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Q4 and Full-Year 2016 Conference Call
January 26, 2017
CHANGING THE COURSE OFHUMAN HEALTH THROUGH BOLD
PURSUITS IN SCIENCE
CHANGING THE COURSE OFHUMAN HEALTH THROUGH BOLD
PURSUITS IN SCIENCE
Q4 and Full-Year 2016 Conference CallQ4 and Full-Year 2016 Conference Call
Mark Alles, Chief Executive Officer
Scott Smith, President, Global I&I
Jackie Fouse, President & Chief Operating Officer
Q&A
Michael Pehl, President, Hematology & Oncology
Peter Kellogg, Chief Financial Officer
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Forward Looking Statements and Adjusted Financial InformationForward Looking Statements and Adjusted Financial Information
3
This presentation contains forward-looking statements, which are generally statements that are not historical facts.Forward-looking statements can be identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,”“plans,” “will,” “outlook,” “targets” and similar expressions. Forward-looking statements are based on management’scurrent plans, estimates, assumptions and projections, and speak only as of the date they are made. We undertake noobligation to update any forward-looking statement in light of new information or future events, except as otherwiserequired by law. Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predictand are generally beyond our control. Actual results or outcomes may differ materially from those implied by the forward-looking statements as a result of the impact of a number of factors, many of which are discussed in more detail in ourAnnual Report on Form 10-K and our other reports filed with the Securities and Exchange Commission.
In addition to unaudited financial information prepared in accordance with U.S. GAAP, this presentation also containsadjusted financial measures. Further information relevant to the interpretation of adjusted financial measures, andreconciliations of these adjusted financial measures to the most comparable GAAP measures, may be found in theAppendix and on our website at www.Celgene.com in the “Investor Relations” section.
Mark AllesChief Executive Officer
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Significant Momentum Heading Into Pivotal Inflection PeriodSignificant Momentum Heading Into Pivotal Inflection Period
Strengthening Value Proposition of Our Commercial Portfolio − Blockbuster products with anchor positions for unmet medical needs− More than 500,000 patients treated in 2016 with our approved commercial therapies
Accelerating the Development of Transformational Products− Dynamic 2 year period; 19 Ph III readouts expected; 9 new molecules advancing to pivotal trials − Advancing 14 new molecules with the potential to be approved over the next 5 years
Enhancing Capabilities and Adding to Our Pipeline− 8 INDs/CTAs filed with first- and best-in-class potential − Key recent business development transactions: EngMab, Evotec, Anokion, Delinia
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Peter KelloggChief Financial Officer
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Full-Year 2016 Financial HighlightsFull-Year 2016 Financial Highlights
Outstanding Operating Results− 2016 year-over-year net product sales grew 22% and adjusted diluted EPS grew 26%− Adjusted operating margins improved by 300 bps
Excellent Performance on Operating Metrics− Strong product growth across both franchises− 4 blockbuster products – REVLIMID®, POMALYST®, OTEZLA®, ABRAXANE®
Balanced Capital Deployment− Invested $1.7B in acquisitions and new collaborations− $2.2B in shares repurchased in 2016
2017: An Inflection Point for Future Growth− 2017 guidance reflects strong operating momentum− Data from multiple Ph III and proof-of-concept trials expected in 2017-2018
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Q4 2016 Total Net Product SalesQ4 2016 Total Net Product Sales
Q4:14 Q4:15 Q4:16
$2,055
$2,539
$2,977
$ M
illio
ns ↑19% ↑24% ↑17%
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Q4:15 Volume Price Fx /Hedge
Q4:16
↑17.2%↓0.3%↑13.9% ↑3.6%
Contribution to Q4:16 Total Net Product Sales Growth
$ M
illio
ns
Total Net Product Sales
Footnote: Growth Rates = Growth vs. Prior Year Period 8
Full-Year 2016 Total Net Product SalesFull-Year 2016 Total Net Product Sales
2014 2015 2016
$7,564
$9,161
$11,185
$ M
illio
ns ↑19% ↑21% ↑22%
$0
$2,000
$4,000
$6,000
$8,000
$10,000
2015 Volume Price Fx /Hedge
2016
↑22.1%↓0.8%↑18.4% ↑4.5%
Contribution to 2016 Total Net Product Sales Growth
$ M
illio
ns
Total Net Product Sales
9Footnote: Growth Rates = Growth vs. Prior Year Period
Q4 2016 Adjusted Diluted Earnings Per ShareQ4 2016 Adjusted Diluted Earnings Per Share
$1.01
$1.18
$1.61
Q4:14 Q4:15 Q4:16
↑33% ↑17%
Dol
lars
Per
Sha
re
↑36%
Q4:15 Oper. Income
OIE Tax Rate
Share Count
Q4:16
Dol
lars
Per
Sha
re
$1.61$0.40$1.18 $0.01 $0.03($0.01)
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Contribution to Q4:16 Adjusted Diluted EPSAdjusted Diluted EPS
Footnote: Growth Rates = Growth vs. Prior Year Period
Full-Year 2016 Adjusted Diluted Earnings Per ShareFull-Year 2016 Adjusted Diluted Earnings Per Share
$3.71
$4.71
$5.94
2014 2015 2016
↑24% ↑27%
Dol
lars
Per
Sha
re
↑26%
$0
$1
$2
$3
$4
$5
$6
2015 Oper. Income
OIE Tax Rate
Share Count
2016
Dol
lars
Per
Sha
re
$5.94$1.41$4.71 ($0.06) $0.16($0.28)
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Contribution to 2016 Adjusted Diluted EPSAdjusted Diluted EPS
Footnote: Growth Rates = Growth vs. Prior Year Period
Key P&L Line Items (Adjusted)Key P&L Line Items (Adjusted)
Q4:16 ∆ vs.Q4:15 2016 ∆ vs.
2015
Product Gross Margin 96.4% ↑20 bps 96.4% ↑60 bps
R&D expenses% of revenue
$673M22.6% ↓270 bps $2,508M
22.3% ↑20 bps
SG&A expenses% of revenue
$534M17.9% ↓290 bps $2,139M
19.0% ↓270 bps
Operating Margin 56.0% ↑590 bps 55.0% ↑300 bps
Effective Tax Rate 14.5% ↓40 bps 15.7% ↑50 bps
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Cash and Marketable SecuritiesCash and Marketable Securities
Cash flow from operations was approximately $3,976M during 2016
Invested $1.7B in acquisitions and new collaborations in 2016
In 2016, purchased $2.16B of shares– $4.73B remaining under existing stock repurchase program
(in Billions) 12/31/16 12/31/15
Cash and Marketable Securities $7.97 $6.55
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Full-Year 2017 Financial OutlookFull-Year 2017 Financial Outlook
2017 Guidance ∆ vs.2016
Total Revenue $13.0B-$13.4B ↑ 18%1
REVLIMID® Net Sales $8.0B-$8.3B ↑ 17%1
POMALYST®/IMNOVID® Net Sales ~$1.6B ↑ ~22%
OTEZLA® Net Sales $1.5B-$1.7B ↑ 57%1
ABRAXANE® Net Sales ~$1.0B ↑ ~3%
Adjusted Diluted EPS $7.10-$7.25 ↑ ~21%1
Adjusted Operating Margin ~56.5% ↑ ~150 bps
Weighted Average Diluted Shares ~815M ↑ ~12M2
1. Using mid-point of the range2. Reflects accounting standard change effective 1/1/2017 which eliminates a favorable adjustment currently provided in diluted share count under existing
accounting guidance14
Michael PehlPresident, Hematology & Oncology
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Q4 2016 and 2016 Hematology & Oncology Franchise ResultsQ4 2016 and 2016 Hematology & Oncology Franchise Results
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Strong Net Product Sales and Operating Momentum into 2017− Q4:16 net sales growth of +13% Y/Y; 2016 +17%− Sales performance driven by strong demand across brands and geographies− POMALYST®/IMNOVID® blockbuster status achieved with 2016 sales of over $1B
2017 Growth Drivers On-Track− Ongoing REVLIMID® NDMM non-SCT launch and increasing use of triplets driving share
and duration around the globe− Significant opportunity from expected regulatory decision for the use of REVLIMID® as
maintenance therapy post-ASCT− Expected U.S. regulatory decision for daratumumab in combination with POMALYST®
− Expected U.S. regulatory decision for enasidenib in IDH2 mutant rrAML− Ph III data on REVLIMID® in indolent lymphoma and ABRAXANE® in adjuvant PanC
Advancement of Transformational Pipeline− 11 pivotal programs with in-line brands and new assets− Data for CC-122, CC-486, durvalumab, marizomib and demcizumab expected in 2017− Opportunity to initiate more than 10 additional pivotal programs with later-stage pipeline
Current Results & Potential Future Growth Drivers
Q4:16 and 2016 REVLIMID® Sales Summary Q4:16 and 2016 REVLIMID® Sales Summary
• Q4:16 sales $1,808M; +16% Y/Y, -4% Q/Q• 2016 sales $6.97B; +20% Y/Y• Ongoing NDMM highly successful launch
– REVLIMID® NDMM NSCT reimbursed in 20 countries– Reimbursement for NDMM NSCT in France expected in Q1:17
• 2017 growth drivers U.S. regulatory decision for maintenance post-ASCT expected in
Q1:17; EU regulatory decision expected in H1:17 Strong momentum for increased duration of treatment and
adoption of continuous treatment around the world
• Potential future growth drivers advancing– Ph III RELEVANCE and AUGMENT® data expected by YE:17– Regulatory submission for RVd in 1st line transplant and non-
transplant candidates planned– Complete enrollment in Ph III ROBUST® trial with REVLIMID® in
1st line DLBCL with ABC-subtype
$997 $1,080 $1,153 $1,187
$577 $621
$738 $621
Q1:16 Q2:16 Q3:16 Q4:16
US ROW
$1,574$1,701
$1,891 $1,808
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Sales ($M)
Current Results & Potential Future Growth Drivers
Q4:16 and 2016 POMALYST®/IMNOVID® Sales SummaryQ4:16 and 2016 POMALYST®/IMNOVID® Sales Summary
$171 $185 $203 $219
$103 $133
$138 $159
Q1:16 Q2:16 Q3:16 Q4:16
US ROW
$274
$318$341
$378
• Q4:16 sales $378M; +29% Y/Y, +11% Q/Q
• 2016 sales $1,311M; +33% Y/Y
• Successful global launch of POMALYST®/IMNOVID® continues – Global demand continues to grow from market share and duration– U.S. POMALYST® leading 3rd line+ share– EU IMNOVID® leading market share in 4th line+– POMALYST® has leading market share in 3rd line+ in Japan
• 2017 growth drivers Duration and market share trends increasing FDA regulatory decision for daratumumab/POMALYST®
expected in Q2:17• Potential future growth drivers
POMALYST®/IMNOVID® combinations with other novel agents advancing
Complete enrollment in Ph III OPTIMISMM® trial with POMALYST® in 2nd line+ MM
Sales ($M)
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Q4:16 and 2016 ABRAXANE® Sales SummaryQ4:16 and 2016 ABRAXANE® Sales Summary
$144 $175
$144 $171
$81
$74 $89
$95
Q1:16 Q2:16 Q3:16 Q4:16
US ROW
$225$249
$233
$266
Sales ($M)
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Current Results & Potential Future Growth Drivers
• Q4:16 sales $266M; -1% Y/Y, +14% Q/Q• 2016 sales $973M; +1% Y/Y• 2017 growth drivers
Maintain leadership in first-line metastatic pancreatic cancer in U.S.
Continue uptake in metastatic pancreatic cancer and metastatic breast cancer in EU
• Potential future growth driversPh III apact® data for ABRAXANE® in adjuvant
PanC by YE:17Advancing I/O strategy in NSCLC, TNBCOngoing trials in support of potential label
expansions in PanC, lung and breast cancer
Advancing a Transformative Hematology & Oncology PipelineAdvancing a Transformative Hematology & Oncology Pipeline
Celgene has an exclusive option to license Demcizumab, JTX-2011, LYC-55716, LYC-30937, OMP-131R10, OMP-305B83, and TIGIT
REVLIMID®
Del 5q MDS
VIDAZA®
MDS, AML
EnasidenibIDH2 AML
LuspaterceptMDS, Beta-thalassemia
CC-486 MDS, AML
DurvalumabMDS, AML
CC-90002AML
CC-90009AML
PNK-007AML
MyeloidDisease
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MarizomibGBM
DemcizumabPanC, NSCLC
CC-486NSCLC, mBC
CC-122HCC
CC-90002Solid TumorsCC-90011
Solid Tumors
ABRAXANE®
PanC, NSCLC, mBC
AG-881Glioma
SolidTumors
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TIGITSolid Tumors
OMP-305B83Solid Tumors
OMP-131R10Solid Tumors
LYC-55716Solid Tumors
JTX-2011Solid Tumors
MarketPh I
L E G E N D
REVLIMID®
MCL
ISTODAX®
PTCL, CTCL
REVLIMID®
NHLCC-122NHL, CLL
JCAR017NHL
DurvalumabNHL, CLL
CC-486NHL
Lymphoma& Leukemia
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REVLIMID®
NDMM, RRMM
POMALYST®
RRMM
THALOMID®
NDMM, RRMM
CC-122RRMM
CC-220RRMM Durvalumab
NDMM, RRMM
bb2121RRMM
PNK-007RRMM
MarizomibRRMM
ACY-241RRMM
CC-486RRMM
MultipleMyeloma
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20
MarketPh I
L E G E N D
REVLIMID®
NDMM, RRMM
POMALYST®
RRMM
THALOMID®
NDMM, RRMM
CC-122RRMM
CC-220RRMM Durvalumab
NDMM, RRMM
bb2121RRMM
PNK-007RRMM
MarizomibRRMM
ACY-241RRMM
CC-486RRMM
MultipleMyeloma
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Advancing a Transformative Hematology & Oncology PipelineAdvancing a Transformative Hematology & Oncology Pipeline
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bb2121Targeting pivotal program initiation in RRMM in 2017
durvalumabBroad Ph I/III FUSIONTM program in MDS, AML, NHL, CLL and MM underway; Ph III enabling data expected in 2017
MarketPh I
L E G E N D Data on CC-122 and CC-220 expected in 2017; INDs for EM901 and CC-95821 by YE:17
New Assets
MarketPh I
L E G E N D
REVLIMID®
MCL
ISTODAX®
PTCL, CTCL
REVLIMID®
NHLCC-122NHL, CLL
JCAR017NHL
DurvalumabNHL, CLL
CC-486NHL
Lymphoma& Leukemia
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Advancing a Transformative Hematology & Oncology PipelineAdvancing a Transformative Hematology & Oncology Pipeline
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REVLIMID® Ph III RELEVANCE and AUGMENT® data expected by YE:17
CC-122Ph I/II trials underway: NHL, CLL and MM; Pivotal program initiation expected in 2017
MarketPh I
L E G E N D Initiate pivotal program in 2017; Breakthrough and PRIME designation grantedJCAR017
Advancing a Transformative Hematology & Oncology PipelineAdvancing a Transformative Hematology & Oncology Pipeline
REVLIMID®
Del 5q MDS
VIDAZA®
MDS, AML
EnasidenibIDH2 AML
LuspaterceptMDS, Beta-thalassemia
CC-486 MDS, AML
DurvalumabMDS, AML
CC-90002AML
CC-90009AML
PNK-007AML
MyeloidDisease
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MarketPh I
L E G E N D
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Enasidenib U.S. regulatory decision for IDH2 mutant rrAML expected in H2:17
LuspaterceptPh III trials in RS+ MDS and beta-thalassemia underway; Trials in broader segments and myelofibrosis expected to begin in 2017
CC-486Ph III trials MDS and AML enrolling; AML trial expected to complete enrollment in 2017; Additional pivotal opportunities in MDS and AMLMarketPh I
L E G E N D
Advancing a Transformative Hematology & Oncology PipelineAdvancing a Transformative Hematology & Oncology Pipeline
Celgene has an exclusive option to license Demcizumab, JTX-2011, LYC-55716, LYC-30937, OMP-131R10, OMP-305B83, and TIGIT
MarizomibGBM
DemcizumabPanC, NSCLC
CC-486NSCLC, mBC
CC-122HCC
CC-90002Solid TumorsCC-90011
Solid Tumors
ABRAXANE®
PanC, NSCLC, mBC
AG-881Glioma
SolidTumors
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TIGITSolid Tumors
OMP-305B83Solid Tumors
OMP-131R10Solid Tumors
LYC-55716Solid Tumors
JTX-2011Solid Tumors
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ABRAXANE® Ph III apact® data for ABRAXANE® in adjuvant PanC by YE:17
Marizomib Targeting pivotal program initiation in GBM in 2017
MarketPh I
L E G E N D Demcizumab Ph II PanC combo trial with ABRAXANE®
underway; Data expected in H1:17
2017 Hematology and Oncology Franchise Outlook2017 Hematology and Oncology Franchise Outlook
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Strong Results from Key Products Expected in 2017− 2017 REVLIMID® net product sales guidance of $8B-$8.3B− 2017 POMALYST®/IMNOVID® net product sales guidance of ~$1.6B− 2017 ABRAXANE® net product sales guidance of ~$1B
Regulatory Catalysts to Expand Portfolio− U.S. regulatory decision for use of REVLIMID® as maintenance therapy post-ASCT
expected in Q1:17; EU regulatory decision in H1:17− U.S. regulatory decision for enasidenib in IDH2 mutant rrAML expected in H2:17− Plan to submit RVd in NDMM by YE:17
Significant Progress in Developing Mid- and Late-Stage Pipeline− Significant additional lifecycle opportunities for luspatercept, CC-486 and enasidenib− Potential to advance marizomib, bb2121, JCAR017, CC-122, durvalumab and
demcizumab into pivotal studies
Scott SmithPresident, Global I&I
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Q4 2016 and Full-Year 2016 I&I Franchise ResultsQ4 2016 and Full-Year 2016 I&I Franchise Results
Accelerating Sales Performance and Momentum for OTEZLA®
– Achieved blockbuster status; Exceeding $1B in sales in second full year on market– Revenue continued to accelerate through Q4:16– Strengthening position in PSOR & PsA; Market share & persistency continue to improve– Expanding U.S. biologic-step-free access position
Expanded OTEZLA® Global Footprint– Approved in Japan ahead of schedule– Preparing for launch in several major European markets and Japan– Advancing regulatory submissions in Eastern Europe, Asia and Latin America
Advancing Development of I&I Pipeline– Ozanimod Ph III program in MS fully enrolled; U.S. pre-registration activities ongoing– Executing pivotal programs for ozanimod in UC, and GED-0301 in Crohn’s disease– CC-220 Ph IIa results support advancement into randomized Ph IIb for SLE
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• Q4:16 sales $305M, +67% Y/Y, +11% Q/Q• 2016 sales $1,017M, +116% Y/Y• Continued growth of OTEZLA® as adoption
and treatment duration continue to improve
• Preparing for full international launch in 2017, including key EU markets
• Development of new indications to expand OTEZLA® clinical profile
OTEZLA®: A Blockbuster for Immune-Inflammatory DiseasesOTEZLA®: A Blockbuster for Immune-Inflammatory Diseases
Current Results & Potential Future Growth Drivers
$175$217
$245 $268
$21
$25$30
$37
Q1:16 Q2:16 Q3:16 Q4:16US ROW
$196
$242$275
$305
Net Sales ($M)
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OTEZLA® Competing for Market Leadership PositionOTEZLA® Competing for Market Leadership Position
• Directly connecting with plaque psoriasis patients through DTC advertising
• Growing prescriber base (trialists, brand awareness)
• Gains in persistence and compliance
• Expanded U.S. access footprint to cover an additional 70-100 million commercial patient lives0%
5%
10%
15%
20%
25%
30%
35%
40%
ENBREL
STELARA
HUMIRA
COSENTYX
OTEZLA
Note: Symphony data is subject to restatement Source: Symphony Prescriber-level data through week ending 9 December 2016
Success Drivers
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Psoriasis Market Share
Expanding OTEZLA® UtilizationExpanding OTEZLA® Utilization
Robust Life Cycle Plan
EventExpected
Timing
Submit sNDAOnce daily formulation
Initiate Ph III TrialScalp Psoriasis
Ph III DataBehçet’s Disease
Ph II DataUlcerative Colitis
2017
2017
2017
2017
2018
Initiate Ph III TrialAnkylosing Spondylitis
Growing Geographic Footprint
France: Secured “No Initial Prescription at Hospital” status, enabling broader utilization
United Kingdom: Positive NICE decisions Psoriasis commercial sales initiated December 2016 PsA sales to begin in January 2017
Japan: OTEZLA® approved on 20 December 2016; represents first oral psoriasis treatment approved in Japan in 25 years; launch expected Q1:17
Italy: Positive decision for PsA , launch began in January 2017; psoriasis decision targeted H2:17
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Advancing Ozanimod Development Towards ApprovalAdvancing Ozanimod Development Towards Approval
MS Program Updates
Ozanimod potentially best-in-class next-generation S1P modulator
Ph III program for RMS fully enrolled –SPA with FDA
Ph III data expected in H1:17; planning NDA submission YE:17
Primary endpoint – Annualized Relapse Rate (ARR)
Key secondary endpoints include: New/enlarging T2 brain MRI
lesions Number of GdE brain MRI lesions Onset of disability progression
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Week 104
Randomization 1:1:1
Screening
Ozanimod 1 mg (N=400)
Ozanimod 0.5 mg (N=400)
Avonex (N=400)
Week 1
Week 52
Randomization 1:1:1
Screening
Phase III Trials
Ozanimod 1 mg (N=400)
Ozanimod 0.5 mg (N=400)
Avonex (N=400)
Week 1Variable Tx Duration
Longer-term MS Data Enhances Ozanimod Clinical ProfileLonger-term MS Data Enhances Ozanimod Clinical Profile
Cross-Trial Comparison by Annualized Relapsed Rate (ARR)12-Year Ph II Data
Safety: Most commonly reported AEs were minor
infections and headache
No noteworthy treatment-related occurrences of cardiac, pulmonary, malignancy adverse events or serious opportunistic infections
0.51
0.22 0.18
Placebo (N=88)Ozanimod 1 mg (N=83) PBO controlled period (24 weeks)Ozanimod 1 mg (N=81) Blinded extension (2 years)
Annualized Relapse Rate:*
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1 Annualized Relapse Rate (ARR) values specific to individual product trials* Unadjusted
Source: Celgene data on file* Unadjusted
0.900.86
0.67
0.60
0.320.26
0.22 0.22 0.22 0.210.18 0.18 0.18 0.17 0.16
2017 I&I Franchise Outlook2017 I&I Franchise Outlook
Maximizing the OTEZLA® Opportunity Continue to accelerate strong growth in the U.S. and early launch markets Advance launch preparations for multiple major European markets and Japan File sNDA for QD formulation Accelerate development of lifecycle management opportunities
Building Capabilities in Neuroscience− Ph III ozanimod results in RMS− Submit ozanimod U.S. NDA in RMS
Moving Key Programs Forward in IBD Advance ozanimod Ph III trial in ulcerative colitis Accelerate enrollment of GED-0301 pivotal trials in CD, enhanced by positive Ph Ib & II trial results Complete GED-0301 Ph II trial in UC
Advancing Development of the I&I Pipeline− Initiate CC-220 into a randomized Ph IIb for SLE− Initiate CC-90001 idiopathic pulmonary fibrosis Ph II trial
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Jackie FousePresident & Chief Operating Officer
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9
TIGIT JTX-2011 CC-90002CC-9000113
CC-95821
2020
Entering a Pivotal Inflection Point with Multiple Value Drivers to Sustain Growth from 2020-2030Entering a Pivotal Inflection Point with Multiple Value Drivers to Sustain Growth from 2020-2030
>$21B Revenue
2020
$13-13.4BRevenue
2017
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19
9
TIGIT JTX-2011 CC-90002CC-9000113
CC-95821
2020
Entering a Pivotal Inflection Point with Multiple Value Drivers to Sustain Growth from 2020-2030Entering a Pivotal Inflection Point with Multiple Value Drivers to Sustain Growth from 2020-2030
>$21B revenue
2020
$13-13.4Brevenue
2017
Key Catalysts in 2017Hematology and Oncology− Regulatory decision on REVLIMID® in maintenance post- ASCT (H1)− Submit sNDA for RVd in NDMM (H2)− U.S. regulatory decision on enasidenib in IDH2 mutant rrAML (H2)− Ph III data for REVLIMID® in FL (RELEVANCE & AUGMENT®) and ABRAXANE® (apact®) (YE)− POC data for CC-486 in mBC, demcizumab in NSCLC and PanC and durvalumab in RRMM
and 1st Line MDS and AML (Throughout 2017)Inflammation & Immunology− Ozanimod in RMS top-line Ph III data (H1)− Submit sNDA for OTEZLA® once-daily formulation (H2)− Submit NDA for ozanimod in RMS (YE) − POC data for OTEZLA® in UC, GED-0301 in UC and ozanimod in CD (Throughout 2017)
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Q4 and Full-Year 2016 Conference Call
January 26, 2017
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Reconciliation Tables
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Reconciliation TablesReconciliation Tables
Use of Non-GAAP Financial Measures
In addition to financial information prepared in accordance with U.S. GAAP, this document also contains certain non-GAAP financial measures based on management’s view of performance including:
Adjusted research and development expenseAdjusted selling, general and administrative expenseAdjusted operating marginAdjusted net incomeAdjusted earnings per share
Management uses such measures internally for planning and forecasting purposes and to measure the performance of the Company. We believe these adjusted financial measures provide useful and meaningful information to us and investors because they enhance investors’ understanding of the continuing operating performance of our business and facilitate the comparison of performance between past and future periods. These adjusted financial measures are non-GAAP measures and should be considered in addition to, but not as a substitute for, the information prepared in accordance with U.S. GAAP. When preparing these supplemental non-GAAP financial measures we typically exclude certain GAAP items that management does not consider to be normal, recurring, cash operating expenses but that may not meet the definition of unusual or non-recurring items. Other companies may define these measures in different ways. The following categories of items are excluded from adjusted financial results:
Acquisition and Divestiture-Related Costs: We exclude the impact of certain amounts recorded in connection with business combinations and divestitures from our adjusted financial results that are either non-cash or not normal, recurring operating expenses due to their nature, variability of amounts, and lack of predictability as to occurrence and/or timing. These amounts may include non-cash items such as the amortization of acquired intangible assets, amortization of purchase accounting adjustments to inventories, intangible asset impairment charges and expense or income related to changes in the estimated fair value measurement of contingent consideration. We also exclude transaction and certain other cash costs associated with business acquisitions and divestitures that are not normal recurring operating expenses, including severance costs which are not part of a formal restructuring program.
Reconciliation TablesReconciliation Tables
Share-based Compensation Expense: We exclude share-based compensation from our adjusted financial results because share-based compensation expense, which is non-cash, fluctuates from period to period based on factors that are not within our control, such as our stock price on the dates share-based grants are issued.
Collaboration-related Upfront Expenses: We exclude collaboration-related upfront expenses from our adjusted financial results because we do not consider them to be normal, recurring operating expenses due to their nature, variability of amounts, and lack of predictability as to occurrence and/or timing. Upfront payments to collaboration partners are made at the commencement of a relationship anticipated to continue for a multi-year period and provide us with intellectual property rights, option rights and other rights with respect to particular programs. The variability of amounts and lack of predictability of collaboration-related upfront expenses makes the identification of trends in our ongoing research and development activities more difficult. We believe the presentation of adjusted research and development, which does not include collaboration-related upfront expenses, provides useful and meaningful information about our ongoing research and development activities by enhancing investors’ understanding of our normal, recurring operating research and development expenses and facilitates comparisons between periods and with respect to projected performance. All expenses incurred subsequent to the initiation of the collaboration arrangement, such as research and development cost-sharing expenses/reimbursements and milestone payments up to the point of regulatory approval are considered to be normal, recurring operating expenses and are included in our adjusted financial results.
Research and Development Asset Acquisition Expense: We exclude costs associated with acquiring rights to pre-commercial compounds because we do not consider such costs to be normal, recurring operating expenses due to their nature, variability of amounts, and lack of predictability as to occurrence and/or timing. Research and development asset acquisition expenses includes expenses to acquire rights to pre-commercial compounds from a collaboration partner when there will be no further participation from the collaboration partner or other parties. The variability of amounts and lack of predictability of research and development asset acquisition expenses makes the identification of trends in our ongoing research and development activities more difficult. We believe the presentation of adjusted research and development, which does not include research and development asset acquisition expenses, provides useful and meaningful information about our ongoing research and development activities by enhancing investors’ understanding of our normal, recurring operating research and development expenses and facilitates comparisons between periods and with respect to projected performance.
Restructuring Costs: We exclude costs associated with restructuring initiatives from our adjusted financial results. These costs include amounts associated with facilities to be closed, employee separation costs and costs to move operations from one location to another. We do not frequently undertake restructuring initiatives and therefore do not consider such costs to be normal, recurring operating expenses.
Reconciliation TablesReconciliation Tables
Certain Other Items: We exclude certain other significant items that may occur occasionally and are not normal, recurring, cash operating expenses from our adjusted financial results. Such items are evaluated on an individual basis based on both the quantitative and the qualitative aspect of their nature and generally represent items that, either as a result of their nature or magnitude, we would not anticipate occurring as part of our normal business on a regular basis. While not all-inclusive, examples of certain other significant items excluded from adjusted financial results would be: expenses for significant fair value adjustments to equity investments, significant litigation-related loss contingency accruals and expenses to settle other disputed matters.
Estimated Tax Impact From Above Adjustments: We exclude the net income tax impact of the non-tax adjustments described above from our adjusted financial results. The net income tax impact of the non-tax adjustments includes the impact on both current and deferred income taxes and is based on the taxability of the adjustment under local tax law and the statutory tax rate in the tax jurisdiction where the adjustment was incurred.
Non-Operating Tax Adjustments: We exclude the net income tax impact of certain other significant income tax items, which are not associated with our normal, recurring operations (“Non-Operating Tax Items”), from our adjusted financial results. Non-Operating Tax Items include items which may occur occasionally and are not normal, recurring operating expenses (or benefits), including adjustments related to acquisitions, divestitures, collaborations, certain adjustments to the amount of unrecognized tax benefits related to prior year tax positions, and other similar items.
See the attached Reconciliations of GAAP to Adjusted Net Income for explanations of the amounts excluded and included to arrive at the adjusted measures for the three- and twelve-month periods ended December 31, 2016 and 2015, and for the projected amounts for the twelve-month period ending December 31, 2017.
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Appendix
CHANGING THE COURSE OFHUMAN HEALTH THROUGH BOLD
PURSUITS IN SCIENCE
CHANGING THE COURSE OFHUMAN HEALTH THROUGH BOLD
PURSUITS IN SCIENCE
2017 Milestones2017 Milestones
Financial Performance Total Revenue $13.0B-$13.4B Net REVLIMID® sales $8.0B-$8.3B Net POMALYST® sales ~$1.6B Net OTEZLA® sales $1.5B-$1.7B Net ABRAXANE® sales ~$1.0B Adj. operating margin ~+150bps Adj. Diluted EPS $7.10-$7.25
Clinical Data Ph III apact® – ABRAXANE® in adjuvant PanC Ph III RELEVANCE – REVLIMID® in 1st line FL Ph III AUGMENT® – REVLIMID® in RR FL Ph III Ozanimod in multiple sclerosis (SUNBEAM and RADIANCE) Ph II CC-486 with fulvestrant in ER+ HER2- mBC Ph II Demcizumab in NSCLC (DENALI) Ph II Demcizumab in PanC (YOSEMITE) Ph II OTEZLA® in UC Ph II GED-0301 in UC Ph II STEPSTONE - Ozanimod in CD Ph I/II Durvalumab in RRMM and 1st Line MDS and AML
Trial Enrollment Complete enrollment in Ph III CD-002 – GED-0301 in CD Complete enrollment in Ph III OPTIMISSM® trial
– POMALYST® in 2nd Line MM Complete enrollment in Ph III ROBUST® - REVLIMID® in DLBCL Complete enrollment in Ph III QUAZAR® - CC-486 in AML Complete enrollment in Ph III MEDALISTTM – Luspatercept in MDS Complete enrollment in Ph III BELIEVETM – Luspatercept in beta-thalassemia Complete enrollment in Ph III RELIEF® – OTEZLA® in Behçet’s Complete enrollment in Ph III TRUE NORTH – Ozanimod in UC
Regulatory Submissions/Decisions FDA decision of REVLIMID® in post-ASCT maintenance EU decision of REVLIMID® in post-ASCT maintenance Submit sNDA for RVd in NDMM FDA decision on Enasidenib in IDH2-mutated AML Submit sNDA for OTEZLA® once-daily formulation Submit NDA for Ozanimod in RMS
Trial Initiations Initiate pivotal trial with CC-122 in NHL Initiate pivotal trial with bb2121 in RRMM Initiate pivotal trial with JCAR017 in NHL Initiate Ph III trial with OTEZLA® in scalp PSOR Initiate Ph III trial with OTEZLA® in AS Initiate Ph III trial with RPC4046 in EoE Initiate pivotal trial with Marizomib in GBM Initiate Ph II trial with Luspatercept in myelofibrosis
R&ED File at least 8 IND’s
48
Celgene PipelineCelgene Pipeline
49
Celgene PipelineCelgene Pipeline
50
Celgene PipelineCelgene Pipeline
51
Celgene PipelineCelgene Pipeline
52
REVLIMID® Multiple Myeloma Late Stage ProgramsREVLIMID® Multiple Myeloma Late Stage Programs
Patient Population Maintenance Post-VMP induction
Trial NameMM-026ARUMM
Phase III
Target Enrollment 350
Design
2:1 randomizationInduction with Melphalan/prednisone/bortezomib (VMP)
for 6-9 cyclesArm A: REVLIMID® (10mg) d 1-21
for 28-day cycleArm B: Placebo d 1-21 for 28-day cycle
Primary Endpoint Progression Free Survival
Status Trial enrolling
53
REVLIMID® Multiple Myeloma Late Stage ProgramsREVLIMID® Multiple Myeloma Late Stage Programs
Patient Population Induction and Maintenance in ASCT EligibleTrial Name MYELOMA XI
Phase III
Target Enrollment 3,970
Design
Arm A: Cyclophosphamide (500mg) d1,8,15; THALOMID® (100mg d1-21 then 200mg daily), Dexamethasone (40mg) d1-4, 12-15 for minimum of 4 21-day cycle
Arm B: REVLIMID® (25mg) d 1-21, Cyclophosphamde (500mg) d1,8, dexamethasone (40mg) d1-4,12-15 for minimum of 4 28-day cycles
Arm C: Cyclophosphamde (500mg) d1,8, Carfilzomib (20 mg/m2) d 1,2 cycle 1 then (36 mg/m2) d 1,2,8,9,15,16, REVLIMID® (25mg) d1-21, Dexamethasone (40mg) d 1-4,8,9,15,16 for 4 21-day cycles
Patients with no change, progressive disease, PR or MR randomized toArm A: Bortezomib (1.3mg/m2) d 1,4,8,11, Cyclophosphamide (500mg) d 1,8,15, Dexamethasone (20mg) d
1,2,4,5,8,9,11,12 for max of 8 21-day cyclesArm B: No treatmentAll patients go to SCT
After SCT randomization to:Arm A: REVLIMID® (10mg) d 1-21 for 28-day cycle to disease progression
Arm B: No maintenance
Primary Endpoint Overall Survival and Progression Free Survival
Status Interim data presented at ASH 2016
54
POMALYST®/IMNOVID® Multiple Myeloma Late Stage ProgramsPOMALYST®/IMNOVID® Multiple Myeloma Late Stage Programs
Patient Population RRMM
Trial NameMM-007
OPTIMISMM®
Phase III
Target Enrollment 782
Design
Arm A: POMALYST®/IMNOVID® (4mg), bortezomib (1.3 mg/m2 IV) and low-dose dexamethasone to disease
progressionArm B: Bortezomib (1.3 mg/m2 IV) and low-dose
dexamethasone to disease progression
Primary Endpoint Progression Free Survival
Status Trial enrolling; Data in 2018E
55
MDS/AML/MF Late Stage ProgramsMDS/AML/MF Late Stage Programs
Patient Population Low risk/INT-1 transfusion-dependent MDS Post induction AML Maintenance
MoleculeCC-486
(Oral Azacitidine)CC-486
(oral azacitidine)
Trial Name AZA-MDS-003 CC-486-AML-001
Phase III III
Target Enrollment 386 460
DesignArm A: CC-486 (150mg or 200mg)
Arm B: PlaceboArm A: CC-486 (150mg or 200mg)
Arm B: Best Supportive Care
Primary Endpoint RBC-transfusion independence for more than 12 weeks Overall Survival
Status Trial enrolling Trial enrolling
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MDS/AML/MF Late Stage ProgramsMDS/AML/MF Late Stage Programs
Patient Population Anemia in to Very Low-, Low-, or Intermediate-Risk MDS
Red Blood Cell Transfusion Dependent Beta-Thalassemia
Molecule Luspatercept Luspatercept
Trial Name MEDALISTTM BELIEVETM
Phase III III
Target Enrollment 210 300
DesignArm A: Luspatercept (Starting dose of 1.0 mg/kg
subcutaneous injection every 3 weeksArm B: Placebo (Subcutaneous injection every 3
weeks)
Arm A: Luspatercept (1mg/kg plus Best Supportive Care
Arm B: Placebo plus Best Supportive Care
Primary Endpoint Red Blood Cell Transfusion Independence (RBC-TI) ≥ 8 weeks
Proportion of subjects with hematological improvement from Week 13 to Week 24 compared
to 12-week prior to randomizationHematological improvement from Week 13 to Week
24 compared to the 12-week.
Status Trial enrolling Trial enrolling
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MDS/AML/MF Late Stage ProgramsMDS/AML/MF Late Stage Programs
Patient Population IDH2 Mutant AML
Molecule Enasidenib (AG-221, CC-90007)
Trial Name IDHENTIFYTM
Phase III
Target Enrollment 280
Design Arm A: Enasidenib (100 mg daily , 28-day cycle) + Best supportive care
Arm B: Best supportive care
Primary Endpoint Overall survival
Status Trial enrolling
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REVLIMID® Lymphoma Late Stage ProgramsREVLIMID® Lymphoma Late Stage Programs
Patient Population Relapsed or Refractory Follicular Lymphoma
Newly Diagnosed Follicular Lymphoma
Untreated Activated B-Cell DLBCL
Trial NameAUGMENTTM
NHL-007RELEVANCE®
ROBUST®
DLC-002
Phase III III III
Target Enrollment 350 1,000 560
Design
Arm A: REVLIMID® (10-20mg) D1-21 / Rituximab 375 mg/m2 weekly for cycle 1 then D 1 of cycles 2-5 for 5 28-day
cyclesArm B: Placebo D1-21, / Rituximab 375
mg/m2 weekly for cycle 1 then D 1 of cycles 2-5 for 5 28-day cycles
Arm A: REVLIMID® (starting dose 20mg)
D2-22 for up to 18 28-day cycles and Rituximab (starting dose 375 mg/m2)
weekly for up to 12 28-day cyclesArm B: Physician’s choice of rituximab-
CHOP, rituximab-CVP or rituximab-bendamustine
Arm a: REVLIMID® (15mg) D1-14/+ R-CHOP21 for 6 21-day cycles
Arm B: Placebo + R-CHOP21 for 6 cycles
Primary Endpoint Progression Free Survival Complete Response Rate and Progression Free Survival Progression Free Survival
StatusTrial enrollingData in 2017E
Enrollment completeData in 2017E
Trial enrollingData in 2019E
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REVLIMID® Lymphoma Late Stage ProgramsREVLIMID® Lymphoma Late Stage Programs
Patient Population Relapsed or Refractory Indolent Lymphoma
Trial NameMAGNIFYTM
NHL-008
Phase III
Target Enrollment 500
Design
Arm A: REVLIMID® (10-20mg) D1-21 / Rituximab 375 mg/m2 weekly for cycle 1 then D 1 of cycles 3, 5, 7,9 and 11 for 12 28-day cycles followed by REVLIMID® (10mg) D1-21 / Rituximab 375 mg/m2 D
1 of cycles 13, 15, 17,19, 21, 23, 25, 27 and 29 for 18 28-day cycles followed by REVLIMID® (10mg) D 1-21 until disease progression – 28 day cycle
Arm B: REVLIMID® (10-20mg) D1-21 / Rituximab 375 mg/m2 weekly for cycle 1 then D 1 of cycles 3, 5, 7,9 and 11 for 12 28-day cycles followed by REVLIMID® (10mg) D1-21 / Rituximab 375 mg/m2 D
1 of cycles 13, 15, 17,19, 21, 23, 25, 27 and 29 for 18 28-day cycles
Primary Endpoint Progression Free Survival
StatusTrial enrollingData in 2020E
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ABRAXANE® Solid Tumor Late Stage ProgramsABRAXANE® Solid Tumor Late Stage Programs
Patient Population Maintenance After Induction in Squamous Non-Small Cell Lung Cancer
Adjuvant Therapy in Surgically Resected Pancreatic Cancer
Trial Name NSCL-003PANC-003
apact®
Phase III III
Target Enrollment 540 846
Design
Induction: ABRAXANE® (100 mg/m2) D 1, 8,and 15 / Carboplatin (6 mg min/mL) D 1 for
4 21-day cyclesMaintenance:
Arm A: ABRAXANE® (100 mg/m2) D 1 and 8 plus BSC until disease progression –
21-day cycleArm B: BSC until disease progression
Arm A: ABRAXANE® (125 mg/m2) / Gemcitabine (1000 mg/m2) D 1, 8 and 15 for 6 28-day cycles
Arm B: Gemcitabine (1000 mg/m2) D 1, 8 and 15 for 6 28-day cycles.
Primary Endpoint Progression Free Survival Disease Free Survival
Status Trial enrollingEnrollment complete
Data in 2017E
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ABRAXANE® Solid Tumor Late Stage ProgramsABRAXANE® Solid Tumor Late Stage Programs
Patient Population First Line Stage IIIB / IV Squamous NSCLC
Trial NameNSCL-003
abound.sqm®
Phase III
Target Enrollment 540
Design
Arm A: Induction – ABRAXANE® (100 mg/m2) D 1, 8 and 15 / Carboplatin(6 mg/min/ml) D 1 of a 21-day cycle; Maintenance – ABRAXANE® (100
mg/m) D 1 and 8 of a 21-day cycle or Best supportive careArm B: Induction – ABRAXANE® (100 mg/m2) D 1, 8 and 15 / Carboplatin(6 mg/min/ml) D 1 of a 21-day cycle; Maintenance – Best supportive care
Primary Endpoint Progression Free Survival
StatusTrial enrollingData in 2017E
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I&I Late Stage ProgramsI&I Late Stage Programs
Patient Population Active Behçet’s Disease
Molecule OTEZLA®
Trial NameBCT-002RELIEFTM
Phase III
Target Enrollment 204
DesignArm A; Placebo for 12 weeks followed by 30mg
OTEZLA® twice daily for 52-weeksArm B: 30mg OTEZLA® twice daily for 64 weeks
Primary Endpoint Area under the curve (AUC) for the number of oral ulcers from baseline through week 12
StatusTrial enrollingData in 2017E
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I&I Late Stage ProgramsI&I Late Stage Programs
Patient Population Active Crohn’s Disease Moderate to Severe Ulcerative Colitis
Molecule GED-0301 Ozanimod
Trial Name CD-002 TRUE NORTH
Phase III III
Target Enrollment 1,064 900
Design
Arm A: GED-301 160mg daily 12 weeks/GED-301 40mg daily 40 weeks
Arm B: GED-301 160mg daily 12 weeks/GED-301 40mg daily 4 weeks on/4 weeks off 40 weeks
Arm C: GED-301 160mg daily 12 weeks/GED-301 160mg daily 4 weeks on/4 weeks off 40 weeks
Arm A: Ozanimod 1mg (daily for induction and maintenance)
Arm B: Placebo (induction and maintenance)
Primary Endpoint Clinical remission defined by Crohn's Disease Activity Index (CDAI)
Clinical remission assessed by Mayo component sub-scores at week 10
Clinical remission assessed by Mayo component sub-scores at week 52
StatusEnrolling
Data in 2018EEnrolling
Data in 2018E
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I&I Late Stage ProgramsI&I Late Stage Programs
Patient Population Relapsing Multiple Sclerosis Relapsing Multiple Sclerosis
Molecule Ozanimod Ozanimod
Trial Name SUNBEAM RADIANCE
Phase III II/III
Target Enrollment 1200 1200
DesignArm A: Ozanimod (0.5mg) daily/placebo IM weeklyArm B: Ozanimod (1mg) daily/placebo IM weekly
Arm C: Oral placebo daily/Beta-interferon IM weekly
Phase IIArm A: Ozanimod (0.5mg) dailyArm B: Ozanimod (1mg) daily
Arm C: Placebo dailyPhase III
Arm A: Ozanimod (0.5mg) daily/placebo IM weeklyArm B: Ozanimod (1mg) daily/placebo IM weekly
Arm C: Oral placebo daily/Beta-interferon IM weekly
Primary Endpoint Annualized relapse rate at month 12 Annualized relapse rate at month 24
StatusEnrollment complete
Data expected in H1:17EEnrollment complete
Data expected in H1:17E
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