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Celgene Corporation (NASDAQ:CELG)

Q1 2013 Earnings Conference Call

April 25, 2013 10:00 AM ET

Executives

Patrick Flanigan - Vice President, Investor Relations

Bob Hugin - Chairman and CEO

Jackie Fouse - Chief Financial Officer

Mark Alles - Global Head, Hematology and Oncology

Analysts

Eric Schmidt - Cowen & Company

Geoff Meacham - JP Morgan

Wes Nurss - ISI Group

Geoffrey Porges - Bernstein

Robyn Karnauskas - Deutsche Bank

Marshall Urist - Morgan Stanley

Chris Raymond - Robert Baird

Rachel McMinn - Bank of America

Michael Yee - RBC Capital Markets

Mara Goldstein - Cantor Fitzgerald

Terence Flynn - Goldman Sachs

Ying Huang - Barclays

Brian Abrams - Wells Fargo

Mike King - JMP Securities

Matt Roden - UBS

Thomas Wei - Jefferies

Jim Birchenough - BMO Capital

Joel Sendek - Stifel Nicolaus

Operator

Good morning. And welcome to Celgene’s First Quarter 2013 Earnings Conference Call. All participants will be in listen-only mode until the question-and-answer session at the end of the conference. I would like to remind you that this call is being recorded.

I would now like to turn the conference over to Patrick Flanigan, Vice President of Investor Relations at Celgene.

Patrick Flanigan

Thanks, Sean. And welcome everyone to our First Quarter Earnings Conference Call. The press release reporting our financial results in addition to the presentation for today’s webcast can be accessed by going to the Investor Relations section of the corporate website at www.celgene.com.

Joining me in the room today with prepared remarks are Bob Hugin, our Chairman and Chief Executive Officer; Jackie Fouse, our Chief Financial Officer; and Mark Alles, who is our Global Head of Hematology and Oncology.

As a reminder, during today’s call we will be making forward-looking statements regarding our financial outlook in addition to regulatory and product development plans. These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these risks can be found in our most recent 10-K on file with the SEC. These statements speak only as of today’s date and we undertake no duty to update or revise them.

Finally, reconciliation of the adjusted financial measures to the most comparable GAAP measure are available as part of the earnings release.

I would now like to turn the call over to Bob.

Bob Hugin

Thank you, Patrick, and thank you, everyone, for joining us this morning. I appreciate the opportunity to review the very positive results and the progress achieved on important corporate initiatives during the first quarter of the year.

2013 is off to an outstanding start with strong momentum across all aspects of our business. Our teams have produced exceptional commercial and financial results, and achieved multiple significant clinical and regulatory milestones. These results and accomplishments position us extremely well to deliver on the potential numerous upcoming catalysts throughout the reminder of the year.

Our commercial performance in the first quarter was outstanding. REVLIMID produced excellent results in markets around the globe. We are also very encouraged by the acceleration of the ABRAXANE growth trajectory following last fall’s non-small cell lung cancer approval in United States.

Clearly one of the brightest highlights of the quarter was the promising launch of POMALYST in United States. Mark will provide his analysis, but I can say that to date the launch is meeting or exceeding all of our expectations.

Our global regulatory and clinical team achieved several meaningful regulatory milestones during the quarter. In addition to the approval of POMALYST in United States on February the 8, we submitted regulatory applications for ABRAXANE and pancreatic cancer both -- to both the FDA and EU authorities, and submitted our psoriatic arthritis application for apremilast in United States and Canada. These are all very exciting developments with enormous potential for patients and for Celgene.

Our teams are also working with regulatory agencies to advance pending applications for REVLIMID and deletion 5q MDS in Europe for mantle cell lymphoma in the United States and for POMALYST in relapsed/refractory multiple myeloma in Europe, action on these applications is expected in the next few months, all important upcoming milestones.

In a few minutes, Jackie will review our financial results and Mark will provide his perspective on our hematology/oncology franchise. As Scott Smith, the Head of our Inflammation and Immunology franchise is not on the call today. I’ll briefly review the status of the apremilast program on which we are making excellent progress.

In addition to our submitted regulatory applications for apremilast for psoriatic arthritis in the United States and Canada, our submission for psoriasis in United States and for psoriatic arthritis and psoriasis in Europe are on track for the second half of the year. These submissions are based on five positive Phase III registration trials, 3 in psoriatic arthritis and 2 in psoriasis.

Enrollment in our Phase III ankylosing spondylitis trial is accelerating rapidly and is significantly ahead of our original internal expectations. Positive results from the ESTEEM program in moderate to severe psoriasis were presented at the American Academy of Dermatology Meeting in March.

We are also well-positioned for major presence at the European League Against Rheumatism Meeting in Madrid this coming June. At EULAR we expect presentations of additional data from the PALACE psoriatic arthritis pivotal program, including topline results of PALACE-3 and importantly, 52-week data from PALACE-1, data from the Behçet's disease Phase II study is also expected to be presented.

With our submissions advancing and continued positive data flow, we are preparing for the apremilast global launch and accelerating or hiring of key franchise leadership. We are very encouraged for the top talent we are attracting in our focus on building a world-class organization.

The accomplishments of the first quarter were substantial and provide us with strong momentum for the rest of the year. We are excited about the data flow and regulatory events expected in the coming months and look forward to updating you on those throughout the year. These accomplishments position Celgene for our next phase of growth and illustrate our accelerated progress on our strategic imperatives.

We are focused on maximizing the full potential of our hematology franchise, expanding our oncology franchise and building a global INI franchise, while we advance our innovative early pipeline.

We are very excited about what the meaningful opportunities on the near-term horizon and extraordinary -- and our extraordinary potential for long-term growth.

Let me now turn the call over to Jackie.

Jackie Fouse

Thank you, Bob and good morning everyone. Thank you for joining us on our call today. We started the year at Celgene with excellent momentum in Q1 and we see that momentum reflected in our results across all of our major performance metrics. Net product sales growth of 15% for the Q1 year over year comparison was driven by REVLIMID growth of 16.5% and was broad based across the globe.

Total revenues also grew 15% and sequential growth in both product and total revenues was 1% off of the strong Q4 2012. Our business model continues to perform well and we leveraged this topline growth to 27% year over year Q1 adjusted earnings per share growth and improved our adjusted operating profit margin for the quarter by 320 basis points. We continue to add value with our share repurchase program and even more importantly, we saw numerous successes from our clinical and regulatory efforts. Successes that will fuel our future growth plans. These included the approval and launch of (inaudible) refractory multiple myeloma in the US. Mark will comment more about this launch in a moment.

We also invested further for our long term future via new R&D collaborations and expansions of existing collaborations. All of our major products contributed to the 15% growth in total net product sales and all grew a double digit rate. I mentioned REVLIMID with 16.5% growth. VIDAZA grew 10% year over year and ABRAXANE 18%. All major geographies contributed to product these results and they were volume driven as we will see in a moment. POMALYST is off to a strong start and is now making its contribution to our total multiple myeloma franchise growth profile.

On this slide, we can see the components of our net product sales growth. All of the 15% year over year growth came from volume. The net global impact of price was somewhat favorable with a 2 percentage point positive contribution but was offset by a 2 percentage point negative foreign exchange impact. This FX impact was about $27 million for the quarter year over year comparison and was in line with our expectations for the quarter. We previously highlighted for you an expected full year impact of FX of about $100 million negative and that is included in our full year guidance. We are currently tracking to that estimate.

With a 27% increase earnings per share grew much faster than revenues. This growth came mainly from operating profit growth of 23% as our operating margin expanded by 320 basis points for the Q1 year over year comparison. This operating margin expansion came most from lower R&D and SG&A expenses as a percentage of revenues with a modest contribution from a higher gross margin.

As you can see from the next slide of the $0.29 absolute growth in EPS, $0.25 is coming from operating income and a net $0.04 from financial drivers mainly share count as we see the cumulative impact of our ongoing share repurchase program.

Turning to the details of our net product sales, REVLIMID growth of 16.5% came from across the globe with similar growth rates in both the US and international. Sequential growth over Q4 was impacted by the usual seasonality of Medicare covered guest expense in the US, with that sequential impact being $11 million and sequential growth in international was impacted by negative foreign exchange of $18 million. Both of these were in line with our internal estimates.

REVLIMID’s growth continues to be volume driven as the dynamic for market share, duration and global expansion remains quite positive. VIDAZA continues its double digit gains on a year over year basis. International growth was impacted by the distributor buying patterns particularly as a sequential comparison. ABRAXANE grew by an outstanding 18% year over year and a strong 15% sequentially as the US had a strong ABRAXANE performance for the fourth quarter and as the international business continues to expand. The momentum behind the product is favorable post the launch of the lung indication in the US.

Finally, we are off to a great start with POMALYST thanks to the excellent work of our US commercial team and our launch in the middle of Q1. I will let Mark comment further on what we are seeing in the market with POMALYST. Let me make one additional comment about the components of REVLIMID’s growth. As we have seen REVLIMID’s growth for Q1 year-over-year was 16.5%, all of that growth came from volume.

The impact of FX on total product sales is most felt by REVLIMID and that impacting Q1 was $19 million or 2.2% negative. This negative impact was offset by price in the quarter. The estimated FX impact for the year is included in our REVLIMID guidance for the full year.

On the next slide you can see the details of the key line items of our P&L and how we deliver the operating margin improvement in Q1, we are tracking nicely against our guidance and are quite pleased with our first quarter performance which is all operations driven and how we see the remainder of the year unfolding.

Our business model continues to deliver sustainable operating leverage and on this chart we track our progress in that regard on the year-to-date basis every quarter. So you can see we are off to a strong start to the year and you can put this year in the perspective with the past five years. All of our P&L metrics are strong and our model is delivering on this promise as a result of the efforts of all Celgene employees around the world and across all function.

We also remain focused on returns and how we invest our capital. In this chart we calculate ROIC using GAAP income and invested capital figures are very conservative picture. We calculate the current year on trailing 12-month basis, so at this time of the year we would not expect to see much of difference in the ROIC trajectory versus the prior year. We track our performance on this metric every quarter and we’ll discuss it with you as we move through the year.

Our cash and marketable securities balance declined somewhat versus year-end 2012 due to the magnitude of our share repurchase activity in the first quarter as we used $1 billion for repurchases during the quarter.

We began execution of $600 million accelerated share repurchase program in February and expect that program to complete in May. In addition, we bought back about 400 million worth of shares outside of the ASR program. Our cash flow from operations for the quarter was $367 million.

Let me wrap up my comments with a quick look at our full year outlook and financial guidance. We are reaffirming total net product sales of $6 billion, annual growth of about 11% and REVLIMID net product sales in the range of $4.1 billion to $4.2 billion, growth of 10% at the mid-point of the range.

Given the strong start to the year, we are increasingly confident in our ability to hit these targets. In light of our strong start and the visibility we have to our P&L dynamic, now that we are about four months into the year, we are raising our full year adjusted earnings per share guidance to a range of $5.55 to $5.65, 14% growth at the mid-point up from our original guidance of $5.50 to $5.60 and 13% growth.

Both our product sales and EPS guidance include the possibility of generic VIDAZA entering in the U.S. during the second half of this year. EPS guidance includes our forecasted investment spend in our emerging Inflammation and Immunology business unit, that spend is more heavily weighted to the second half of the year. EPS guidance assumes the weighted average fully diluted share count for the full year $430 million and an effective tax rate of 16.5%.

Thank you. And I’ll now turn the call over to Mark.

Mark Alles

Thanks very much, Jackie. Good morning, everyone. We produced excellent year-on-year growth in the first quarter. We delivered meaningful clinical and regulatory catalysts that will add to our short and long-term growth opportunities, and we build a strong foundation to achieve our full year 2013 sales targets.

First total product sales grew 15% year-on-year to $1.429 billion, greater customer demand across our brand and our core markets combined to offset the negative growth to that and foreign exchange impact that Jackie has discussed.

Even with these first quarter challenges, year-on-year REVLIMID sales grew 16.5% to $1.003. Through the first four months of this year our franchise regulatory and clinical teams have been remarkably productive. Let me summarize the highlights.

In February, the U.S. FDA approved POMALYST for patient with multiple myeloma who have received at least prior therapies, including REVLIMID and bortezomib, and he was demonstrated disease progression on or within 60 days of completing their last therapy.

In China, REVLIMID was approved by the SFDA for patients with multiple myeloma who have received at least one prior therapy. In United States, the REVLIMID supplemental new drug application for relapsed and refractory mantle cell lymphoma remains on track for approval by the June 5 PDUFA date. The CHMT review of our POMALYST marketing application for relapsed and refractory multiple myeloma is progressing well, and we expect a decision in the EU during the third quarter.

Patient enrollment into our early access program across Europe suggests very significant patient needs for POMALYST. We are working hard to meet this need. We’ve submitted marketing applications to the FDA in March and to the CHMT in April for the innovative drug combination ABRAXANE plus (inaudible) for the treatment of pancreatic cancer. This follows the January ASCO GI meeting and the oral presentation demonstrated significant overall survival benefit in metastatic pancreatic cancer.

During the next few minutes I would like to focus your attention on five specific topics. Q1 REVLIMID results, the current status of the four pivotal phase 2 studies that support our regulatory strategy to expand REVLIMID into newly diagnosed multiple myeloma, the early launch of POMALYST in the US, ABRAXANE performance and momentum and current perspective on the upcoming American Cytoclinical oncology meeting.

Turning to the Q1 REVLIMID sales, our global year on year sales increased by over 16%. In the United States year on year sales grew by 15%. Even though sequential quarterly sales growth was impacted by the [covered got] rebate, overall market share increased slightly during the quarter as more unique patients were treated with REVLIMID than in any previous quarter and as the duration of therapy continued to increase.

Given the ongoing economic conditions in Europe we were very pleased with this region 16% year on year and 6% quarter on quarter REVLIMID sales growth. Market share gains in second line multiple myeloma and increases in duration in our major markets combined this very positive result. France was a particularly strong contributor, re-emerging as a critical growth driver.

Q1 REVLIMID sales in Japan, Canada and Australia, were excellent. We have made outstanding progress preparing to launch REVLIMID in China and expect to generate our first REVLIMID’s commercial sale later this quarter. During the first quarter we successfully expanded REVLIMID reimbursement for deletion 5q MDS in Australia and achieved full public reimbursement for REVLIMID in relapsed and refractory multiple myeloma in Taiwan. There is no greater priority for us than to expand the clinical benefit of REVLIMID patients with newly diagnosed multiple myeloma.

Results from three large randomized phase 3 studies MM-015 cell GB 100104 and the IFM 0502 have been presented at numerous (inaudible) meeting and were published in the May 2012 edition of the New England Journal of Medicine. Until now these published and presented results have been accompanied by relatively shortfall for overall survival as forecasted. Overall survival events in our sponsor trials MM-015 now exceeds 50% of the overall study population and the in incidence rate of second primary malignancy has plateaued and can be considered mature. We’ve conducted analyses to update the overall and event free survival results for the intentions to treat population and for patients less than 75 years of age.

The overall and event free survival trends remain positive. We plan to discuss this updated data with regulatory agencies in the coming months and we will submit an abstract of the results to the American Society Hematology meeting in December of this year and update analyses of the significant overall survival events from the use of REVLIMID as maintenance therapy following a (inaudible) stem cell plantation in a randomized phase 3 placebo controlled study, (inaudible) 100-104 was presented during the recent international multiple myeloma workshop meeting in (inaudible) Japan.

Meetings follow-up is now four years and the updated overall survival analysis confirms treatment with REVLIMID continues to demonstrate a significant overall survival benefit with a p-value of p equals 0.008 and has a ratio of 0.61. This result is despite crossover of more than 70% of patients from placebo to REVLIMID maintenance prior to disease progression. Compared with previously reported analyses of SPMs, the update from [Chilto] demonstrated a numerical increase in the REVLIMID and placebo arms but concluded that the benefit risk profile for REVLIMID remains positive.

It is our understand that updated results including overall survival and the incident rates of SPMs in the IFM 0502 study -- following stem cell transplantation will be submitted to this year’s ASH meeting. Once these data are available to us we will immediately consider the IFM field to resolve to develop our global regulatory submission strategy for REVLIMID as maintenance therapy for newly diagnosed multiple myeloma following stem cell transplantation.

The unblinded efficacy and safety analysis of MM-20, our international Phase III study of REVLIMID plus low-dose dexamethasone versus the standard melphalan prednisone thalidomide regiment are forecast to be available late this quarter or early in the third quarter. The exact timing of data availability is dependent on when the protocol required number of progression events is met.

The efficacy results will include the final analysis for the primary endpoint, progressive free survival and interim analysis of overall survival. Important secondary endpoints and safety data will be included.

Given the current timeline, we expect that these results will be available in time to be submitted to the ASH meeting in December, considered separately and together, the results from these four REVLIMID studies in patients with newly diagnosed multiple myeloma, will inform and dictate our global regulatory submission strategy.

We are encouraged by the early commercial success of POMALYST in the U.S. market. As Jackie outlined, U.S. sales from mid-February to the end of March were $22 million and global Q1 sales were $29 million. We made excellent progress introducing our harmonizer risk management program, so that hematologist and their patients were able to immediately access POMALYST.

More than 1000 patients were registered and more than 1000 prescriptions were dispensed during the first quarter. Early feedback from hematologist about their clinical experience is very positive and we received broad coverage and reimbursement support from national and regional payors.

Not surprisingly, thought leaders are developing clinical trial strategies to combine POMALYST with other approved and investigational agents. With approval in Europe expected later this year, we remain confident that this important therapy will become our next block buster hematology brand.

The string of good news and momentum for ABRAXANE continued into the first quarter, driven by stable share of the U.S. metastatic breast cancer market and measurable market share gain in the non-small cell lung cancer market, Q1 net sales reached an all time high of $123 million.

ABRAXANE year-on-year sales increased 15% in U.S. and 28% internationally. We also advanced number of new clinical studies of ABRAXANE including triple-negative breast cancer, squamous cell non-small cell lung, bladder cancer and adjuvant pancreatic cancer.

Recently the National Comprehensive Cancer Network or NCCN updated its practice guidelines for the combination of ABRAXANE, plus gemcitabine for treat, as a treatment for pancreatic cancer from category 2B to category 1.

We expect final overall survival data which is event driven from our Phase III study of ABRAXANE in metastatic melanoma during the second half of 2013. The 2013 calendar of Academic Cancer Meeting offer significant and numerous opportunities for new and updated presentations of clinical data for our portfolio.

Through April we have benefited by featured presentations of data in pancreatic cancer, multiple melanoma, AML and MDS. Next up is the American Society of Clinical Oncology Meeting in Chicago. We have currently worth approximately 50 abstracts on Celgene products that have been accepted.

Importantly, these abstracts provide data on one or more of our products across nine diseases and more than 20 unique clinical studies. We believe five abstracts are important and immediate clinical considerations.

In newly diagnosed multiple myeloma, the efficacy and safety of nPR compared with high-dose melphalan and stem cell transplantation, followed by a second randomization comparing REVLIMID maintenance versus placebo will help further define the benefit of REVLIMID maintenance therapy in newly diagnosed multiple myeloma, and lower risk transfusion-dependent non-deletion 5q MDS, the transfusion independent response rate for the combination of REVLIMID plus erythropoietin will be reported.

Full responsive safety data from the REVLIMID mantle cell lymphoma study MCL over one plus data from two additional REVLIMID studies in patients with aggressive NHL and mantle cell lymphoma will be available.

Robust pharmaco economic and safety data about the use of POMALYST in patients with multiple myeloma and renal impairment was accepted.

Given the clinical concerns about renal function patients with multiple myeloma, this is critically important information and the abstract reporting updated results of our ABRAXANE phase 3 study metastatic pancreatic cancer has been accepted and will be in oral presentation. We are at the beginning of a new phase of growth driven by very good operating momentum. We have and continue to build opportunities for accelerated sales growth.

Throughout 2013 we expect global regulatory approvals for new indication that will support the growth of our existing products, to launch REVLIMID in new markets, to successfully launch POMALYST in the US and in Europe and to benefit from robust new data coming from studies of novel drug combinations. We are extremely confident in our full year outlook. Thank you very much and I will now turn the call back to Bob.

Bob Hugin

Thanks Mark and Thanks Jackie. The first quarter was a great start to 2013 as Celgene delivered excellent operating results and advanced our portfolio. We are energized by our progress to date and focused on our near-term objectives with multiple clinical and regulatory milestones throughout the remainder of the year. I want to thank all of my colleagues at Celgene for their dedication and commitment to delivering outstanding results and advancing our strategic initiatives and most of all for striving to improve the lives of patients worldwide.

I hope you will be able to join us either in person or on the internet for our upcoming analyst day on May, the 6th in New York City. This meeting offers us the opportunity to provide you with a more in-depth review of our research and development programs. Thank you for joining us today. Operator, please open the question to questions.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from Eric Schmidt with Cowen & Company.

Eric Schmidt - Cowen & Company

Mark, I just wanted to clarify on the MM-015 study it sounds like if you have the mature overall survival data in-house and did you confirm the positive trend in patients over the age of 75?

Mark Alles

So we confirmed the positive trend overall, but the trend that we are focused on is the less than 75 population and that trend is quite favorable. So we are beyond 50% events but I will just remind everyone that 50% is a bit of an arbitrary cut, we want that as a minimum. So we continue to follow and will continue to look at updated cuts of survival as we go forward. We thought that was the minimum threshold and we would look to continue to update appropriately and engage the regulatory agencies in the coming months.

Eric Schmidt - Cowen & Company

Just a quick one for Jackie if I may. You didn’t mention any Q1 impact from the donut whole or patient assistance programs. Was that not a particular seasonal headwind this year?

Jackie Fouse

I think just on the coverage gap, the sequential change is a 11 million unfavorable for REVLIMID. So the actual number for REVLIMID for the quarter in 2013 for the coverage gap expense of $15 million, Q4 2012 it was 4 and Q1 of 2012 just way of reference also was 13. That was in line with our expectation, it is in a 11 million sequential headwind for REVLIMID.

Operator

Our next question comes from Geoff Meacham with JP Morgan.

Geoff Meacham - JP Morgan

One for you on POMALYST can you give us a sense of for the line of therapy, is it mostly second or third line? I know it’s early but I just want to get some initial feedback. And then maybe tell us so far where you think that patients are coming from, is it mostly REVLIMID or Velcade?

Mark Alles

It’s Mark, it’s an important question. So on our analysis first, it’s important that virtually 100% of patients who were receiving POMALYST have previously been treated with REVLIMID. So that’s the first metric. We believe that the vast majority of the patients are third, fourth line and given the recent introduction of (inaudible) we are aware that many patients are either finishing or switching from cuts follows-through POMALYST and then we see a dynamic where it’s moving up.

Geoff Meacham - JP Morgan

Just to follow up on the myeloma franchise. I know you guys had talked about the filing strategy in the U.S. and Europe for newly diagnosed but how do you think about other regions beyond U.S. and Europe. Are you waiting on 020 to mature and to have four full packages or four full trials to submit? Should we think about say Japan or other regions as kind of the next wave for first line newly diagnosed as an opportunity? Thanks.

Bob Hugin

I think it’s very fair to think about rest of the world beyond Europe, U.S. as a next wave. I think that’s a fair characterization but what we’re really doing is focused on getting a referenced country. So either the U.S. or Europe and following that we would have a cascade of other markets.

Operator

Our next question comes from Mark Schoenbaum with ISI Group. Please go ahead with your question.

Wes Nurss - ISI Group

Everyone, this is Wes turning in for Mark. Two questions, one was, I just wanted to specifically ask you didn’t change the 2013 revenue guidance but you did change the EPS guidance. So I want to know what’s specific line items below the revenue line changed?

My second question was regarding the CALGB data presented at the conference of [Quidel]. You mentioned that the benefit risk ratio was continued to be positive. I want to know if you had spoken or trying to speak to the regulators in Europe about that 50% mark?

Jackie Fouse

Wes, this is Jackie. Let me take the first question. So there are multiple drivers within the P&L dynamic of EPS growth. So given that we’re four months into the year now, essentially we got a bit more visibility to our operating expenses. We feel like we can increase the EPS guidance now and be very, very comfortable with that work.

We feel quite optimistic about where our revenue was as well and very confident of hitting those revenue targets across the board as we’ve outlined damages. There are more drivers of EPS we thought, we had bit more visibility to the overall P&L dynamics. There is nothing more than that. Maybe I’ll turn it over to Mark on the CALGB question.

Mark Alles

Actually, I think we’re encouraged by the updated analysis of survival from CALGB that included now more mature data on the crossover effect. The SPM rate has for all intents and purpose plateaued and matured but that was important to have as an update.

Our intent is to look now to segment newly diagnosed Myeloma regulatory consideration as well as the market into the elderly non-transplant eligible and still the still post transplant maintenance setting, the younger patients and we think that the IFM update later this year will be important.

But this composite of the four studies, 20, 015, IFM and CALGB remains a bit of an ongoing composite opportunity for us to consider what our final or comprehensive approach would be to a regulatory approval for REVLIMID in newly diagnosed myeloma. So nothings ruled in, nothing ruled out yet but we’re very, very encouraged by the [Quidel] update.

Operator

Our next question comes from Geoffrey Porges with Bernstein. Please go ahead with your question.

Geoffrey Porges - Bernstein

Thanks very much and congrats on the quarter. Look -- so you keep talking on these four trials mostly. First on MM-020, you’ve said recently I thought that the result could come as late as the end of Q3. Is that still your expectation? And has your expectations changed since you’ve seen the analysis of CALGB in terms of what you think the outcome in those arms will be for the SPM rate?

And lastly, related to that, U.S. filing for maintenance, are you expecting to go ahead with just what you have now or are you going to wait for 020 or is that still up in the air? Thanks.

Bob Hugin

On MM-020, our pursuit is in ventures and analysis that we’ve been talking about a lot. The timing continues to be on almost every other week to every month basis because it is event driven. So we are getting close to that protocol specified number but it really depends on when we would hit it, adjudicate those progression events and then turn it over to the BMC for final decision of unblinding. So we’re in this window of two to three to four months where it's just very difficult to be more precise than what we have done. For your question about Q3, is that topical, I think it’s in the range, yes, it’s possible but exactly what the timing would be is other than what we are seeing today very difficult to pen out. And I can say we would expect it certainly this year but we are trying to narrow it down because we need that information as much as you do.

With respect to maintenance, the sort of the post-transplant maintenance environment, the survival data from CLGB is still only about 30%. We don’t know what the ISM update will be at the end of the year but we’re hopeful that, that would show survival as well. So then we would be looking at two studies robust PFS, a mature SPM rate we would expect because the follow-up on the two studies should be much longer than four years at that point. And then we would be able to put the benefit risk into the context of regulators whether it’s the US and Europe for those specific indication of maintenance post-transplant.

Geoffrey Porges - Bernstein

What about maintenance, not post transplant but with the US, 015 or you’re going to wait for it to…

Bob Hugin

I think in US like Europe we would want to try look at the opportunity of both studies, not one or the other and see if again we could combine data or have one -- won’t be supportive but I am happy that we have the opportunity to a potential 2.

Operator

Our next question comes from Robyn Karnauskas, Deutsche Bank.

Robyn Karnauskas - Deutsche Bank

Just on the POMALYST, you mentioned that (inaudible) the latest trial is growing faster, maybe you can give us an update on how -- what can be the earliest timeframe where you can get the date? And regarding the market opportunities, there is around 2.5 million patients, what percentage is treated? And then second, regarding your POMALYST for PALACE 4, how do you view the opportunity and when could we get the data in the naive population?

Mark Alles

Robyn, on the ankylosing spondylitis we had targeted originally early in next year that the ankylosing spondylitis trial would fully accrue, that was our internal estimate. We are probably close to six months ahead of that in terms of the speed at which accelerated in the last few months. We’ve got a half -- at least a six-month follow-up after that. So we would see -- we hope to see topline data in that timeframe but assuming that the accrual continues these next few months and finishes again in the next few months, and then we will hopefully six months after that to see the data.

Bob Hugin

And PALACE 4, that is -- I think we are expecting that data imminently. So we’d expect some top line results hopefully here in the next month or so.

Robyn Karnauskas - Deutsche Bank

And the market opportunities for naives and spondylitis what percentage of this 2.5 million actually get treated?

Bob Hugin

Yeah, I think that certainly with ankylosing spondylitis, there really has never been a therapy similar to POMALYST in terms of an oral opportunity for that disease. Obviously we have to see the data to know the magnitude of the effect and profile etc. before we could really quantify what that market opportunity is. But it is a tremendously unmet need that if we were to get positives, but we do get positive data it really does expand the opportunity very significantly for us and on the naïve population I think that it's been rare that therapies in different (inaudible) have looked at this population because of the failed results that have been seen in rheumatoid arthritis etc. And so if we can show a positive result there, that also would be a significant market expansion for us. So I think again when we see the data, understand the durability of the data, the magnitude of effect, I think then if that turns out to be positive, it is another very significant expansion of the opportunity for POMALYST.

Operator

Our next question comes from Marshall Urist with Morgan Stanley.

Marshall Urist - Morgan Stanley

Just two from me, one is for Mark. Could you maybe just clarify again what exactly plan on the non-transplant setting is in Europe, and you have seen 015 under 75 data, and when can you update us on kind of feedback from regulators on how they are working at now the combination of the trend, the trend in OS in that population. If you can give us into how that compares to the last -- I think we saw it was July of last year and kind of how that spell up, is it gotten better, is it consisting with what we saw last time?

And then second just for everyone, it would be helpful, ahead of the R&D date, maybe you can just highlight a couple of the things that you guys expect kind of most interesting drop from the pipeline side for people as we think about what we are going to hear then? Thanks.

Mark Alles

Marshall, it’s Mark. Thanks for the question. So the regulatory discussion environment has always been dynamic, so we recently updated our analysis for overall and the target population less than 75 years of age. So we will begin to engage regulators, especially in Europe over the next coming months. So we schedule these events. We have a dynamic process, so we are on the front end of that. There is no question that as soon as we are able to update you on the progress of those discussions and the strategy for a submission on the transplant eligible population of Europe. We would speak to that.

So, I think it’s a dynamic active environment and we are at the front end of that. I think the notion that we would in the interim, as we are having these discussions expect or hope that we would have other data facts including maybe MM-20, is important not just for us but the dynamic discussions with regulatory agencies. So we will update you when we can but we are at the beginning of it and we will see where we go.

With respect to R&D data, I don’t know Bob or anyone wants to make the comment but I’d just tell you our agenda is robust. We’ve been working to bring together from our early research group, Tom Daniel shop, what I believe is a very comprehensive view of our alliances, the platforms we have across external partnerships, the very, very exciting data that’s emerging around our global leadership in epigenetics. And these mechanisms that work around the macro environment of the epigenetic therapy. So we are excited about that.

On the hematology, oncology franchise, my colleague, Jean-Pierre Bizzari who runs our global research organization and then our new head of global medical affairs, Dr. Markus Renschler. We intend to go through a very structured well laid out view of the next five to seven years of how our hema franchise in line and then how our early drug pipeline would lay on top of that. So we are putting this together today but I hope to show up.

Bob Hugin

And also, we obviously will spend time to go through where exactly we are with apremilast, the opportunity there. So there will be a good I&I franchise review and also discussion of our focus in where we are in cellular therapy initiatives. So our goal is to give you a very broad based. There will be some financial components to it. So we will give you -- it’s an Analyst Day not just an R&D day. So we will give you a good idea of our strategy, financial strategy and our business strategies of the franchisees, the research programs. So our goal is to give you the opportunity to hear what we are really doing more in depth than we will ever have the chance at the investor presentation or a conference call and the opportunity to make it interactive with the broader sense of set of Celgene leaders. So you really can get in-depth discussions, both from the presentations and in discussions with people throughout the course of the day.

Marshall Urist - Morgan Stanley

Great. Thanks. And Mike, just a follow up, just on the most recent 015 analysis and even some qualitative comments on how it compares to the last cut in the under-75 from, I think summer last year?

Bob Hugin

So qualitatively, the trends remain positive and we think that the trends are supportive of the overall benefit risk that we need to be able to secure label expansion in Europe, ultimately secure label expansion in Europe.

Marshall Urist - Morgan Stanley

Great. Thanks for the question.

Operator

Our next question comes from Chris Raymond with Robert Baird. Please go ahead with your question.

Chris Raymond - Robert Baird

Thanks. It’s more of a, sort of a macro question in terms of what you are seeing the marketplace. So, I know it is early days here since sequestration cuts have hit few reimbursements from medicare. But a lot of the oncology advocacy organizations have been making a big deal out of this.

I’m just wondering if, since your hema offerings represents sort of an economic alternative to injectable, especially in multiple myeloma. Are you seeing any dynamics out there that you can describe in terms of what physicians are doing? Is there any sort of benefit that perhaps you can describe to the REVLIMID and other compounds in your franchise?

Jackie Fouse

This is Jackie. Let me make just a very high level for financial comment, I think this is a little bit early as we watch it play out. But you might imagine that when you look at the composition of portfolio versus maybe other companies in the industry you can think through what some of the issues would be and maybe some of the ways that we could be positioned well and in the grand scheme of overall sometimes difficult environment. But just from a very high level we take a look at the totality of what we think all of the impact could be of the current budget available, it’s less than one half of one percent of Celgene global revenues that could be impacted by that. So it’s a very modest impact that again I think relates to the portfolio of products that we have in the therapeutic categories in which we compete. Now Bob might have some higher level macro comment, Mark may as well.

Bob Hugin

I think with sequestrations specifically putting aside the budget proposals from the different entities, sequestration would be expected all things considered to have a slightly positive impact on orals compared to other programs just in that period through the October the 1st, after that it's really dependent on other issues in the budget and as Jackie pointed out so far we seem to be not having any kind of dramatic effect on any of the proposals excluding the Presidents which we don’t think is included in either the House or the Senate budget proposals. So we will see but again not dramatic but if there is any benefit orals would be slightly preferred for the next four to five months.

Operator

Our next question comes from Rachel McMinn with Bank of America Merrill Lynch.

Rachel McMinn - Bank of America

I am wanting to follow up on ABRAXANE. Actually you had given guidance I guess earlier in the year, 600 to $700 million in 2013 sales, with the first quarter under your belt and looking now that lung (inaudible) how confident are you in your ability to exceed that guidance range?

Jackie Fouse

Just a short answer is very confident. We think we are going to have accelerating momentum in ABRAXANE over the course of the, and we like very much how we came out of the gate in the first quarter.

Rachel McMinn - Bank of America

And do you see the momentum primarily from pancreatic or is it a combination of things (inaudible)?

Jackie Fouse

The primary driver at this point in time is momentum behind the lung launch was occurred in the middle of fourth quarter, and now as we move into the first full quarter of that and I think Mark made some comments about share gains in that segment in the US in his remark. So it’s mostly positive momentum from lung in the US and then as you saw on the international numbers not strong growth there from the continued expansion of the ABRAXANE product outside of the US. I think Mark…

Mark Alles

And to that point, Jackie, just as a reminder, we were very pleased for (inaudible) where they received approval for it, not just lung cancer but also gastric cancer. So we have seen this incremental upside in the label expansion and of course we will benefit royalties from that opportunity. But I think the composite for ABRAXANE from geographic contribution from the lung launch which is really still relatively early and then Rachel, as you know, you and I were in San Francisco for the GI presentation on the pan data, that was late January and we really think the pancreatic market dynamic is that new patients starve versus existing therapy is really the sort of go forward opportunity for pancreatic cancer. Again, I am very encouraged the NCCN guidelines were updated to reflect the high level of evidence in category in support of the combination. So I think we are confident about the outlook for the year and we like the different elements coming together to support the brand.

Operator

Our next question comes from Michael Yee with RBC Capital Markets. Please go ahead with your question.

Michael Yee - RBC Capital Markets

Hey. Thanks. On 020 and we are doing a lot of work obviously on REVDEX maintenance versus the control. But of course there is also another arm with a fixed dosing regiment, I think, 18 months. Can you just give us some expectation, so that when investor see this, they know where we should be thinking about for the fixed dose, were you expecting what is you powered for, what the importance of that arm in thinking about the totality of the study? Thanks.

Mark Alles

Thanks for the question. So just as a reminder, so we are all on the same page, the study has 1,600 patients, little more than 500 per arm, arm A is REVDEX continuous, arm B is REVDEX for 18 months of therapy, that’s the fixed arm and then MPT is the control arm which on a dose intensity basis is 18 months of therapy.

So we are looking for the primary comparison of arm A, so already continuous to the control arm and the study assumed 25% improvement in progression free survival, that approximately is around 30 months versus around 24 months for the control. So those are our assumptions.

It is our strong expectation that the two REVLIMID arms at 18 months will be superimposable because it’s a same regiment for up to 18 months and then what we’ve seen in many data sets that have been reported as soon as therapy is discontinued either for tolerability or in this case protocol defined stop progression begin. So we have an assumption built on arm A versus arm C and arm B will overtime show progression.

Michael Yee - RBC Capital Markets

Okay.

Operator

Our next question comes from Mara Goldstein with Cantor Fitzgerald. Please go ahead with your question.

Mara Goldstein - Cantor Fitzgerald

Great. Thanks very much. A question on ABRAXANE and on REVLIMID. On ABRAXANE, the inclusion in the company, does that change any of the marketing work that you can do prior to NDA approval of ABRAXANE in pancreatic cancer?

And then Secondarily on REVLIMID, the guidance for the year is about 10% growth, the first quarter saw 16% growth, and offsetting price and currency. So I was hoping that you might be able to give us some thoughts about any quarterly fluctuations, given that the overall growth guidance for the year is lower than what we saw in the first quarter?

Jackie Fouse

Hi, Mara. Let me take the REVLIMID question first, I mean, this is simply a function of the continuously increasing base for REVLIMID and when we start the year and do first quarter comparison. I think we maybe a little bit of ahead of where we expected to be. We feel very good about how we started the year. But I think you would expect that to kind of convert a bit overtime towards our 10% guidance for the full year. But we like where we are. We like the momentum as we started the year with REVLIMID.

Mara Goldstein - Cantor Fitzgerald

Okay.

Mark Alles

On the ABRAXANE question with respect to NCCN guideline update. It doesn’t change anything that we can do commercially or from the marketing point of view because we don’t have indication yet, so that doesn’t have any impact. I think on the payor side there is a sense of confidence in that, if they would see a claim for the combination, they would recognize that it is supported by the highest level of evidence.

I think the other area that dynamically is evolving as I mentioned in my prepared remarks is that the investigator community in pancreatic cancer, some of the top thought leaders in the world are aggressively with our clinical resource organization to develop and launch an adjuvant pancreatic study, there is a lot of interest in advancing the clinical profile into the resectable or surgical setting. And I think the triple-negative opportunity and some other study opportunities really are where we are in the current lifecycle.

Mara Goldstein - Cantor Fitzgerald

Okay. All right. Thanks. And if you don’t mind me asking on REVLIMID in France, where do you think you are at this point in terms of regaining sort of from a market share perspective in that particularly country pre-SPM versus post-SPM at this point in time?

Mark Alles

We are at and we think now slightly ahead of the pre-SPM time period.

Mara Goldstein - Cantor Fitzgerald

Okay. Thank you very much.

Operator

Our next questions comes from Terence Flynn with Goldman Sachs.

Terence Flynn - Goldman Sachs

Was wondering first just to follow up on Tom, if you can provide any color in terms of trends you're seeing in April versus March in terms of new add and then anything on combo, you just went out Prolyst, separately on a POMALYST, can you just remind us of potential sizing of the sales force, and when you might start to take those actions to build out the commercial site there?

Mark Alles

I will tell you the trends in April for POMALYST are accelerating and we do not see any use of POMALYST with CYPOLYST in the market and investigators are just high, we have a number of investigators in Kyoto who would like to see if for example, POM or CYPOLYST that might be somewhat superior indirectly to what people are already seeing with REVLIMID CYPOLYST. I will tell you that the RCD or CRD combination as it’s called was very very well-received during the Kyoto, Japan meeting particularly in studies like smoldering myeloma and newly diagnosed myeloma. So I think the marketplace whether we are talking about academic research or combination therapy is really thinking that REV CYPOLIST vaccine could end up being the top regiment especially for high-risk patients or in the setting of newly diagnosed myeloma. I don't think that there is any real momentum around POM CYPOLIST vaccine yet. But of course over time that study will have whether it’s 1, 2 or phase 3, it will happen at some point in the future.

And then on [Premalibs], the buildout accelerates in the second half of the year as we get closer to the launch time of the US and in terms of sizing, we have an opportunity at the analyst day to go into more depth and more discussions on some of these issues but slightly bigger investment on the dermatology side to cover that marketplace you are talking about 100 plus, maybe 120 and on the rheumatology side, on the arthritis side, you are taking about 100 maybe slightly less is this order of magnitude of the type of sales force that we are talking about now. As that plays out in the second half of the year we can continue to update you on more robust discussion on May 6.

Operator

Our next question comes from Ying Huang with Barclays.

Ying Huang - Barclays

On the slide, the parts the coverage gaps in the first quarter…

Jackie Fouse

You’re breaking out just a little bit, so I think I heard yes we did quantify that the dollar impact of the coverage gaps for REVLIMID in Q1 of 2013 is $15 million and that’s an increase of $11 million over Q4 of 2012, it’s an increase of $2 million over Q1 of 2012.

Operator

Our next question comes from Brian Abrams of Wells Fargo.

Brian Abrams - Wells Fargo

This is Matthew just call in for Brian. A couple on POMALYST for Mark, could you talk about the amount of revenues from inventory fill for first-quarter?? Second of all the rationale behind running the 009 and 010 studies for POMALYST (inaudible) studies and then lastly timing for POMALYST (inaudible) in Japan looks like there is a pretty dose escalation study ongoing?

Jackie Fouse

Let me quickly touch the inventory question, with the launch in the US you would -- we had -- or you would expect in terms of putting some products into the top line, we think the impact of that was probably in the order 6 to 8 million and now what we see is prescriptions catching up with that and that inventory coming down to what we would expect and over the course of the coming months and throughout the year it’s going to come down to a normal level along the lines of what we would see with REVLIMID. So that’s going as we saw it.

Mark Alles

Just a little bit of an extended comment on inventory. The level that we saw Jackie outlined a number was what we expected given the footprint of our specialty pharmacies in the U.S. So it’s about what we expected with the respect to the expanded access protocol.

So [Paxil] 9 and then 10 for Europe, this is a very important of cancer drug development and I think if you look across different portfolios from cancer companies when regulatory certainty starts to become more focused or the opportunity is clear for the drug we approve, creating an expanded access program following the pivotal results you have and regulatory discussions.

It is really an important part of the launch as well as the access opportunity for patient. So I think the logic is that we want patients who have exhausted existing therapy to be able to, in a pre-launch period get access. That said the 09 study, the [Paxil] study did not have much participation really at all.

We had the protocol open for about six or seven months. But the participation was again what we expected but not a huge number of patients enrolled. Again I think it was the dynamic nature of drugs becoming available, Kyprolis became available and then as you know, POMALYST got to prove in a fairly rapid fashion.

In Europe, the access programs are expanding because with approval, the dynamic is a little bit different. We want to make sure we have access through the course of time, where we get reimbursement country by country. So that’s the dynamic and the logic for Europe.

Brian Abrams - Wells Fargo

Great. Thank you. And then just Japan?

Bob Hugin

So we are conducting the bridging study. And we will once complete it and again have a reference country. We have the U.S. now but the European [DEX], which is very important. Remember in European, our [DEX] is supported by the survival benefit from MM-003. And that’s really the international label including Japan that we would want to have.

Brian Abrams - Wells Fargo

Great. Okay. Thank you.

Operator

Our next question comes from Mike King with JMP Securities. Please go ahead with your question.

Mike King - JMP Securities

Good morning, guys. Thanks for fitting me in and congrats on a great quarter. I wanted to focus on VIDAZA if we could. Jackie didn’t mention anything about expectations on the guidance for generic. So I just wonder if we could get a quick update on that and then I just wanted to ask also about when we might see the first efficacy of the oral VIDAZA and when we might see some, you mentioned in the slide some heavy generic programming, I guess, you could call it with VIDAZA. When might we see the first evidence of that data.

Jackie Fouse

Hi Mike. So the 2013 full-year guidance can accommodate a generic VIDAZA entrant here in the U.S. anytime in the second half of the year. That’s how we put it together. Originally, it continues to be that way. Not much has changed but we want to be able to accommodate that should it come in the second half of the year. The latest date for our assumption of generic VIDAZA is competition in the U.S. and that is built into the targets that go up 2017 is the first of January of 2014.

And on the -- the other questions around oral azacitidine and Celgene are priming and things like that, I’ll turn it over to Bob or Mark. You will see that as one of the key feature topic at our investor analyst day on May 6. So I think we are getting pretty excited about that program. Go ahead Mark.

Mark Alles

Yeah. Just to add, Jackie is exactly right. Thanks for the question. The way I would frame it as you’ll see data at R&D Day in Celgene Oncology as well as existing data, recall that at ASH last year, M.D. Anderson reported on oral aza in a couple of abstracts and we can provide them to you following this conference call.

So there is some data available that we continue to update it and our enthusiasm for combination therapy as well as how we could build priming and sensitizing strategies with oral aza is growing.

Jackie Fouse

We have four of you left in the queue. And we’re going to try and go and get all four of you. So, operator, please go ahead.

Operator

Our next -- are you waiting for the next question.

Jackie Fouse

Yeah. Please, thank you.

Operator

Our next question comes from Matt Roden with UBS. Please go ahead.

Matt Roden - UBS

Great. Thanks for taking the question. Good morning. Question for Jackie, in your 2015 and ‘17 EPS guidance can you talk about the various ways by which you could protect EPS if for any reason the top line scenarios don’t play out as projected because I get a questions on this, I thought it will be helpful if you could talk about the ways -- what levers you could pull, to what extent you have flexibility to protect the bottom line number a wide range of 7%?

Jackie Fouse

So I think one thing that I would point it out first is that even when we think about the top line target now we have more and more drivers of that top line growth through an increasingly diversified product portfolio, increasingly diversified number of indications and increasingly diversified geographies. So even when we think about our ability to have some upside on things that might offset downside on things within the revenue portfolio, I think that is the one thing to consider. Beyond that, when you look at our P&L dynamic and whether you go back and look at how it’s evolved over time and the company build up the global commercial infrastructure and what, that gives us the ability to do particularly on the size and scale that we have now and with that increasing diversification just focus model that we have on specialty position channel and the clear benefit profiles of our products, what you see is in the P&L we have positive dynamic of the gross margin level, those are modest and they are there and we have positive dynamics in the R&D line as a percent of revenue and the SG&A line as a percentage of revenues. We have large buckets of sand where we still got efficiency to capture, the leverage that we are going to get with additional scale.

So that’s why you continue to see our results being driven by leverage as a operating profit line items in the P&L and that is going to be a story for a very long time, and you heard talk about going from 49% this year even while we are investing in the immunology franchise to 52 to 53% in 2015 and into the mid 50% right about 2017, all imminently doable. This is a multiple line items in the P&L that are contributing to that while we continue to invest for the long term future growth in the biz. As the NIM when you look at below that at the financial drivers obviously you know what is the assumption for share count of 430 million, you know what the assumption is for pancreatic 16.5 for spend which I feel very confident is not going to go up, maybe there is a little bit of room there over time as well. So a lot of levers to pull.

Operator

Our next question comes from Thomas Wei with Jefferies.

Thomas Wei - Jefferies

I just had a couple on MM20, how would you guide or direct us to think about the prospects on the overall survival and plain and then I wanted to see if you could help us with any interpretation of the delay in the times to the MM20, is that something that would have been actually expected based on prior historical data, (inaudible) that’s very linear initially but then they start becoming non-linear when you got to the tail end of the curve, or is this something that given the timing of follow up, was unanticipated and so this population seemed to be obtained quite differently from historical cohorts treated with (inaudible).

Mark Alles

So the first part of your question was about overall survival and what we anticipate is that the overall survival in terms of a follow up on events would be rather immature given the nature of the population and of course the cost of the therapies that exist in the market, (inaudible). So there are number of dynamics where we would think the overall survival would be rather immature. That said, there will be an interim survival analysis done in conjunction with the unblindings. So we look forward to that as very interesting part of the analysis.

With respect to your other question, I suppose that if we had to bracket where we are we don't think that there is any change that has any sort of dimension to it that we don’t understand, whether we talk about the population newly diagnosed multiple myeloma, the performance of MPT, what we would expect from [RV]. So really what we’ve been talking about is, would we land sometime in Q2, let say, in the June timeframe or would we potentially land sometime in the August, September timeframe.

And I think our thinking is not change from what’s been. The constant feature or factor variable that is driving all this is the rate with which progression events occur. So, I would leave it there and I guess, I would tell you that, as the study continues to mature, there are still our patients on therapy in arm A, which is another reason why the study continues to have this window for when progression events would occur.

Operator

Our next question comes from Jim Birchenough with BMO Capital. Please go ahead with your question.

Jim Birchenough - BMO Capital

Hi, guys. Two questions, just coming out of, one of the things we heard is, you guys are making a big push in China and folks were impressed with that push. So, could you maybe provide some guidance on the opportunity in China and always seems to be this market that never gets realized because it’s just one-off and private pay? But how are you thinking about that?

And then just quickly on 020, in terms of what we should be focused on when we get the data? Is the median benefit important versus the hazard ratio and the reason I ask that is, as we get deeper into the tail of the curve, I’m just wondering whether that 24 versus 30-month improvement at the median is realistic, is that still a goal or can we or should we expect something less? Thanks.

Jackie Fouse

Jim, it’s Jackie. Let me jump in on China first. So, obviously, we are very excited about it because the REVLIMID approval in China is completely incremental for us, our team in China and Asia-Pacific are quiet excited about it. The -- we’ve been in China for awhile now with great infrastructure and people on the solid tumor side with ABRAXANE already. So we’ve the country platform if you will and are looking forward to the launch later this year of REVLIMID in relapsed and refractory multiple myeloma.

The -- to put it in perspective, I do think that we all have to look at, what other drugs have done in that market and it can take several years for you to get up to $100 million or over $100 million opportunity, which is a very nice opportunity, but let's not get carried away there in the grand scheme of the Celgene portfolio by 2027 that this is going to be enormous, we like it a lot because its incrementally positive adds to incremental growth, it will help solidify the platform there and with more products coming in the future, all those come the thing is we think it's going to be a very nice market for us, let’s put in the perspective with everything else as part of continuing global expansion strategy for all of our product.

Bob Hugin

I think, this is Bob, just, in general as a corporate philosophy where we don’t have experience, dramatic experience in the marketplace, it’s appropriate for us to be relatively conservative in our modeling as to what the potential benefit can be to our long range plan and that’s certainly the case for us in China. So, if any thing to our models, China would be limited risk and potential upside if we outperform our conservative expectation over the next five years?

Jackie Fouse

Really great; I think Mark has a comment on the 020 question.

Mark Alles

Yeah. Again, thanks. We absolutely believe that a different of six months or longer in progression free survival in this very, very important clinical trial is clinically meaningful and we have good contacts from regulatory agencies that a win on the primary end point with all the appropriate secondary end points, the analysis for safety that this would be quiet acceptable.

Jackie Fouse

And I think, so we have time for one last question operator please.

Operator

Our final question comes from Joel Sendek with Stifel Nicolaus. Please go ahead with your question.

Joel Sendek - Stifel Nicolaus

Thanks from me and I’ll make it quick. So on ABRAXANE it looks like you’re not getting much growth out of breast cancer. I'm wondering is that how we should model it or is there still growth available there? And then on the refilling, can you give us -- I know this might be hard to answer, but can you give us any sense as to how long it will take the EU regulators to review the filing once you get it in, especially as you are starting to just talk to them now? Thanks.

Bob Hugin

So let me start with breast cancer, and then I’m going to ask you to clarify the other part of your question.

Joel Sendek - Stifel Nicolaus

Sure.

Bob Hugin

So with breast cancer, what was very important, I think you know and everyone knows, there has been a dynamic window over the last 12, 14 months, following the CLGB breast cancer results that included Avastin in three arms that they trial. The U.S. market has been quite dynamic, trying to sort out between the arms and in the marketplace, what to do.

We were very encouraged that in the fourth quarter and then into the first quarter, the use of ABRAXANE in metastatic breast cancer in the U.S. market has stabilized, and we believe we can reaccelerate from here. Importantly, the rethrough of ABRAXANE gemcitabine in our metastatic pancreatic cancer trial has drawn the attention of the marketplace and investigators to look at the combination in triple negative breast cancer, which is a significant unmet medical need remaining because of the failure of multiple previous strategies to try to treat those patients in a more unique way.

We are pursuing that aggressively and have great encouragement from the same thought leaders involving CLGB trial to endorse the ABRAXANE gemcitabine clinical trial strategy. So we look for that to be supportive of a reaccleration in breast cancer. Your other question I just didn’t hear the beginning of it. Could you ask it again?

Joel Sendek - Stifel Nicolaus

Sure. Just wondering how long it will take post the filing for in EU for us to or for them to make their regulatory decision, whether it will be accelerated given the fact that you are talking to regulators now or whether EU will require a full review?

Bob Hugin

Thanks for the question. I wish I can give you better color on that. But as I said, we are so early with the new data we have. There are a number of dynamics that we don’t have time to get on the cost they, including for example some draft guidance, the European regulators were looking out to adopt over the summer that may or may not have implications for the new data like the data we are talking about on the 115. So, I think it’s just too early to give any color on timing.

Bob Hugin

Let just assumed, I guess the conservative thing to do is assume once we submit standard review.

Joel Sendek - Stifel Nicolaus

Okay. That’s helpful. Thank you.

Jackie Fouse

Thanks, everybody. Thanks for joining us today and we look forward to seeing you all on May, the 6th. Have a great day.

Bob Hugin

Thanks

Operator

Thank you. Ladies and gentlemen, thank you for participation in today’s conference. This does, concludes the conference. You may now disconnect. Good day.

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