1. Healthcare Industry Group
Celgene
Healthcare Industry Group

2. Bought Celgene for $62 Now at 101 63% Return Sell Half Position Amgen
OUR SUGGESTIONS
NOV
Bought Celgene for $62
Now at 101
63% Return
Sell Half Position
BUY
Amgen

3. Biopharmaceutical Companies
Obamacare
More people insured→ more people demanding drugs
Insurance Reimbursement Risk
Compared to Generic Drug companies

4. Celgene OVERVIEW Diversification 25 ongoing Phase III Trials
POSITIVES
RISKS
Diversification
25 ongoing Phase III Trials
Robust Growth Prospects
Cash
R&D
Slowing Revlimid Sales
Failure to expand usage
Failure of approve drug

5. Briefly…Amgen
More mature company with a dividend

6. Acquired November, $61.64
52 Week Range: $ $102.29
Current Price: $101.65
YTD: Up 28% ($78-$101)

7. Background Founded in 1986 4,460 Employees as of December 2011
Headquarters: Summit, NJ
Locations across the US: NJ, CA, FL, among others
Locations across the EU: London, Milan, Paris, among others

8. CEO- Robert J. Hugin
Had high leadership roles in the company since 1999
Former Managing Director at JP Morgan
Board of Directors at PhRMA (Pharmaceutical Research and Manufacturers of America)
Does advocacy for public policy to incentivize R&D

9. The Board Michael Casey (2002) Rodman Drake (2002)
Baringo Capital LLC
Gilla Kaplan, Ph.D (1998)
-On Scientific Advisory Committee of Bill & Melinda Gates foundation
James Loughlin (2007)
-Former National director of KPMG Pharmaceuticals Practice
Ernest Mario, Ph.D. (2007)
-Former deputy Chairman and CEO of Glaxo Holdings plc.
Second largest pharmaceuticals corporation to Merck & Co.
-2007 Remington Award Winner
American Pharmacy Association’s highest honor
Carrie Cox (2009)
Michael Friedman, M.D. (2011)
Richard Barker, D.Phil (2012)

10. Revlimid Multiple Myeloma Revlimid Market Other Uses of Revlimid
2/3 of Celgene Revenue
Long term growth potential
Global
Other Uses
Competition
12% in 2013
Other Uses of Revlimid

11. Revlimid Multiple Myeloma Revlimid Market Other Uses of Revlimid
2/3 of Celgene Revenue
Long term growth potential
Global
Other Uses
Competition
12% in 2013
Other Uses of Revlimid
From Fiscal Year End December 2012, Celgene Corporation Annual Report-10k form

12. Revlimid Multiple Myeloma Revlimid Market Other Uses of Revlimid
Lots of other potential uses-driver of growth
Mantle Cell Lymphoma

15. Pomalyst
Apremilast
New Drugs
Pomalyst, Apremilast, Abraxane

16. Pomalyst FDA approval announced on February 11th, 2013
Refractory treatment for Multiple Myeloma (MM)
International Myeloma Foundation
100,000 people in the U.S. currently with MM
Nearly 200,000 new cases diagnosed each year
Multiple Myeloma: also known as plasma cell myeloma, white bloods cells normally responsible for producing antibodies. In MM, collections of abnormal plasma cells accumulate in the bone marrow and interfere with the production of normal blood cells. Generally thought to be treatable but incurable.
Refractory: disorder that is resistant to treatment.
Second most commonly diagnosed blood cancer.
Represents 1% of all cancers and 2% of all cancer deaths.

17. Apremilast CELG’s leader in the pipeline for new drugs
Treatment for severe psoriasis, psoriatic arthritis, and ankylosing spondylitis
CELG reported positive Phase III Apremilast data for psoriasis and psoriatic arthritis
Plans for FDA and European regulatory filings in 2013
Estimated FDA approval in 2014
Psoriasis: an immune-mediated disease affecting the skin. Characterized by skin redness, irritation, and thick red skin with flakey silver-white patches called scales. Typically developed between the ages of 15-35, not contagious, a lifelong disease, there is no cure but medications available to control the symptoms. Affects 7.5 million Americans and 125 million worldwide. About 150,000 new cases diagnosed each year in the U.S.
Psoriatic arthritis: type of arthritis that occurs with psoriasis. Estimated that up to 30% of individuals with psoriasis also develop psoriatic arthritis. Here symptoms include joint swelling, skin and nail changes and pitting.
Ankylosing spondylitis: Long-term disease that involves inflammation of the joints between spinal bones, and the joints in between the spine and pelvis. Joints become swollen and inflamed.
Phase III of clinical trial: trial in which the new drug, which has proven to be effective for some patients, is compared to the standard or best-known treatment.
Pomalyst and Apremilast positive

18. Abraxene
Pancreatic cancer, metastatic breast cancer and advanced non-small cell lung cancer
Sales of about $386 million in 2011
Approved in 2012 for first-line treatment of metastatic non-small cell lung cancer among patients who could not receive radiation therapy or curative therapy.
It is now undergoing trials for cancers of the bladder, ovaries, as well as metastatic melanoma
The FDA orphan drug act was designed to encourage the development of products that demonstrate promise for the diagnosis, prevention and/or treatment of life-threatening or very serious conditions that are rare and affect 200,000 persons or less in the United States

19. Amrubicin Small cell lung cancer
Approved in 2008 as an FDA Orphan Drug.
It is currently approved and marketed in
Japan for the treatment of small cell lung
cancer.

20. Financial Trends 4th Quarter Results: $1.32 per share
$2.78 billion Long-term Debt
$3.9 billion cash

21. Price Target

22. Valuation (HIGH)

23. SELL HALF POSITION CONCLUSIONS POSSIBLE UPSIDE POTENTIAL
BUT WANT TO CASH IN AT OUR GAINS
SELL HALF POSITION
BUY AMGEN
SIMILAR COMPANY, NOT AS RISKY