celgene announces acquisition of receptos · high potential therapy potential disruptive oral...

Celgene Announces Acquisition of Receptos

July 14, 2015

Agenda

Bob Hugin, Celgene Chairman & Chief Executive Officer• Strategic Overview

Scott Smith, Celgene President of Global Inflammation and Immunology• Enhancing the I&I Franchise

Mark Kreston, Celgene Corporate Vice President, Global Marketing I&I• Ozanimod Opportunity in IBD and MS

Peter Kellogg, Celgene Executive Vice President & Chief Financial Officer• Transaction Overview

2

Forward Looking Statements and Adjusted Financial Information

This presentation contains forward-looking statements, which are generally statements that are not historicalfacts. Forward-looking statements can be identified by the words “expects,” “anticipates,” “believes,”“i t d ” “ ti t ” “ l ” “ ill ” “ tl k” d i il i F d l ki t t t b d“intends,” “estimates,” “plans,” “will,” “outlook” and similar expressions. Forward-looking statements are basedon management’s current plans, estimates, assumptions and projections, and speak only as of the date theyare made. We undertake no obligation to update any forward-looking statement in light of new information orfuture events, except as otherwise required by law. Forward-looking statements involve inherent risks anduncertainties, most of which are difficult to predict and are generally beyond our control. Actual results or

t diff t i ll f th i li d b th f d l ki t t t lt f th i toutcomes may differ materially from those implied by the forward-looking statements as a result of the impactof a number of factors, many of which are discussed in more detail in our Annual Report on Form 10-K andour other reports filed with the Securities and Exchange Commission.

In addition to unaudited financial information prepared in accordance with U.S. GAAP, this presentation alsot i dj t d fi i l th t b li id i t d t ith l t lcontains adjusted financial measures that we believe provide investors and management with supplemental

information relating to operating performance and trends that facilitate comparisons between periods and withrespect to projected information. These adjusted measures are non-GAAP and should be considered inaddition to, but not as a substitute for, the information prepared in accordance with U.S. GAAP. We typicallyexclude certain GAAP items that management does not believe affect our basic operations and that do notmeet the GAAP definition of unusual or non-recurring items. Other companies may define these measures indifferent ways. Further information relevant to the interpretation of adjusted financial measures, andreconciliations of these adjusted financial measures to the most comparable GAAP measures, may befound on our website at www.Celgene.com in the “Investor Relations” section.

3

Additional Information on the Tender Offer

The tender offer described herein has not yet commenced. The description contained herein is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any shares of Receptos. At the time the tender offer is commenced Celgene and its wholly owned subsidiary Strix Corporation intend to file with thethe tender offer is commenced, Celgene and its wholly owned subsidiary, Strix Corporation, intend to file with the U.S. Securities and Exchange Commission (the “SEC”) a Tender Offer Statement on Schedule TO containing an offer to purchase, a form of letter of transmittal and other documents relating to the tender offer, and Receptos intends to file a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the tender offer. Celgene, Strix Corporation and Receptos intend to mail these documents to the stockholders of ReceptosReceptos.

THESE DOCUMENTS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TENDER OFFER AND RECEPTOS STOCKHOLDERS ARE URGED TO READ THEM CAREFULLY WHEN THEY BECOME AVAILABLE.

Stockholders of Receptos will be able to obtain a free copy of these documents (when they become available) and other documents filed by Receptos, Celgene or Strix Corporation with the SEC at the website maintained by the SEC at www.sec.gov. In addition, stockholders will be able to obtain a free copy of these documents (when they become available) from the information agent named in the offer to purchase or from Celgene.

4

Agenda





5

Our Mission and Vision

Celgene is building a preeminent global biopharmaceutical company focused on the discovery development andcompany focused on the discovery, development and

commercialization of innovative therapies for unmet medical needs in cancer and immune-inflammatory diseases

6

OUR FOCUS:Executing on Five Strategic Imperatives

Operational excellence

Capitalizing on strength in Hematology

Expanding the Oncology franchise

Building an Immunology & Inflammation franchise

Sustaining innovation and long-term growth

7

Operational Excellence

Delivering Financial & Operational PerformanceDelivering Financial & Operational Performance

• Exceptional Q2:15 Financial Performance (preliminary)

– Total Revenue of approximately $2.28 billion, 22% year-over-year increase

Adj t d EPS f i t l $1 23 i l di $0 06 i th l f it– Adjusted EPS of approximately $1.23, including a $0.06 gain on the sale of an equity investment, 37% year-over-year increase

• Significant Operational Accomplishments in the H1 of 2015

– Six approvals in major markets

– Advancing 15 pivotal trials across the in-line brands and pipeline portfolio

• Strong Momentum Expected Through the Remainder of 2015g p g

– Total Net Product Sales between $9.0 to $9.5 billion, in-line with earlier FY guidance

– Raising adjusted EPS guidance to $4.75 - $4.85, inclusive of the Receptos impact, compared to earlier guidance of $4.60 - $4.75p g

8

Sustaining Innovation and Long-Term Growth

Investing in the Future from a Position of StrengthInvesting in the Future from a Position of Strength

• Added Significant Next-generation Growth Drivers

– Deals with AstraZeneca, Juno, and Receptos enhance our existing pipeline by adding the potential of 4 product approvals in multiple diseases by 2020g p p pp p y

– Accelerated revenue and earnings growth expected beyond 2020

• Expanded Our Immuno-Oncology Foundation

– AstraZeneca and Juno collaborations are highly complementary

– Comprehensive strategy activating innate and adaptive immunity

• Enhancing Our I&I Franchise with the Receptos Acquisitiong p q

– Ozanimod is a strong strategic fit with blockbuster potential

– Robust combined portfolio addressing $70B marketplace with up to 10 indications

9

Ozanimod Is a Strong Strategic Fit with Significant Potential

Established mechanism of action with broad applicability across a range I&I diseases

Strong Strategic Fit

High Potential Therapy

Potential disruptive oral therapy for chronic care markets Enhances our inflammatory bowel disease (IBD) portfolio

Potential best-in-class profile demonstrated in ulcerative colitis (UC) and multiple sclerosis (MS) Phase III trials in UC and RMS underway; data expected beginning in H1:17 with first approvals in 2018 Expected peak sales of $4 to $6 billion with intellectual property protection extending to 2030+

Complementary to OTEZLA®, GED-0301 and CC-220 Potential for paradigm-changing early utilization in markets with high unmet medical need

Well-Aligned with Existing Pipeline

Leverages existing I&I capabilities and future IBD commercial infrastructure

Financially Compelling

Multi-indication potential including Crohn’s disease (CD), lupus and psoriasis

Leverages existing I&I capabilities and future IBD commercial infrastructure Neutral to adjusted EPS in 2018; accretive beginning in 2019 Raising 2020 targets to $21B+ in revenue (+$1B) & $13.00+ in adjusted EPS (+$0.50)

10

Agenda





11

Receptos is a Strong Strategic Fit for Celgene I&I

Disruptive I&I

• Ozanimod is a potential best-in-class oral S1P receptor modulator in late-stage development presenting a $4B - $6B peak sales opportunity

• Ozanimod advancing in Phase III for Ulcerative Colitis and Relapsing Multiple Sclerosis Products with tremendous potential across multiple indications

• Second product candidate, RPC4046, an IL-13 antibody in Phase II for Eosinophilic Esophagitis, an orphan disorder with no FDA approved drugs

Robust Ozanimod

Clinical Data

• Phase II TOUCHSTONE trial in UC, met key clinical and endoscopic endpoints for both induction and maintenance

• Phase II RADIANCE trial in RMS, met the primary efficacy endpoint and all key secondary endpoints

• Potential to offer an improved cardiac profile reduced hepatoxicity and faster lymphocytePotential to offer an improved cardiac profile, reduced hepatoxicity and faster lymphocyte recovery versus currently marketed S1P drugs

Differentiated • IBD is a $9B market today with very few effective treatment options, especially for

moderate-to-severe diseaseAsset

Targeting Large Markets

• Ozanimod could be the first S1P receptor modulator approved for IBD• RMS is a $20B market today and Ozanimod has the potential to be highly differentiated

versus current therapies

12

Receptos Enhances our I&I Franchise with Additional Cornerstone ProductReceptos Enhances our I&I Franchise with Additional Cornerstone Product

Combined Robust and Deep I&I Pipeline

Programs and Indications Pre-Clinical Phase I Phase II Phase III Reg. ApprovalOTEZLA (PDE4 inhibitor)

Psoriatic ArthritisPsoriasisBehçet SyndromeBehçet SyndromeAnkylosing SpondylitisAtopic DermatitisUlcerative colitis

GED-0301 (Smad7 antisense oligo)Crohn’s DiseaseUlcerative Colitis (planned)Ulcerative Colitis (planned)

Ozanimod (S1PR modulator)Relapsing Multiple Sclerosis Ulcerative ColitisCrohn’s Disease (planned)

RPC 4046 (IL-13 inhibitor)1

Eosinophilic EsophagitisSotatercept (ACT2RB fusion protein)

Renal Anemia / BoneCC-292 (BTKi)

B-Cell Mediated Disease/ RACC-220 (CELMod)( )

LupusCC-90001 (JNK1i)

IPF / Liver FibrosisCC-90005 (PKC-θi)

Psoriasis/ other indicationsGLP 1 receptor modulatorGLP-1 receptor modulator

Type 2 Diabetes

13

Celgene existing Receptos1 Under co-development option with AbbVie

Phase III Ozanimod Data Expected Beginning in H1:17

RADIANCE Ph II / III t i l i R l i M lti l S l i

Ozanimod: Key Expected Clinical MilestonesOzanimod: Key Expected Clinical Milestones

• RADIANCE: Phase II / III trial in Relapsing Multiple Sclerosis– Enrollment completed in March 2015

– Data expected in H1:17

• SUNBEAM: Phase III trial in Relapsing Multiple Sclerosis– Enrollment initiated December 2014

– Data expected in H1:17

• TRUE NORTH: Phase III trial in Ulcerative Colitis– Enrollment initiated in July 2015

– Data expected in 2018

14

Accelerating Momentum in the I&I Portfolio

Multiple Blockbuster Products Expected in I&IMultiple Blockbuster Products Expected in I&I

Significant Growth through 2020 and

beyondOzanimod beyondUC

2019E

GED-0301CD

OzanimodRMS

2018E

CD2019E

OTEZLA®

PsA / Psor2014

2018E

Celgene existing Receptos

15

1 Under co-development option with AbbVie

Celgene I&I Targets Sizable Evolving Markets with a Portfolio of Disruptive Oral Therapies

Rh t l

Therapeutic AreaMarket Size ($B)2014E 2020E

$27 $34

TargetedIndications Products

• PsA• Behçet’s CC-220

rtfo

lio

Rheumatology

Dermatology

$27 $34

$11 $17

• AS• SLE• Sjogrens

• Psoriasis

Ozanimod

ne I&

I Por Dermatology

Gastroenterology /

$11 $17

$9 $15

• Atopic Dermatitis

• CD• UC

Ozanimod

GED-0301

Cel

gen

IBD

Neuro-

$9 $15

$20 $27

• UC• EoE

• RMS

Ozanimod RPC-4046

OzanimodInflammation $20 $27

Total ($B) $67 $93

• RMS Ozanimod

16

The Celgene I&I portfolio will target the majority of a $90-$100B market in 2020 The Celgene I&I portfolio will target the majority of a $90-$100B market in 2020 Footnote: Expansion of Ozanimod in Rheumatology and Dermatology plannedSource: Evaluate Pharma

Agenda





17

Ozanimod: Potential Best-in-Class Oral S1PR ModulatorTransformational Potential in UC, MS and Beyond

• Highly selective for S1P1 & S1P5Dose-Attuned

Intrinsic Properties:Intrinsic Properties:Product Attributes:

• Negligible S1P3 activity = less CV tox • PK – delayed Cmax, T1/2, Vd

• No pro-drug

Dose Attuned Titration Schedule

Treatment Benefits:

Potential for Improved Cardiac Profile

(HR QTc)

Potential for Reduced Hepatotoxicity

Rapid Lymphocyte Recovery(HR, QTc)

Broad Applications for Clinical DevelopmentBroad Applications for Clinical Development

MS (Multiple Sclerosis)UC (Ulcerative Colitis) CD (Crohn’s Disease)

SLE (Systemic Lupus Erythematosus)AD (Atopic Dermatitis)Psoriasis y )

18

Ozanimod: A Potentially Transformational Profile in UC

Novel oral treatments

Unmet Needs in IBDUnmet Needs in IBD Differentiated Clinical ProfileDifferentiated Clinical Profile

Induction of Remission

and Response

Induction of Remission

and Response

Rapid Onset of Efficacy

Rapid Onset of Efficacy

Effective treatments to induce clinical response and to maintain remission

OzanimodOzanimod Mucosal HealingMucosal Healing

Once-dailyOral DosingOnce-daily

Oral Dosing

Therapies that are well tolerated with limited side effects

Safe (non-immunosuppressive)

AEs & SAEs AEs & SAEs 32-Week32-Week

( pp )and effective therapy; reduction of corticosteroid use

Alternative disruptive MOAsSimilar to Placebo

Similar to Placebo

32-Week Maintenance

32-Week Maintenance

19

Current profile based on Phase II

Tremendous Opportunity for Ozanimod to Disrupt the UC Treatment Paradigm

Expected Positioning of UC Treatments

5 Aminosalicylates

Majority of >1.3 million Patients with UC are Moderate to Severe

5-Aminosalicylates

Immunosuppressants and Corticosteroids18%

Remicade®

Humira®

Entyvio®

45%55%

Tysabri®

Ozanimod

37%

1st line treatment

2nd line treatment

3rd line treatment

Last line treatmentMild Moderate Severe

Potential to be used as first line drug of choice in moderate to severe UC patients Potential to be used as first line drug of choice in moderate to severe UC patients

20

TOUCHSTONE Trial Results Reveal Transformational Potential for Ozanimod in the Treatment of Moderate-to-Severe UC

• Efficacy: – Met primary efficacy and all secondary endpoints for patients on 1 mg dose after 8 weeks of treatment (induction)

– Met primary efficacy and all secondary endpoints for patients on 1 mg dose after 32 weeks of treatment (maintenance)

• Safety: Generally favorable and consistent with prior studies– Incidence of adverse events across active treatment groups and placebo appeared similar

– No new safety signals observed

Changes in heart rate generally modest during first 6 hours after administration– Changes in heart rate generally modest during first 6 hours after administration

– Rates of liver enzyme elevations observed were low

Cross Trial Comparison with Humira in UC

9 3% 8 5%

16.4% 16.5% 17.3%15%20% All key endpoints

achievedData

6.2%9.3% 8.5%

0%5%

10%

Ozanimod Wk 8 Ph II

Humira Wk 8 Ph III

Ozanimod Wk 32 Ph II

Humira Wk 52 Ph III

Data presentation

expected in H2

Phase II Phase III Phase II Phase IIIPlacebo Ozanimod 1.0mg Humira

21

Ozanimod Addresses Significant Unmet Medical Needs in Relapsing Multiple Sclerosis

Unmet Needs in RMSUnmet Needs in RMS Differentiated Clinical ProfileDifferentiated Clinical Profile

Therapies that offer improved disease control for relapsing forms of MS

Reduction in GdE lesionsReduction in GdE lesions

Reduced Annualized

Relapse Rate

Reduced Annualized

Relapse Rate

forms of MS

Additional safe and well-tolerated oral therapies

OzanimodOzanimod

Favorable Cardiac Profile

Favorable Cardiac Profile

Once-dailyOral DosingOnce-daily

Oral Dosing Therapies appropriate for long-

term use

Agents that halt and / or reverse di bilit

(HR, QTc)(HR, QTc)

Generally Generally FavorableFavorabledisability Well Tolerated

Well Tolerated

Favorable HepatotoxFavorable Hepatotox

Current profile based on Phase II

22

Ozanimod: Best-in-Class S1P1 Potential for Utilization in First-Line RMS

Beta Interferons

Expected Positioning of RMS Treatments Explosive growth expected in MS oral revenues ($mm)

$17,500

$15 000

$20,000 / Copaxone®

Ozanimod*

Tecfidera®*

$10,000

$15,000

Gilenya®*

Aubagio®* Daclizumab

$3,029

$5,957

$5,000

Lemtrada™Ocrelizumab

Tysabri®

JC virus negative patients

$0 $15 $494 $1,204

$0 2009 2010 2011 2012 2013 2014 2020E

* = Oral treatment

Newly diagnosed 1st line treatment• Cycling• New therapies will be introduced

2nd line treatment• 1st line failures• Tolerability issues

Last line treatment• Salvage treatment

Source: Company reports and Evaluate Pharma

Orals to Represent 60-70% of the $27B MS Market in 2020Orals to Represent 60-70% of the $27B MS Market in 2020

23

Ozanimod Phase II Efficacy Comparisonto GILENYA® and TECFIDERA®

100%

Cross Trial Comparisons of Select Oral MS Therapies

82%

90%

74%

86% 86%

70%

80%

90%

55% 53%

44%

53%50%

60%

70%

31%

20%

30%

40%

0%

10%

GD+ Lesion Reduction* ARR Reduction*

GILENYA FREEDOMS (0.5mg qd) TECFIDERA DEFINE (240mg bid) TECFIDERA CONFIRM (240mg bid)Ozanimod 0.5mg Phase II Ozanimod 1.0mg Phase II

* Reduction vs. Placebo

24

Agenda





25

Transaction Overview

Consideration• All-cash consideration of $232 per share• Total transaction value of $7.2 billion, net of cash

Financing• Sources of cash: mix of new debt and cash • Committed bridge financing in place• Plan to access debt capital markets for permanent funding

Financial benefits

• Adjusted EPS impact: $0.40 to $0.25 dilutive in 2016 and 2017, respectively; break-even in 2018; accretive beginning in 2019

• Raising 2020 targets: total net product sales $21B+; adjusted EPS $13.00+ • Significant growth driver beyond 2020: peak Ozanimod sales of $4 to $6 billion

Other

Significant growth driver beyond 2020: peak Ozanimod sales of $4 to $6 billion

• Strong combined balance sheet • Resulting capital structure consistent with financial strategy and investment grade profile

Acquisition leverages our commercial structure / expertise further diversifiesAcquisition leverages our commercial structure / expertise further diversifies

Other• Transaction expected to close in Q3:15• Maintains financial flexibility for additional value creating transactions and share buyback

Acquisition leverages our commercial structure / expertise, further diversifies revenue and enhances long-term growth

Acquisition leverages our commercial structure / expertise, further diversifies revenue and enhances long-term growth

26

Celgene Announces Acquisition of Receptos

July 14, 2015

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