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Robert J. Hariri, MD, PhD Founder & Chairman Celgene Cellular Therapeutics
Understanding the Value of Medical Innovation
Longer Life Through Better Medicines 1900-2010
2
1908 First Large-Scale
Adoption of Water Chlorination
1921 Diphtheria and TB
Vaccines
1930s Pertussis Vaccine
1936 Yellow Fever
Vaccine
1935 Sulfa Drugs
(first antibiotic)
1940s Penicillin First Used
as a Treatment
1955 Polio
Vaccine
1963 Measles Vaccine
1974 Meningococcal
Disease Vaccine
1985 Influenza Vaccine 1995
Hepatitis A Vaccine
1987 Azidothymidine
(first HIV treatment)
Deaths per 100,000 people
48
78
20
475 Life Expectancy
Source: The Hamilton Project at the Brookings Institution. Available at http://www.hamiltonproject.org/multimedia/charts/deaths_from_major_infectious_disease/. Accessed on 11/1/12.
>96% Decrease
>62% Increase
Life Expectancy Growth
49 U.S.
31 WW
68
49
79
67
85yrs
72yrs
New drugs are no small part of this medical miracle. Mark McClellan, FDA “ ”
The Gift of Life
3
3 Source: United Nations Development Program. U.S. Food and Drug Administration. Centers for Disease Control and Prevention and National Center for Health Statistics. Health, United States, 2011: With Special Feature on Socioeconomic Status and Health. Available at http://www.cdc.gov/nchs/index.htm. Accessed 11/12/12.
New Therapies are the Greatest Contributor to Increased Life Expectancy
4
New therapies account for 45% of the increase in life expectancy
New therapies account for 73% of the increase in life expectancy
45% 73%
4
Source: Lichtenberg FR. NBER Working Paper No. 18235. Pharmaceutical innovation and longevity growth in 30 developing and high-income countries, 2000-2009.
Impact of New Therapies on Death Rates
5
Millions of Dollars
100
300
500
700
900
1,100
1,300
1,500 80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Deaths per 100,000
R&D in Millions
Mortality Rate (All Causes)
Source: Centers for Disease and Prevention’s National Center for Health Statistics. Health, United States, 2011: With Special Feature on Socioeconomic Status and Health. Available at http://www.cdc.gov/nchs/. Accessed 11/16/12. PhRMA Annual Reports 1960-2010. Available at www.phrma.org. Accessed 11/16/12.
Cancer Innovation Tells the Story
6
Annual Percent
Change in Death Rate
from Cancer
0.0
0.5
1.0
-1.5
-1.0
-0.5
-2.0
U.S. War on
Cancer – 1972
Source: Kort EJ, Paneth N, Vande Woude GF. Cancer Res. 2009;69:6500-6505.
Decline in Death Rates from Leading Causes 1960-2011
7
2011
1960
Deaths Per 100,000
Source: Centers for Disease Control and Prevention and National Center for Health Statistics. National Vital Statistics System. 2011. Available at http://www.cdc.gov/nchs/data/nvsr/nvsr61/nvsr61_06.pdf#page1. Accessed 11/12/12.
Survival Rate For Myeloma Patients Soars With New Innovative Therapies
8
5-year relative survival rate, myeloma
Year of Diagnosis
SurvivalRate %
50% INCREASE 1992-2008
Source: National Cancer Institute, Surveillance Epidemiology and End Results (SEER). Available at http://seer.cancer.gov/csr/1975_2009_pops09/browse_csr.php?section=18&page=sect_18_table09.html. Accessed 10/31/12.
Myeloma Survivorship Rapidly Increasing
9
81,089
46,856 Survivors
Survivors
2000
2009
73% Increase in
Myeloma Survivors
Source: National Cancer Institute, Surveillance Epidemiology and End Results (SEER). Cancer Statistics Review: 1975-2009 Estimates of complete prevalence. Available at http://seer.cancer.gov/csr/1975_2009_pops09/. Accessed 11/16/12.
Five-Year Survival from Myelodysplastic Syndromes (MDS) Increasing
10
+60%
38% 24%
Source: Smout R, Horn S, Goldberg R. Age Period Cohort Analysis of Cancer Survival In SEER 18 Registry. Center for Medicine in the Public Interest.
11
The Virtuous Cycle
Innovation Celgene has a proven track record of delivering better outcomes with better
healthcare through innovation.
Innovation is a Virtuous Cycle. Requiring Commitment. Investment. Vision.
12
Virtuous Cycle of Innovation
Improvements in healthcare are an important source of gains in health, longevity
and productivity globally.
Access Access and reimbursement
for current innovative therapies funds investment in future innovation.
Investment Innovation results from continuous
investment of time and resources by biopharmaceutical companies such
as Celgene.
Commitment The unprecedented survival results reported with Celgene’s innovative therapies are direct
results of the company’s commitment to improving the lives of patients worldwide.
Maximizing the Promise of Science: 5,000+ Medicines in Development in 2011
13
Reflects number of compounds in Phase I, II, III, or having been filed with the FDA, or approved by the FDA, but not yet on the market in the U.S (as of January 2013). Medicines with multiple indications may appear in more than one category but are counted only once for total (3,091).
454 Musculoskeletal Diseases
1,247 Neurological
Disorders
650 Cardiovascular
Disorders 412
Diabetes Mellitus
204 HIV/AIDS
and Related Conditions
69 Liver Disease and Related Conditions
1,586 Infectious Diseases
1,795 Rare
Diseases
731 Immunological
Conditions
95 Breast Cancer
63 Colorectal Cancer
142 Lung Cancer
383 Blood Cancers
105 Skin Cancer
13
Source: PhRMA. The Biopharmaceutical Pipeline: Evolving Science, Hope for Patients. Available at http://phrma.org/sites/default/files/2435/phrmapipelinereportfinal11713.pdf. Accessed 1/18/13.
3,436 Cancer
Living Longer, Better and Healthier Benefits Society
14
$500 Billion In Societal Value
A 1%
REDUCTION
In CANCER- related DEATHS
in the U.S.
Stimulates economy
Improved quality of life
Maximized life expectancy
*Extended survival contributes to economic stimulus by affording people more time to purchase and enjoy leisure activities
Source: Murphy KM and Topel RH. The Value of Health and Longevity. J Political Econ 2006: 114; 5; 871-904.
Greatest Source of Jobs in 21st Century
15
TOTAL JOBS SUPPORTED
4 million total U.S. jobs supported by the biopharmaceutical sector
More than 650,000 jobs in the U.S. biopharmaceutical sector
OPEN
Each direct biopharmaceutical job
supports 5 additional jobs in other sectors
BIOPHARMA JOBS
Source: Battelle Technology Partnership Practice. The U.S. Biopharmaceuticals Sector: Economic Contribution to the Nation. July 2011. Available at http://www.phrma.org/sites/default/files/159/2011_battelle_report_on_economic_impact.pdf. Accessed 11/1/12.
Estimated Value of Additional Life Years Gained From Innovative Cancer Treatments 1988-2010
16
42 Million
Life Years $3.5
Trillion GDP
Source: Estimate derived from the National Bureau of Economic Research. An Economic Evaluation of the War on Cancer. NBER Working Paper No. 15574. Issued in December 2009. Available at http://www.nber.org/papers/w15574. Accessed 11/16/12.
History of Celgene
17
2011 2013 2009 2007 2005 2000 1992 1986
2014 2010 2008 2006 2003 1998 1987 2012
Celgene spins off
as independent
biopharmaceutical
Company from Celanese
Corporation
Celgene licenses Thalomid
(thalidomide)
Celgene acquires Signal
Pharmaceuticals Inc.
FDA approves Revlimid
(lenalidomide) for treatment
of patients with
transfusion-dependent
anemia due to Low- or
Intermediate-1-risk MDS
(associated with deletion
5q cytogenetic abnormality
with or without additional
cytogenetic abnormalities)
EMA (European Medicines
Agency) approves Revilimid,
in combination with
dexamethasone, for treatment
of multiple myeloma
National Institute for Health
and Clinical Excellence
(NICE) recommends
Revlimid in combination
with dexamethasone, for
treatment of patients with
multiple myeloma who
have received two or more
prior therapies (in U.K.
and Wales)
Celgene inducted into
NASDAQ
FDA grants accelerated
approval of Istodax for
patients with peripheral t-cell
lymphoma who have received
at least one prior therapy
FDA approves POMALYST for
multiple myeloma patients
FDA approves REVLIMID for
relapsed or refractory mantle
cell lymphoma
EMA approves REVILIMID for
deletion 5q myelodysplastic
syndromes
Celgene completes
initial public offering
Food and Drug
Administration (FDA)
approves Thalomid for acute
treatment of cutaneous
manifestations of moderate
to severe erythema
nodosum leprosum
Celgene works with FDA to
develop pioneering System
for Thalidomide Education
and Prescribing Safety
(S.T.E.P.S.®) program
Celgene acquires
Anthrogenesis
Corporation (now
Celgene Cellular
Therapeutics)
FDA approves Thalomid
plus dexamethasone for
treatment of multiple
myeloma
FDA approves Revlimid
plus dexamethasone for
the treatment of multiple
myeloma
Celgene beings distribution
of Revlimid through
RevAssist® program
Celgene inducted into
S&P 500
EMA approves Thalomid
Celgene acquires Pharmine
EMA approves Vidaza for
treatment of myelodysplastic
syndromes (MDS) (Pharmion
received FDA approval for
Vidaza in 2004)
Celgene Cellular Threapeutics
announces first ever
human patient treated with
combination of cord blood and
placental-derived stem cells
Celgene acquires Glouster
Pharmaceuticals
Ministry of Health, Labour
and Welfare (MHLW)
approves Revlimid for
the treatment of multiple
myeloma and MDS
associated with a deltetion
5q chromosomal
abnormality in Japan
Celgene acquires Abraxis
Pharmaceuticals
Celgene acquires Avila
Therapeutics
Celgene earns
placement
on Fortune 500 list
FDA approves
Abraxane (paciitaxel
protein-bound) in
combination with the
drug carboplatin to treat
advanced or spreading
non-small cell lung
cancer
EMA approves IMNOVID in
combination with low-dose
dexamethasone for relapsed
and refractory multiple
myeloma
FDA approves ABRAXANE
in combination with
gemcitabine for metastatic
pancreatic cancer
Celgene Then and Now
FDA approves OTEZLA for
Psoriatic Arthritis and
Psoriasis
Sustaining Growth through Innovation
18
• Advanced partnered programs into clinical trials
• Accelerated Ph II trials to critical decision points
• Initiated broad program with novel-novel combinations
• Filed 4 Investigational New Drug (IND) applications
• Initiated new and broadened existing strategic collaborations
Sustaining innovation and long-term growth Major Accomplishments
the industry average
A Commitment to Research and Development Unmatched in the Industry
19
Celgene's commitment to R&D remains strong as we continue to develop innovative therapies
compounds in our library, several of which are
being studied in hundreds of clinical trials
30% More than
reinvestment
into R&D
in the past 2 years
Innovative Discoveries in
Our Compounds Are Carefully Studied in Clinical Trials
20
Even though new treatments can take 12+ years to reach approval status — Celgene remains dedicated to clinical development of innovative therapies
pivotal/phase III programs underway
clinical trials
at major
medical centers
(as of 2014)
Compounds are being studied for • incurable hematological cancers
• Solid tumor cancers
• Serious inflammatory diseases
Continued investment in
Immunology & Inflammation
Solid Tumor Cancers
Hematological Cancers
Leveraging Our Global Infrastructure to Build a Portfolio of Innovative Therapies
21
…while focusing on rare diseases and unmet medical needs
Myelodysplastic syndromes (MDS)
Metastatic breast cancer (MBC)
Squamous cell carcinoma
Large cell carcinoma
Adenocarcinoma
Non-small cell lung cancer (NSCLC):
mPAC (pancreatic cancer)
Multiple myeloma (MM)
Mantle cell lymphoma (MCL)
Cutaneous T-cell lymphoma (CTCL)
Peripheral T-cell lymphoma (PTCL)
Non-Hodgkin lymphoma:
Psoriatic arthritis
Psoriasis
Complementing Our Internal Strengths with Selected External Partnerships
22
Rational Combinations
Cancer Stem Cells/ Resistance
Immuno- therapy
Epigenetics
Next Generation
Biologics
Protein Homeostasis
Apremilast+ Combinations
Novel Targets Fit
for Purpose Fibrosis
Novel IMiDs® / CRBN & Other
Ubiquitin Ligase Targets
New Targets, Epigenetic Priming &
Convergence with Metabolic
Targets
+PDE4 Complementation
+PKCq
GDF Family PKCq,
BTKi, TYK2,
Novel Targets
JNK1, New Targets,
Novel phenotypic
screens
Payload Delivery, Next Gen Enhanced Activities
Novel and Complementary Approaches to
Immuno- therapy,
Breaking Tumor Tolerance
Unique Validation /
Testing Capabilities from
Breaking Tumor
Tolerance
Pathway Convergent
Mechanisms, Synthetic Lethal Combinations
PLATFORMS
23
Net Product Sales ($B)
EPS2 ($)
Notes: 1) CAGR calculated using 2017 midpoint 2) Adjusted EPS reflects 2014 stock split
Accelerating Growth Outlook Through 2017
2013 2015E 2017E 2013 2015E 2017E
$13-$14
$6.4
$8.5-$9.5
21% CAGR1
~$7.50
$2.98
$4.50-$4.75
26% CAGR
We will invest about $2B in R&D in 2015!
Powerful Business Model, Driving Sustainable Growth
24
Leveraging Powerful Model
Strong Growth to 2017
Sustainable Trajectory Beyond 2017
Leveraging model – all metrics
improving
More diversified – lower risk
4 blockbuster products by 2017
Adjusted EPS expected to grow at 26% CAGR
22 programs
>50 indications
100+ clinical trials
2013 2015E 2017E
5-10 years
26% CAGR
Adjusted EPS
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
25
Current Portfolio
Leverage Internal Pipeline
Building for the Long-Term Building for the Long-Term
Doing Well by Doing Good Our Commitment to Making a Difference Worldwide
26
Hundreds of millions of dollars contributed
annually to third party co-pay foundations to help
patients access medicines
The Promise of Medical Innovation = Fewer Lives Lost
27
160 Million
96 Million
Life Years Lost to Cancer
40% REDUCTION
Source: Soerjomataram I, et al Global burden of cancer in 2008: a systematic analysis of disability-adjusted life-years in 12 world regions. Lancet 2012; 10.1016/S0140-6736(12)60919-2.
Investment in Medical Innovation is the Most Powerful Force for Human Progress
28
If cancer were prevented in 2020, we could save:
$158 Billion a year in medical costs
1.9 Million lives
$2.2 Trillion in value
$158
a year
Save
Source: National Cancer Institute. Cancer costs projected to reach at least $158 billion in 2020. Available at http://www.cancer.gov/newscenter/newsfromnci/2011/CostCancer2020. Estimates from International Agency for Research on Cancer. GLOBOCAN 2008. Available at http://globocan.iarc.fr/. Accessed 11/15/12.
Billion
29 29
We are at Critical Crossroads
Medical Innovation Freeing the World from Disease
30
Pneumonia or influenza
202.2
Tuberculosis
194.4
Gastrointestinal Infections
142.7
Heart Disease 137.4
Cerebrovascular Disease 106.9
Nephropathies 88.6
Cancer 64.0
Senility 50.2
Heart Disease 192.9.2
Cancer 185.9
Noninfectious Airway Diseases 44.6
Cerebrovascular Disease 41.8 Alzheimer’s Disease 27.0 Diabetes 22.3 Nephropathies 16.3 Pneumonia or Influenza 16.2
Nu
mb
er
of
De
ath
s p
er
10
00
,00
0
Diphtheria 40.3
Source: Centers for Disease Control and Prevention and National Center for Health Statistics. National Vital Statistics System. 2011. Available at http://www.cdc.gov/nchs/nvss.htm. Accessed 11/12/12.
The Value of Medical Innovation: HIV
31
90% decline in
people dying from HIV
4 HIV Therapies
Source: Francis DR. New Drugs and HIV Mortality. National Bureau of Economic Research. Based on NBER Working Paper No. 11109. Issued in February 2005. Available at http://www.nber.org/digest/apr05/w11109.html. Accessed 10/31/12.
Medical Innovation Delivered on Its Promise for Patients with HIV
32
3M life
years saved 3 Million
Life Years Saved
$1.3
Trillion Economic
Value
32 Source: Walensky RP, Freedberg KA, Weinstein MC. Cost-Effectiveness of HIV Testing and Treatment in the United States. Clin Infect Dis. 2007; 45, Supplement 4: S248-S254. Available at http://cid.oxfordjournals.org/content/45/Supplement_4/S248.full. Accessed 11/16/12.
Potential Cost of Increased Reimbursement Regulation on Innovation
33
Between 2010-2040:
Decline in R&D for cancer and rare diseases
75 Billion
Fewer life years
80 Million
Lost economic growth potential
4.5 Trillion
33 Source: Vernon J and Goldberg R. Comparative Effectiveness Research: Effect on Pharmaceutical Innovation, Value of Health and Longevity. Center for Medicine in the Public Interest. 2011. Available at http://www.cmpi.org/uploads/File/Comparative-2.pdf. Accessed 11/15/12.
We Are at a Critical Crossroads for Medical Innovation
34
R&D Investment Longer, Better, Healthier Lives
A
MAJOR PARADOX The potential of science is
greater than ever …
But the outlook for
investment has
never been more
uncertain
34
What’s at Stake …
35
“
Today’s investments in healthcare and R&D can create a world free from cancer for our children and our children’s children.
Gene therapy
Personalized medicine
OFFER HOPE
Immunomodulators
Epigenetics
Nanotechnology
Gene mapping
Cellular therapies
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