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Executives

Patrick E. Flanigan III -

Robert J. Hugin - Chairman, Chief Executive Officer, President, Secretary and Chairman of Executive Committee

Jacqualyn A. Fouse - Chief Financial Officer and Senior Vice President

Mark J. Alles - Chief Commercial Officer and Executive Vice President

Analysts

Geoffrey C. Meacham - JP Morgan Chase & Co, Research Division

Marshall Urist - Morgan Stanley, Research Division

Mark J. Schoenebaum - ISI Group Inc., Research Division

Navdeep Singh - Deutsche Bank AG, Research Division

Eric Schmidt - Cowen and Company, LLC, Research Division

Gene Mack - Mizuho Securities USA Inc., Research Division

Sapna Srivastava - Goldman Sachs Group Inc., Research Division

Brian Abrahams - Wells Fargo Securities, LLC, Research Division

Aleksandr Rabodzey

Rachel L. McMinn - BofA Merrill Lynch, Research Division

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

Yaron Werber - Citigroup Inc, Research Division

Christopher J. Raymond - Robert W. Baird & Co. Incorporated, Research Division

Nicholas Abbott - BMO Capital Markets U.S.

Ravi Mehrotra - Crédit Suisse AG, Research Division

Michael G. King - Rodman & Renshaw, LLC, Research Division

Matthew Roden - UBS Investment Bank, Research Division

Celgene (CELG) Q1 2012 Earnings Call April 26, 2012 9:00 AM ET

Operator

Good day, ladies and gentlemen, and welcome to the Celgene Corporation First Quarter 2012 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Patrick Flanigan, Vice President of Investor Relations. Please go ahead.

Patrick E. Flanigan III

Thanks, Stephanie, and welcome, everyone, to Celgene Corporation's First Quarter Earnings Conference Call. The press release reporting our first quarter 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 are Bob Hugin, our Chairman and Chief Executive Officer; Jackie Fouse, our Chief Financial Officer; and Mark Alles, who is our Chief Commercial Officer.

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, a reconciliation of any non-GAAP financial measure to the most comparable GAAP measure is available as part of our earnings release.

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

Robert J. Hugin

Thanks, Patrick, and thank you, everyone, for joining us this morning. I appreciate the opportunity to review the results of the first quarter and our outlook for the full year. 2012 is a year of multiple important milestones with a potential to transform Celgene. I'll share with you our significant progress towards achieving these milestones and advancing key programs.

Before I review these major inflection points, let me provide my perspective on our financial results. The first quarter results demonstrated strong annual growth of 17% in product sales and 30% growth in non-GAAP earnings. These financial results were at the low end of our expectations. Our global businesses had a slower-than-anticipated January. Importantly, though, across geographies, positive momentum built during February and March, and this trajectory is continuing into April. This positive momentum was partially offset by some end-of-quarter customer inventory reductions primarily in the United States. Given our current trajectory and outlook for the full year, we are reaffirming our 2012 guidance of 15% revenue and 25% earnings per share growth. Our teams are focused and well positioned to achieve these targets, and Jackie and Mark will provide greater detail in a few minutes.

Let me now turn to our key strategic initiatives designed to enhance our growth well into the future. Maximizing REVLIMID's full potential is an important growth driver for 2012 and beyond. During the quarter, we advanced a number of initiatives positioning REVLIMID for continued strong growth. In February, we submitted our REVLIMID marketing application for del 5q MDS in Europe, with the potential for a regulatory decision by year end. And in terms of our newly diagnosed multiple myeloma application in Europe, we submitted our responses to the 180-day questions and are on track for a CHMP recommendation by the end of this quarter. The benefits of growth from geographic expansion are quite clear, and progress has been achieved during the quarter in advancing our relapsed/refractory myeloma applications in Mexico, Brazil and China, all with the potential for a regulatory or reimbursement action during the year. Myeloma is an important growth driver for REVLIMID, and we are equally committed to realizing its full potential to benefit patients across other hematological malignancies.

The REVLIMID program in the lymphomas and leukemia are progressing rapidly. We've completed the accrual in our special protocol assessment mantle cell lymphoma trial and are planning for a regulatory submission within the next 9 to 12 months. Based on positive results in our DCL-001 REVLIMID relapsed/refractory diffuse large B-cell lymphoma study, we're advancing into the Phase III portion of the trial. We also continue to accrue patients in our other 2 Phase III lymphoma studies in DLBCL maintenance and follicular lymphoma.

In chronic lymphocytic leukemia, we expect to complete enrollment in our Phase III first-line study in elderly patients by year end. With the addition of AVL-292 from the Avila acquisition, we're accelerating combination studies with this Btk inhibitor and REVLIMID CLL and lymphomas.

One of our most important achievements of the past few months is the submission to the FDA of our New Drug Application for pomalidomide, our next-generation immunomodulatory therapy for heavily pre-treated multiple myeloma patients. This submission is a major step forward in broadening our product portfolio and strengthening our myeloma franchise.

At the same time, we're accelerating our regulatory progress in Europe. We're on track to submit our marketing application during this quarter. As the potential impact of this product on both myeloma patients and Celgene is significant, we'll update you on our progress navigating the regulatory processes including acceptance of filings and the type and timing of reviews. I should note that our international Phase III multiple myeloma study, MM-003, is expected to complete accrual later this quarter. Additionally, during this quarter, we completed accrual of our Phase III myelofibrosis study, MF-002, and are initiating a Phase II pomalidomide study in systemic sclerosis.

Our hematology/oncology portfolio was also strengthened by clinical and regulatory progress achieved with ABRAXANE. Our supplemental New Drug Application for ABRAXANE in non-small cell lung cancer has been filed with the FDA and has an October PDUFA date. During the quarter, we completed enrollment in the Phase III ABRAXANE trial in metastatic pancreatic cancer. The trial enrolled over 800 patients and will answer the question whether the addition of ABRAXANE to gemcitabine meaningfully improves overall survival. If the data are consistent with Phase II filings, and we'll know that in the next 9 to 12 months, we believe that ABRAXANE would have a transformative impact on the treatment of the disease. I should also note that we'll see Phase III data in melanoma for ABRAXANE in the coming 3 to 4 months, excellent progress.

Apremilast holds the promise of a new therapeutic franchise for Celgene. There's a major market opportunity for a safe and effective, orally available therapy for the over 3 million patients in the United States and Europe suffering from psoriatic arthritis and moderate-to-severe psoriasis, the initial indications in our registration program. As we've reported, our 5 Phase III studies have been fully accrued, and pivotal data are targeted on all the studies by year end. The initial data readout will begin with psoriatic arthritis this summer. Assuming positive data, we plan on initial regulatory submissions early next year.

Speaking of Phase III trials, based on the data presented last fall at the American College of Rheumatology meeting, we've recently initiated the apremilast Phase III study in ankylosing spondylitis, AS001. I should also point out that within the next few weeks, we expect to provide top line data on our Phase IIb rheumatoid arthritis study. Assuming a positive outcome, we're preparing to initiate our Phase III program as soon as possible. 2012 is a year of significant data flow and great promise for apremilast.

We also made progress advancing our deep and diverse mid-stage pipeline as well. We have 7 additional novel products in clinical development spanning hematology, oncology and immune-inflammatory diseases that provide new platforms for delivering therapies to patients with serious unmet medical needs. We look forward to communicating about these programs as they advance in development.

We have a leadership position in epigenetics, a therapeutic class in which we market 2 of the 4 approved oncology products, VIDAZA and ISTODAX. This morning, we announced a strategic collaboration with Epizyme, a leader in the discovery and development of compounds inhibiting a new class of epigenetic enzymes, a mechanistic and therapeutic category that we increasingly believe will have broad potential in a wide range of malignancies. We have an active epigenetics development program and are advancing CC-486, oral azacitidine, into a Phase III registration study in lower-risk MDS by the end of this year. And based upon new data discussed at the American Association for Cancer Research meeting in early April, we will begin trials in multiple solid tumors, including non-small cell lung cancer later this year.

All in all, we have made significant progress this quarter. We're committed to further strengthening our capabilities to innovate and deliver novel therapies to patients worldwide. We are leveraging our leadership position in hematology and expanding into oncology and immune-inflammatory diseases. We look forward to updating you with the outcomes of the many important inflection points that are expected throughout the year.

Let me now turn the call over to Jackie to review our financial results.

Jacqualyn A. Fouse

Thank you, Bob. Good morning, everyone, and thank you for joining us on the call. Celgene produced good year-over-year financial results for Q1 2012, though we were at the low end of our internal estimates for the quarter. Our year-over-year revenue growth of 15% and net product sales growth was higher at 17%. This growth was volume-driven and allowed us to produce faster EPS growth of 30%. Sequentially, product revenues were flat, and EPS grew 3%. And I will speak more about this in a moment.

Our operating profit margin improved by 230 basis points year-over-year and 70 basis points sequentially. Our business model is performing as it should, and we will continue to see that over the course of the year. We also added some incremental value with financial drivers as we bought back 2.35 million shares for $170 million during the quarter, and we are now delivering a lower tax rate than last year.

In keeping with our philosophy to continuously invest for the future while producing good short-term performance, we made a lot of progress with our late-stage pipeline projects, entered a new collaboration agreement with Epizyme and closed on the Avila transaction making the $350 million upfront payment.

We are producing very solid growth on a larger and larger base. Our annual guidance foresaw top line percentage growth in 2012 that would be slower than prior years. Given the larger base, the trajectory for VIDAZA in the U.S. post loss of exclusivity, where we are today with growth following launches in major markets like Japan and moving into the second year comps after the Abraxis acquisition.

However, beyond that overall expected trend, Q1 was also impacted by lower inventory levels, primarily in the U.S. across all products, and partly driven by the merger of 2 large pharmaceutical benefits management companies but also in Japan as a result of their March fiscal year end. Our estimates for this global impact range from about $30 million to $35 million, with a significant amount of that impacting REVLIMID and the U.S. Our year-over-year growth was good despite this inventory headwind, and the quality of our growth is very good. As a result, we are confident in our ability to deliver on our annual guidance.

Speaking to the quality of the growth, 80% of the quarter's growth came from volume and the other 20% from price. This was driven by product sales growth of 17%, higher than the 15% overall revenue growth as we saw declines in our royalty income. The Celgene business model is performing as expected, and our P&L dynamic is strong. As a result, year-over-year EPS growth of 30% far outpaced revenue growth and was comparable to the same period 1 year ago. About 70% of the year-over-year increase in EPS came from growth in operating income. In addition, we continue to add incremental value with financial drivers that will provide sustainable benefits in the future. The good performance at the operating profit level resulted in an improvement in margin to 46.2%. This margin improved both on a year-over-year and on a sequential basis.

With respect to individual product revenues and year-over-year performance, REVLIMID demonstrated good growth of 17%, with similar increases in both the U.S. and international. VIDAZA continues to solidify its position in international markets, with 23% growth there, and the product grew 14% globally. ABRAXANE started the year well, and we are seeing good uptake of the product in international markets. During Q1, the U.S. market experienced complete resolution of the generic paclitaxel shortages we saw in the second half of last year.

As a reminder, Q1 sequential growth in the U.S. is negatively impacted each year by relatively larger portion of the Medicare Coverage Gap expense occurring in the quarter versus other quarters. This year, that sequential impact was about $9 million for REVLIMID and $13 million in total. In addition for all products, the sequential growth from Q4 2011 to Q1 2012 in the U.S. was impacted by inventory reductions, and we also saw lower inventories in Japan. I already mentioned that we estimate the global impact of that inventory effect at about $30 million to $35 million, and we think about $20 million of that relates to REVLIMID. Mark will cover the commercial dynamics for the product in just a moment.

A quick look back at our history of quarterly revenues for both total revenues and REVLIMID revenues shows that Q1 of any given year is often the slowest sequential growth quarter, and we have also experienced phases of very rapid growth followed by short periods of slightly slower growth before we embark on another strong leg of growth. This was particularly evident in the second half of 2008 and entering 2009. We now see that we experienced a similar pattern in late 2011 and entering 2012. This being said, as you will hear from Mark, all of the commercial metrics for REVLIMID were very positive at the end of Q1, and we feel quite good about the prospects for Q2 as we have started this quarter strong and for the full year, and that is reflected in the affirmation of our guidance.

Our P&L is performing extremely well. We are on track to achieve our full-year guidance across all line items, and we have already produced and improved operating profit margin in Q1. R&D and SG&A expenses are where we expected them to be. As a reminder, SG&A expense is impacted by much higher patient assistance expense in Q1 than in other quarters of the year, and we expect to see SG&A, as a percentage of revenues decline over the course of the year to end the full year at about 21%.

With respect to the effective tax rate, we are seeing a more favorable mix of earnings across geographies, and we may end the year somewhat lower than our original guidance. We will give you an update on that later in the year. We do expect this lower rate to be sustainable on a go-forward basis. Again, all of the trends in our P&L dynamic are tracking as we expected, with the usual impact I referred to in Q1 in SG&A expense.

We had very good net cash from operations generation in the quarter at just over $300 million. The amount of cash in our balance sheet declined somewhat versus year-end 2011 as we redeployed capital to buy back about 170 million of our own shares, make the $350 million upfront payment for Avila and pay down some of our short-term debt, including commercial paper of $250 million.

Here, we provide you with some information to better link our P&L and balance sheet performance, and you can see our return on invested capital history for the current trailing 12 months and the prior 5 years. With the green line in this chart, you can see a continuously improving ROIC that now stands at around 16%. We executed on the Abraxis acquisition in 2010 and held ROIC about flat during that time and then resumed our growth in returns in 2011 and are on track to produce higher returns in 2012. Full details of the ROIC calculation can be found in the Reconciliation Tables attached to our webcast slides. In those, we will see that we have used the more conservative GAAP operating income as the starting point for this analysis and growth as opposed to net debt in the invested capital base.

To summarize, we reaffirm our original full-year guidance for total revenues, REVLIMID revenues and EPS with top line growth of 15%, global REVLIMID growth of 19% and EPS growth of 25% at the midpoints of the ranges. Our Q1 performance was solid, and we finished the quarter strong. The Celgene business model is delivering on all of the important operating and financial metrics and is allowing us to produce good short-term results while continuing to invest for our future growth.

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

Mark J. Alles

Thanks very much, Jackie, and good morning, everyone. While we are pleased to report that our year-on-year first quarter total net product sales grew by 17%, it is clear that sequential quarterly sales growth was below our expectations. For the next several minutes, I'd like to add my perspective to these results, to our expectations for expanded market opportunities from new indications and pomalidomide and to highlight some of the emerging new clinical data expected to shape the value proposition of our products.

First quarter 2012 global REVLIMID sales were $861 million, an increase of 17% compared with 2011. This year-on-year result demonstrates strong quality growth over a period of time when Celgene, our customers and our patients manage the uncertainty created by the regulatory and market focus on second primary malignancies. In Q1 2012, several well-understood product performance metrics and conditions contributed to flat quarter-on-quarter product sales growth. Jackie discussed the negative impact global inventory variances and the Medicare Part D Coverage Gap expense had on our sales results. My comments will focus on the key metrics that best describe product performance.

Across our core markets, January REVLIMID sales were down compared with December but grew through the balance of the quarter. In the United States, Q1 new patient starts increased by 13% compared with the fourth quarter. This positive change represents the second highest sequential quarterly growth in new patient starts since the REVLIMID launch in 2006 and a record quarter for the most new patient starts. This jump in REVLIMID new patient demand translated into a first quarter market share trend that increased by approximately 4 points over the quarter to an overall myeloma market share of approximately 56%. Please remember that the reimbursed use of REVLIMID for myeloma in Europe is limited to previously treated patients.

In Q1, our 4 major markets in Europe realized an approximately 2-point improvement in second line myeloma market share. This growth increased total REVLIMID share in this segment to approximately 54%. These promising Q1 trends have continued into the second quarter. We constantly measure duration of therapy, and this important indicator of REVLIMID growth improved in Q1. Importantly, the peer-reviewed publications that we expect will fully characterize the benefit of continuous treatment with REVLIMID in myeloma, either as induction and maintenance or as maintenance following autologous stem cell transplantation are expected to be published in the month of May. We anticipate that the availability of the full results of MM-015 and the CALGB and IFM studies will provide additional clarity on the optimal use of REVLIMID for patients with newly diagnosed multiple myeloma. Our integrated clinical, regulatory and commercial plan designed to maximize the full potential of REVLIMID is just beginning to produce the promise of this product.

Pivotal Phase II and III trials in newly diagnosed multiple myeloma, non-Hodgkin's lymphoma and chronic lymphocytic leukemia are maturing, such that we expect new commercial opportunity this year, but more importantly, significant opportunities over the next 5 years. Approval of the pending newly diagnosed and maintenance marketing application in Europe will add incremental sales to 2012, with billion-dollar potential per year over time. Approval of the pending MDS del 5q market application will provide reimbursed access for patients in Europe to REVLIMID in this well-recognized standard of care status for low-risk MDS. Securing regulatory approvals for relapsed and refractory multiple myeloma in new markets will add significant commercial opportunities to repeat the launch of REVLIMID in all planned indications. Our model is well established, it's leveraged and we are executing.

We submitted the pomalidomide NDA in early April and are advancing our commercial plans to launch this important new therapy in the U.S. and Europe. The current pomalidomide clinical profile demonstrates broad utility for patients regardless of the number or type of prior anti-myeloma therapies. The Phase III program that will fully develop the potential pomalidomide and multiple myeloma includes the ongoing international study, MM-003, the MM-005 Phase I/II study, combining pomalidomide and dexamethasone with Bortezomib, the special protocol assessment Phase III study, MM-007, and we plan to introduce expanded access programs in the U.S. and Europe following acceptance of our regulatory submissions. Regulatory and commercial plans are now in development to support what we expect will be positive results from the Phase III myelofibrosis study, MF-002.

Turning to VIDAZA. First quarter 2012 VIDAZA sales were $186 million. Sequential quarterly sales were essentially flat, with year-on-year growth of 14%. Sequential sales in the United States decreased to $74 million but continue to reflect the consistent quarter-by-quarter strong market share and VIDAZA demand trends. International sales of VIDAZA, particularly in the recent launch markets of Germany, Italy, the United Kingdom and Spain, grew 23% year-on-year and 9% over the fourth quarter. The lack of a generic entrant in the U.S., our commercial launch momentum in new markets and our focus on improved duration of therapy should return VIDAZA to positive quarterly growth. Our early Q2 trends for VIDAZA are strong. Multiple strategies to leverage our global MDS franchise continue to be developed. VIDAZA and REVLIMID are being advanced in a series of clinical studies in higher-risk MDS and AML. The initiation of the Phase III study of CC-486, oral azacitidine, in lower-risk MDS is on track for the fourth quarter. Other trials in development will seek to define this novel agent's role in maintenance therapy for acute myeloid leukemia.

First quarter sales of ABRAXANE were $104 million, representing strong year-on-year growth of 41%. We are encouraged by the improving contribution international launches are making to ABRAXANE total sales. Sequential quarterly international sales and year-on-year sales increased significantly. Year-on-year, U.S. sales grew 30% but before restocking of generic paclitaxel negatively impacted ABRAXANE inventory levels and use outside of metastatic breast cancer late in the fourth quarter and throughout the first quarter. With a current quarterly base of more than $100 million and multiple opportunities for growth this year, we look to the execution of the clinical and regulatory program goals established in breast cancer, lung cancer, melanoma and pancreatic cancer to create new therapeutic and commercial opportunities. Adding indications from our pivotal studies in non-small cell lung cancer and pancreatic cancer should ensure that ABRAXANE will become one of the billion-dollar brands in our cancer portfolio.

Our scientific presence at this year's American Society of Clinical Oncology meeting will be meaningful for the quantity but more important, the quality of the data we expect to be presented. We are currently aware of approximately 50 abstracts that have been submitted. We are most interested in the Phase II study reporting data on the combination of REVLIMID and dexamethasone, combined with carfilzomib, the RCD regimen, in newly diagnosed multiple myeloma; pomalidomide Phase II data in the important segment of patients refractory to REVLIMID; the very first randomized study and data on the combination of REVLIMID plus rituximab in recurrent follicular lymphoma; more data from studies testing REVLIMID and VIDAZA in MDS and AML; the full presentation of the ABRAXANE plus Avastin data from the CALGB breast cancer trial, plus new ABRAXANE data in operable pancreatic cancer and updated results from our ABRAXANE pivotal Phase III trial in non-small cell lung cancer. Our internal research team has now successfully advanced CC-223, our dual TOR kinase inhibitor in the Phase I, with the first oral presentation of its clinical profile expected during ASCO.

In summary, we are very proud of our year-on-year total net product sales performance. In addition, the leading indicators of performance for our products such as new patient starts, market share and duration of therapy are on track, and we are confident we will achieve our full-year targets. We expect to realize the commercial benefit of significant new market opportunities throughout 2012, and we are completely focused on executing and delivering on our commercial plan.

Thank you very much. And I'd like to turn the call back to Bob.

Robert J. Hugin

Thanks, Mark, and thanks, Jackie. We've covered a lot of ground this morning. Although we had some early challenges in the quarter, our current trajectory is positive and momentum strong. We're energized by our progress to date, advancing key programs across our hematology, oncology and immune-inflammatory franchises, and we're focused on our near-term objectives, which position us to achieve multiple clinical and regulatory milestones throughout the remainder of the year. 2012 will be a transformational year for Celgene. I do want to thank all my colleagues at Celgene for their dedication and commitment to delivering on our strategic goals and their focus on improving the lives of patients worldwide.

Thank you. Operator, please open the call to questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Geoff Meacham from JPMorgan.

Geoffrey C. Meacham - JP Morgan Chase & Co, Research Division

Just got a couple of them. When you guys talk about global inventory for REVLIMID, if you help us out with how o U.S. inventories are different from the U.S. And the second question is, assuming European approval, how do you guys see the pace of reimbursement discussions thereafter, given that you'll be into a seasonally slow period?

Jacqualyn A. Fouse

Geoff, it's Jackie. I'll take the first one and pass it to Mark for the second one. So with respect to the inventory impact, I highlighted the total of $30 million, $35 million globally for all products, of which we think REVLIMID was about $20 million or so globally, with around $15 million of that being in the U.S. and the balance mostly in Japan related to the March fiscal year end.

Mark J. Alles

Yes. I think, Geoff, the other component of that is that we do have obviously multiple markets around the world now where we're in various stages of maturing, some early, some a little bit later. And I think those other markets in combination make up the balance of what Jackie just presented. Geoff, can I just ask you to restate the second part of your question? I want to be sure I understood it well.

Geoffrey C. Meacham - JP Morgan Chase & Co, Research Division

Yes. So if you assume European approval, I would say third quarter, you're right in to sort of the vacation season and you -- this is for first line REVLIMID and myeloma, obviously. I mean, I'm assuming that it's going to take maybe 6 months, 9 months to get full reimbursement throughout the big 5, but do you -- would you now see, for example, the impact of that label skewed to say maybe mid-'13 as opposed to early '13?

Mark J. Alles

No, really, thank you for the detail. I wanted to be sure it was clear. First, the expected positive outcome of this CHMP review, we think, will be a big lift in the current market. So the incremental we see this year would be confidence in the brand moving to first line. That would be the market statement. Market by market, though, the difference between when we launched REVLIMID in the relapsed/refractory setting across Europe is we had to really build our plans market by market from a 0 base. Today, we have, of course, a fully integrated global team focused on market access, so we built and have in the queue the value proposition dossiers that would be ready to engage much earlier post-approval. Having said that, it will be a month-by-month, quarter-by-quarter process, as you know, to get reimbursement. So our focus would be on the early opportunity markets in a priority order and yet still seek reimbursement in parallel across these markets. So is it going to be a Q1 to Q2 to Q3 effect in Europe? Certainly. But we're looking to front-load, to the best of our ability, broad reimbursement for newly diagnosed myeloma in the major European markets.

Operator

Our next question comes from Marshall Urist from Morgan Stanley.

Marshall Urist - Morgan Stanley, Research Division

So first question is just on U.S., on U.S. REVLIMID. I wanted to get a sense of just as we put the pieces together, given the price increase late last year, I realized it was a slow January. But can you help us think about how much unit growth you saw quarter-over-quarter, even if we take out the inventory in terms of end market unit growth? We'd love to get a better sense of kind of how that looked for the full quarter.

Mark J. Alles

So these variables, of course, happen in the quarter on a bit of a gated month-by-month. But we're looking at what we think now in absolute comparison unit growth in the mid single digits. But again, as we got into the second part of the quarter, we saw acceleration. So I think it's in absolute terms about mid single digits, but we're encouraged, as we said, about what we saw through March and into the early part of April.

Marshall Urist - Morgan Stanley, Research Division

Great. And just 1 more follow-up on Europe. Just wanted to get an update on sort of the post the 180-day questions? Kind of how your -- is the confidence in the broad label still there and any sort of changes in how you're thinking about that or some of the age issues for elderly patients in the non-transplant setting?

Robert J. Hugin

Marshall, it's Bob. We're obviously in the late stages of the review, and we're now into the last couple of months. Hopefully, by the end of the quarter, have the CHMP recommendation. So again, we're engaged in a very active dialogue. And so I think until the results are clear, we'll see. But we're well positioned, and we're focused on the right issues. And we've got strong data, and we'll be discussing that over the coming weeks.

Operator

Our next question comes from Mark Schoenebaum from ISI Group.

Mark J. Schoenebaum - ISI Group Inc., Research Division

Thanks for all transparency on the quarter. It's very helpful. Number one, will you be -- on the MMO-20 trial, will you be waiting for mature survival data before stopping that, even if PFS has a profound early separation? And number two, would you be willing to give us the actual durations of therapy in the quarter in the U.S. and in Europe? And then the third is, have you gotten a request yet for an oral argument in front of the CHMP? And if not, is that something that you would disclose or is that not something you'd disclose?

Mark J. Alles

Mark, it's Mark. So on MMO-20, this is, of course, a very, very important study for us and to really, really, I think, solidify ultimately the Rev/Dex proposition in myeloma regardless of age or intent to transplant. The way we've approached this is that the planned statistical analysis, of course, will lead to various points in time where the event rate on things like survival, like progression-free survival would lead to independent review. And depending on the results, that review would either, by ethical reasons, say unblind or in the case of survival, if things are trending the right way, the recommendation could be to remain unblinded until survival. And we really don't have a choice in the matter, but our view would be, given the complexity of the comparison to melphalan, MPT, the optimal would be that the first look would include at least the strong trend of survival, if not, a complete analysis of OS. The second part of our duration, what I can say is that duration continues to improve. And when one looks at the dynamics first in Europe, the duration gain that we saw in the more recent quarter was quite positive. In the U.S., of course, we have a much more mature base of patients. And so while duration continues to improve, we're looking at the combination of the different cohorts. We call them short runners, 6 to 10 months on therapy, and then those very long runners where you get out to 2 years plus of therapy to understand if it's still accelerating as we expected. So I think generally speaking, we're satisfied where duration's at. But as I said in my comments earlier, the publication of the 3 papers that speak to duration in multiple settings from newly diagnosed multiple myeloma in the context of second primary malignancies, we believe, is very important confidence-building information to make sure duration stays on track now and in the future.

Robert J. Hugin

On the third question, I think I'm always cautious about discussing specific regulatory issues in between actual action at public action dates because we'd have a conversation one day and then something changes the next week, and you don't have the same forum providing some of that issue, plus I don't think anybody wants to negatively impact relationships with regulators. But specifically to your question about the oral explanation, we have not been asked to appear for oral explanation, though we are prepared if that were to happen in the next couple of weeks.

Operator

Our next question comes from Robyn Karnauskas from Deutsche Bank.

Navdeep Singh - Deutsche Bank AG, Research Division

It's actually Navdeep substituting in for Robyn. I think you mentioned the increase in quarter-over-quarter new patients on REVLIMID was pretty robust, I think as robust as you've seen in many years. What drove this increase? Was it because Q4 new patients were soft? And a question on apremilast. If you're looking at umbrellaing pipe to continue to grow despite the competition, what kind of data do you think will be competitive as we approach the data readout?

Mark J. Alles

Yes, it's Mark Alles. So on the point that you're making, the comparable base of patients in Q4 or the second half of last year and how robust Q1 new patient starts were, I appreciate the question. We became aware of the relationship more acutely around getting new patient starts back on a strong growth trend towards, let's say, the latter part of Q3 into Q4. We were not declining, but the growth rate was a little bit less than we expected. So there is a little bit, a very small amount of that slightly lower base, I'd say, in Q4 coming into Q1, but it is so insignificant that we didn't call it out. However, we were aware, and our commercial organization around the world, but in particular, in the U.S., became very focused again on creating demand while still dealing with some of the questions clinically about overall treatment in the face of second primary malignancies. So that relationship is important, but we see it clearly. And no matter how we look at the quarter-over-quarter on new patients, this is an all-time record.

Robert J. Hugin

And on the apremilast issues, we're obviously very near-term to getting the important data starting, again, in the next few weeks for the controlled Phase II data of rheumatoid arthritis, which is very important for us to see if we're going to have a potential to go down a registration path there and obviously the summer beginning the psoriatic arthritis data then late in the year on the psoriasis. I think in terms of the data itself, it's obviously a very competitive market. It's an incredibly exciting market opportunity for us that an oral therapy that so far has the kind of side effect profile that ideally positions it in the marketplace. And I think on the efficacy side or the activity side, it's going to be very important for us to be able to distinguish it in its own right on that activity side and looking at it both from TNF naïve patients and TNF pre-treated patients. And so we're optimistic it's going to be a very competitive on all aspects, and the reality of it is, the data is in 2012. So we're not going to wait long to have to make those judgments and see how we can maximize the opportunity here. But where we see it today, it's a tremendous opportunity.

Operator

Our next question comes from Eric Schmidt from Cowen and Company.

Eric Schmidt - Cowen and Company, LLC, Research Division

Jackie, on the inventory changes, would -- will we expect that to rebound in Q2? Or are these now with the TTM [ph] merger that you mentioned sort of reset as a new lower level, and we just don't -- won't see the same decline in Q2?

Jacqualyn A. Fouse

What I can tell you is that -- I think the most important thing is that we are not counting on a rebound with respect to how we're looking at delivering on the full-year guidance, and that gives us a lot of confidence in terms of affirming that guidance. I really can't tell you whether this is the new normal or not. What we can say is that we saw inventory levels in the U.S. that are the lowest that we've ever seen. Maybe the channel is becoming more efficient and some of that is permanent. Maybe some of it comes back. But we're not counting on it to come back in terms of delivering our guidance, so let's see how it plays out in Q2.

Eric Schmidt - Cowen and Company, LLC, Research Division

If I could ask a second question, Mark, on MMO-020. Just on the timing, there's been some speculation about when we may see the results. Is there still a potential 2012 event? And if not, when would be the next interim?

Mark J. Alles

I think potential is the operative word. It's certainly, on an event basis, has the potential. I think the way we would think about it is, the longer we wait to see the results, the more likely we get an overall unblinding against all primary and secondary end points, such that the clear proposition of the product comes out first time with the unblinding. So the timing, unlikely this year, very likely in '13, but it's hard to know. It's one of these event-driven studies. And I'll just say it again, the longer we wait, the more positive we think about the data.

Operator

Our next question comes from Gene Mack from Mizuho.

Gene Mack - Mizuho Securities USA Inc., Research Division

On pomalidomide, I'm just wondering, would it be possible, in your view, for the FDA to accept the application? I guess they would let you know in early May. And then perhaps -- or early June, rather, and then perhaps schedule you for ODAS [ph] panel on June 20 or 21? I see that the register reflects a panel for carfilzomib in relapsed/refractory myeloma? I'm just wondering if there's still a potential that you see for the FDA to review both drugs together.

Robert J. Hugin

Yes, obviously, we can't speak for the FDA. But by having the application in now, we're in a good position that the data has been very rigorously analyzed and presented. So again, we haven't even passed the date for the submission to turn into a filing and for the FDA to notify us on the priority status of the review. But I do think based on the size of the trial and the completeness of the analysis that -- again, we can't speak for the FDA. We have no insight into this, but we will be prepared to move very expeditiously in any review. If there is an opportunity to review it more quickly, we'll be prepared and be very supportive of that.

Mark J. Alles

Just to clarify a point, I want to make sure people didn't hear what Bob said differently. We don't know the status of acceptance or not of the file. So we're not saying that there's a priority status given or not at this point. We've submitted, and I just -- I heard the word priority but didn't want people to connect the 2.

Operator

Our next question comes from Sapna Srivastava from Goldman Sachs.

Sapna Srivastava - Goldman Sachs Group Inc., Research Division

The first question I just had was on the U.S. filing for front line. I just wanted to know as to when you expect -- I mean, what the gating factors still are. And do you expect that once you have to get the label in the U.S., I know the drug is used quite broadly off label, but is there room for acceleration once you get the label in the U.S.?

Robert J. Hugin

Yes, I think -- Sapna, it's Bob. Clearly, getting the European filing completed and getting that recommendation and move forward with that is the first priority, and that's what we're focused on. And that will occur before we submit in the U.S. and get -- making sure that the data is the right maturity for the U.S. regulators. So I think we're moving forward as appropriately as we can. And I think that any label expansion is always an opportunity to impact on the commercial opportunity for us. We obviously have a strong position, and Mark will add in a second his perspective. So positive label expansion is a good thing. It's not critical in the U.S., but it certainly will be, on the margin, a positive.

Mark J. Alles

Yes, no, I agree completely with Bob. One of the aspects we are interested in is to the extent that we go through the full regulatory procedure in Europe. We learn many, many things that would be helpful to helpful and inform how we would approach international filings, including FDA.

Operator

Our next question comes from Brian Abrahams from Wells Fargo.

Brian Abrahams - Wells Fargo Securities, LLC, Research Division

Two quick questions. First, wondering, how much U.S. adoption of REVLIMID maybe has been impacted by lingering second primary malignancy concerns? And I guess I'm wondering if you saw any change in use patterns. Once the label is updated last month, perhaps with conditions, reassure that -- of the FDA's conclusion of our safety review. And then secondly, on VIDAZA, just wondering how far out your level of visibility is here in terms of potential generic entry. As from now into the year, wondering what your guidance now presumes in terms of how long you'll be able to maintain VIDAZA revenues in the U.S. before generic entry.

Robert J. Hugin

Yes, Brian, we obviously follow the VIDAZA situation very closely, but we don't have any access, any information that would be any different than anybody in the public domain as to the timing of that. We continue to support VIDAZA actively in the U.S. and [indiscernible] international presence. And as you've heard, there is some very encouraging epigenetic work being done presented at the American -- at the AACR meeting early this month about the potential for VIDAZA and ultimately for us oral azacitidine in number of areas of malignancy solid tumors. So that's an important development area for us. But as far as the generics specifically goes, we don't have any more clarity than what's available in the public domain.

Mark J. Alles

Brian, thanks for the question about SPMs. You're asking an umbrella question about its impact. Let me start with the past year. There's no question that in the hematology circles, academic meetings, patient advocacy, et cetera, that this was a finding, an outcome that people really focused on and wanted to understand. Interestingly, third-party evidence like the NCCN guidelines, et cetera, were not changed at all in the face of this concern. But as you point out, the label was just updated. There's no doubt that in certain markets, there was an acute measurable impact from the emergence of second primary malignancies, and we talked about France historically. Qualitatively, around the world, and I think to a certain extent in the U.S., we do think that some of what could be considered a little slower growth has to be related to the emergence and now what we believe is the full characterization of the benefit risk profile on this question. Once again, the full publication of the 3 papers that really led to the question should really help to put this issue more in the rearview mirror of everyone, academics, physicians, community physicians, but more importantly, inform patient advocacy and patients around the world that the benefit risk profile is well understood, and it's far better to get treated continuously than it is to not continue and then have progression of myeloma.

Operator

Our next question comes from Geoff Porges from Sanford Bernstein.

Aleksandr Rabodzey

It's Aleks here for Geoff. I just got 2 quick questions. First is, could you give us some guidance of how we should think about the change in the amount of rebates that you will be paying between now and 2014 when the donut hole will be closing and probably the share will increase? And then the second quick question is, how should we think about the size of potential opportunity beyond multiple myeloma for REVLIMID, NHL, CLL, MDS? If you could kind of qualify that.

Robert J. Hugin

Yes, on the rebate or the closing of the donut hole, the -- our responsibility as a branded pharmaceutical company on the Part D Medicare Coverage Gap is will be unchanged going forward, unless the legislation has changed. And that's obviously an issue that if the Supreme Court ordered to overturn the legislation, the Affordable Care Act, that, that aspect of providing assistance to patients would have to be changed and figured out. But if the law is ruled constitutional and the Congress doesn't change it, we don't anticipate any change in our obligation in terms of any coverage and change to those rebates.

Mark J. Alles

Yes. And on the question of the market opportunity beyond myeloma, we are -- as Bob and I pointed out earlier, we are extremely encouraged by the maturity, the maturing of our CLL and NHL program. Just to put this in context, rituximab is the most commonly used product in leukemia and lymphoma, and global sales of this product are in the $6 billion range. So when we think about the combination of Rituxan with REVLIMID, which will be featured at ASCO in follicular lymphoma that we plan to file the mantle cell application with the FDA later this year from our study MCL-001, that we have ongoing maintenance trials in both follicular and especially diffuse large B-cell lymphoma for patients with high-risk disease. The opportunity for REVLIMID over the next 5 to 6 years in lymphoma is multibillion. In CLL, we have particular segmentation in the elderly population with single agent REVLIMID and then combination strategies and maintenance strategies in patients who have been previously treated. So this also represents another billion dollar or so opportunity just from CLL. So the next 3, 4, 5 years, we'll see new data, new indications and a ramp-up of this product across these diseases.

Operator

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

Rachel L. McMinn - BofA Merrill Lynch, Research Division

I think you mentioned that some of the most important data for REVLIMID would be newly diagnosed data in combination with carfilzomib, and I wanted to better understand your perspective on that because we've already seen some Velcade/Rev/Dex combination data. So do you think this carfilzomib data is going to augment your market share? Do you think that bodes well for pomalidomide? I just want to better understand that. And then, Jackie, if could comment on France. You have mentioned, that's been sluggish since the SPM stuff came out. Has that rebounded?

Mark J. Alles

Rachel, it's Mark. On the carfilzomib piece, thanks for calling that out. One of the interesting things about the development of REVLIMID in myeloma that you understand very well is that it has become the backbone of all myeloma clinical trials that we're aware of regardless of the novel agent and development, in this case, carfilzomib. Our interest is because, as you know, the pivotal Phase III trial, RCD versus RD in relapsed/refractory myeloma, the Aspire trial is fully accrued. What we don't have, at least I don't have, is awareness of does that regimen look like or perform like the other proteasome inhibitor combination that you pointed out in combination with Rev/Dex? So we would look to that regimen to see if the response rates are similar. More importantly, I think, is the side effect profile equal to or better of what we see with Rev/Dex and Bortezomib? So it really does look at the landscape. No matter how one looks at these combinations, improving the therapeutic profile of Rev/Dex in a triplet like this, would be something that would improve the prospects of our products over time.

Jacqualyn A. Fouse

And Rachel, just to your second question on France, as we've mentioned before, that market was sequentially down in Q2, then stable in Q3 and Q4, is how we would characterize it essentially and then starting to grow again in Q1. So the plan that we have internally for the French market has a growth in it. It's -- we're moving to this year, and we're essentially on track with that plan. That being said, that market is not yet back to the trajectory that it was on before in terms of duration and share and other things like that. But it is back on growth track, and over time, hopefully, we'll catch back up to where we were in terms of trajectory before.

Operator

Our next question comes from Joel Sendek from Stifel, Nicolaus.

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

I have a question on apremilast. So if you get all of these studies between here and the end of the year, I'm wondering, you kind of suggest that you're going to wait for all the data prior to deciding the regulatory strategy? I'm wondering if 1 or 2 of the studies are particularly [Audio Gap] might be able to accelerate a filing on the basis of what you see. So is that possible at all?

Robert J. Hugin

Yes -- no, Joel, I apologize. I wasn't clear enough. We're going to get psoriatic arthritis data beginning in the summer. And the moderate-to-severe psoriasis pivotal is not towards the end of the year and -- hopefully, by January or so, but certainly, our goal at the end of the year. But we're not waiting for all that data to begin the filing. The fact that our target is to begin regulatory submissions at the beginning of '13 when we'll only have just -- either just getting the final psoriasis data or maybe not even having all the final psoriasis data and begin the psoriatic arthritis filing process -- submission process, again, assuming the data is positive and supportive of that. So we're going to be moving forward on multiple fronts in sequence or in parallel depending on what's available when. And we'll obviously begin in the U.S. and then begin international filings as appropriately as quickly thereafter as possible.

Jacqualyn A. Fouse

Joel, one thing you might have heard us say before, so we will file for PsA first in the U.S., psoriasis second. There are 2 different indications that go to different departments in Europe. Because it's the same department and just given the timing on that, they will likely go together in Europe but after the first U.S. filing.

Robert J. Hugin

And you can imagine based on the data what's the best indication for us to go for, not just from a regulatory point of view but from a reimbursement and a market access and a marketing strategy, because this will be a very important market opportunity that needs to have a very specific marketing strategy in these kinds of market. So the opportunity is very significant. The plans have to be very appropriate for reimbursement pricing and regulatory issues market by market.

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

Got it. Okay. And then real quickly on REVLIMID. When will you have the Phase III NHL data?

Mark J. Alles

So the lymphoma program, the NHL program is, as I said, gated. The very first opportunity would be the mantle cell submission late this year. And then I think we would be looking a little bit further out for the results of some of the other studies. As everyone knows, these are patients who do quite well in response rates. So the effect on -- with REVLIMID will take a little bit longer. In our model, we have data flow coming '13 through '15 from the Phase III programs. So the order, much like we just talked about apremilast, really depends on the different histologies, segments of the population and then, of course, events, but a continuous flow of data beginning end of this year through '13 and really through the next maybe 5 to 6 years. That's before we add more to it based on opportunity.

Operator

Our next question comes from Yaron Werber from Citi.

Yaron Werber - Citigroup Inc, Research Division

So I have 2 questions. One is for Jackie and Mark, actually both of them. So just help us understand a little bit. It sounds like there was about a $9 million headwind from Medicare rebates and about $30 million to $35 million between inventory. So it looks like demand was closer to 905, if you just kind of -- 900 to 905. So the first question, is that sort of -- do you agree with that? Is that sort of how we should look at the transition into Q2? And then secondly, you're not changing the guidance. You're starting sort of $29 million or so below consensus. So I'm just trying to understand, what else are you seeing on a global basis that gives you a lot of confidence in the outlook ahead? And I'm just trying to get a sense kind of how to think about where we're going to end up at the end of the year.

Jacqualyn A. Fouse

Let me start. So just to be very clear on the numbers, again, we estimate that the impact of the change in the number of days of inventory from 12/31/'11 to 3/31/'12 globally to be about $30 million to $35 million, okay? And we thought that we ended 2011 at a level that was in line with historical norms that we saw. So end of the first quarter of 2012 was lower. As I said before, we don't know if some of that is the new normal or not. Some of it is probably not, so that just be clear about that. When we look at the coverage gap expense, so the $9 million sequential impact that I talked about for REVLIMID equates to $13 million of expense in the first quarter of 2012, okay? And then the overall, as I said, was -- the sequential change was $13 million, the total expense was $16 million. So again, in Q1 2012, Coverage gap only expense for REVLIMID was $13 million, which is $9 million higher than Q4. The inventory impact for REVLIMID, out of the $30 million to $35 million, we estimate to be about $20 million or so. So those 2 REVLIMID sequential differences are $20 million and $9 million from Q4 to Q1.

Mark J. Alles

I think the -- Yaron, this is Mark. The other demand component is, in a quarter, patients are coming in, in bowl [ph] of pieces, whether it's at the beginning, the middle or the end. What we've seen in the second half of Q1, small amounts of time but encouraging new patient starts really back ended to the quarter with what's happening in early April. We're comfortable with that. Also remember that we have a lot of markets around the world that are in different stages of launch phases. So, for example, Jackie pointed out Japan and its impact in the quarter. We have renewed outlook for Japan coming out of Q1 despite the variance that Jackie spoke to where the underlying performance is stronger. Let me give you the example of that 1 variable. So everyone knows that every year in the April timeframe, the Japanese government looks across the pharmaceutical industry and will look to net out all discounts in the market, all rebates in the market and will reset pricing and reimbursement at that lower level. Lenalidomide, REVLIMID was fortunate that we don't discount, of course, our list price is our price, and we were not exposed to any reduction and reimbursement in April in Japan. This is 1 example such that in the model for the performance of Japan this year, that is a modest upside. And there are many items like that, that contributes over/under to our reaffirmation of guidance.

Yaron Werber - Citigroup Inc, Research Division

Just maybe -- that's very useful, but Jackie, just for you, just so I'm clear, we're clear. You mentioned that there was a $20 million quarter-to-quarter headwind related to inventory and not $30 million to $35 million? I'm just trying to understand that.

Jacqualyn A. Fouse

Yes, Yaron, what we said was the global impact across all products of inventories. So for total Celgene revenues, we estimate that to be $30 million to $35 million, of which the global impact for REVLIMID only is about $20 million.

Yaron Werber - Citigroup Inc, Research Division

Right. So it looks like that's going to be -- so let's say 890 was the real demand then minus the -- including the inventory and the rebate. So is that how we should think about it? Is it 890 is really the level of demand as we enter Q2?

Jacqualyn A. Fouse

That's the math that I think we can all do.

Mark J. Alles

Well, I have to say it this way because we're on the call, we're not going to calculate all the different numbers. What we can say is there's certainly a range zone that you're speaking to. But on a demand basis, it's probably fairly accurate. The exact number, we could debate for a while, but I think we're in the range.

Robert J. Hugin

Right. But also just to reiterate what Jackie earlier said is that on that inventory front, we don't -- we're not using that to affirm our guidance, and we don't know when that -- if and when it will rebound or not. So it may be the new normal, it may not be. So I think it's -- you have to be careful of putting it in 1 quarter or not. It's -- we just -- and so I think that was the point that Jackie made.

Mark J. Alles

Absolutely.

Operator

Our next question comes from Chris Raymond from Robert W. Baird.

Christopher J. Raymond - Robert W. Baird & Co. Incorporated, Research Division

Just wanted to ask maybe a detailed question here on ABRAXANE. Kind of struck by the x U.S. number. Can you maybe talk a little bit -- I know you guys have been in the process of relaunching it in x U.S., especially in Europe. But can you maybe tell us what specifically happened in the quarter for that kind of -- for the big number that you had there? And also maybe give us some color around the generic paclitaxel impact. Has it all worked its way through sort of rebasing ABRAXANE demand or do you expect maybe more impact? And if I can sneak one more question in. Do you guys ever plan on breaking Japan out for REVLIMID? That's it.

Jacqualyn A. Fouse

Let me start real quickly and then pass it to Mark. I think we've talked over a couple of quarters about -- and I think we've used the word choppiness in the ABRAXANE international totals just because of the different stages of launch there. When we started rolling out in Europe, you get a little bit of top line fill and then we've got -- we use distributors in a few places. So you get irregular order patterns there. And I think what we said was that for a little while, for ABRAXANE total international, you would see that number move around because of those different issues and the fact that we're still on a very modest base. And we certainly saw that from Q3 to Q4. I think what we start to see now in Q1 is a little bit of smoothing out of some of those effects. And as the launches start to fully, in different countries, be in place and that continues to roll forward, I think it's pretty safe to say that the total international ABRAXANE base is something around that number that we saw in the first quarter. And we'll probably not going to see these $20 million to $12 million type of movements anymore, but there still will be a little bit of erratic pattern in that as we continue that. But again, I think that $20 million to $25 million per quarter base number that we saw for total international ABRAXANE is probably a pretty good way to think about it.

Mark J. Alles

Yes, no, just to follow that point, in Japan, our partner is Taiho. They recently filed the ABRAXANE product for gastric cancer and non-small cell lung cancer. So back to Jackie's point about choppiness, not only do you have the buying pattern but you also have the potential that this brand could grow in Japan off of these new indications. In Europe, I think it's very important to call out that a year ago this time, we made the business decision to establish a dedicated oncology presence in Europe similar to the U.S. The difference is that in the U.S., ABRAXANE launched and was commercialized for several years, where in Europe, despite an approval, it was never actually launched or commercialized in any meaningful way. What we've realized year-on-year in the quarter is our focus in Europe on core markets and our alignment with a lot of the breast cancer key opinion leaders across key markets has translated into market penetration and adoption that we're pleasantly surprised by. We look to expand that from here, in particular, because we're setting ourselves up for multiple launches with, for example, the pancreatic indication, which we think in Europe is going to be quite important like the rest of the world. But we recently looked at plans in Europe in the pancreatic market and are quite encouraged about what the potential is there. So I think we're in this window where we're getting beneficial effects year-on-year, and it will continue in the quarter from Europe. The other choppiness Jackie already spoke to with the real window is as we get new data and these markets expand for ABRAXANE, we see this brand becoming a meaningful top line contributor.

Jacqualyn A. Fouse

Just on the generic paclitaxel, I think we feel like we've seen that fully washed out, now that supply has essentially returned to normalcy in the U.S. in Q1. And that was a last half of last year impact.

Mark J. Alles

Absolutely.

Jacqualyn A. Fouse

Just on Japan, will we break it out or not? I can't tell you the answer to that today. We continue to look at it and try to tailor our disclosures to best mirror how we manage the business and what we think informs you best about the business. So we'll continue to have a look at that. Not only is Japan develops, the rest of the world market portfolio develops as well.

Operator

Our next question comes from Jim Birchenough from BMO Capital Markets.

Nicholas Abbott - BMO Capital Markets U.S.

This is Nick standing in for Jim. A couple of questions. The first one is, you mentioned the publications on the 3 front line REVLIMID trials. I'm wondering, do you know, is an editorial being written to go with those trials? And if so, who's writing it? And then a couple of pipeline questions. First one on ABRAXANE. Obviously, melanoma and pancreatic cancer are tough tumors, and I know that you've been beefing up designs around SPARC. Is there a plan to validate Spark as a biomarker in these trials if the overall data, the ITT data, does not support or is not as positive as you want? And then last one on the DLC-001 trial. We believe that trial was trying to show a benefit in the A, B, C phenotype of lymphoma, which obviously has a higher net medical need. Since you've now expanded that into Phase III, is it focused now on A, B, C or on all comers?

Mark J. Alles

On the publication front, our awareness is very, very superficial about the timing, but we're very sure of what we said in March. We have no information whatsoever about editorials or not. We know that it is customary for publications of this importance to be accompanied by editorials, but we don't have specific knowledge one way or the other. With respect to then the diffuse large B-cell lymphoma environment, I know that Bob mentioned that before. But I'll just make the observation that REVLIMID's activity in diffuse large B-cell lymphoma has been validated across the general population through our Phase II program. And this initial program is demonstrating, we think, good evidence that there is a difference by phenotype, and we want to exploit that difference.

Robert J. Hugin

And I think as we move into the Phase III trial, we're optimistic that at ASH, we'll be able to have some of this data available to look at the overall marketplace, as Mark mentioned, and the differentiated opportunities in the GCB, non-GCB.

Nicholas Abbott - BMO Capital Markets U.S.

And then any comments on SPARC?

Robert J. Hugin

Both the melanoma and the pancreatic studies were both initiated, the Phase III studies, prior to our acquiring Abraxis. So those studies are well along and obviously completed enrollment. Going forward, we have, as you mentioned, significant work going on with major centers that focus on this research. The ability to validate a specific biomarker for a regulatory purpose or a marketing opportunity is still not clear, but it's something that we have a lot of interest in and we're advancing over these coming months.

Mark J. Alles

So the shorter version of how we would look at it is SPARC seems to be perhaps more important in pancreatic cancer, where that study will allow for a more complete exploration of this as a biomarker. But I think as Bob said, we're in different positions than the other disease categories. So I think pancreatic cancer is an area that we would really seek to determine that as a direct factor for benefit.

Operator

Our next question comes from Ravi Mehrotra from Crédit Suisse.

Ravi Mehrotra - Crédit Suisse AG, Research Division

Probably a question for Jackie. On medium-term perspective, so 2013, 2014, the U.S. REVLIMID, specifically, how confident are you that you can deliver double-digit growth just on the MM indication?

Jacqualyn A. Fouse

We're very confident.

Operator

Our next question comes from Mike King from Rodman & Renshaw.

Michael G. King - Rodman & Renshaw, LLC, Research Division

Nick had asked my question about lymphoma, but as long as you've let me jump in here, let me ask about sort of longer-term strategy with regard to lymphoma. I'm just looking at what you guys are doing from a business development standpoint with Avila back in March and now with Epizyme. I'm just wondering, are you guys thinking in a long-term basis that most of your indications, whether it be lymphoma and myeloma, et cetera, are going to be within oral -- all oral drug combination? Or do you still think that the best way forward is going to be with -- being on the back of antibodies like rituximab?

Mark J. Alles

It's Mark. I mean, it's a very important question you're asking, I think, even though it was not your original question. Lymphoma is an area of still high unmet medical need, particularly in the subsets. One of the things that we are, as I said, very anxious to see at ASCO is the validation of antibody-dependent cellular cytotoxicity, so called ADCC. Because I think our view long term is that the combination of REVLIMID and oral therapy with an anti-CD20 play, in this case, rituximab or a biosimilar over time, what we could see happen is that we would get rid of chop or the traditional chemotherapy that is usually the base for Rituxan-based therapy. So if I look longer term, it would be that an immunomodulatory drug with a monoclonal antibody targeting, in this case, CD20, would be the play that would get rid of finally these toxic, very old chemotherapies and improve not only response rates and other outcomes but really get rid of toxicity. So I think that's the play.

Michael G. King - Rodman & Renshaw, LLC, Research Division

Okay. And then does Btk fit into that? And when might we see the first trials of the Avila Btk inhibitor?

Robert J. Hugin

Well, we're moving very quickly on that front, and we're working -- we've approved internally clinical development plan already. And we're initialing trials, and the combinations certainly are going to be underway in 2012.

Jacqualyn A. Fouse

Operator, I think we've got time for 1 more question. And Ravi, I didn't mean to be cute. I think that all the dynamics that Mark highlighted today with respect to the potential for continued share gains in the U.S. and what we're seeing in terms of the dynamics there, what we think is going to happen with the publications and all the rest put us in a very good place in multiple myeloma in the U.S. for 2013 and 2014 and beyond. So just to make sure that we clarify that. And operator, if we could have 1 more question, please.

Operator

Our final question comes from Matt Roden from UBS.

Matthew Roden - UBS Investment Bank, Research Division

One of your near-term events here is ABRAXANE Phase III data in metastatic melanoma. This is a rapidly changing therapeutic category. So if successful, where do you think that ABRAXANE would fit into this treatment paradigm? What kind of data do you think it would take to become a highly attractive competitor in that category? Just trying to get a sense for how you view that opportunity.

Mark J. Alles

Matt, it's Mark, and of course, Bob, Jackie should jump in as well. You actually positioned it nicely. Finally, after decades, metastatic melanoma has a B-Raf inhibitor and the ipilimumab from BMS. So in back-to-back years, we have survival in this disease. What we think is important with ABRAXANE is that it could become the base chemotherapy for patients who are either in a combination approach or one could even imagine for certain subsets, maybe it's now a 3-drug combination versus 2. So I think the first important step is the readout of the data. We internally have gated it to say if we achieve PFS with a trend to OS, we have 1 strategy. If we achieve PFS and overall survival, we, of course, would accelerate our regulatory strategy around that. But no matter what, what you're describing is high academic interest in ABRAXANE beating dacarbazine, much like ipilimumab and the B-Raf inhibitor did. And on that basis, the combination studies would go forward.

Jacqualyn A. Fouse

Thank you very much. For anybody who is still in the queue, sorry that we are running up on 1.5 hours here and need to stop the call. So thanks very much for being on the call today, and we will speak with you soon.

Robert J. Hugin

Thank you.

Operator

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

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