Survival in
Patients with Higher-Risk Myelodysplastic Syndromes (MDS)
Approved by FDA

-- VIDAZA Royalty Obligation Purchased in October 2008 for All
Future Periods Optimizing Long-Term Value of VIDAZA Franchise

-- Initiated FDA Special Protocol Assessment (SPA) Phase III
REVLIMID CONTINUUM Maintenance Trial in Chronic Lymphocytic
Leukemia

-- Initiated FDA SPA Phase II REVLIMID EMERGE Trial in Patients
With Relapsed/Refractory Mantle Cell Lymphoma (MCL)

-- REVLIMID Approved by Health Canada as a Treatment for Patients
with Multiple Myeloma (MM) Who Have Received at Least One
Prior Therapy

-- REVLIMID Listed in The Drug Dex Compendia for
Relapsed/Refractory Chronic Lymphocytic Leukemia

-- REVLIMID Listed in The National Comprehensive Cancer Network
Compendium for Low- to Intermediate-1 MDS

-- Enrollment Completed in REVLIMID Newly Diagnosed Multiple
Myeloma (NDMM) Phase III Trial (MM-015); Melphalan Prednisone
REVLIMID (MPR) versus Melphalan Prednisone

-- Initiated Enrollment in REVLIMID(R) Newly Diagnosed Multiple
Myeloma Phase III (MM-020) FIRST Clinical Trial; REVLIMID
Dexamethasone (Rd) Versus Melphalan Prednisone Thalidomide
(MPT)

-- Initiated ECOG E1A06 Phase III Study MPR vs. MPT

-- Initiated SWOG S0777 Phase III Study RVd vs. Rd Followed by
REVLIMID Maintenance

-- Completed REVLIMID Del 5Q MDS Phase III MDS-004 Clinical Trial

-- Landmark Filing Of IND For PDA-001 Placental-Derived Stem
Cells in Crohn's Disease

-- Enrollment Completed in Apremilast PSOR-004 Phase II Dose
Escalation Study in Recalcitrant Psoriasis

-- Initiated PSOR 005 Phase IIb Clinical Trial Of Apremilast
(CC-10004) in Moderate to Severe Psoriasis

-- Celgene and Acceleron Pharma Initiated Phase II Study of
ACE-011 in MM Patients Suffering from Cancer-Related Bone Loss

-- Advanced First-in-Class JNK Inhibitor CC-930 with Initiation
of Phase Ib Multiple Dose Study in Healthy Volunteers

-- Advanced IMiDs(R) Compound CC-10015 in Multiple-Ascending Oral
Dose Phase I Study in Subjects with Systemic Sclerosis

-- Amrubicin Granted FDA Fast Track Designation for 2nd Line
Small Cell Lung Cancer

-- Approximately 100 Abstracts on REVLIMID, THALOMID(R),
VIDAZA(R) and Pomalidomide Submitted to The American Society
of Hematology

-- The Journal of Clinical Oncology, October 20th Issue,
Published Results of NHL-002, REVLIMID in Relapsed/Refractory
Aggressive Non-Hodgkin's Lymphoma (NHL)

-- The Mayo Clinic Proceedings, October 2008, Published an
Article "Commentary, Treatment of Myeloma: Cure vs. Control"

-- The Journal BLOOD, September 29th Issue, Published Results
Evaluating REVLIMID as a Single-Agent in Acute Myeloid
Leukemia (AML) Patients With Cytogenetic Abnormality Trisomy
13

2008/2009 Objectives

-- Maximize the Clinical, Regulatory and Commercial Potential of
REVLIMID, VIDAZA and Global THALOMID/Thalidomide in Nearly 100
Countries over the Next Five Years

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-- Submit REVLIMID Regulatory Filing for MM and Del 5Q MDS in
Japan
-- Approvals in Russia, Turkey, Middle East, Central & South
America
-- Reimbursement Approvals in UK, Canada, Australia and Other
Countries
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-- Advance Global Regulatory Strategies to Expand REVLIMID Label
to NDMM

-- Achieve Approval for VIDAZA in Higher-Risk MDS and AML in EU

-- Initiate REVLIMID NHL Phase III SPA Trial in MCL Maintenance
Study

-- Initiate Phase II REVLIMID SPRINT Trial in Patients with
Relapsed/Refractory Mantle Cell Lymphoma

-- Achieve Compendia Listing for REVLIMID in NHL

-- Advance Amrubicin Phase III Clinical Study in Small Cell Lung
Cancer

-- Advance Pomalidomide Clinical Studies in Multiple Myeloma and
Myelofibrosis

-- Complete Apremilast PSA-001 Phase II Dosing Study in Psoriatic
Arthritis

-- Progress Global Regulatory Phase III Strategies for Oral
Anti-Inflammatory Compounds Apremilast and CC-11050 in Broad
Range of Inflammatory Indications

-- Advance Clinical Strategies for JNK Inhibitor CC-930 and PDAC
Programs

-- Achieve Positive Recommendation from National Institute for
Health and Clinical Excellence (NICE) in First Quarter 2009

Celgene Corporation (NASDAQ: CELG) reported non-GAAP net income
for the quarter ended September 30, 2008, of $185.9 million, or
non-GAAP earnings per diluted share of $0.40. Based on U.S. Generally
Accepted Accounting Principles (GAAP), Celgene reported net income of
$136.8 million, or diluted earnings per share of $0.29 for the quarter
ended September 30, 2008. GAAP net income for the third quarter of
2008 included the after-tax impact of share-based employee
compensation expense of $22.3 million. GAAP net income for the third
quarter of 2007 was $38.8 million, or diluted earnings per share of
$0.09, including the after-tax impact of share-based employee
compensation expense of $12.8 million.

Non-GAAP total revenue was $586.7 million for the quarter ended
September 30, 2008, an increase of 68 percent over the same period in
2007. GAAP total revenue was $592.5 million. The increase in total
revenue was driven by REVLIMID(R) net sales of $342.6 million, an
increase of 72 percent over the same period in 2007. Global
THALOMID(R)/Thalidomide and VIDAZA(R) net sales reached $132.4 million
and $63.5 million, respectively. ALKERAN(R) net sales for the third
quarter of 2008 were $21.8 million compared to $18.9 million in the
third quarter of 2007. Revenue from Focalin(TM) and the Ritalin(R)
family of drugs totaled $23.8 million for the third quarter of 2008
compared to $15.8 million over the same period last year.

For the first nine months of 2008, non-GAAP total revenue was
$1.614 billion, an increase of 63 percent year-over-year. REVLIMID net
sales for the first nine months of 2008 reached $955.2 million
compared to $526.5 million in 2007, an increase of 81 percent
year-over-year. Global THALOMID/Thalidomide and VIDAZA net sales for
the first nine months of 2008 were $377.9 million, and $137.0 million,
respectively. Celgene posted non-GAAP net income of $517.9 million or
non-GAAP earnings per diluted share of $1.13 during the first nine
months of 2008. For the first nine months of 2008, on a GAAP basis,
Celgene reported a net loss of $1.384 billion, or a loss per diluted
share of $3.17, compared to GAAP net income of $151.1 million, or
earnings per diluted share of $0.36 for the first nine months of 2007.

To support clinical development and to advance global regulatory
filings, the company increased R&D investments in multiple
international clinical programs. For the third quarter of 2008 on a
non-GAAP basis the company incurred R&D expenses, which exclude
share-based compensation expense, of $149.9 million compared to $84.6
million for the third quarter of 2007. On a GAAP basis, R&D expenses
were $160.9 million compared to $130.8 million for the same quarter in
2007. These R&D expenditures continue to support ongoing clinical
progress in multiple proprietary development programs for REVLIMID(R);
pomalidomide and other IMiDs(R) compounds; VIDAZA; amrubicin, our lead
compound for small cell lung cancer; apremilast (CC-10004); and other
oral anti-inflammatory compounds; our pleiotropic pathway modifier
program; our kinase inhibitor program; and our placental-derived stem
cell programs.

Non-GAAP selling, general and administrative expenses, which
exclude share-based compensation expense, were $152.0 million for the
third quarter of 2008 compared to $85.5 million for the third quarter
of 2007. On a GAAP basis, selling, general and administrative expenses
were $168.6 million for the third quarter in 2008 compared to $94.7
million for the same quarter in 2007. The increase reflects marketing
and sales expenses related to ongoing product launch activities for
REVLIMID and Global Thalidomide in Europe, Canada and Australia, as
well as activities for the relaunch of VIDAZA in the U.S. and
preparation for the VIDAZA launch in Europe. Also, the increased
expenses reflect the continued expansion of the international
operations of Celgene in over 65 countries.

For the quarter ended September 30, 2008, interest and other
income, net was $21.6 million compared to $26.4 million in the same
period during the prior year. Celgene reported $2.454 billion in cash,
cash equivalents, and marketable securities as of September 30, 2008.

"The third quarter results reflect our ongoing progress marked by
multiple commercial, clinical, regulatory, operational and financial
milestones toward our goal of becoming the premier global
biopharmaceutical company," said Chairman and Chief Executive Officer
Sol J. Barer, Ph.D. "The results achieved by our worldwide team
demonstrate the value of our innovative products for our patients and
stakeholders."

See the attached Reconciliation of GAAP to Non-GAAP Net Income
(Loss) for an explanation of the amounts excluded and included to
arrive at non-GAAP net income and non-GAAP earnings per share amounts
for the three and nine months ended September 30, 2008 and 2007.
Non-GAAP financial measures provide investors and management with
supplemental measures of operating performance and trends that
facilitate comparisons between periods before, during and after
certain items that would not otherwise be apparent on a GAAP basis.
Certain unusual or non-recurring items that management does not
believe affect the company's basic operations do not meet the GAAP
definition of unusual or non-recurring items. Non-GAAP net income and
non-GAAP earnings per share are not, and should not be viewed as a
substitute for similar GAAP items. We define non-GAAP diluted earnings
per share amounts as non-GAAP net income divided by the weighted
average number of diluted shares outstanding. Our definition of
non-GAAP net income and non-GAAP diluted earnings per share may differ
from similarly named measures used by others.

Webcast

Celgene will host a conference call to discuss the results and
achievements of its third quarter 2008 operating and financial
performance on Thursday, October 23rd at 9:00 a.m. EDT. The conference
call will be available by webcast at www.celgene.com. An audio replay
of the call will be available from noon, October 23, 2008 until
midnight, EDT October 30, 2008. To access the replay, dial:
888-203-1112 and enter reservation number: 5014615. The international
dial-in number is: 719-457-0820. The company's fourth quarter and full
year 2008 financial and operational results will be reported on
January 29, 2009.

About Celgene

Celgene Corporation, headquartered in Summit, New Jersey, is an
integrated global biopharmaceutical company engaged primarily in the
discovery, development and commercialization of novel therapies for
the treatment of cancer and inflammatory diseases through gene and
protein regulation. For more information, please visit the Company's
website at www.celgene.com.

This release contains certain forward-looking statements which
involve known and unknown risks, delays, uncertainties and other
factors not under the Company's control, which may cause actual
results, performance or achievements of the Company to be materially
different from the results, performance or other expectations implied
by these forward-looking statements. These factors include results of
current or pending research and development activities, actions by the
FDA and other regulatory authorities, and those factors detailed in
the Company's filings with the Securities and Exchange Commission such
as Form 10-K, 10-Q and 8-K reports.

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Celgene Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)

Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- ---------------------
2008 2007 2008 2007
------------- ------------ ------------ --------

Net product sales $ 567,017 $ 331,169 $ 1,541,556 $919,910
Collaborative
agreements and other
revenue 2,402 4,616 9,960 14,520
Royalty revenue 23,046 14,123 75,011 56,800
------------- ------------ ------------ --------
Total revenue 592,465 349,908 1,626,527 991,230

Cost of goods sold
(excluding
amortization
expense) 70,534 34,066 190,452 84,840
Research and
development 160,911 130,841 462,650 301,341
Selling, general and
administrative 168,607 94,736 485,345 310,669
Amortization of
acquired intangible
assets 32,833 2,290 77,842 6,755
In-process research
and development - - 1,740,000 -
------------- ------------ ------------ --------
Total costs and
expenses 432,885 261,933 2,956,289 703,605

Operating income
(loss) 159,580 87,975 (1,329,762) 287,625

Equity in losses of
affiliated companies 2,338 1,106 8,761 3,338
Interest and other
income, net 21,630 26,414 70,270 68,189
------------- ------------ ------------ --------

Income (loss) before
taxes 178,872 113,283 (1,268,253) 352,476

Income tax provision 42,058 74,450 116,138 201,364
------------- ------------ ------------ --------

Net income (loss) $ 136,814 $ 38,833 $(1,384,391) $151,112
============= ============ ============ ========

Per common Share:
Net income (loss) -
basic $ 0.30 $ 0.10 $ (3.17) $ 0.40
Net income (loss) -
diluted $ 0.29 $ 0.09 $ (3.17) $ 0.36

Weighted average
shares - basic 456,509 383,774 437,206 380,841
============= ============ ============ ========

Weighted average
shares - diluted 468,891 432,817 437,206 431,208
============= ============ ============ ========

September 30, December 31,
2008 2007
------------- ------------
Balance sheet items:
Cash, cash
equivalents &
marketable
securities $ 2,454,170 $ 2,738,918
Total assets 4,357,424 3,611,284
Convertible notes - 196,555
Stockholders' equity 3,588,361 2,843,944
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Celgene Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Net Income (Loss)
(In thousands, except per share data)

Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ----------------------
2008 2007 2008 2007
--------- --------- ------------ ---------

Net income (loss) - GAAP $136,814 $ 38,833 $(1,384,391) $151,112

Before tax
adjustments:
Net product sales:
Pharmion
products to
be divested (1) (5,725) - (12,153) -

Cost of goods sold
(excluding amortization
expense):
Share-based
compensation
expense (2) 668 582 1,829 1,379
Pharmion
inventory
step-up (3) 7,545 - 18,668 -
Pharmion
products to
be divested (1) 2,450 - 5,014 -
EntreMed
intercompany
royalty (4) (398) (427) (398) (427)

Research and
development:
Share-based
compensation
expense (2) 10,964 5,220 32,264 11,165
Upfront
collaboration
payment (5) - 41,050 45,000 41,050

Selling, general
and
administrative:
Share-based
compensation
expense (2) 16,596 9,274 41,557 24,280

Amortization of
acquired
intangible assets (6) 32,833 2,290 77,842 6,755
In-process
research and
development (7) - - 1,740,000 -

Equity in losses
of affiliated
companies:
Equity in
losses of
EntreMed (8) 763 988 2,821 3,031

Interest and other
income, net
Share-based
compensation
expense (2) - - - 4,806

Income tax
adjustment (9) (16,638) (26,639) (50,191) (32,115)
--------- --------- ------------ ---------
Net income - non-GAAP $185,872 $ 71,171 $ 517,862 $211,036
========= ========= ============ =========

Per Common Share as
adjusted:
Net income - basic $ 0.41 $ 0.19 $ 1.18 $ 0.55
Net income - diluted(10)$ 0.40 $ 0.17 $ 1.13 $ 0.50

Explanation of adjustments:
(1) Exclude sales and cost of sales related to former non-core
Pharmion Corp. products to be divested.
(2) Exclude SFAS 123R share-based compensation expense for the third
quarter totaling $28,228 in 2008 and $15,076 in 2007. The after
tax net impact reduced GAAP net income for the third quarter by
$22,253, or $0.05 per diluted share in 2008 and $12,764, or $0.03
per diluted share in 2007. Exclude SFAS 123R share-based
compensation expense for the nine-month period totaling $75,650
in 2008 and $41,630 in 2007. The after tax net impact reduced
GAAP net income for the nine-month period by $60,800, or $0.14
per diluted share in 2008 and $33,273, or $0.08 per diluted share
in 2007.
(3) Exclude acquisition related Pharmion Corp. inventory step-up
adjustment to fair value expensed during the period.
(4) Exclude the Company's share of THALOMID royalties payable to
EntreMed, Inc.
(5) Exclude upfront payment for research and development collaboration
arrangement with Acceleron Pharma, Inc. for the nine-month period
in 2008 and exclude a combined $41,050 in upfront collaborative
research and development arrangements with Array Bio Pharma Inc.
and PTC Therapeutics for the third quarter and nine-month period
in 2007.
(6) Exclude amortization of acquired intangible assets for the third
quarter resulting from the acquisitions of Pharmion Corp. of
$32,833 in 2008 and Penn T of $2,290 in 2007. Exclude
amortization for the nine-month period from the acquisitions of
Pharmion Corp. and Penn T of $76,205 and $1,637, respectively, in
2008 and Penn T of $6,755 in 2007.
(7) Exclude the in-process research and development write-off related
to the acquisition of Pharmion Corp.
(8) Exclude the Company's share of equity losses in EntreMed, Inc.
(9) The income tax adjustment reflects the tax effect of the above
adjustments.
(10)Diluted net income per share for the nine months ended September
30, 2008 was determined using diluted weighted average shares of
459,304.

Adjusted net income and earnings per share on both a basic and diluted
basis have been revised for the three- and nine-month periods ended
September 30, 2007 to conform to the current year's presentation
basis. Amounts reported in the previous year for the three-month
period ended September 30, 2007 were $124,078, $0.32 and $0.29,
respectively. Amounts reported in the previous year for the nine-
month period ended September 30, 2007 were $320,144, $0.84 and $0.75,
respectively. The current year basis eliminates certain immaterial
adjustments and revises the method for determining the tax impact of
pro-forma adjustments. The 2007 adjusted income tax provision
previously reported reflected a pro-forma annual income tax rate of
28.0%.
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Celgene Corporation
David W. Gryska, 908-673-9059
Sr. Vice President and Chief Financial Officer
OR
Brian P. Gill, 908-673-9530
Vice President
Corporate Communications

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