Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Celgene Corporation (NASDAQ:CELG)

Q3 2013 Earnings Conference Call

October 24, 2013 09:00 ET

Executives

Patrick Flanigan - Vice President, Investor Relations

Bob Hugin - Chairman and Chief Executive Officer

Jackie Fouse - Chief Financial Officer

Mark Alles - Global Head, Hematology and Oncology

Scott Smith - Global Head, Inflammation and Immunology

Analysts

Geoff Meacham – JPMorgan

Rachel McMinn - Bank of America Merrill Lynch

Geoffrey Porges - Sanford Bernstein

Terrence Flynn - Goldman Sachs

Mark Schoenbaum - ISI Group

Michael Yee - RBC Capital

Robyn Karnauskas - Deutsche Bank

Eric Schmidt - Cowen & Company

Howard Liang - Leerink Swann

Mike King - JMP Securities

Thomas Wei - Jefferies & Company

Joel Sendek - Stifel Nicolaus

Ying Huang - Barclays

Ravi Mehrotra - Credit Suisse

Jim Birchenough – BMO

Mara Goldstein - Cantor Fitzgerald

Brian Abrahams - Wells Fargo Securities

Gene Mack - Brean Capital

Operator

Good morning and welcome to Celgene’s Third Quarter 2013 Earnings Conference Call. All participants will be in a 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 turn the call over to Patrick Flanigan, Vice President of Investor Relations at Celgene. Please go ahead.

Patrick Flanigan

Thanks, Stephanie, and welcome everyone to our third quarter earnings conference call. 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; Mark Alles, who is Global Head of our Hematology and Oncology franchise and the Global Head of our Inflammation and Immunology franchise, Scott Smith.

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-Q 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 measures 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 outstanding results in the third quarter and the sustained progress achieved on critical corporate objectives. This quarter Celgene teams across the globe produced exceptional commercial and operating results leading to outstanding financial performance which again supports raising our full year financial guidance for adjusted earnings per share. We achieved important milestones during the quarter including the approval of Pomalidomide in Europe for our last refractory myeloma and the launch of the ABRAXANE in the United States for pancreatic cancer. We also advance important initiatives that position us for a strong finish to 2013 and to deliver on the promise of 2017 and beyond. Our commercial performance in the third quarter was excellent with our regular teams producing impressive results in markets around the world. The stronger ABRAXANE trajectories that began with the lung cancer launch late last year has accelerated with the introduction of the pancreatic cancer indication in the United States.

POMALYST’s launch momentum continued in the second full quarter in the market and we’re now beginning our commercial efforts in Europe. And are encouraged by the early results. Several important clinical and regulatory developments also strengthen and enhance our hematology, oncology portfolio. We are pursuing regulatory approvals for ABRAXANE and pancreatic cancer around the world to stand access to this important therapy to patients in need. In Europe we expect the CHMT opinion by the end of the year. As we continue to learn more about the potential of ABRAXANE we are expanding our clinical trial programs in multiple indications including Triple Negative Breast Cancer and adjuvant pancreatic cancer.

We also expect final overall survival data from our Phase III trial at metastatic myeloma in the coming months. And the annual meeting December will again be a highlight for Celgene. And Mark will provide his perspective on the important body of clinical data from the Celgene portfolio expected to be presented in New Orleans. An important part of today’s presentation will be Scott Smith’s update on a very positive developments or inflammation and immunology franchise. Our team is working hard to prepare for an expected first quarter launch of a POMALYST [ph] for psoriatic arthritis in the United States. We are accelerating the build out of our organization in the U.S. and beginning to expand our operations overseas in time for expected approvals in 2015.

Though we have much to do the expertise and commitment of our new team and the extensive preparations to insure a world class launch are impressive. Our clinical and regulatory teams are meeting all expected time lines for psoriasis and psoriatic arthritis applications around the world. We hope to see some of you at the American College of Rheumatology Conference in San Diego starting this weekend where important new data will be presented on the POMALYST and psoriatic arthritis and the Behcet disease further strengthening the value proposition of this very promising new therapy. We’re expanding the clinical profile of POMALYST additional indications specifically our Phase III trial and ankylosing spondylitis is now fully enrolled and we expect top line data in the first half of next year and we’re also beginning trials in additional areas of unmet medical needs and Scott will provide more detail in developments and potential of POMALYST in few minutes.

During this quarter we continue to strengthen our prospects for sustained long term growth by advancing our internal pipeline and portfolio of external collaborations. We’re confident that our strategy of investing an internal programs with disruptive potential and complementary external programs that leverage our competitive advantages positions our franchises to deliver transformational therapies for patients.

We’re energized by the significant promise of our innovative portfolio. As we looked to 2014 and beyond we’re excited about the opportunities for Celgene. We’re focused on our strategic imperatives maximizing the full potential of our hematology franchise expanding our oncology business, building a global I&I franchise and advancing our innovative early pipeline. Our business model has extraordinary potential to deliver exceptional near term results and long term growth. Let me now turn the call to Jackie.

Jackie Fouse

Thank you Bob and good morning everyone. Thank you for joining us on our call. 2013 continues to be a great year for Celgene and the third quarter provided further evidence of our strong commercial and financial momentum. Year-over-year product sales growth accelerated again and reached 18% for Q3. REVLIMID growth was 12% propelled by volume growth and total hematology franchise sales are benefiting from the rapid uptake of POMALYST in the U.S. as it had its second full quarter of sales as well as the launch of IMNOVID in August in Europe.

Excellent ABRAXANE growth continues in the U.S. in non-small-cell lung cancer and now in pancreatic cancer post our September approval for that indication in the U.S., while the product marches upward outside the U.S. Our P&L metrics remained positive and we grew earnings per share by 21%. Our operating margin for the quarter was down 20 basis points versus last year as a result of our investments in launch activity, but year-to-date Q3 compared to the same period last year, we have increased our operating margin by 150 basis points to 49.3%. And we did this while investing in our emerging inflammation and immunology franchise.

Through Q3 of this year, we have bought back over $2 billion of our own shares. And during the quarter, we entered into several new research and development collaboration agreements as part of our ongoing unique strategic approach to accessing leading-edge science in ensuring our long-term growth potential. With the 18% year-over-year growth, total net product sales for the quarter were $1.644 billion and total revenues reached $1.674 billion. All major products are contributing to our growth and our portfolio is becoming ever more diversified based on new products, new indications and new geographies.

The net product sales growth of 18.4% came from 19.3% volume growth that was negatively impacted by foreign exchange of about $16 million or just over 1 percentage point. Price was essentially flat globally. The 19.3% volume growth is our strongest volume quarter so far this year. With 21% year-over-year earnings per share growth for the quarter, we continue to deliver faster EPS growth and revenue growth and we are doing this while making important investments and product launches this year and while building our inflammation and immunology franchise as Scott will speak about in a moment. The $0.27 absolute increase in quarterly earnings per share year-over-year came from a $0.23 increase via operating income growth and only a net $0.04 increase from all financial drivers combined. This means that 85% of our earnings per share growth is operationally driven with the added value from financial contributors being the icing on the cake.

Taking a look at individual product sales. REVLIMID’s very solid commercial momentum was appearing yet again this quarter as the product posted 12% year-over-year and 4% sequential growth for the quarter. The U.S. came off of a very strong 10% sequential growth rate in Q2 and put up 1% sequential growth in Q3, a pattern consistent with last year. International sequential growth was strong at 7% and was demand driven. VIDAZA was impacted in the U.S. by the long-awaited entry of generic competition and Mark will speak more about our CapEx for addressing that category in a moment. The product remains on very sound footing outside the U.S., an international growth of 13% fuels the quarter’s 4% global sequential growth.

Year-over-year ABRAXANE growth of 60% and sequential growth of 10% comes from the products continued strong non-small-cell lung cancer performance in the U.S. from building momentum now in pancreatic cancer in the U.S. and from very solid performance in breast cancer globally. POMALYST in the U.S. and IMNOVID in Europe are driving outstanding sales results globally in relapsed and refractory multiple myeloma and global sales of these products totaled $90 million in Q3. These products are still early in their long-term growth trajectories.

REVLIMID’s year-over-year 12.3% growth for the quarter came from 11% volume growth and a net positive contribution of 1.3% on price and foreign exchange. Our positive income statement dynamic and operational leverage story remain robust. Gross margins improved 20 basis points for the year-over-year comparisons for both the quarter and Q3 year-to-date.

Research and development expenses as a percentage of revenues is running at just over 22% and was down 90 basis points for the quarter comparison and 230 basis points year-to-date. This percentage can fluctuate up or down in any given period depending on the time lines for our clinical trials and the timing of collaboration milestone payment. SG&A expense as a percentage of revenues is running around 24%, but peaked during Q3 and should trend downward in Q4 following spending on multiple product launches earlier this year. The increase in SG&A as a percentage of revenues of 150 basis points this quarter and 110 basis points year-to-date is driven by a combination of launch expenses and selective investment in our global hematology and oncology franchise commercial infrastructure along with new investment spend in our inflammation and immunology franchise.

Even with all of these investments our year-to-date adjusted operating margin has improved by 150 basis points to 49.3%, our effective tax rate is running at 16.8% slightly above last year’s 16.5% due to our revenue mix.

To the point of improving operating margins a look back at the last five years and 2013 through Q3 shows our track record of sustained improvements in margin as we leverage our global business model. This data also reveals the power of our model to generate the P&L capacities that allows us to make appropriate new or incremental investments in both our research and development and commercial capabilities to ensure our long-term growth profile while we also deliver faster profit growth to our shareholders today.

To complete the picture on our financial metrics we have an objective to improve our return on invested capital overtime. On this slide we show you both the most conservative measure of ROIC based on total invested capital including cash and U.S. GAAP income as well as return on invested capital excluding cash balances. As a result of the debt raise we view [ph] it back in August in the higher cash balance we carried as of Q3, our gross ROIC dipped slightly in the third quarter on a 12 months trailing basis. You can see the positive momentum in the net ROIC calculation driven by our operating profit performance and our returns both as long term investment approach.

As we continue our strong operating performance on a go forward basis and as we maintain and enhance our capital structure strategy we expect positive trends for both of these ROIC metrics. Our strong business model produced a strong cash flow that allow us to reinvest for the long term health of our business and simultaneously return funds to shareholders. Cash generated by operations in Q3 was just over $570 million and year-to-date we have repurchased 2.05 billion of our stock. We have also deployed over 500 million to investments in various strategic business development opportunities this year.

To wrap up my section today I’m pleased to provide you with some updates to our full year 2013 financial guidance. We now expect our total net product sales to exceed $6.2 billion and we expect REVLIMID sale to be in the middle to upper end of our guidance range of $4.2 billion to $4.3 billion. We continue to expect operating margins to come in around 49%.

We now expect full year adjusted earnings per share to be in the range of $5.90 to $5.95 assuming a full year weighted average fully diluted share count of 430 million and an effective tax rate between 16.5% and 17%. As compared to prior periods the fourth quarter of this year will reflect the impact of the generic VIDAZA U.S. in turn.

In addition investment in our inflammation and immunology franchise will accelerate in Q4 in advance of our first expected POMALYST approval early next year and as we build that franchise into an engine for future growth.

Thank you for listening and let me now turn the call over to Mark.

Mark Alles

Thanks very much Jackie. Good morning everyone. We had an excellent quarter, third quarter total net product sales grew 5% quarter-on-quarter and 18% year-on-year to $1.144 billion a very positive reflection of the discipline execution of our integrated clinical regulatory and commercial operating plans. Our hematology and oncology franchise made substantial progress in the third quarter towards achieving the four key objectives that we established at the beginning of this year. To capitalize our clinical and commercial strength in hematology to build our global oncology franchise to deliver strong product sales growth and to accelerate the pace of scientific innovation to provide new and significant long-term opportunities.

Our multiple myeloma business is well-positioned for its next phase of growth. REVLIMID demand fundamentals were strong in the third quarter and in 20 met its primary endpoint. POMALYST is launching in the United States and now in Europe and we established new drug development collaborations with the biotechnology companies MorphoSys and Acetylon to expand our myeloma therapies to include monoclonal antibodies and new HDAC inhibitors.

REVLIMID sales were driven by the combination of duration, global share of the myeloma market above 50% and prescriptions in the new indications mantle cell lymphoma in the United States and MDS deletion 5q in Europe. REVLIMID sales grew 4% quarter-on-quarter and 12% year-on-year to $1.90 billion. Third quarter POMALYST sales grew 35% quarter-on-quarter to $90 million. In the United States, POMALYST continues to rapidly gain market share in the third and fourth lines of therapy for myeloma. The launch results remain above plan. In early August, we received European marketing authorization for pomalidomide with the trade name IMNOVID and we immediately launched in Germany.

We are pleased with the pace of sales in France and the use of IMNOVID in the United Kingdom is now being reimbursed from a special cancer drug fund prior to formal review by NICE. We are confident in the value proposition IMNOVID provides for patients and for payers. Our market active teams have started reimbursement negotiations in every European market and we expect to achieve broad patient access throughout Europe by the second half of 2014. With regulatory approvals now in both the United States and Europe and the clear unmet medical need of patients in this clinical setting, POMALYST IMNOVID is on track to become our next hematology blockbuster.

Sales of VIDAZA in the third quarter were $220 million, 4% quarter-on-quarter growth and flat year-on-year. While we did see the launch of generic azacitidine in the United States during the quarter, we remain committed to optimize in the full potential of VIDAZA in Europe and other international markets. Top line results from our Phase 3 study of VIDAZA in elderly and now are expected by the end of this year or early next year. And we are advancing two Phase 3 registration track studies for CC46 in AML and MDS. Our MDS AML business continues to represent a multi-billion dollar potential and Celgene is committed to remaining the scientific leader in the specialized segment of hematology.

Third quarter ABRAXANE sales were $170 million, representing 10% quarter-on-quarter growth and 60% year-on-year growth. Sales were driven by increased use in both histologic substance of non-small-cell lung cancer, steady demand in metastatic breast cancer, early adoption in metastatic pancreatic cancer and increased sales in Europe and in Japan. In the United States, ABRAXANE is emerging as a cornerstone therapy for the treatment of multiple solid tumor cancers.

The FDA approval in September of ABRAXANE in combination with gemcitabine for the treatment of patients with metastatic pancreatic cancer expands the commercial opportunity for ABRAXANE to three major indications, breast cancer, non-small-cell lung cancer and now metastatic pancreatic cancer. FDA approval of this important indication represents the first of what we expect will be a series of international regulatory marketing approvals starting with the expected CHMP opinion in Europe by the end of this year.

We are driving a paradigm shift in the treatment of pancreatic cancer. Just last week, the results of the Phase 3 CA46 study were published in the New England Journal of Medicine. We are confident that this ABRAXANE regimen has the potential to rapidly become the global standard of care for the treatment of this incredibly challenging disease. In late 2012, we described the significant and clinically meaningful progression free survival advantage demonstrated by ABRAXANE over the carbazine in a Phase 3 study of patients with metastatic melanoma. We expect the final overall survival results to be available during the fourth quarter. These data will inform our regulatory strategy and we will submit the final study results of presentation at a medical meeting next year.

To further expand the clinical and commercial potential of ABRAXANE, we initiated the Phase 2/3 study in first line triple-negative metastatic breast cancer during the quarter. Additional Phase 3 studies in adjuvant pancreatic cancer and squamous cell, non-small cell lung cancer should begin by the end of this year. Every year the American Society of Hematology meeting provides an important opportunity to present the results of the latest research featuring our therapies and our promising pipeline drugs. And the 2013 will continue this tradition. We’re aware of at least 160 abstracts that have been submitted to ASH [ph] on Celgene therapies. There are approximately 100 abstracts on REVLIMID alone a strong signal [ph] opposite involving clinical profile in multiple myeloma NMVS [ph] and it's emerging profile in other hematological malignancies.

Important abstracts on POMALYST and relapse and refractory multiple myeloma will provide additional clinical information that should help hematologist to further define their use of this novel therapy. Initial data from this separate Phase I studies of CC-122, CC-223 and CC-292 will also be highlighted. I would like to briefly summarize three important abstracts on the use of REVLIMID and newly diagnosed multiple myeloma. First, updated results from the MM015 study will be an oral presentation. This abstract focuses on the mature overall survival data in elderly patients with newly diagnosed multiple myeloma. The presentation will also include an important analysis of progression free survival to PFS2 is a validated surrogate endpoint for overall survival and it is an important end point with respect to European regulatory guidelines recognized now as a clinical benefit end point.

As you know assessment of PFS2 is measured from the time from initial randomization to the time of second progression after the next line of therapy or debts from any cause. The second abstract is an important and robust meta-analysis conducted by hematologist with the Mayo Clinic in Rochester, Minnesota of randomized trials testing REVLIMID maintenance in newly diagnosed multiple myeloma. This abstract was also selected for oral presentation. We expect the results to highlight the overall benefits to risk ratio of REVLIMID used continuously to maintain long term disease control in patients with newly diagnosed multiple myeloma.

Third the ASH Program Committee has selected the abstract summarizing the initial results of the Celgene sponsored international Phase III NM-20 study for presentations during the scientific plenary session. The plenary session is scheduled during the afternoon of December 8, you will recall that in July we announced that MM20 met the primary end point of superior progression free survival for the combination of REVLIMID, plus low dose dexamethasone used continuously until disease progression compared with standard Melphalan, Prednisone and Thalidomide for the treatment of patients with newly diagnosed multiple myeloma who are not eligible for stem cell transplantation.

The part of presentation of MM20 is expected to review analysis of final progress free survival interim overall survival, PFS2, response rates, time to response, duration of response and safety including second primary malignancies across all three arms of the study achieving global regulatory approvals for REVLIMID for the treatment of newly diagnosed multiple myeloma is one of our most important corporate objective and it is the most important objective for our hematology franchise meeting to the regulatory authorities to discuss our submission plan for REVLIMID in this indication have progressed and are ongoing.

We’re working expeditiously to submit our regulatory dossiers to the CHMT in Europe and to the FDA in the United States and expect to submit these applications in the first quarter of 2014.

Our hematology and oncology franchise is generating strong operating momentum. We’re on track to feed our full year 2013 sales target to advance the significant near term sales catalyst and to unlock new opportunities for growth. I would love to thank and recognize my colleagues in clinical and regulatory and in commercial for their extra-ordinary dedication to our vision and to the mission to discover and develop therapies that extend and improve the lives of people with cancer. Our results and our products are making the positive difference. Thank you very much. I would like to turn the call over to Scott Smith for an update on our POMALYST and our inflammation and immunology franchise.

Scott Smith

Thank you Mark and good morning to all. 2013 has been a year of tremendous progress and momentum within the I&I franchise. We are refocusing on four key strategies as we move the franchise forward targeting markets with high-end medical needs. Precise execution of the clinical development plan is evidenced by six positive Phase 3 trials in psoriasis and PsA hiring experienced leadership with peak therapeutic knowledge to lead our global launches and advancing the important programs in our early clinical phase pipeline.

Our regulatory plans for apremilast will remain on track. Our discussions with the FDA on our PsA application have been progressing well as we move closer to the March 2014 PDUFA date. We are on track with our apremilast psoriasis NDA filings with the FDA later this year. In addition, we expect to submit the combined psoriasis PSA marketing authorization application to the European authorities before the end of the year. During Q3, we completed enrollment in our 500 patient Phase 3 POSTURE trial of apremilast in ankylosing spondylitis. AS is a formal arthritis is primarily affecting the spine. It has estimated effect over 2 million people in the United States and Europe and there is a tremendous need for new treatment options for this disease. We expect to see top line results from POSTURE I trial in the first half 2014.

Earlier this month at the European Academy of Dermatology and Venereology Annual Meeting, there was a deeper look at the ESTEEM 1 data, the positive and robust scalp and nail psoriasis could be very meaningful to patients as additions. More than half of psoriasis patients have scalp or nail involvement, which can be debilitating and difficult to treat. An effective oral option for these patients could be an important addition to the treatment (indiscernible). Also presented in the ADV was an abstract that demonstrated that apremilast improves psoriasis patient’s quality of life as measured by improvements in the LQIs and other key secondary endpoints.

We are also very excited about the upcoming ACR which will start later this week in San Diego. You can see from the slide there will be a tremendous amount of apremilast data being presented including 52-week results from both the PALACE-2 and PALACE-3 trials data on the effect of apremilast and the important disease manifestations of PsA such as dactylitis and enthesitis as well as swollen and tender joints, improved safety and laboratory data. These data showed apremilast offers patients a robust response as the continuing to prove over time reaching ACR 20 scores in the 50% to 60% plus percent range by week 52 as well as deep and clinical meaningful responses in numerous key secondary endpoints. The cool safety and laboratory data show a consistent and highly differentiated safety profile that confirms our belief of laboratory monitoring for patients will not likely be necessary.

In addition to the data listed above, I am excited to announce the acceptance of a late-breaking abstract of our PALACE-4 trial of apremilast monotherapy in DMARD-naïve patients. An abstract on the use of apremilast in Behcet’s disease from our recent Phase 2 trial was selected by the ACR to be a plenary presentation confirming the importance of this data and the need for new treatment options for patients with this serious disease. Finally, there will be some interesting data on our new immunology-specific compounds CTQ20 which will begin Phase 3 trials in the near future. We will be summarizing all these data as well as highlighting our launch readiness and an investor event at ACR on Sunday, October 27, 6.30 PM Pacific Time. This event will also be available via webcast.

In summary, a lot of progress has been made since we last spoke. We are very confident about the emerging profile of apremilast based on the robustness and consistency of the data including the 52 week results. Our launch planning has continued to accelerate and we will be prepared to execute a high impact launch early next year. Joining our team recently had been a number of very talented experienced commercial and medical affairs leaders that are finalizing and implementing launch plans as appropriate. We are now actively recruiting a rheumatology sales force in the United States. The response and caliber of candidates has been tremendous. It’s very exciting time, a lot has been accomplished. There is still a lot yet to do. Our team is working passionately to ensure that we can bring this potentially transformational treatment option to patients worldwide in the near future.

Thank you. And I would like to turn it over to Bob.

Bob Hugin

Thank you, Scott and thank you Jackie and Mark. Third quarter performance was truly outstanding. We are encouraged by these operating results as we look forward to the promise of the coming quarters. Our teams are focused on discovering and delivering innovative therapies and are well-positioned to sustain long-term growth. I want to thank all my colleagues around the world for their dedication to improving the lives of patients every day. We look forward to updating you on a number of occasions before the end of the year, including at the American College of Rheumatology meeting this weekend in San Diego and at the American Society of Hematology meeting at early December in New Orleans. We believe these meetings will highlight the exceptional potential of the Celgene portfolio. Thank you for joining this morning. Operator please open the call to questions.

Question-and-Answer Session

Operator

(Operator Instructions). Our first question comes from Geoff Meacham with JPMorgan. Your line is open.

Geoff Meacham – JPMorgan

Got one for you on 020 what was the driver to push the EU filing, was it just data maturation or was it the request of the regulators and just another one related to ABRAXANE. You guys talked about last quarter acceleration mostly due to lung cancer approval and was that also the case in the third quarter did you guys see some early signals of pancreatic uptick? Thanks a lot.

Mark Alles

Geoff on MM020 we have great clarity on where we believe the dossiers need to evolve in terms of collecting the data we have organizing it well and submitting with the best a dossier is possible. So when we look at the timeline it pushes it into Q1 just to be sure that everything is exactly right and when the submissions go in they are lined up with what the regulators have talked to us about and that the process is smooth and complete. With respect to what’s happened with ABRAXANE the dynamics are very interesting. We still see as I said good penetration in the lung cancer markets and we remain excited about that opportunity but there is no doubt we saw uptick in pancreatic cancer and I think it's consistent with the idea that remember the (indiscernible) data were presented first early this year at (indiscernible) but then again featured as ASCO and I think that the marketplace is getting used to the idea that this is a robust outcome from those patients, it has been as a single agent the standard of care and it's evolving nicely. So we’re looking forward to even accelerated performance now that we have launched.

Operator

Our next question comes from Rachel McMinn with Bank of America Merrill Lynch. Your line is open.

Rachel McMinn - Bank of America Merrill Lynch

I know it's a little bit early to ask for 2014 guidance specifically but can you help us a little bit with the SG&A expense line, you know for 2013 it was on track for more 20% growth in that line item. Is there a lot of new infrastructure that’s going to come in 2014 with marketing for POMALYST infrastructure there and then as a totally separate question I’m curious on your R&D perspective for the need for a JAK inhibitor just following the ruxolitinib data there and some of the evolving landscape with a lot of companies placing bets on JAK inhibitors. Thanks.

Jackie Fouse

When you look at the targets that we have laid out going back to earlier this year in 2013, ‘15 and ’17 obviously you can look at the trajectory there and we have also I think laid out on a couple of occasions how we see the P&L dynamic evolving and how we can deliver faster profit growth in the revenue growth even when we we’re making these investments and we only talked about 2013 and 2014 being the incrementally largest investment years in terms of building the inflammation and immunology franchise. So you see what we have done so far in 2013 when you look out a how we have talked about ’15 and ’17 where we say that we would go around 52% operating margin by 2015 and 55 by 2017 it's not going to be a linear progression but as we have talked about we will still deliver leverage in 2014 even while we invest in mostly the I&I platform from an incremental standpoint. So while we took the opportunity to do in 2013 is invest appropriately and ahead of the launches so that you have seen the trajectories in the launches and the demonstration of the executions on the commercial teams there both in the U.S. and in Europe with POMALYST IMNOVID in the S-REVLIMID and ABRAXANE and others. And now we start seeing a bit of a sheath and more standard going to the I&I platform and we will see that continue in 2014. So we will deliver the P&L leverage at the operating profit levels despite that. When we think about R&D as long as there is some getting to the end is determining on that will be dependent on the time launch for our clinical trials. You have seen us talk about adding some new trials for ABRAXANE. We have a big portfolio now where we do get some turnover as things come down and some new things come into the mix and then whether we have collaboration milestones or not. So we are seeing that percentage of revenue to be a little bit lower this year than we thought, but it’s just because the nature of this large portfolio.

Bob Hugin

And Rachel, it’s Bob. Generally, we are very pleased with the performance of our internal pipeline and the progress that our collaborators are making in programs that will help support our pipeline and broaden and deepen our pipeline over time. And clearly, the marketplace has embraced some of those collaborators in terms of the opportunity to even raise more capital over the last few months. And so we feel very good about where we are. So we don’t see a need to do anything that at this time we feel very good about where we are positioned. We always are looking at the landscape for partnership opportunities and products that have a good value proposition. And if there is an opportunity to bring something in this complementary and to our products, we certainly do that, we look very closely. And even if we don’t bring the products into our specific portfolio, we very actively look at clinical collaborations whether that’s in combination or sequential to ensure that our products are combined with the best products to give the best output for patients, but I can’t comment anything specifically, but there is nothing dramatic that we are looking at right now and we will continue to look at the landscape.

Operator

Thank you. (Operator Instructions) Our next question comes from Geoffrey Porges with Sanford Bernstein. Your line is open.

Geoffrey Porges - Sanford Bernstein

Thanks very much for taking the question and congrats on the quarter and the progress. Mark, just a follow-up on the question about the filing about MM-020, we are not seeing an update on IFM or CALGB at ASH and can you comment specifically on that this morning? Could you tell us whether the filing is going to include all four of the frontline trials IFM, CALGB, 015 and 020 or is it really now focused on 020? And should we anticipate that the label includes both transplant and non-transplant patients frontline in maintenance or is there going to be some subset of that? Thanks.

Mark Alles

Thanks for the question, Geoff. First, our intent is to get the broadest possible label for newly diagnosed myeloma period. Second, the IFM 05-02 study will be at ASH. There is an update plan. The reason that I didn’t speak about it directly is because is the trial that would be part of as it goes to your question about the comprehensive nature of the application. It is a trial that will be included in integrated safety summary that we do as part of our submissions without doubt. So we are looking for a broad label. We are looking for the safety data from all of the REVLIMID and the MM studies and then of course MM-020 with 015 would be the pivotal studies that would make up the bulk of the dossier.

Bob Hugin

And country by country can have very different outcomes on the label and the indication, but we are very encouraged by the discussions and we are moving as quickly as possible.

Geoffrey Porges - Sanford Bernstein

Okay, thanks very much.

Operator

Our next question comes from Terrence Flynn with Goldman Sachs. Your line is open

Terrence Flynn - Goldman Sachs

Hi, thanks for taking the question. Was just noticed your comments, Mark, about PFS 2 and I was just – that’s the kind of the first time I have heard about this was just wondering how we should think about that in the context of overall survival data here? And then want to know longer term multiple myeloma market, just would love your thoughts on the potential for PD-1 drugs here? Thanks.

Mark Alles

Thank you for the question. I think this first thing is we really should congratulate regulatory agencies when they look at these diseases like lymphoma, myeloma, etcetera and overall survival as a primary endpoint is so difficult to achieve because of the ability to treat these diseases long-term is very important for us to say PFS2 as a validated surrogate endpoint is quite important. What that allows us to do is priority study progression as an endpoint that is extremely valuable. We know that from PFS and the initial way of looking at our data but now even after cross over one is able to measure the effect of the drug from randomization all the way through the second progression. The regulatory things are moving with the science, the biology and the therapies in this space. The way I think about it is that we will always now in lymphoma, leukemia, and myeloma looking to build in PFS, PFS2 and then of course as a secondary endpoint overall survival. I think with the respect to PD1, you know it's interesting because I think it's a very, very flexible mechanism and I think we just had to wait and see a little bit and it's pretty clear what’s happening in the market generally but we have thought about that a lot and in fact in our discussions about antibiotics generally it has come into our scientific debate.

Operator

Our next question comes from Yaron Werber with Citi. Your line is open.

Yaron Werber - Citi

I just had a question, Jackie just a little bit when you look at your share count I mean this year you’ve done about 2 billion in stock buybacks last year, the share count went down you know pretty significantly throughout the year and I’m trying to kind of get a sense and last year potentially the same amount of stock buy backs what difference this year or do you think the share count will go down dramatically, is there a catch up effect in Q4?

Jackie Fouse

It's most related to the fact that you know the stock price is a lot higher now than it was a year ago. So again we stick by the assumption that we have underlying our targets which is a flat share count and if we have you know lower share counts in that in the future obviously that gives some upside potential from the financial drivers.

Yaron Werber - Citi

Okay but the option expenses is pretty much consistent I guess just to clarify the question.

Jackie Fouse

Yeah I mean you get a little bit more delusional when the share price is higher and then it depends a little bit on the activity you know of employees there so.

Bob Hugin

The expense is higher, the stock price rises was restricted stock but it's really it's just the function of the stock price.

Operator

Our next question comes from Mark Schoenbaum with ISI Group. Your line is open.

Mark Schoenbaum - ISI Group

Can I just clarify Geoff’s question the on the filing, can you just confirm for clarity sake that you will be filing both for the transplant eligible population as well as the transplant ineligible population when you file on the U.S. and Europe and then Pomalidomide if I might or POMALYST possible to give us a couple symmetric such as perhaps share in the U.S. in the target market and I assume Mark since you used the word blockbuster I know you’ve have used that before with Pomalidomide that I would assume that you would encourage us but do not view this drug as anywhere near it's peak potential right now, there is a lots of growth ahead I just want to make sure I understood your, not over-reading your comments. Thanks a lot.

Bob Hugin

So just to clarify again on our filing strategy the intent is to use a comprehensive data set, MM-20 is key to that in all markets around the world O15 [ph] is also part of that remember that in O15 lenalidomide maintenance was used after MPRs induction. So this gives us a lot of flexibility market to market in different regulators to seek the broadest possible label for newly diagnosed myeloma. By definition that would allow for us to look for the transplant ineligible as well as had discussions about eligible because the label for the treatment of myeloma could then be considered inclusive. So with all of the above not one or the other at this point and we’re moving as quickly as we can to make sure these dossiers are comprehensive line-up with the regulatory agencies expectations and include the very important safety data that is part of the overall set of induction, maintenance, eligible, ineligible patients.

Mark Schoenbaum - ISI Group

CALGB and IFM trials be in the package?

Bob Hugin

These data on maintenance at CALGB and IFM will be part of it at least the integrated safety summary for the brand. Now, with respect to pomalidomide and the blockbuster status, I think it’s clear to us that the brand I know that everyone has modeled this has $1 billion plus potential in its core indication. So that’s the context of the comment.

Jackie Fouse

And just when you think about the trajectory I mean, look we are only in the second full quarter in the U.S. the product screening, while we just launched the product in Europe while we are well ahead of the competition. So the growth trajectory is very good for this product and will be for a while.

Operator

Our next question comes from Michael Yee with RBC Capital. Your line is open.

Michael Yee - RBC Capital

Hi, thanks. Good morning. A question on guidance actually when you gave your 2017 guidance, you didn’t have your MM-020 results, so given the importance of that study, did that change how we should be thinking about your guidance over the next few years, has that changed probabilities? And then as a related question, when you present that MM-020 data and when you submit it, what is the maturity of events on the PFS and OS? Thanks.

Jackie Fouse

Let me start and take the question. So when we gave the 2017 targets – 2015 targets for that matter, we did not have the visibility to (indiscernible) that we have today and some other things as well. So the way that I would look at that is I mean a couple of from a couple of different perspectives, first of all, you can take the targets that we have laid out there and consider that they are highly achievable and that we have significantly de-risked the assumptions necessary to get to those targets over the course of this year. So if for anybody who is still doing their analysis to come to a conclusion about how they think, what they think about our range for apremilast since that’s the newest thing that’s in there now, we still have to get out there and get the approvals and execute on that or whether you think about the potential for upside to those targets based on where you are in your analysis, I think you can come at it from both of those different ways, but there is a significantly lower level of risk to our achieving those targets today versus when we gave them 10 months ago.

Bob Hugin

Again, I will just follow up that question with the data. We are encouraged about MM-020 and we are really looking forward to reviewing it at ASH. The abstracts will come out in early November and I think together we can look at the data after the scientific plenary session, but we are very, very optimistic about the impact of the data.

Operator

Our next question comes from Robyn Karnauskas with Deutsche Bank. Your line is open.

Robyn Karnauskas - Deutsche Bank

Great, thanks for taking my questions, (indiscernible) on behalf of Robyn. Congrats on the good quarter guys. So question on 020 again, just I guess wanted to get your thoughts on how this – how that could impact the U.S. trends. And if I could take another one then, do you think that apremilast will require a panel?

Mark Alles

I think this is Mark. Thank you for the question about MM-020 and IMPACT. The important part of the newly diagnosed multiple myeloma trials that have been ongoing were (indiscernible) MM-020 other studies and there will be a lot at ASH is that the constancy in this continuous Rev decks is highly effective at producing progressive-free survival, trends in overall survival. We have seen overall survival in many studies. So the nice opportunity here is to reinforce duration of therapy matters in the treatment of myeloma. So we look for opportunities and we think that data will start by increasing duration of therapy even above the pace it’s on today. Beyond that, I think there is a market share opportunity, but that would come largely from the approval and the first time that our full U.S. commercial organization is able to promote REVLIMID’s benefit for newly diagnosed myeloma. So it’s kind of two stages duration in the short-term, share in the longer term.

Scott Smith

And this is Scott, relative to the apremilast Adcom question at this time, we do not anticipate an Adcom, but the regular process – the regulatory process is ongoing.

Operator

Our next question comes from Eric Schmidt from Cowen & Company. Your line is open.

Eric Schmidt - Cowen & Company

Thank you. Question for Mark on REVLIMID, it looks like maybe for the first time at about a year you saw a nice quarter-on-quarter increase in the international business there. Just wondering if there is a different trend in Europe or if that’s coming from some other new markets you may have penetrated can you give us some more detail.

Mark Alles

Sure. So as you know different markets will come in and out of picture but Europe was quite strong, we were very, very happy with the performance of Europe in general and then we saw some strength in Japan. Canada and Australia, quarter-by-quarter are very strong so when you add it up you see that nice performance in the quarter very balanced.

Operator

Our next question comes from Howard Liang with Leerink Swann. Your line is open.

Howard Liang - Leerink Swann

Just regarding ASH data for 015 are we, we’re going to see survival data with more than 50% of events and also what data are we (indiscernible) antibody and how much, get update on CC-292. Thanks.

Bob Hugin

Well Howard CC-292 is really just an ongoing update of the Phase I profile, as you know there is combination data with REVLIMID my guess is that we would see some of that in the presentation. With respect to O15, the maturity of the survival continues but what is the feature of the O15 study is the pre-specified plan to look at progression free survivals and this is the initial PFS2 results which could be considered final but we don’t have not yet, it's the percent. That’s correct, right. So we’re still maturing on overall survival but PFS2, one can consider that mature.

Operator

Our next question comes from Mike King with JMP Securities. Your line is open.

Mike King - JMP Securities

Regarding the guidance for the remainder of the year, it seems rather conservative because if you just do the math real quick it looks like you’re guiding to us to down towards quarter historically your fourth quarter has if anything has been the most robust of the year. So I’m just wondering if you can help us think that through.

Jackie Fouse

So the way that we’re looking Q4 is we’re factoring in the impact of the generic VIDAZA entering in the U.S. where we would have all of that in the fourth quarter as you know that came very late in Q3 so there was little or no impact on either of the top line or the bottom line in the third quarter. So we would have the first full quarter impact of that and then we’re also looking at an acceleration in the expense investment in I&I at the same time we will be coming you know off a bit on the hematology oncology side of things because of the launch expenses that we have had up to now so I would expect percentage of revenue the SG&A to come down a little bit. I think when I look at, everybody is for the quarter I think we have got a little bit higher estimates for our R&D expense in the quarter versus the rest of you but let’s see where we come out. I feel very, very good about our ability to hit the new rates, guidance’s that we have given for the full year.

Operator

Our next question comes from Thomas Wei with Jefferies. Your line is open.

Thomas Wei - Jefferies & Company

I just wanted to ask on this PFS2 endpoint, how should we think about the regulatory or marketing value of an endpoint like that when the protocol does not prespecific that patients in the control arm receive REVLIMID on progression. I don’t quite know how to think about that I guess it's specifically from a regulatory standpoint and then just separately any update on the I&I marketing strategy and what you’re planning to do on the dermatology side?

Mark Alles

So the way the conversations have gone with the academic key opinion leaders and then more generally with the regulatory authorities is that while we wait for mature that is greater than 50% or 75% of the survival events PFS2 becomes a surrogate and now it is recognized in the EMEA guidelines as an endpoint that will be substituting for final overall survival advantage and it of course calculates in a PFS continuum from time of randomization all the way through the benefit of in this case the experimental arm of the study. So I think it’s acting as a long-term view at the health disease control from the first treatment through the impact of crossover and then prior to survival benefits patients and it is a very, very good surrogate. So the way we are thinking about it from a regulatory endpoint is it completes the discussion about risk benefit from progression-free survival in the setting of in our case this question about long-term exposure in SPMs that develop or don’t develop as a consequence of treatment. So the general way to think about it is as a surrogate for benefit risk prior to having final overall survival. I&I was your second question.

Mark Alles

Yes, it was around general marketing strategy. We are moving forward and preparing strongly for a second half of the year 2014 launch in the dermatology space with psoriasis. We are on selected geographies together with some certain patient segment having some discussions around partnering, but we are definitely preparing to do it and manage it ourselves in that space. We think there is tremendous potential in the derm space. We are also looking at some potential DTC type approaches in a targeted perspective once we get into 2014 or 2015, but we are moving strongly towards market in the second half of the year next year.

Operator

Our next question comes from Joel Sendek with Stifel Nicolaus. Your line is open.

Joel Sendek - Stifel Nicolaus

Thanks a lot. I just have a question about the strength in your myeloma business in the past quarter. So first a follow-up on Eric’s question, you said for REVLIMID x U.S. or in Europe, you are particularly strong. I am just wondering if that’s driven by duration off label use, can you give us any view on that? And then Kyprolis in the U.S., I am wondering what the kind of the same question there is, is that driven by duration or sequencing ahead from relative to Kyprolis for pomalidomide, is it due to sequencing ahead of Kyprolis if you can give us any detail on that? Thanks.

Mark Alles

Thanks Joel. It’s Mark. So with respect to Europe, we saw market share gains in the second and later lines of therapy, where REVLIMID is reimbursed for second line therapy in the UK, it’s later lines, but very, very good market share growth. Duration was the biggest driver in the quarter for Europe. And I think the dynamic continues where now POMALYST coming into the market, one would imagine as we have seen in the U.S. a list of REVLIMID, because now the drug can be completely exhausted prior to moving to a salvage setting, which in Europe of course will be POMALYST only IMNOVID, not Kyprolis. So this is why when we talk about blockbuster status, Europe has a very different dynamic than the U.S. where POMALYST is competing with day-in and day-out in the salvage market Kyprolis. Today, we can tell you that the vast majority of POMALYST patients are either coming directly from a REVLIMID containing regimen, so a direct sequence or this is a patient getting I am sorry, POMALYST instead of Kyprolis. So it’s really not a dynamic between Kyprolis and POMALYST in the market, it’s more where and how the patient treated before a decision is made to use pomalidomide or carfilzomib and you could see the dynamic is favoring in the short-term more POMALYST.

Jackie Fouse

So we have got a few questions still left in the queue. We are going to try to get at least to those of you who haven’t gotten to ask a question yet. So operator, please next question.

Operator

Our next question comes from Ying Huang with Barclays. Your line is open.

Ying Huang - Barclays

Thanks for taking me. So the first question is given the long-term falloff of apremilast in (indiscernible), was your update is thinking about pricing and also as you have seen, what the (indiscernible) in the market? The second one is without knowing the PFS term separation before ASH, what is your base case consideration here? Does that impact your guidance for 2017 if you only get 6 cycle 18 months REVLIMID on label in Europe for frontline? Thanks.

Mark Alles

So first the question relative to POMALYST pricing relative to 52 weeks data. We have a 52 week data for PALACE-1 and ACR will have the full 52 week data for PALACE-2, 3 and 4. So there will be a fuller picture of what that 52 week data looks like relative to the effect on pricing. I think what we want to do is, we want to make sure we price POMALYST in a position which is in accordance with where we see the utilization. We see mostly the utilization being in pre-biologic space before initiation of biologic therapy so we will price it according to that. There was also a question on (indiscernible) we certainly we take a look at their strategies and things but I don’t want to comment on them.

Jackie Fouse

And just on the 2017 guidance and what we have assumed in there for newly diagnosed there are a number of assumptions in there around shares and durations and the different geographies and all sorts of things but we have also got assumptions in there around the timing of approvals, launches as well the issue that came up earlier around the patient population that might or might not end up in the label. So we have been quite conservative in that regard with respect to what we have assumed in the financial model for non-stem cell transplant versus stem cell transplant. So again you will use the data at ASH but between that and the way that we built the financial model for 2017. I feel very, very good about our 2017 targets in general and specifically related to the newly diagnosed piece of that

Mark Alles

Just a quick add-on part of the question was about a cap on the use of REVLIMID when it's improved for newly diagnosed myeloma. I want to just remind you that arm A which is the continuous REVLIMID dexamethasone arm was superior to MPT and it's the overwhelming data set generally for REVLIMID is continuous treatment until disease progression. This benefit risk profile continues to favor by far the use of continuous treatments and we don’t expect capping in the label.

Jackie Fouse

That’s correct and in the financial model we’re not anywhere close in 2017 to where the durations could go when we look at the assumptions that we made for where duration is at that point in time.

Operator

Our next question comes from Ravi Mehrotra with Credit Suisse. Your line is open.

Ravi Mehrotra - Credit Suisse

Thanks for taking my questions which regards to more to 202, your CD38, there is obviously a lot have been increasing interest in this target. Can you tell us why you think 202 is best in class related to that can you run through the synergies that you can see whichever to with potentially REVLIMID and confirm whether we get one or Phase I2 [ph] data is at ASCO relative to ASH. Thank you.

Mark Alles

We like more to lot, we looked at daratumumab long before it was licensed to another company and looked at different synergies with IMiDs. Of course we’re doing the Phase I program with more 202 but our view was that overall we saw a different antibody that was a little more specific to the target, the infusions schedule administrations was very different and favorable than daratumumab and so we think about controlling the development of IMiDs antibody through Phase I and into our overall program with REVLIMID and then of course with Pomalidomide in the relapse setting. But generally we think this is a better asset but of course it's going to be used in combination and we’re going to build it that way.

Operator

Our next question comes from Jim Birchenough with BMO.

Jim Birchenough – BMO

Two quick questions, just on O2O, well we have enough events in the over 75 year old age group to have some statistical conclusions on overall survival and just on the POMALYST could you give us some sense of the ankylosing spondylitis market relative to psoriatic arthritis and maybe talk about a strategy to get into the bigger market of axiale spondylitis off of these. Thanks.

Mark Alles

I apologize we’re just not able to get into the data, there are two opportunities one is when the ASH abstract sort of available online and in publication which is November 7, and when those data are available of course we can have discussions about the abstract and then of course this is plenary session presentation so a lot of the questions, for example, the proportion of patients above or below a certain age this will be part of the plenary presentation we just can’t comment.

Mark Alles

And relative to ankylosing spondylitis very interesting market for us that trial, the POSTURE trial enrolled well ahead of schedule, which is always a good sign. I think if we get positive data there, there is tremendous opportunity. There is very little oral therapy that’s been effective if any in the space. Biologic utilization is relatively low. There is approximately a million ankylosing spondylitis patients in the United States and some are 2.2 or 2.3 U.S. and Europe. So the significant from an epidemiology standpoint and on to your broader actual spondyloarthropathy question, that is a much bigger market than you see what they (indiscernible) probably the major subset of that. But in that group just probably 2.5 million patients in the United States alone and so it’s a market opportunity with very little there nothing from an oral perspective. The general strategy will be to get the indication in AS first and then move it to the broader patient group as we go forward.

Operator

Our next question comes from Mara Goldstein with Cantor Fitzgerald. Your line is open.

Mara Goldstein - Cantor Fitzgerald

Thank you very much for taking the question. On ABRAXANE in the adjuvant setting, can you just confirm when you think first patient will be enrolled in that trial and when you might expect the first data point from it? And just quickly on apremilast, can you just remind us the size of the field sales force for apremilast?

Mark Alles

Mara, hi, it’s Mark.

Mara Goldstein - Cantor Fitzgerald

Hi Mark.

Mark Alles

So I heard two questions. One was about ABRAXANE pancreatic cancer, we are making great progress with the protocol and believe that we will have sites initiated in the early part of ‘14 and the demand for the trial based on our discussions with key opinion leaders is quite high. They want to enroll patients in that controlled setting with the combination, it’s a curative intent. I also want to make sure that we repeat that with the triple-negative breast cancer study opened at the end of Q3 and we are seeing early signs of adoption with patients approved already.

Bob Hugin

I don’t want to give specific numbers around exact use of our particular field forces, but you can think about these sales forces in the rheumatology space. The general size of the sales forces in the 70 to 100 person for the U.S. range. Dermatology, a little bit bigger, maybe 20% bigger than that to cover it, but it’s a relatively small number, especially focused in the sales force, but 70 to 100 on the rheum side and a little bit more on derm side is what the market is doing right now.

Mark Alles

And traditional medical fairs and marketing support for that.

Bob Hugin

Absolutely.

Jackie Fouse

I think we have got time for two more questions please operator.

Operator

Our next question comes from Brian Abrahams with Wells Fargo Securities. Your line is open.

Brian Abrahams - Wells Fargo Securities

Alright, thanks for squeezing me in. You mentioned that we see – we will see second primary malignancy data (indiscernible), I was just wondering what your sense is to which aspect of that data is going to be most important to regulators? Is it continuous or fixed duration (indiscernible) continuing regimens or overall rates in this study versus historical studies? And then just on a related note, how different are regulatory views of this PFS 2 endpoints in the U.S. relative to Europe? Thanks.

Bob Hugin

I will start with the latter. PFS 2 has gone through the European regulatory review and it’s not part of the guidelines. FDA, other agencies are aware, but they are in a slightly different place in terms of adopting it as a formal clinical endpoint for review and approval. My expectation is this will evolve over time where it will be widely recognized as part of clinical research. With respect to your inquiry about SPMs, please don’t take this to be cute, but everything you mentioned in your list of things that would be important about second primary malignancies is inclusive of what we are prepared to discuss. So we believe that the issue is well-characterized, the benefit risk is well characterized, but as we put together our dossiers we want to anticipate any question that we might get with respect to SPM. So it could be all of the above or none of the above, because of the totality of the benefit data. Thank you.

Operator

Our next question comes from Gene Mack with Brean Capital. Your line is open.

Gene Mack - Brean Capital

Hi, thanks for taking the question. I know you guys won’t comment specifically on duration, but I am wondering if you could just give us what are the some sort of qualitative guidance or your thoughts where things are relative between U.S. and EU in terms of duration? How much behind is EU from U.S. right now, any sort of comment you can give us on the average duration for REVLIMID.

Mark Alles

Yeah I’m glad you qualified because with POMALYST it's just too early know, I assumed you met REVLIMID. So let me start with Europe. So the European all in with second, third line therapy the duration is approaching very nicely that year plus mark and we like that because the reality of that is we see a lot of upside again when POMALYST is available for salvage where today some physicians will stop prematurely, they have disease control, they want to optimize the product and just creates a lot of confidence and the ability to continue to use REVLIMID while other drugs like POMALYST are available at progression. With respect to the U.S. we’re quite encouraged by the duration effect but we still know and again in U.S. the duration is a magnitude of order better because what ends up happening of course is that there are different segments of patients in the U.S. some newly diagnosed we have the maintenance feature after transplant that’s part of the duration curve in the U.S. and that’s quite long. So it's a very different dynamic. You can think of these markets as totally different with respect to duration but what you can say is that across the board and around the world duration in sequential quarters continues to improve.

Jackie Fouse

With that thank you everyone for joining us on the call today. We look forward to seeing many of you, hopefully all of you over the course of the next couple of months between the ACR meeting that we have got coming up with the I&I team starting this coming weekend and into the first part of next week and then at ASH in December. So looking forward to seeing you. Thanks again. See you soon.

Operator

Thank you ladies and gentlemen. That does conclude today’s conference. You may all disconnect and have a wonderful day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Celgene's CEO Discusses Q3 2013 Results - Earnings Call Transcript
This Transcript
All Transcripts