Celgene Annual Report 2018

SECURITIES AND EXCHANGE COMMISSION
FORM 10-K
Annual report pursuant to section 13 and 15(d)
Filing Date: 2019-02-26 | Period of Report: 2018-12-31

SEC Accession No. 0000816284-19-000014
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FILER
CELGENE CORP /DE/ Mailing Address Business Address
86 MORRIS AVENUE 86 MORRIS AVENUE
CIK:816284| IRS No.: 222711928 | State of Incorp.:DE | Fiscal Year End: 1231 SUMMIT NJ 07901 SUMMIT NJ 07901
Type: 10-K | Act: 34 | File No.: 001-34912 | Film No.: 19630828 (908)673-9000
SIC: 2834 Pharmaceutical preparations
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark one)
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2018
or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 001-34912
CELGENE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of 22-2711928
incorporation or organization) (I.R.S. Employer Identification No.)
86 Morris Avenue
Summit, New Jersey 07901
(Address of principal executive offices) (Zip Code)
(908) 673-9000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered

Common Stock, par value $.01 per share NASDAQ Global Select Market
Contingent Value Rights NASDAQ Global Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth
company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange
Act.
Large accelerated filer x Accelerated filer o Non-accelerated filer o Smaller reporting company o Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Act). Yes o No x
The aggregate market value of voting stock held by non-affiliates of the registrant on June 30, 2018, the last business day of the registrant's most recently completed second
quarter, was $55,804,979,945 based on the last reported sale price of the registrant's Common Stock on the NASDAQ Global Select Market on that date.
There were 702,164,345 shares of Common Stock outstanding as of February 21, 2019.
Documents Incorporated by Reference
Specified portions of the registrant’s proxy statement, which will be filed with the Commission pursuant to Regulation 14A within 120 days of the end of the fiscal year
ended December 31, 2018 in connection with the registrant’s 2019 Annual Meeting of Stockholders, are incorporated by reference into Part III of this annual report on
Form 10-K.

CELGENE CORPORATION
ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
Item No. Page

Part I
1. Business 1
1A. Risk Factors 16
1B. Unresolved Staff Comments 32
2. Properties 32
3. Legal Proceedings 33
4. Mine Safety Disclosures 33
Part II
5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities 34
6. Selected Financial Data 35
7. Management's Discussion and Analysis of Financial Condition and Results of Operations 36
7A. Quantitative and Qualitative Disclosures About Market Risk 58
8. Financial Statements and Supplementary Data 62
9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 135
9A. Controls and Procedures 135
9B. Other Information 137
Part III
10. Directors, Executive Officers and Corporate Governance 137
11. Executive Compensation 137
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 137
13. Certain Relationships and Related Transactions, and Director Independence 137
14. Principal Accountant Fees and Services 137
Part IV
15. Exhibits, Financial Statement Schedules 138
16. Form 10-K Summary 141
Signatures 142

PART I
ITEM 1. BUSINESS
Celgene Corporation, together with its subsidiaries (collectively “we,” “our,” “us,” “Celgene” or the “Company”), is an integrated global
biopharmaceutical company engaged primarily in the discovery, development and commercialization of innovative therapies for the
treatment of cancer and inflammatory diseases through next-generation solutions in protein homeostasis, immuno-oncology, epigenetics,
immunology and neuro-inflammation. Celgene Corporation was incorporated in the State of Delaware in 1986.
On January 2, 2019, we entered into a definitive merger agreement with Bristol-Myers Squibb Company (Bristol-Myers Squibb) under
which Bristol-Myers Squibb will acquire Celgene in a cash and stock transaction with an equity value of approximately $74 billion, based
on the closing price of Bristol-Myers Squibb shares of $52.43 on January 2, 2019, subject to the terms and conditions set forth therein. The
transaction is subject to approval by Bristol-Myers Squibb and Celgene shareholders and the satisfaction of customary closing conditions
and regulatory approvals. Bristol-Myers Squibb and Celgene expect to complete the transaction in the third quarter of 2019. See Part I,
Item 1A, “Risk Factors,” Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and
Note 22 of the Notes to Consolidated Financial Statements included in this report for additional information regarding the transaction.
Our primary commercial stage products include REVLIMID®, POMALYST®/IMNOVID®, OTEZLA®, ABRAXANE®, and VIDAZA®.
We continue to invest substantially in research and development in support of multiple ongoing proprietary clinical development
programs which support our existing products and pipeline of new product candidates. Our clinical trial activity includes trials across the
disease areas of hematology, oncology, and inflammation and immunology. REVLIMID® is being evaluated in phase III trials covering
a range of hematological malignancies that include lymphomas. In July 2018, the phase III trial (AUGMENTTM) for REVLIMID® in
combination with rituximab (R2), for the treatment of relapsed and/or refractory follicular or marginal zone lymphoma achieved its
primary endpoint. In December 2018, we submitted a U.S. supplemental New Drug Application (NDA) for REVLIMID® in combination
with rituximab in relapsed and/or refractory indolent non-Hodgkin lymphoma (NHL) and in January 2019 we submitted an application
with the European Medicines Agency (EMA) for approval in Europe. Also, within hematological malignancies, POMALYST® is in phase
III and post-approval trials for relapsed and/or refractory multiple myeloma (RRMM). In solid tumors, ABRAXANE® is currently being
investigated in pancreatic cancer, breast and non-small cell lung cancers. In inflammation and immunology in 2018, we submitted a U.S.
supplemental NDA and Japan NDA for OTEZLA® in Behçet’s disease following positive results from the phase III trial (RELIEFTM).
Patients with active Behçet’s disease showed statistically significant reductions in oral ulcers with OTEZLA® when compared to placebo.
Also in 2018, the phase IIIb study (STYLETM) for OTEZLA® in patients with moderate to severe scalp psoriasis showed statistically
significant improvement of the Scalp Physician’s Global Assessment (ScPGA) response compared with placebo. OTEZLA® is also being
evaluated in a phase III trial in pediatric psoriasis (SPROUT®), while continuing to be studied in psoriatic arthritis and plaque psoriasis.
We also have a growing number of potential products in phase III trials or that have completed phase III across multiple diseases. In the
inflammation and immunology therapeutic area, we completed two phase III trials (RADIANCETM and SUNBEAMTM) for ozanimod in
relapsing multiple sclerosis (RMS). Both RADIANCETM and SUNBEAMTM achieved their primary endpoints in reducing the annualized
relapse rate in patients with RMS. Enrollment is currently ongoing for the phase III TRUENORTHTM trial in ulcerative colitis (UC) and
the phase III YELLOWSTONETM trial in Crohn’s Disease (CD). In hematology, we submitted a U.S. NDA for fedratinib for the treatment
of patients with myelofibrosis in January 2019. In June and July 2018, Celgene and Acceleron Pharma, Inc. (Acceleron) announced that
luspatercept achieved all primary and key secondary endpoints in the phase III MEDALISTTM and BELIEVETM trials in patients with
low-to-intermediate risk myelodysplastic syndromes (MDS) and transfusion-dependent beta-thalassemia, respectively. In collaboration
with bluebird bio, the pivotal study (KarMMaTM) evaluating bb2121 in RRMM is ongoing and enrollment was completed in the fourth
quarter. The clinical program evaluating bb2121 in earlier lines of multiple myeloma (MM) is also advancing. In the second quarter of
2018 we initiated the pivotal TRANSCEND WORLD trial evaluating liso-cel (lisocabtagene maraleucel) (JCAR017) in relapsed and/
or refractory diffuse large B-cell lymphoma (DLBCL). Phase III trials are also underway for CC-486 in MDS, acute myeloid leukemia
(AML), and angioimmunoblastic T-Cell lymphoma (AITL). In solid tumors, we are supporting a phase III study of marizomib in newly
diagnosed glioblastoma, sponsored by the European Organization for Research and the Treatment of Cancer (EORTC) in collaboration
with the Canadian Cancer Trials Group (CCTG). In 2018, our partner BeiGene, Ltd. (BeiGene) initiated phase III trials for tislelizumab
(BGB-A317) in 1L hepatocellular carcinoma, 2L/3L hepatocellular carcinoma, and 2L/3L non-small cell lung cancer.
Beyond our phase III programs, we have access to a growing early-to-mid-stage pipeline of novel potential therapies to address significant
unmet medical needs that consists of new product candidates and cell therapies developed in-house, licensed from

1

other companies or able to be optioned from collaboration partners. We believe that continued use of our primary commercial stage
products, participation in research and development collaboration arrangements, depth of our product pipeline, potential regulatory
approvals of new products and new indications for existing products will provide the catalysts for future growth.
Our primary commercial stage products are approved to treat the diseases described below for the major markets of the United States, the
European Union and Japan. Approvals in other international markets are indicated in the aggregate for the disease indication that most
closely represents the majority of the other international approvals.
REVLIMID® (lenalidomide): REVLIMID® is an oral immunomodulatory drug approved in the United States and many international
markets for the following uses:
Disease Geographic Approvals

Multiple myeloma (MM)
MM in combination with dexamethasone, in patients who - United States
have received at least one prior therapy - European Union
- Japan
- Other international markets
MM in combination with dexamethasone for newly - United States
diagnosed patients - Japan
Adult patients with previously untreated multiple - European Union
myeloma who are not eligible for transplant - Other international markets
Monotherapy for the maintenance treatment of patients - United States
with Newly Diagnosed Multiple Myeloma (NDMM) after - European Union
autologous stem cell transplant (ASCT) - Other international markets
Myelodysplastic syndromes (MDS)
Transfusion-dependent anemia due to low- or - United States
intermediate-1-risk MDS associated with a deletion 5q - Other international markets
abnormality with or without additional cytogenetic
abnormalities
Transfusion-dependent anemia due to low- or - European Union
intermediate-1-risk MDS in patients with isolated deletion
5q cytogenetic abnormality when other options are
insufficient or inadequate
MDS with a deletion 5q cytogenetic abnormality. The - Japan
efficacy or safety of REVLIMID® for International
Prognostic Scoring System (IPSS) intermediate-2 or high
risk MDS has not been established.
Mantle cell lymphoma (MCL) in patients whose disease has - United States
relapsed or progressed after two prior therapies, one of which - European Union
included bortezomib - Other international markets
Relapsed or refractory Adult T-cell leukemia/lymphoma - Japan
(ATLL)

POMALYST®/IMNOVID® (pomalidomide)1: POMALYST®/IMNOVID® is a proprietary, distinct, small molecule that is administered
orally and modulates the immune system and other biologically important targets. POMALYST®/IMNOVID® is approved for the
following uses:

MM, in combination with dexamethasone, for patients who - United States
have received at least two prior therapies, including
lenalidomide and a proteasome inhibitor and have
demonstrated disease progression on or within 60 days of
completion of the last therapy
RRMM, in combination with dexamethasone, for adult - European Union
patients who have received at least two prior therapies - Other international markets
including both lenalidomide and bortezomib and have
demonstrated disease progression on the last therapy
RRMM for patients who have received REVLIMID® and - Japan
bortezomib
1 We received regulatory approval for pomalidomide under the trade name POMALYST® in the United States and Japan and under the trade
name IMNOVID® in the European Union.
OTEZLA® (apremilast): OTEZLA® is an oral small-molecule inhibitor of phosphodiesterase 4 (PDE4) specific for cyclic adenosine
monophosphate (cAMP). PDE4 inhibition results in increased intracellular cAMP levels. OTEZLA ® is approved for the following uses:

Psoriatic arthritis
Adult patients with active psoriatic arthritis - United States
- Japan
Adult patients with active psoriatic arthritis who have had - European Union
an inadequate response or who have been intolerant to a
prior disease-modifying antirheumatic drug (DMARD)
therapy
Psoriasis
Patients with moderate to severe plaque psoriasis who are - United States
candidates for phototherapy or systemic therapy - Other international markets
Adult patients with moderate to severe chronic plaque - European Union
psoriasis who failed to respond to or who have a
contraindication to, or are intolerant to other systemic
therapy including cyclosporine, methotrexate or psoralen
and ultraviolet-A light
Adult patients with plaque psoriasis with inadequate - Japan
response to topical therapies

ABRAXANE® (paclitaxel albumin-bound particles for injectable suspension): ABRAXANE® is a solvent-free chemotherapy product
which was developed using our proprietary nab® technology platform. This protein-bound chemotherapy agent combines paclitaxel with
albumin. ABRAXANE® is approved for the following uses:

Breast Cancer
Metastatic breast cancer, after failure of combination - United States
chemotherapy for metastatic disease or relapse within six - Other international markets
months of adjuvant chemotherapy. Prior therapy should
have included an anthracycline unless clinically
contraindicated.
Metastatic breast cancer in adult patients who have failed - European Union
first-line treatment for metastatic disease for whom
standard, anthracycline containing therapy is not indicated
Breast cancer - Japan
Non-Small Cell Lung Cancer (NSCLC)
Locally advanced or metastatic NSCLC, as first-line - United States
treatment in combination with carboplatin, in patients who - European Union
are not candidates for curative surgery or radiation therapy - Other international markets
NSCLC - Japan
Pancreatic Cancer
Metastatic adenocarcinoma of the pancreas, a form of - United States
pancreatic cancer, as first line treatment in combination - European Union
with gemcitabine - Other international markets
Unresectable pancreatic cancer - Japan
Gastric Cancer - Japan
VIDAZA® (azacitidine for injection): VIDAZA® is a pyrimidine nucleoside analog that has been shown to reverse the effects of DNA
hypermethylation and promote subsequent gene re-expression. The U.S. regulatory exclusivity for VIDAZA® expired in May 2011. After
the launch of a generic version of VIDAZA® in the United States by a competitor in September 2013, we experienced a significant
reduction in our U.S. sales of VIDAZA®. In 2013, we contracted with Sandoz AG (Sandoz) to sell a generic version of VIDAZA® in
the United States, which we supply, and we recognize net product sales from our sales to Sandoz. Regulatory exclusivity for VIDAZA®
is expected to continue in Europe through 2019. VIDAZA® is approved in the United States and many international markets for the
following uses:

MDS
All French-American-British (FAB) subtypes - United States
Intermediate-2 and high-risk MDS - European Union
MDS - Japan
Chronic myelomonocytic leukemia with 10% to 29% marrow - European Union
blasts without myeloproliferative disorder - Other international markets
AML with 20% to 30% blasts and multi-lineage dysplasia - European Union
Acute myeloid leukemia with >30% bone marrow blasts - European Union
according to the World Health Organization (WHO)
classification in patients aged 65 years or older who are not
eligible for haematopoietic stem cell transplantation

REVLIMID® and POMALYST® are distributed in the United States primarily through contracted pharmacies under the
REVLIMID® Risk Evaluation and Mitigation Strategy (REMS) and POMALYST REMS® programs, respectively. These are proprietary
risk-management distribution programs tailored specifically to provide for the safe and appropriate distribution and use of REVLIMID®
and POMALYST®. Internationally, REVLIMID® and IMNOVID® are distributed under mandatory risk-management distribution
programs tailored to meet local authorities’ specifications to provide for the product’s safe and appropriate distribution and use. These
programs may vary by country and, depending upon the country and the design of the risk-management

program, the product may be sold through hospitals or retail pharmacies. OTEZLA®, ABRAXANE® and VIDAZA® are distributed
through the more traditional pharmaceutical industry supply chain and are not subject to the same risk-management distribution programs
as REVLIMID® and POMALYST®/IMNOVID®.
PRECLINICAL AND CLINICAL-STAGE PIPELINE
Our preclinical and clinical-stage pipeline of new product candidates includes small molecules, biologics and cell therapies. These
product candidates are at various stages of preclinical and clinical development. Below we describe our significant clinical programs for
new indications for our existing products, as well as new product candidates.
Immune-Inflammatory Diseases: OTEZLA® (apremilast) a novel PDE4 inhibitor, was submitted for approval to the U.S. Food and
Drug Administration (FDA) and the Japanese Pharmaceuticals and Medical Devices Agency (PMDA) for the treatment of oral ulcers
associated with Behçet’s disease, and is being studied in phase III trials for pediatric psoriasis and mild to moderate plaque psoriasis,
phase IIIb trials in scalp psoriasis and moderate to severe genital psoriasis and continues to be studied in phase IV trials in psoriatic
arthritis and plaque psoriasis. Differentiated oral therapies are advancing through mid- to late-stage trials in inflammatory diseases,
including ozanimod, a potential best-in-class S1P receptor modulator in phase III trials in UC and CD. Other potential oral therapies
include iberdomide (CC-220), a CELMoD® in development for systemic lupus erythematosus (SLE) and CC-90001, a JNK inhibitor
in development for idiopathic pulmonary fibrosis. Additionally, we are evaluating RPC4046, a monoclonal antibody against IL-13 in
eosinophilic esophagitis.
A phase Ib trial in psoriasis patients is underway with CC-90006, an injectable PD-1 agonist antibody for autoimmune disorders. In
Inflammation and Immunology, phase I trials were initiated evaluating CC-92252 an IL-2 mutein Fc protein and CC-99677 an MK2
inhibitor.
Myeloid Diseases: In collaboration with Acceleron, we are developing luspatercept for patients with myeloid diseases. In June and
July 2018, Celgene and Acceleron announced that luspatercept achieved all primary and key secondary endpoints in the phase III
MEDALISTTM and BELIEVETM trials in patients with low-to-intermediate risk MDS and transfusion-dependent beta-thalassemia,
respectively. In addition, the phase III COMMANDS™ front-line trial evaluating luspatercept in erythropoiesis-stimulating agent (ESA)-
naïve, very low, low or intermediate risk MDS patients initiated in the third quarter. The phase II BEYONDTM trial in non-transfusion
dependent beta-thalassemia and the phase II trial in myelofibrosis are currently enrolling.
Epigenetics: The current insights into molecular regulation of genetic information (Epigenetics) have the potential to transform human
diseases. We currently market three epigenetic modifiers, VIDAZA®, ISTODAX® and IDHIFA®. We have two phase III trials of CC-486
(oral 5-azacitidine) currently enrolling to evaluate its efficacy in the treatment of MDS and AML. We are currently evaluating ivosidenib
or IDHIFA® combined with standard induction chemotherapy (7+3 regimen) in patients with newly diagnosed AML with an isocitrate
dehydrogenase (IDH)-1 or IDH-2 mutation from a phase I trial.
A phase I trial of a lysine-specific histone demethylase inhibitor (LSD1i, CC-90011) is under way in solid tumors. Additionally, two
bromodomain and extra-terminal motif (BET) inhibitors CC-90010, and FT-1101 in collaboration with FORMA Therapeutics, Inc.
(FORMA), are in phase I dose escalation trials under investigation in NHL, solid tumors and acute leukemia indications.
Protein Homeostasis: We are currently developing novel CELMoD® compounds to address unmet needs in myeloma, AML, lymphoma
and lupus. These assets have been developed based on our scientific understanding of Cereblon-mediated protein homeostasis and
are differentiated from previous compounds (such as thalidomide, lenalidomide and pomalidomide) based on their enhanced speed
and efficiency of degrading critical substrate proteins using Cereblon as a tool to achieve this degradation. Iberdomide (CC-220) is a
CELMoD® compound currently being evaluated in a phase I/II trial in patients with RRMM and a phase II trial in patients with SLE.
CC-90009, whose activity is related to the depletion of the novel substrate GSPT1 is currently in phase I in patients with relapsed or
refractory AML. CC-92480 is a novel CELMoD® with a differentiated preclinical profile, currently being investigated in a phase I trial in
patients with RRMM. In addition, an Investigational New Drug (IND) application and a Clinical Trial Application (CTA) were submitted
in December 2018 for a novel CELMoD® in development for NHL.
Immuno-Oncology: bb2121, a B-cell maturation antigen (BCMA) chimeric antigen receptor (CAR) T cell therapy, is being developed in
collaboration with bluebird bio. The pivotal KarMMaTM study in RRMM is currently ongoing. Also in collaboration with bluebird bio,
bb21217, a second anti-BCMA CAR T cell therapy, is currently in phase I development in RRMM. JCARH125, a BCMA CAR T cell
therapy, being developed by Juno Therapeutics, a Celgene Company, is in a phase I trial (EVOLVE) in patients with RRMM. Liso-cel
(JCAR017), an anti-CD19 CAR T cell therapy is being developed in patients with NHL, including the ongoing pivotal TRANSCEND
trial in 3L DLBCL and the TRANSFORM trial in patients with 2L transplant-eligible DLBCL. In addition, the pivotal phase II portion

of the phase I/II trial (TRANSCEND CLL-004) in patients with relapsed or refractory chronic lymphocytic leukemia initiated in January
2019.

In addition to the BCMA-targeted CAR T cell therapies in development, our BCMA campaign in MM includes CC-93269, a T cell
engager currently in a phase I trial in RRMM and an antibody drug conjugate (ADC) in collaboration with Sutro Biopharma.
Our anti-CD47 antibody targeting macrophage activity, CC-90002, is currently in phase I trials being evaluated for the treatment of NHL
and we are initiating a phase I study in solid tumors with CC-95251, a monoclonal antibody directed against SIRPα in the macrophage
activity pathway.
A number of additional programs from our collaboration partners are in phase I clinical testing in multiple solid tumor indications,
including JTX-2011, an ICOS-agonist, (Jounce Therapeutics, Inc), AG-270, a MAT2a inhibitor (Agios), GEM-333, a bispecific antibody
directed against CD33 (GEMoaB), Etigilmab (OncoMed), an anti-TIGIT antibody and MSC-1, a leukemia factor inhibitor (Northern
Biologics). TRPH-222 (Triphase), a CD-22 ADC, is also being investigated in a phase I study in NHL.
PRODUCT DEVELOPMENT
We devote significant resources to research and development programs in an effort to discover and develop potential future product
candidates. The product candidates in our pipeline are at various stages of preclinical and clinical development. The path to regulatory
approval ordinarily includes three phases of clinical trials in which we collect data to support an application to regulatory authorities to
allow us to market a product for treatment of a specified disease. There are many difficulties and uncertainties inherent in research and
development of new products, resulting in a high rate of failure. To bring a drug from the discovery phase to regulatory approval, and
ultimately to market, takes many years and significant cost. Failure can occur at any point in the process, including after the product
is approved, based on post-marketing events or developments. New product candidates that appear promising in development may fail
to reach the market or may have only limited commercial success because of efficacy or safety concerns, inability to obtain necessary
regulatory approvals, limited scope of approved uses, reimbursement challenges, difficulty or excessive costs of manufacture, alternative
therapies or infringement of the patents or intellectual property rights of others. Uncertainties in the FDA approval process and the
approval processes in other countries can result in delays in product launches and lost market opportunities. Consequently, it is very
difficult to predict which products will ultimately be submitted for approval, which will obtain approval and which will be commercially
viable and generate profits. Successful results in preclinical or clinical studies may not be an accurate predictor of the ultimate safety or
effectiveness of a drug or product candidate.
Phase I Clinical Trials

Phase I clinical trials begin when regulatory agencies allow initiation of clinical investigation of a new drug or product candidate
and usually involve up to 80 healthy volunteers or subjects. These trials study a drug's safety profile and may include a preliminary
determination of a drug or product candidate's safe dosage range. The phase I clinical trial also determines how a drug is absorbed,
distributed, metabolized and excreted by the body, and therefore the potential duration of its action. Phase I clinical trials generally
take from one to three years to complete.
Phase II Clinical Trials

Phase II clinical trials are conducted on a limited number of subjects with the targeted disease. An initial evaluation of the drug's
effectiveness on subjects is performed and additional information on the drug's safety and dosage range is obtained. Phase II clinical
trials normally include up to several hundred subjects and may take as many as two to three years to complete.
Phase III Clinical Trials

Phase III clinical trials are typically controlled multi-center trials that involve a larger target patient population that normally consists
of several hundred to several thousand subjects to ensure that study results are statistically significant. During phase III clinical trials,
physicians monitor subjects to determine efficacy and to gather further information on safety. These trials are generally global in
nature and are designed to generate the clinical data necessary to submit an application for marketing approval to regulatory agencies.
Phase III clinical trial testing varies by disease state, but can often last from two to seven years.
Regulatory Review
If a product candidate successfully completes clinical trials and trial data is submitted to governmental regulators, such as the FDA in
the United States or the European Commission (EC) in the European Union (EU), the time to final marketing approval can vary from
six months (for a U.S. filing that is designated for priority review by the FDA) to several years, depending on a number of variables,
such as the disease state, the strength and complexity of the data presented, the novelty of the target or compound, risk-management
approval and whether multiple rounds of review are required for the regulatory agency to evaluate the submission. There is no
guarantee that a potential treatment will receive marketing approval, or that decisions on marketing approvals or treatment indications
will be consistent across geographic areas.

6

The current stage of development of our commercial stage products and new product candidates in various areas of research are outlined
in the following table:
Entered Current
Area of Research Status1 Status
Multiple Myeloma (MM)
IMiD: REVLIMID® RRMM Post-approval research 2006
Newly diagnosed transplant ineligible Post-approval research 2015
Newly diagnosed multiple myeloma
(NDMM) post-ASCT maintenance Post-approval research 2017
IMiD: POMALYST®/IMNOVID® RRMM Post-approval research 2013
IMiD: THALOMID®/Thalidomide
Celgene® NDMM Post-approval research 2006
BCMA CAR T: (bb2121)3 RRMM Phase II/Pivotal 2017
BCMA CAR T: (bb21217)3 RRMM Phase I 2017
BCMA CAR T: (JCARH125) RRMM Phase I Q1 2018
CELMoD®: CC-220 RRMM Phase I/II 2016
CELMoD®: CC-92480 RRMM Phase I 2017
BCMA TCE: CC-93269 RRMM Phase I Q2 2018
Myelodysplastic Syndromes (MDS)
DNMT inhibitor: VIDAZA®

MDS Post-approval research 2004
IMiD: REVLIMID® Deletion 5q Post-approval research 2005
DNMT inhibitor: CC-486 Lower-risk Phase III 2013
Post hypomethylating agent (HMA) failure Phase II 2015
BET inhibitor: FT-1101 MDS Phase I 2015
TGF-β inhibitor:
luspatercept (ACE-536)4 MDS Phase III 2016
Acute Myeloid Leukemia (AML)

DNMT inhibitor: VIDAZA® AML (20%-30% blasts) (EU) Post-approval research 2008
AML (>30% blasts) (EU) Post-approval research 2015
BET inhibitor: FT-1101 AML Phase I 2015
IDH2 inhibitor: IDHIFA® AML Post-approval research 2017
CELMoD®: CC-90009 Relapsed refractory AML Phase I 2016
DNMT inhibitor: CC-486 Post-induction AML maintenance Phase III 2013
CD3xCD33: GEM333 AML Phase I Q2 2018
Lymphoma
Mantle cell lymphoma: Relapsed and/or
IMiD: REVLIMID® refractory (US) Post-approval research 2013
Mantle cell lymphoma: Relapsed and/or
refractory (EU) Post-approval research 2016
Diffuse large B-cell (ABC-subtype): first
line Phase III 2015

Indolent lymphoma: Relapsed and/or
refractory Regulatory submission Q4 2018
Adult T-cell leukemia-lymphoma (Japan) Post-approval research 2017

Entered Current
HDAC inhibitor: ISTODAX®

Cutaneous T-cell lymphoma (US)5 Post-approval research 2009
Peripheral T-cell lymphoma: Relapsed and/
or refractory (US)5 Post-approval research 2011
Peripheral T-cell lymphoma: Relapsed and/
or refractory (Japan) Post-approval research 2017
Peripheral T-cell lymphoma: first-line Phase III 2013
CELMoD®: avadomide (CC-122) Diffuse large B-cell lymphoma Phase I 2014
Indolent lymphoma: Relapsed and/or
refractory Phase I 2014
DNMT inhibitor: CC-486 Diffuse large B-cell lymphoma Phase I 2015
AITL Phase III Q4 2018
Aggressive large B-cell lymphoma:
Liso-cel (CD19 CAR T) JCAR017 Relapsed and/or refractory Phase I/II Pivotal 2015
Anti-CD47 antibody: CC-90002 NHL Phase I 2015
BET inhibitor: CC-90010 NHL Phase I 2017
Chronic Lymphocytic Leukemia (CLL)

Liso-cel (CD19 CAR T) JCAR017 Relapsed and/or refractory CLL Phase I/II Q1 2018
Beta Thalassemia
TGF-β inhibitor:
luspatercept (ACE-536)4 Beta-thalassemia Phase III 2016
Myelofibrosis
TGF-β inhibitor:
luspatercept (ACE-536)4 Myelofibrosis Phase II 2017
JAK2 kinase inhibitor: fedratinib Myelofibrosis Regulatory submission Q1 2019
Solid Tumors
nab-paclitaxel: ABRAXANE® Breast: Metastatic Post-approval research 2005
Non-small cell lung: Advanced (first-line) Post-approval research 2012
Pancreatic: Metastatic (first-line) Post-approval research 2013
Pancreatic: Adjuvant Phase III 2014
Gastric: Metastatic (Japan)6 Post-approval research 2013
Proteasome inhibitor: Marizomib Glioblastoma Phase III Q3 2018
Anti-CD47 Antibody: CC-90002 Solid tumors Phase I 2015
LSD1 Inhibitor: CC-90011 Solid tumors Phase I 2016
BET Inhibitor: CC-90010 Glioblastoma Phase I 2017
Anti-PD-1: Tislelizumab (BGB-
A317) Hepatocellular carcinoma (HCC) Phase III Q1 2018
Non-small cell lung cancer (NSCLC) Phase III Q1 2018

Inflammation and Immunology

Entered Current
PDE4 inhibitor:
OTEZLA® (apremilast) Psoriatic arthritis Post-approval research 2014
Plaque psoriasis Post-approval research 2014
Behçet's disease Regulatory submission Q3 2018
Scalp psoriasis Phase IIIb 2017
Pediatric psoriasis Phase III Q4 2018
S1P1/5 agonist: ozanimod Relapsing multiple sclerosis Regulatory submission 2 Q1 2018
Ulcerative colitis Phase III 2015
Crohn's disease Phase III Q2 2018
MK2 inhibitor: CC-99677 Inflammation Phase Ib Q2 2018
IL-2 mutein: CC-92252 Inflammation Phase Ib Q3 2018
Anti-IL-13: RPC-4046 Eosinophilic esophagitis Phase II 2014
CELMoD®: CC-220 SLE Phase IIb 2017
JNK inhibitor: CC-90001 Idiopathic pulmonary fibrosis (IPF) Phase II 2017
Anti-PD-1 agonist: CC-90006 Psoriasis Phase I 2016
1 "Regulatory submission" indicates US and/or EU submission unless another country or region is indicated under Area of Research.
2 Initial regulatory submission in Q4 2017; received Refusal to File from FDA in Q1 2018. Anticipating regulatory resubmission in Q1
2019.
3 In collaboration with bluebird bio, Inc.
4 In collaboration with Acceleron Pharma, Inc.
5 Regulatory approval based on pivotal phase II data.
6 Trial conducted by licensee partner, Taiho Pharmaceuticals Co. Ltd.
PATENTS AND PROPRIETARY TECHNOLOGY
We consider intellectual property protection to be critical to our operations. For many of our products, in addition to compound (e.g.,
drug substance) and composition (e.g., drug product) patents, we hold polymorph, formulation, methods of treatment or use, delivery
mechanism and methods of manufacture patents, as well as manufacturing trade secrets, that may extend exclusivity beyond the
expiration of the compound patent or composition patent.

Key patent expirations and exclusivities:
The following table shows the expected expiration dates in the United States and Europe of the last-to-expire period of exclusivity
(primary patent or regulatory approval) related to our primary marketed drug products. In some instances, there are later-expiring patents
relating to particular forms or compositions, methods of manufacturing, or use of the drug in the treatment of particular diseases or
conditions. However, such additional patents may not protect our drug products from generic competition after the expiration of the
primary patent.
U.S.1 Europe
REVLIMID® brand drug 20272 20243
(U.S. and European use patents)
POMALYST®/IMNOVID® brand drug 2025 20234
(U.S. drug substance/use patent)
OTEZLA® brand drug 2028 2028
(U.S./European drug substance patent)
ABRAXANE® brand drug 20265 20226
(U.S. use patent and European use/formulation patents)
VIDAZA® brand drug 20117 2019
(U.S. use patent and EMA regulatory exclusivities only)
_____________________
1 The patents covering these drugs include patents listed in the U.S. Orange Book.
2 In December 2015, we announced the settlement of litigations with Natco Pharma Ltd. (Natco) and its partners and affiliates, relating
to certain patents for REVLIMID®. As part of the settlement, we agreed to provide Natco with a volume-limited license to sell generic
lenalidomide in the U.S. commencing in March 2022. Natco’s ability to market generic lenalidomide in the U.S. will be contingent on
its obtaining approval of an Abbreviated New Drug Application (ANDA). See Note 19 of Notes to Consolidated Financial Statements
contained elsewhere in this report.
3 In June 2018, we announced the settlement of litigations with Accord Healthcare Ltd. (Accord) relating to patents for REVLIMID®. As
part of the settlement, we granted Accord the ability to market a generic lenalidomide product for certain conditions prior to expiry of
Celgene’s patent and supplementary protection certificate (SPC) rights in the U.K. beginning on January 18, 2022, and in various other
European countries where Celgene’s SPC is in force beginning on February 18, 2022. In addition, subject of ongoing European Patent
Office (EPO) opposition proceedings. See Note 19 of Notes to Consolidated Financial Statements contained elsewhere in this report.
4 Based on ten years regulatory exclusivity.
5 In January 2018, we entered into a settlement with Actavis LLC to terminate patent litigation and Inter Partes Review (IPR) challenges
between the parties relating to certain patents for ABRAXANE®. As part of the settlement, we have agreed to provide Actavis with a
license to certain patents required to manufacture and sell a generic paclitaxel protein-bound particles for injectable suspension product
in the United States beginning on March 31, 2022. See Note 19 of Notes to Consolidated Financial Statements contained elsewhere in
this report.
6 Subject of ongoing SPC appeal proceedings in the UK and the Court of Justice for the European Union that may result in patent
extension until 2022. See Note 19 of Notes to Consolidated Financial Statements contained elsewhere in this report for more
information.
7 We contracted with Sandoz to sell azacitidine for injection, which they launched after the introduction of a generic version of
VIDAZA® in the United States by a competitor in September 2013.
The term of individual patents and patent applications will depend upon the legal term of the patents in the countries in which they are
obtained. In the United States, the patent term is 20 years from the date of filing of the patent application although term extensions are
available. We may obtain patents for certain products many years before marketing approval is obtained for those products. Because of
the limited life of patents, which ordinarily commences prior to the commercial sale of the related product, the commercial value of the
patent may be limited. However, we may be able to obtain patent term extensions upon marketing approval. For example, SPCs on some
of our products have been granted in a number of European countries, compensating in part for delays in obtaining marketing approval.
Also, under the Hatch-Waxman Act, the term of a patent that covers an FDA-approved drug may also be eligible for patent term extension
(for up to five years, but not beyond a total of 14 years from the date of product approval) as compensation for patent term lost during the
FDA regulatory review process. When possible, depending upon the length of clinical trials and other factors involved in the filing of a
NDA with the FDA, we expect to apply for patent term extensions for patents covering our drug products and their use in treating various
diseases.

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In most cases, our drugs are also covered in foreign countries by patents and patent applications that correspond to certain of those listed
in the U.S. Orange Book. For example, patents related to the active pharmaceutical ingredient, uses and pharmaceutical compositions for
most of our drugs have been granted in Europe. Although certain of the patents granted by the regulatory authorities of the European
Union may expire at specific dates, patents granted in certain European countries, such as Spain, France, Italy, Germany and the United
Kingdom, will extend beyond such European Union patent expiration date due to the SPCs granted in these countries for many of our
drugs. The table above may also reflect patents in Europe that relate to certain polymorphic forms of the active pharmaceutical ingredient
of our drugs.
Patent term extensions have been granted in other markets for certain of our patents related to REVLIMID®. Patent term extensions for
certain of our patents related to lenalidomide have been granted in Europe, Australia, Japan and Russia. Further, patent term extensions
for certain of our patents related to ABRAXANE® have been secured and/or are actively being sought in Europe, Australia, Japan,
Russia and Korea. We are also considering alternative exclusivity strategies, mostly through international treaties, in a variety of countries
throughout Latin America.
The existence of issued patents does not guarantee our right to practice the patented technology or commercialize the patented product.
Third parties may have or obtain rights to patents which could be used to prevent or attempt to prevent us from commercializing
the patented product candidates. Patents relating to pharmaceutical, biopharmaceutical and biotechnology products, compounds and
processes, such as those that cover our existing compounds, products and processes and those that we will likely file in the future, do not
always provide complete or adequate protection. Future litigation or re-examination proceedings (including oppositions and invalidity
proceedings such as interparty reviews) regarding the enforcement or validity of our existing patents or any future patents could invalidate
such patents or substantially reduce their protection.
Our patents are subject to challenge by generic drug companies and others for a variety of reasons. For more information regarding
challenges to certain of our patents, see Item 1A. "Risk Factors” and Note 19 of Notes to Consolidated Financial Statements contained
elsewhere in this report.
Trade secret strategies and intellectual property rights in our brand names, logos and trademarks are also important to our business. We
maintain both registered and common law trademarks. Common law trademark protection typically continues where and for as long as
the mark is used. Registered trademarks continue in each country for as long as the trademark is registered.
GOVERNMENTAL REGULATION
General: Regulation by governmental authorities in the United States and other countries is a significant factor in the manufacture
and marketing of pharmaceuticals and in our ongoing research and development activities. Our therapeutic products require regulatory
approval by governmental agencies. Human therapeutic products are subject to rigorous preclinical testing and clinical trials and other
pre-marketing and post-marketing approval requirements of the FDA and regulatory authorities in other countries. In the United States,
various federal and, in some cases, state statutes and regulations also govern, or impact the manufacturing, testing for safety and
effectiveness, labeling, storage, record-keeping and marketing of, such products. The lengthy process of seeking required approvals and
the continuing need for compliance with applicable statutes and regulations, require the expenditure of substantial resources. Regulatory
approval, if and when obtained, may be limited in scope, which may significantly limit the uses for which a product may be promoted.
Further, approved drugs, as well as their manufacturers, are subject to ongoing post-marketing review, inspection and discovery of
previously unknown problems with such products or the manufacturing or quality control procedures used in their production, which may
result in restrictions on their manufacture, sale or use or in their withdrawal from the market. Any failure or delay by us, our suppliers
of manufactured drug product, collaborators or licensees, in obtaining regulatory approvals could adversely affect the marketing of our
products and our ability to receive product revenue, license revenue or profit sharing payments. For more information, see Item 1A. “Risk
Factors.”
Clinical Development: Before a product may be administered to human subjects, it must undergo preclinical testing. Preclinical tests
include laboratory evaluation of a product candidate's chemistry and biological activities and animal studies to assess potential safety and
efficacy. The results of these studies must be submitted to the FDA as part of an IND application which must be reviewed by the FDA
primarily for safety considerations before clinical trials in humans can begin.
Typically, clinical trials in humans involve a three-phase process as previously described under “- Product Development.”
In some cases, further studies beyond the three-phase clinical trial process described above are required as a condition for an NDA or
biologics license application (BLA) approval. The FDA requires monitoring of all aspects of clinical trials and reports of all adverse

events must be made to the FDA. The FDA may also require the conduct of pediatric studies for the drug and indication either before or
after submission of an NDA.
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FDA Review and Approval: The results of the preclinical testing and clinical trials are submitted to the FDA as part of an NDA or
BLA for evaluation to determine if there is substantial evidence that the product is sufficiently safe and effective to warrant approval.
In responding to an NDA or BLA, the FDA may grant marketing approval, deny approval, or request additional information, including
data from new clinical trials. Modifications to an approved drug or biologic, including new indication or changes to labeling or
manufacturing processes or facilities, may require the submission and approval of a supplemental NDA or BLA before modifications can
be implemented, which may require that we develop additional data or conduct additional preclinical and clinical trials.
Expedited Programs for Serious Conditions: The FDA has developed four distinct approaches to make new drugs available as rapidly as
possible in cases where there is no available treatment or there are advantages over existing treatments.
The FDA may grant “accelerated approval” to products that have been studied for their safety and effectiveness in treating serious or
life-threatening illnesses and that provide meaningful therapeutic benefit to patients over existing treatments. For accelerated approval,
the product must have an effect on a surrogate endpoint or an intermediate clinical endpoint that is considered reasonably likely to predict
the clinical benefit of a drug, such as an effect on irreversible morbidity and mortality. When approval is based on surrogate endpoints
or clinical endpoints other than survival or morbidity, the sponsor will be required to conduct additional post-approval clinical studies
to verify and describe clinical benefit. These studies are known as "confirmatory trials." Approval of a drug may be withdrawn or the
labeled indication of the drug changed if these trials fail to verify clinical benefit or do not demonstrate sufficient clinical benefit to justify
the risks associated with the drug.
The FDA may grant “fast track” status to products that treat serious diseases or conditions and demonstrate the potential to address
an unmet medical need. Fast track is a process designed to facilitate the development and expedite the review of such products by
providing, among other things, more frequent meetings with the FDA to discuss the product's development plan, more frequent written
correspondence from the FDA about trial design, eligibility for accelerated approval if relevant criteria are met, and rolling review, which
allows submission of individually completed sections of an NDA or BLA for FDA review before the entire submission is completed. Fast
track status does not ensure that a product will be developed more quickly or receive FDA approval.
“Breakthrough Therapy” designation is a process designed to expedite the development and review of drugs that are intended to treat
a serious condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available
therapy on a clinically significant endpoint. For drugs and biologics that have been designated as Breakthrough Therapies, robust FDA-
sponsor interaction and communication can help to identify the most efficient and expeditious path for clinical development while
minimizing the number of patients placed in ineffective control regimens.
The FDA may grant “priority review” status to products that, if approved, would provide significant improvement in the safety or
effectiveness of the treatment, diagnosis, or prevention of serious conditions. Priority review is intended to reduce the time it takes for the
FDA to review an NDA or BLA, with the goal to take action on the application within six months, compared to ten months for a standard
review.
Orphan Drug Act: Under the United States Orphan Drug Act, a sponsor may request that the FDA designate a drug intended to treat a
“rare disease or condition” as an “orphan drug.” A “rare disease or condition” is one which affects less than 200,000 people in the United
States, or which affects more than 200,000 people, but for which the cost of developing and making available the product is not expected
to be recovered from sales of the product in the United States. Upon the approval of the first NDA or BLA for a drug designated as
an orphan drug for a specified indication, the sponsor of that NDA or BLA is entitled to seven years of exclusive marketing rights in
the United States unless the sponsor cannot assure the availability of sufficient quantities to meet the needs of persons with the disease.
However, orphan drug status is particular to the approved indication and does not prevent another company from seeking approval of an
off-patent drug that has other labeled indications that are not under orphan or other exclusivities. Orphan drugs may also be eligible for
federal income tax credits for costs associated with the drugs' development. In order to increase the development and marketing of drugs
for rare disorders, regulatory bodies outside the United States have enacted regulations similar to the Orphan Drug Act.
Review and Approval Outside of the United States: Approval procedures must be undertaken in virtually every other country comprising
the market for our products. The approval procedure and the time required for approval vary from country to country and may involve
additional testing. In certain countries such as the EU countries, Switzerland, Canada and Australia, regulatory requirements and approval
processes are similar to those in the United States, where approval decisions by regulators are based on the regulators’ review of the
results of clinical trials performed for specific indications. Other countries may have a less comprehensive review process in terms of data
requirements and may rely on prior marketing approval from a foreign regulatory authority in other countries such as the United States
or the EU.

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Manufacturing Quality Control: Among the conditions for NDA or BLA approval is the requirement that the prospective manufacturer’s
quality control and manufacturing procedures continually conform with the FDA’s current Good Manufacturing Practice (cGMP)
regulations (which are regulations established by the FDA governing the manufacture, processing, packing, storage and testing of drugs
and biologics intended for human use). In complying with cGMP, manufacturers must devote substantial time, money and effort in the
areas of production, quality control and quality assurance to maintain compliance. Material changes in manufacturing equipment, location
or process, may result in additional regulatory review and approval. The FDA, the EC and other regulatory agencies conduct periodic
visits to inspect equipment, facilities, and processes following the initial approval of a product. If a manufacturing facility is not in
substantial compliance with the applicable regulations and requirements imposed when the product was approved, regulatory enforcement
action may be taken, which may include a warning letter or an injunction against shipment of products from the facility and/or recall of
products previously shipped.
Post-approval Review and Enforcement: Regulatory authorities closely review and regulate the marketing and promotion of drug and
biologic products. In most countries, regulatory approval is granted for a specified indication and is required before marketing or
promoting a product for that indication. Regulatory authorities may take enforcement action against a company for promoting and/or
reimbursement of unapproved uses of a product or for other violations of advertising and labeling laws and regulations.
When an NDA or BLA is approved, the NDA or BLA holder must, among other things, (a) employ a system for obtaining reports of
adverse events and side effects associated with the drug and make appropriate submissions to the FDA and (b) timely advise the FDA
if any approved product fails to adhere to specifications established by the NDA or BLA. If the FDA concludes that a drug previously
shown to be effective can be safely used only if distribution or use is restricted, the FDA will require post-marketing restrictions as
necessary to assure safe use. The sponsor may be required to establish systems to assure use of the product under safe conditions. The
FDA may require the drug sponsor to implement programs similar to our REMS programs to ensure that benefits of a drug outweigh risks
and that safety protocols are adhered to.
In addition, a sponsor of a drug product has an ongoing obligation to update product labels with new information and to report to
regulatory authorities concerning assessment of serious risks associated with the drug. Following assessment of these reports, regulatory
authorities can require product label updates to reflect new safety data or warnings. If the FDA or other regulatory authorities become
aware of new safety information, they can also require us to conduct studies or clinical trials to assess the potential for a serious risk or
to update the product label. The FDA and other regulatory authorities can also impose marketing restrictions, including the suspension of
marketing or complete withdrawal of a product from the market.
The FDA may issue publicly available warning letters and non-compliance letters, which may require corrective actions, including
modification of advertising or other corrective communications to consumers or healthcare professionals.
Failure to comply with applicable FDA or other regulatory agency requirements can result in enforcement actions, such as license
revocation or suspension; orders for retention, recall, seizure or destruction of product; cessation of manufacturing; injunctions;
inspection warrants; search warrants; civil penalties, including fines based on disgorgement; restitution; and criminal prosecution.
Other Regulations: We are also subject to various federal and state laws, as well as foreign laws, pertaining to healthcare “fraud and
abuse,” including anti-kickback laws and false claims laws. Anti-kickback laws make it illegal to solicit, offer, receive or pay any
remuneration in exchange for or to induce the referral of business, including the purchase or prescription of a particular drug that is
reimbursed by a state or federal program. False claims laws generally prohibit knowingly and willingly presenting, or causing to be
presented for payment to third-party payers (including Medicare and Medicaid) any claims for reimbursed drugs or services that are false
or fraudulent, claims for items or services not provided as claimed or claims for medically unnecessary items or services. Our activities
related to the sale and marketing of our products may be subject to scrutiny under these laws. Violations of fraud and abuse laws may be
punishable by criminal and/or civil sanctions, including fines and civil monetary penalties, as well as the possibility of exclusion from
federal healthcare programs (including Medicare and Medicaid).
We are also subject to regulation under the Occupational Safety and Health Act, the Toxic Substances Control Act, the Resource
Conservation and Recovery Act and other federal, state and local laws, rules and regulations. Our research and development activities
may involve the controlled use of hazardous materials, chemicals, biological materials and various radioactive compounds. We believe
our procedures comply with the standards prescribed by federal, state or local laws, rules and regulations; however, the risk of injury or
accidental contamination cannot be completely eliminated.
Additionally, the U.S. Foreign Corrupt Practices Act (FCPA) prohibits U.S. corporations and their representatives from offering,
promising, authorizing or making payments or providing anything of value to any foreign government official, government staff member,
political party or political candidate, with corrupt intent for the purpose of obtaining or retaining an improper business advantage. The

scope of the FCPA includes interactions with certain healthcare professionals in many countries. Other countries have enacted similar
anti-corruption laws and regulations to which our activities are subject.
13

COMPETITION
Our current products and products under development face competition from other innovative drugs and, in some cases, generic drugs.
The relative speed with which we develop new products, complete clinical trials, obtain regulatory approvals, receive pricing and
reimbursement approvals, and finalize manufacturing and distribution arrangements, and market our products are critical factors in
gaining a competitive advantage. Competition among approved products depends, among other things, on product efficacy, safety,
convenience, reliability, availability, price, third-party reimbursement, sales and promotional activities, product liability issues and patent
and non-patent exclusivity. For additional information, see Item 1A. "Risk Factors.”
SIGNIFICANT ALLIANCES
We have entered into a variety of alliances in the ordinary course of our business. Although we do not consider any individual alliance
to be material, a brief description of certain of the more notable alliances are identified in Note 18 of Notes to Consolidated Financial
Statements contained elsewhere in this report.
MANUFACTURING
We own and operate a manufacturing facility in Zofingen, Switzerland which produces the active pharmaceutical ingredient (API) for
OTEZLA®, REVLIMID® and THALOMID®. In addition, we contract with several third-party organizations to provide back-up API
manufacturing services for certain products.
We have contracted with several third-party API and drug product manufacturing and packaging service providers, to provide primary
and/or back-up sources for ABRAXANE®, POMALYST®/IMNOVID®, IDHIFA®, ISTODAX® and VIDAZA® (azacitidine for
injection).
Manufacturing for REVLIMID®, POMALYST®/IMNOVID®, THALOMID® and OTEZLA® which consists of bulk production,
packaging, warehousing and distribution, is performed at our facilities in Boudry, Switzerland and Couvet, Switzerland. Manufacturing
for ABRAXANE®, which consists of bulk production, packaging, warehousing and distribution, is performed at our facility in Phoenix,
Arizona, U.S. In addition, we have contracted with several third-party drug product manufacturing and packaging organizations to
provide back-up sources for these products.
We have established primary and back-up manufacturing sites for late-phase development programs. For luspatercept, we have contracted
third-party manufacturing organizations to supply drug substance and drug product manufacturing and packaging services. We are
leveraging a combination of Celgene-owned and third-party manufacturing organizations for fedratinib, CC-486 and ozanimod. We have
invested in our own manufacturing network, including facilities in Bothell, Washington and Summit, New Jersey, as well as contracted
with third-party organizations, for cellular therapy product candidates, including bb2121 and liso-cel (JCAR017).
All of our owned manufacturing facilities and third-party organizations that manufacture Celgene products are approved by the regulatory
authorities for the geographies that they serve.
SALES AND COMMERCIALIZATION
We promote our brands globally through our hematology, oncology, and inflammation and immunology commercial organizations which
support our currently marketed brands and prepare for the launches of new products, as well as new indications for existing products. For
OTEZLA®, we also provide information about the appropriate use of our products to consumers in the U.S. through direct-to-consumer
print and television advertising. We have a team of dedicated market access professionals to help physicians and payers understand
the value our products deliver. Given our goal to ensure that patients who might benefit from our therapies have the opportunity to
do so and given the complex reimbursement environment in the United States, we offer the services of Celgene Patient Support® and
Otezla SupportPlus® to serve as dedicated, central points of contact for patients and healthcare professionals who use or prescribe our
products. Celgene Patient Support® and Otezla SupportPlus® are free services that help patients and healthcare professionals navigate the
challenges of reimbursement by providing information regarding insurance coverage, prior authorization requirements, appeals processes
and financial assistance programs.
In most countries, we promote our products through our own sales organizations. In some regions, particularly in some countries in
Latin America, we partner with third-party distributors. Generally, we distribute our products through commonly used channels in local
markets. However, certain of our products, including REVLIMID® and POMALYST®/IMNOVID®, are distributed under mandatory

risk-management distribution programs (such as REMS) tailored to meet local authorities' specifications to provide for their safe and
appropriate distribution and use.
14

EMPLOYEES
As of December 31, 2018, we had 8,852 full-time employees, of whom 3,990 were engaged primarily in research and development
activities, 2,497 were engaged primarily in sales and commercialization activities, 742 were engaged primarily in manufacturing, and the
remaining 1,623 were engaged primarily in management and general and administrative activities. The number of full-time employees
in our international operations has grown from 3,091 at the end of 2017 to 3,212 at the end of 2018. We also employ a number of part-
time employees and maintain consulting arrangements with a number of researchers at various universities and other research institutions
around the world.
SEASONALITY
Our worldwide product sales do not reflect any significant degree of seasonality in end-user demand. Several other factors, including
government rebates, distributor buying patterns and government tender timing impact the dollar value of product sales recorded in any
particular quarter. In the United States, manufacturers of pharmaceutical products are responsible for 50 percent of the patient’s cost of
branded prescription drugs related to the Medicare Part D Coverage Gap (70 percent beginning in 2019). We fulfill this obligation by
providing rebates to the government, resulting in a reduction in the dollar value of U.S. net product sales in the quarter in which the
rebates are provided. Historically, these rebates are higher during the first quarter primarily due to the larger volume of patient deductibles
at the beginning of a calendar year. In addition, in the U.S., the timing of net product sales may be affected by fluctuations in wholesaler
inventory levels. Outside of the U.S., the timing of governmental tenders for product may also impact net product sales in a particular
quarter.
AVAILABLE INFORMATION
Our Current Reports on Form 8-K, Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K are electronically filed with or
furnished to the Securities and Exchange Commission (SEC), and all such reports and amendments to such reports have been and will be
made available, free of charge, through our website (http://www.celgene.com) as soon as reasonably practicable after submission to the
SEC. Such reports will remain available on our website for at least 12 months. The contents of our website or any other website are not
incorporated by reference into this Annual Report on Form 10-K.
The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC.
DISCLOSURE PURSUANT TO SECTION 219 OF THE IRAN THREAT REDUCTION AND SYRIA HUMAN RIGHTS ACT
OF 2012
Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (ITRSHRA) added Section 13(r) to the Securities
Exchange Act of 1934, as amended, which requires, among other things, disclosure by an issuer, in its annual or quarterly reports, as
applicable, whether it or any of its affiliates knowingly conducted, without specific authority from a U.S. federal department or agency,
any transaction or dealing with the Government of Iran, which includes, without limitation, any person or entity owned or controlled,
directly or indirectly, by the Government of Iran or any of its political subdivisions, agencies or instrumentalities. Neither Celgene nor, to
its knowledge, any of its affiliates engaged in activities during 2018 that are required to be disclosed pursuant to ITRSHRA.
FORWARD-LOOKING STATEMENTS
Certain statements contained or incorporated by reference in this Annual Report on Form 10-K are considered forward-looking statements
(within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended) concerning our business, results of operations, economic performance
and/or financial condition, based on management's current expectations, plans, estimates, assumptions and projections. Forward-looking
statements are included, for example, in the discussions about:
• the proposed transaction with Bristol-Myers Squibb;
• strategy;
• new product discovery and development;
• current or pending clinical trials;
• our products' ability to demonstrate efficacy or an acceptable safety profile;
• actions by the FDA and other regulatory authorities;
• product manufacturing, including our arrangements with third-party suppliers;

• product introduction and sales;
15

• royalties and contract revenues;
• expenses and net income;
• credit and foreign exchange risk management;
• liquidity;
• asset and liability risk management;
• the outcome of litigation and other proceedings;
• intellectual property rights and protections;
• economic factors;
• competition; and
• operational and legal risks.
Any statements contained in this report that are not statements of historical fact may be deemed forward-looking statements. Forward-
looking statements generally are identified by the words "expects," "anticipates," "believes," "intends," "estimates," "aims," "plans,"
"may," "could," "will," "will continue," "seeks," "should," "predict," "potential," "outlook," "guidance," "target," "forecast," "probable,"
"possible" or the negative of such terms and similar expressions. Forward-looking statements are subject to change and may be affected
by risks and uncertainties, most of which are difficult to predict and are generally beyond our control. Forward-looking statements speak
only as of the date they are made, and we undertake no obligation to update any forward-looking statement in light of new information
or future events, although we intend to continue to meet our ongoing disclosure obligations under the U.S. securities laws and other
applicable laws.
We caution you that a number of important factors could cause actual results or outcomes to differ materially from those expressed in,
or implied by, the forward-looking statements, and therefore you should not place too much reliance on them. These factors include,
among others, those described herein, under "Risk Factors" and elsewhere in this Annual Report on Form 10-K and in our other public
reports filed with the SEC. It is not possible to predict or identify all such factors, and therefore the factors that are noted are not intended
to be a complete discussion of all potential risks or uncertainties that may affect forward-looking statements. If these or other risks and
uncertainties materialize, or if the assumptions underlying any of the forward-looking statements prove incorrect, our actual performance
and future actions may be materially different from those expressed in, or implied by, such forward-looking statements. We can offer no
assurance that our estimates or expectations will prove accurate or that we will be able to achieve our strategic and operational goals.
ITEM 1A. RISK FACTORS
The following describes major risks to our business and should be considered carefully. Any of these factors could significantly and
negatively affect our business, prospects, financial condition, operating results or credit ratings, which could cause the trading prices of
our equity securities to decline. The risks described below are not the only risks we may face. Additional risks and uncertainties not
presently known to us, or risks that we currently consider immaterial, could also negatively affect us.
Risks Related to our Business
Our operating results may be subject to significant fluctuations.
Our operating results may fluctuate from quarter to quarter and year to year for a number of reasons, including the risks discussed
elsewhere in this “Risk Factors” section. Events such as a delay in product development or a revenue shortfall may cause financial results
for a particular period to be below our expectations. In addition, we have experienced and may continue to experience fluctuations in our
quarterly operating results due to the timing of charges that we may take. We have recorded, or may be required to record, charges that
include development milestone and license payments under collaboration and license agreements, amortization of acquired intangibles
and other acquisition related charges, and impairment charges. Several other factors, including government rebates, distributor buying
patterns and government tender timing, impact the dollar value of product sales recorded in any particular quarter.
Our revenues are also subject to foreign exchange rate fluctuations due to the global nature of our operations. We recognize foreign
currency gains or losses arising from our operation in the period in which we incur those gains or losses. Although we utilize foreign
currency forward contracts, a combination of foreign currency put and call options, and occasionally purchased put options to manage
foreign currency risk, our efforts to reduce currency exchange losses may not be successful. As a result, currency fluctuation among our
reporting currency, the U.S. Dollar, and the currencies in which we do business will affect our operating results. Our net income may
also fluctuate due to the impact of charges we may be required to take with respect to foreign currency and other hedge transactions. In
particular, we may incur higher than expected charges from hedge ineffectiveness or from the termination of a hedge arrangement. For
more information, see Item 7A. "Quantitative and Qualitative Disclosures About Market Risk" contained elsewhere in this report.

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We are dependent on the continued commercial success of our primary products, REVLIMID®, POMALYST®/IMNOVID®,
OTEZLA®, ABRAXANE®, and VIDAZA®.
Our business is largely dependent on the commercial success of REVLIMID®, POMALYST®/IMNOVID®, OTEZLA®, ABRAXANE®,
and VIDAZA®. REVLIMID® currently accounts for over half of our total revenue. As new products, such as POMALYST®/IMNOVID®
and OTEZLA®, have obtained regulatory approval and gained market acceptance, our dependence on REVLIMID® has decreased, a
trend that we expect to continue. A significant decline in REVLIMID® net revenue, in the absence of offsetting increases in revenue
from our other marketed products, would have a material adverse effect on our results of operations, cash flows and financial condition.
The success of these products depends on acceptance by regulators, key opinion leaders, physicians, and patients as effective drugs with
certain advantages over other therapies. A number of factors, as discussed in greater detail below, may adversely impact the degree of
acceptance of these products, including their efficacy, safety, price and benefits over competing products, as well as the reimbursement
policies of third-party payers, such as government and private insurance plans.
If unexpected adverse events are reported in connection with the use of any of these products, physician and patient acceptance of the
product could deteriorate and the commercial success of such product could be adversely affected. We are required to report to the FDA
or similar bodies in other countries events associated with our products relating to death or serious injury. Adverse events could result
in additional regulatory controls, such as the imposition of costly post-approval clinical studies or revisions to our approved labeling
which could limit the indications or patient population for a product or could even lead to the withdrawal of a product from the market.
THALOMID® is known to be toxic to the human fetus and exposure to the drug during pregnancy could result in significant deformities.
REVLIMID® and POMALYST®/IMNOVID® are also considered toxic to the human fetus and their respective labels contain warnings
against use which could result in embryo-fetal exposure. While we have restricted distribution systems for THALOMID®, REVLIMID®,
and POMALYST®/IMNOVID®, and endeavor to educate patients regarding the potential known adverse events, including pregnancy
risks, we cannot ensure that all such warnings and recommendations will be complied with or that adverse events resulting from non-
compliance will not occur.
Our future commercial success depends on gaining regulatory approval for products in development, and obtaining approvals for our
current products for additional indications.
The testing, manufacturing and marketing of our products require regulatory approvals, including approval from the FDA and similar
bodies in other countries. Our future growth would be negatively impacted if we fail to obtain timely, or at all, requisite regulatory
approvals in the United States and internationally for products in development and approvals for our existing products for additional
indications.
The principal risks to obtaining and maintaining regulatory approvals are as follows:
• In general, preclinical tests and clinical trials can take many years and require the expenditure of substantial resources, and the
data obtained from these tests and trials may not lead to regulatory approval;
• Delays or rejections may be encountered during any stage of the regulatory process if the clinical or other data fails to
demonstrate compliance with a regulatory agency’s requirements for safety, efficacy and quality;
• Delays in the acceptance, review and approval of products by the FDA may result from government shutdowns due to the
failure by Congress to enact regular appropriations;
• Requirements for approval may become more stringent due to changes in regulatory agency policy or the adoption of new
regulations or legislation;
• Even if a product is approved, the scope of the approval may significantly limit the indicated uses or the patient population for
which the product may be marketed and may impose significant limitations in the nature of warnings, precautions and contra-
indications that could materially affect the sales and profitability of the product;
• After a product is approved, the FDA or similar bodies in other countries may withdraw or modify an approval in a significant
manner or request that we perform additional clinical trials or change the labeling of the product due to a number of reasons,
including safety concerns, adverse events and side effects;
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• Products, such as REVLIMID® and POMALYST®/IMNOVID®, that receive accelerated approval can be subject to an expedited
withdrawal if post-marketing restrictions are not adhered to or are shown to be inadequate to assure safe use, or if the drug is
shown to be unsafe or ineffective under its conditions of use;
• Guidelines and recommendations published by various governmental and non-governmental organizations can reduce the use of
our approved products;
• Approved products, as well as their manufacturers, are subject to continuing and ongoing review by regulatory agencies, and the
discovery of previously unknown problems with these products or the failure to comply with manufacturing or quality control
requirements may result in restrictions on the manufacture, sale or use of a product or its withdrawal from the market; and
• Changes in regulatory agency policy or the adoption of new regulations or legislation could impose restrictions on the sale or
marketing of our approved products.
If we fail to comply with laws or government regulations or policies our business could be adversely affected.
The discovery, preclinical development, clinical trials, manufacturing, risk evaluation and mitigation strategies (such as our REMS
program), marketing and labeling of pharmaceuticals and biologics are all subject to extensive laws and government regulations and
policies. In addition, individual states, acting through their attorneys general, are increasingly seeking to regulate the marketing of
prescription drugs under state consumer protection and false advertising laws. If we fail to comply with the laws and regulations regarding
the promotion and sale of our products, appropriate distribution of our products under our restricted distribution systems, off-label
promotion and the promotion of unapproved products, government agencies may bring enforcement actions against us or private litigants
may assert claims on behalf of the government against us that could inhibit our commercial capabilities and/or result in significant damage
awards and penalties.
Other matters that may be the subject of governmental or regulatory action which could adversely affect our business include laws,
regulations and policies governing:
• protection of the environment, privacy, healthcare reimbursement programs, and competition;
• parallel importation of prescription drugs from outside the United States at prices that are regulated by the governments of
various foreign countries; and
• mandated disclosures of clinical trial or other data, such as the EMA’s policy on publication of clinical data.
Sales of our products will be significantly reduced if access to and reimbursement for our products by governmental and other third-
party payers are reduced or terminated.
Sales of our current and future products depend, in large part, on the conditions under which our products are paid for by health
maintenance, managed care, pharmacy benefit and similar health care management organizations (HCMOs), or reimbursed by
government health administration authorities, private health coverage insurers and other third-party payers.
The influence of HCMOs has increased in recent years due to the growing number of patients receiving coverage through a few large
HCMOs as a result of industry consolidation. One objective of HCMOs is to contain and, where possible, reduce healthcare expenditures.
HCMOs typically use formularies (lists of approved medicines available to members of a particular HCMO), clinical protocols, volume
purchasing, long-term contracts and other methods to negotiate prices with pharmaceutical providers. Due to their lower cost generally,
generic medicines are typically placed in preferred tiers of HCMO formularies. Additionally, many formularies include alternative and
competitive products for treatment of particular medical problems. Exclusion of our products from a formulary or HCMO-implemented
restrictions on the use of our products can significantly impact drug usage in the HCMO patient population, and consequently our
revenues.
Generally, in Europe and other countries outside the United States, the government-sponsored healthcare system is the primary payer
of patients’ healthcare costs. These health care management organizations and third-party payers are increasingly challenging the prices
charged for medical products and services, seeking to implement cost-containment programs, including price controls, restrictions
on reimbursement and requirements for substitution of generic products. Our products continue to be subject to increasing price
and reimbursement pressure due to price controls imposed by governments in many countries; increased difficulty in obtaining and
maintaining satisfactory drug reimbursement rates; and the tendency of governments and private health care providers to favor generic

pharmaceuticals. In addition, governmental and private third-party payers and purchasers of our products may restrict access to
formularies or otherwise discourage use of our products. Limitations on patient access to our drugs, adoption
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of price controls and cost-containment measures could adversely affect our business. In addition, our operating results may also be
affected by distributors seeking to take advantage of price differences among various markets by buying our products in low cost markets
for resale in higher cost markets.
Federal and state legislation may affect our pricing policies and government reimbursement of our products which may adversely
impact our revenues and profitability.
In the U.S. there have been and are likely to continue to be a number of legislative and regulatory proposals and enactments (e.g.,
the President's American Patients First Blueprint and related regulatory proposals) related to drug pricing and reimbursement at both
the federal and state level that could impact our profitability. The Patient Protection and Affordable Care Act and the Health Care and
Education Reconciliation Act of 2010, or the ACA, were signed into law in March 2010, and are referred to collectively as the Healthcare
Reform Acts. Since its enactment, there have been judicial and congressional challenges to certain aspects of the ACA, and we expect
there will be additional challenges and amendments to the ACA in the future. For example, in December 2018, a U.S. district court held
that the ACA was unconstitutional, although the ruling is stayed pending the appeals process. In addition, the Tax Cuts and Jobs Act of
2017, which includes a provision that entered into effect on January 1, 2019, that repeals the tax-based shared responsibility payment
imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly
referred to as the “individual mandate.” Since the enactment of the Tax Cuts and Jobs Act of 2017, there have been additional amendments
to certain provisions of the ACA, and we expect the Trump Administration and Congress may continue to seek to modify, repeal, or
otherwise invalidate all, or certain provisions of, the ACA. It is uncertain the extent to which any such changes may impact our business
or financial condition.
Moreover, changes could be made to governmental healthcare and insurance reimbursement programs that could significantly impact
the profitability of our products. Building from the President’s American Patients First Blueprint, the Centers for Medicare & Medicaid
Services (CMS) released an Advanced Notice of Proposed Rulemaking in October 2018, seeking comments on possible changes to
certain Medicare Part B reimbursement mechanisms. Notably, one such proposal would introduce international reference pricing for
pharmaceuticals in setting reimbursement for those medicines. As these proposals are just at the beginning of the regulatory process, we
cannot predict what the final rules (if any) will be, or the impacts on our products.
Additionally, the pricing and reimbursement of pharmaceutical products, in general and specialty drugs in particular, have received the
attention of U.S. policymakers, state legislators and others. In January 2019, as part of an inquiry sent to twelve companies representing
many of the most significant Part D drugs, we received a letter from the House Oversight and Government Reform Committee
(“Committee”) inquiring into certain matters relating to the pricing and commercialization practices for REVLIMID®, as well as other
information relating to company operations. We are cooperating with the Committee to respond; however, at this time, we cannot predict
the impact of this request or the increased policy focus on the pricing or reimbursement of our products or pharmaceutical products
generally. Other committees in the House or Senate have held hearings or announced plans to consider a variety of legislative initiatives
relating to pricing and access for pharmaceutical products.
The Healthcare Reform Acts, among other things, made significant changes to the Medicaid rebate program by increasing the minimum
rebates that manufacturers like us are required to pay. These changes also expanded the government’s 340B drug discount program
by expanding the category of entities qualified to participate in the program and benefit from its deeply discounted drug pricing. The
Healthcare Reform Acts also obligate the Health Resources and Services Administration (HRSA), which administers the 340B program,
to update the agreement that each manufacturer must sign to participate in the 340B program to require each manufacturer to offer the
340B price to covered entities if the manufacturer makes the drug product available to any other purchaser at any price, and to report the
ceiling prices for its drugs to the government. HRSA issued this update in late 2016, and we signed an amendment to our agreement on
December 29, 2016.
Furthermore, the Trump Administration’s budget proposal for fiscal year 2019 contains further drug price control measures that could
be enacted during the budget process or in other future legislation, including, for example, measures to permit Medicare Part D plans
to negotiate the price of certain drugs under Medicare Part B, to, among other things, allow some states to exclude coverage for some
prescription drugs under Medicaid. While any proposed measures will require authorization through additional legislation to become
effective, Congress and the Trump Administration have each indicated that it will continue to seek new legislative and/or administrative
measures to control drug costs. We expect that additional U.S. federal healthcare reform measures could be adopted in the future, any
of which could limit the amounts that the U.S. federal government will pay for healthcare products and services, which could result in
reduced demand for our products or additional pricing pressures.
HRSA also issued proposed regulations to implement an administrative dispute resolution (ADR) process for certain disputes arising
under the 340B program, including (1) claims by covered entities that they have been overcharged for covered outpatient drugs by

manufacturers; and (2) claims by manufacturers, after a manufacturer has conducted an audit, that a covered entity has violated the
prohibition on diversion of covered outpatient drugs to ineligible patients or duplicate discounts. The exact timing
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and content of final action on these matters is uncertain at this time. Depending on their final form, these actions could affect our
obligations under the 340B program in ways that may have an adverse impact on our business. Additionally, in early 2016, HRSA
finalized a regulation regarding the 340B pricing methodology and providing guidelines for when civil monetary penalties may be issued
for “knowing and intentional” manufacturer overcharges of 340B covered entities. The effective date of this regulation was January 1,
2019. Following the effective date, manufacturers who are found to have knowingly and intentionally overcharged 340B covered entities
could be subject to significant monetary penalties. Such findings could also result in negative publicity that could harm the manufacturer’s
reputation or cause business disruption.
Over the course of the past few years, we have received inquiries from HRSA regarding our limited distribution networks for
REVLIMID®, POMALYST®, and THALOMID® and our compliance with the 340B program. We have cooperated fully in responding to
those inquiries and believe that we have complied with applicable legal requirements.
If we are ultimately required to change our sales or pricing practices with regard to the distribution of these drugs under the 340B program,
or if we were required to pay penalties under the applicable regulations, there would be an adverse effect on our revenues and profitability.
Our ability to sell our products to hospitals in the United States depends in part on our relationships with group purchasing
organizations.
Many existing and potential customers for our products become members of group purchasing organizations (GPOs). GPOs negotiate
pricing arrangements and contracts, sometimes on an exclusive basis, with medical supply manufacturers and distributors, and these
negotiated prices are made available to a GPO’s affiliated hospitals and other members. If we are not one of the providers selected by
a GPO, affiliated hospitals and other members may be less likely to purchase our products, and if the GPO has negotiated a strict sole
source, market share compliance or bundling contract for another manufacturer’s products, we may be precluded from making sales to
members of the GPO for the duration of that contractual arrangement. Our failure to enter into or renew contracts with GPOs may cause
us to lose market share and could adversely affect our sales.
Our long-term success depends, in part, on intellectual property protection.
Our success depends, in part, on our ability to obtain and enforce patents, protect trade secrets, obtain licenses to technology owned by
third parties and to conduct our business without infringing upon the proprietary rights of others. The patent positions of pharmaceutical
and biopharmaceutical companies, including ours, can be uncertain and involve complex legal and factual questions. There can be no
assurance that if claims of any of our owned or licensed patents are challenged by one or more third parties (through, for example,
litigation or post grant review in the United States Patent and Trademark Office (USPTO) or EPO), a court or patent authority ruling
on such challenge will ultimately determine, after all opportunities for appeal have been exhausted, that our patent claims are valid and
enforceable. If a third party is found to have rights covering products or processes used by us, we could be forced to cease using such
products or processes, be subject to significant liabilities to such third party and/or be required to obtain license rights from such third
party. Lawsuits involving patent claims are costly and could affect our results of operations, result in significant expense and divert the
attention of managerial and scientific personnel. For more information on challenges to certain of our patents and settlement of certain of
these challenges, see Note 19 of Notes to Consolidated Financial Statements contained elsewhere in this report.
In addition, we do not know whether any of our owned or licensed pending patent applications will result in the issuance of patents or, if
patents are issued, whether they will be dominated by third-party patent rights, provide significant proprietary protection or commercial
advantage or be circumvented, opposed, invalidated, rendered unenforceable or infringed by others.
Our intellectual property rights may be affected by certain provisions of the America Invents Act (AIA) enacted in 2011. For example,
under the AIA, members of the public may seek to challenge an issued patent by petitioning the USPTO to institute a post grant
proceeding, such as a Post Grant Review (PGR) or Inter Partes Review (IPR). Once a post grant proceeding is instituted, the USPTO
may find grounds to revoke the challenged patent or specific claims therein. For more information with respect to IPRs, see Note 19 of
Notes to Consolidated Financial Statements contained elsewhere in this report. A similar procedure (known as a patent opposition) has
existed in Europe for many years and we have defended our European patents in certain of those proceedings. We cannot predict whether
any other Celgene patents will ever become the subject of a post grant proceeding or patent opposition. If a significant product patent is
successfully challenged in a post grant proceeding or patent opposition, it may be revoked, which would have a serious negative impact
on our ability to maintain exclusivity in the market-place for our commercial products affected by such revocation and could adversely
affect our future revenues and profitability.
On October 2, 2014, the EMA adopted its clinical transparency policy, "Policy on Publication of Clinical Data for Medicinal Products for
Human Use" (Clinical Data Policy), which became effective on January 1, 2015. In general, under the Clinical Data

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Policy, clinical data is not deemed to be commercially confidential data. Therefore, there is a risk that unpublished proprietary
information, including trade secrets that are incorporated into a marketing application before the EMA may be made publicly available.
It is difficult to predict how any public disclosure of our trade secrets or other confidential and proprietary information made available
under the Clinical Data Policy may adversely impact our patent rights and our competitive advantage in the marketplace.
Also, procedures for obtaining patents and the degree of protection against the use of a patented invention by others vary from country
to country. There can be no assurance that the issuance to us in one country of a patent covering an invention will be followed by the
issuance in other countries of patents covering the same invention or that any judicial interpretation of the validity, enforceability or scope
of the claims in a patent issued in one country will be similar to or recognized by the judicial interpretation given to a corresponding
patent issued in another country.
The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee
payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by
payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in
abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
We also rely upon unpatented, proprietary and trade secret technology that we seek to protect, in part, by confidentiality agreements with
our collaborative partners, employees, consultants, outside scientific collaborators, sponsored researchers and other advisors. Despite
precautions taken by us, there can be no assurance that these agreements provide meaningful protection, that they will not be breached,
that we would have adequate remedies for any such breach or that our proprietary and trade secret technologies will not otherwise become
known to others or found to be non-proprietary.
We receive confidential and proprietary information from collaborators, prospective licensees and other third parties. In addition, we
employ individuals who were previously employed at other biotechnology or pharmaceutical companies. We may be subject to claims that
we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information
of these third parties or our employees’ former employers. Litigation may be necessary to defend against these claims, which can result in
significant costs if we are found to have improperly used the confidential or proprietary information of others. Even if we are successful
in defending against these claims, litigation could result in substantial costs and diversion of personnel and resources.
Our products may face competition from lower cost generic or follow-on products.
Manufacturers of generic drugs are seeking to compete with our drugs and present a significant challenge to us. Those manufacturers may
challenge the scope, validity or enforceability of our patents in court, requiring us to engage in complex, lengthy and costly litigation. If
any of our owned or licensed patents are infringed or challenged, we may not be successful in enforcing or defending those intellectual
property rights and, as a result, may not be able to develop or market the relevant product exclusively, which would have a material
adverse effect on our sales of that product. In addition, manufacturers of innovative drugs as well as generic drug manufacturers may be
able to design their products around our owned or licensed patents and compete with us using the resulting alternative technology. For
more information concerning certain pending proceedings relating to our intellectual property rights and settlements of certain challenges,
see Note 19 of Notes to Consolidated Financial Statements contained elsewhere in this report.
Upon the expiration or loss of patent protection for a product, or upon the “at-risk” launch by a manufacturer of a generic version of one
of our products, we can quickly lose a significant portion of our sales of that product. In addition, as additional competitors enter the
market, our patented products may face increased competition or pricing pressure.
Orphan exclusivity and regulatory data protection for REVLIMID®’s multiple myeloma indication in Europe expired in June 2017. The
regulatory marketing protection for REVLIMID® in Europe expired in June 2018. Notwithstanding that our intellectual property rights
for REVLIMID® in the major European markets are due to remain in force through at least 2022, we expect that some generic drug
companies may attempt to market a generic version of REVLIMID® in such European markets before this time. We have recently been
made aware of various generic drug manufacturers receiving regulatory clearance for generic versions of REVLIMID® in some European
countries. Although we are confident in the strength of our intellectual property rights, it may be possible for generic drug companies
to successfully challenge our rights and launch their generic versions of REVLIMID® into the market prior to the expiration of our
intellectual property rights in Europe for REVLIMID®.
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Certain novel approaches to the treatment of diseases, such as CAR T cell therapy, may present significant challenges and risks for
us.
The development of novel approaches for the treatment of diseases, such as our acquisition in the first quarter of 2018 of Juno’s CAR T
cell immunotherapy and related technologies, presents many new challenges and risks due to the unique nature of genetic modification
of patient cells ex vivo using certain viruses to reengineer these cells to ultimately treat diseases, including obtaining regulatory approval
from the FDA and other regulatory agencies that have very limited experience with the development of cellular therapies involving
genetic modification of patient cells; developing and deploying consistent and reliable processes, while limiting contamination, for
engineering a patient’s cells ex vivo and infusing genetically modified cells back into the patient; developing processes for the safe
administration of cellular therapies, including long-term follow-up for patients receiving cellular therapies; and sourcing additional
clinical and, if approved, commercial supplies for the materials used to manufacture and process our potential CAR T products. The use
of reengineered cells as a potential cancer treatment is a recent development and may not be broadly accepted by the regulatory, patient
or medical communities. Further, we may not be able to satisfactorily establish the safety and efficacy or the reliability of these therapies
or demonstrate the potential advantages and side effects compared to existing and future cellular therapies. Regulatory requirements
governing gene and cell therapy products have changed frequently and may continue to change in the future. For instance, in February
2019, CMS issued a proposed coverage decision memo on CAR T cells that would apply to the entire Medicare program that, if finalized
as drafted, includes requirements such as patient enrollment in a registry and certain capabilities required of the site to be eligible for
Medicare payment for CAR T cell therapy. Furthermore, certain payment models could impact the interest of appropriate treatment sites
in administering CAR T cell therapies, thereby limiting patient access. The CMS has opened a national coverage analysis on CAR T cells
and may impose coverage limitations on such cellular therapies. These coverage limitations would apply to the entire Medicare program
and could include, among other things, a requirement for patients to be enrolled in a registry in order for the provider to be paid for CAR
T cell therapy. To date, only a few products that involve the genetic modification of patient cells have been approved for commercial sale.
Moreover, the safety profiles of cellular therapies may adversely influence public perception and may adversely influence the willingness
of subjects to participate in clinical trials, or if approved, of physicians and payors to subscribe to these novel treatment approaches. If
we fail to overcome these and other challenges, or if significant adverse events are reported from similar therapies, our development
of these novel treatment approaches may be hampered or delayed, which could adversely affect our future anticipated revenues and/or
profitability related to this therapeutic program.
Our business operates in an extremely competitive environment.
The pharmaceutical and biotechnology industries in which we operate are highly competitive and subject to rapid and significant
technological change. Our present and potential competitors include major pharmaceutical and biotechnology companies, as well as
specialty pharmaceutical firms, including, but not limited to:
• Hematology and Oncology: AbbVie, Amgen, AstraZeneca, Bristol-Myers Squibb, Eisai, Gilead, Johnson & Johnson, Merck,
Novartis, Roche/Genentech, Sanofi and Takeda; and
• Inflammation and Immunology: AbbVie, Amgen, Biogen, Eisai, Eli Lilly, Johnson & Johnson, Merck, Novartis, Pfizer and UCB
S.A.
Some of these companies have considerably greater financial, technical and marketing resources than we have, enabling them, among
other things, to make greater research and development investments. We also experience competition in drug development from
universities and other research institutions, and we compete with others in acquiring technology from these sources. The pharmaceutical
industry has undergone, and is expected to continue to undergo, rapid and significant technological change, and we expect competition to
intensify as technical advances are made and become more widely known. The development of products or processes by our competitors
with significant advantages over those that we are developing could adversely affect our future revenues and profitability.
A decline in general economic conditions would adversely affect our results of operations.
Sales of our products are dependent, in large part, on third-party payers. As a result of global credit and financial market conditions, these
organizations may be unable to satisfy their reimbursement obligations or may delay payment. For information about receivable balances
relating to government-owned or -controlled hospitals in European countries, see Item 7. "Management’s Discussion and Analysis of
Financial Condition and Results of Operations" contained elsewhere in this report.
In addition, due to tightened global credit, there may be a disruption or delay in the performance of our third-party contractors, suppliers
or collaborators. We rely on third parties for several important aspects of our business, including portions of our product manufacturing,
clinical development of future collaboration products, conduct of clinical trials and supply of raw materials. If

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such third parties are unable to satisfy their commitments to us, our business could be adversely affected.
We may be required to modify our business practices, pay fines and significant expenses or experience other losses due to
governmental investigations or other enforcement activities.
We may become subject to litigation or governmental investigations in the United States and foreign jurisdictions that may arise from the
conduct of our business. Like many companies in our industry, we have from time to time received inquiries and subpoenas and other
types of information requests from government authorities and we have been subject to claims and other actions related to our business
activities.
While the ultimate outcomes of investigations and legal proceedings are difficult to predict, adverse resolutions or settlements of those
matters could result in, among other things:
• significant damage awards, fines, penalties or other payments, and administrative remedies, such as exclusion and/or debarment
from government programs, or other rulings that preclude us from operating our business in a certain manner;
• changes and additional costs to our business operations to avoid risks associated with such litigation or investigations;
• product recalls;
• reputational damage and decreased demand for our products; and
• expenditure of significant time and resources that would otherwise be available for operating our business.
For more information relating to governmental investigations and other legal proceedings and recent settlements of legal proceedings, see
Note 19 of Notes to Consolidated Financial Statements contained elsewhere in this report.
The development of new biopharmaceutical products involves a lengthy and complex process and we may be unable to commercialize
any of the products we are currently developing.
Many of our drug candidates are in the early or mid-stages of research and development and will require the commitment of substantial
financial resources, extensive research, development, preclinical testing, clinical trials, manufacturing scale-up and regulatory approval
prior to being ready for sale. This process takes many years of effort without any assurance of ultimate success. Our product development
efforts with respect to a product candidate may fail for many reasons, including:
• the failure of the product candidate in preclinical or clinical studies;
• adverse patient reactions to the product candidate or indications of other safety concerns;
• insufficient clinical trial data to support the effectiveness or superiority of the product candidate;
• our inability to manufacture sufficient quantities of the product candidate for development or commercialization activities in a
timely and cost-efficient manner;
• our failure to obtain, or delays in obtaining, the required regulatory approvals for the product candidate, the facilities or the
process used to manufacture the product candidate;
• changes in the regulatory environment, including pricing and reimbursement, that make development of a new product or of an
existing product for a new indication no longer attractive;
• the failure to obtain or maintain satisfactory drug reimbursement rates by governmental or third-party payers; and
• the development of a competitive product or therapy.
If a product were to fail to be approved or if sales fail to materialize for a newly approved product, we may incur losses related to the
write-down of inventory, impairment of property, plant and equipment dedicated to the product or expenses related to restructuring.

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Disruptions of our manufacturing and distribution operations could significantly interrupt our production and distribution
capabilities.
We have our own manufacturing facilities for many of our products and we have contracted with third parties to provide other
manufacturing, finishing, and packaging services. Any of those manufacturing processes could be partially or completely disrupted by
fire, contamination, natural disaster, terrorist attack or governmental action. A disruption could lead to substantial production delays
and the need to establish alternative manufacturing sources for the affected products requiring additional regulatory approvals. In the
interim, our finished goods inventories may be insufficient to satisfy customer orders on a timely basis. Further, our business interruption
insurance may not adequately compensate us for any losses that may occur.
In all the countries where we sell our products, governmental regulations define standards for manufacturing, packaging, labeling,
distributing and storing pharmaceutical products. Our failure to comply, or the failure of our contract manufacturers and distributors to
comply with applicable regulations could result in sanctions being imposed on them or us, including fines, injunctions, civil penalties,
disgorgement, suspension or withdrawal of approvals, license revocation, seizures or recalls of products, operating restrictions and
criminal prosecutions.
We have contracted with various distributors to distribute most of our branded products. If our distributors fail to perform and we cannot
secure a replacement distributor within a reasonable period of time, our revenue could be adversely affected.
We have limited experience manufacturing CAR T cell immunotherapies, and our processes may be more difficult or more expensive
than the approaches taken by our current and future competitors. We cannot be sure that the manufacturing processes employed by us will
result in CAR T cell immunotherapies that will be safe and effective. Our ability to source supplies for materials used to manufacture
our CAR T cell immunotherapies and to develop consistent and reliable manufacturing processes and distribution networks with an
attractive cost of goods could impact future anticipated revenue and gross profit for our CAR T cell immunotherapies. In addition, we
may face challenges with sourcing supplies for clinical and, if approved commercial manufacturing. Logistical and shipment delays and
other factors not in our control could prevent or delay the delivery of our product candidates to patients. Additionally, we are required
to maintain a complex chain of identity and custody with respect to patient material as such material moves through the manufacturing
process, and failure to maintain such chain of identity and custody could result in adverse patient outcomes, loss of product or regulatory
remedial action, which could adversely affect our future anticipated revenues and/or profitability related to this therapeutic program.
The consolidation of drug wholesalers and other wholesaler actions could increase competitive and pricing pressures.
We sell our pharmaceutical products in the United States primarily through wholesale distributors and contracted pharmacies. These
wholesale customers comprise a significant part of our distribution network for pharmaceutical products in the United States. This
distribution network is continuing to undergo significant consolidation. As a result, a smaller number of large wholesale distributors and
pharmacy chains control a significant share of the market. We expect that consolidation of drug wholesalers and pharmacy chains will
increase competitive and pricing pressures on pharmaceutical manufacturers, including us. In addition, wholesalers may apply pricing
pressure through fee-for-service arrangements and their purchases may exceed customer demand, resulting in increased returns or reduced
wholesaler purchases in later periods.
Risks from the improper conduct of employees, agents, contractors or collaborators could adversely affect our business or reputation.
We cannot ensure that our compliance controls, policies and procedures will in every instance protect us from acts committed by our
employees, agents, contractors or collaborators that violate the laws or regulations of the jurisdictions in which we operate, including
employment, anti-corruption, environmental, competition and privacy laws. Such improper actions, particularly with respect to foreign
healthcare professionals and government officials, could subject us to civil or criminal investigations, monetary and injunctive penalties,
adversely impact our ability to conduct business in certain markets, negatively affect our results of operations and damage our reputation.
We are subject to a variety of risks related to the conduct and expansion of our business internationally, particularly in emerging
markets.
As our operations expand globally, we are subject to risks associated with conducting business in foreign markets, particularly in
emerging markets. Those risks include:
• increased management, travel, infrastructure and legal compliance costs;

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• longer payment and reimbursement cycles;
• difficulties in enforcing contracts and collecting accounts receivable;
• local marketing and promotional challenges;
• lack of consistency, and unexpected changes, in foreign regulatory requirements and practices;
• increased risk of governmental and regulatory scrutiny and investigations;
• increased exposure to fluctuations in currency exchange rates;
• the burdens of complying with a wide variety of foreign laws and legal standards;
• operating in locations with a higher incidence of corruption and fraudulent business practices;
• difficulties in staffing and managing foreign sales and development operations;
• import and export requirements, tariffs, taxes and other trade barriers;
• weak or no protection of intellectual property rights;
• possible enactment of laws regarding the management of and access to data and public networks and websites;
• possible future limitations on foreign-owned businesses;
• increased financial accounting and reporting burdens and complexities; and
• other factors beyond our control, including political, social and economic instability, popular uprisings, war, terrorist attacks and
security concerns in general.
As we continue to expand our business into multiple international markets, our success will depend, in large part, on our ability to
anticipate and effectively manage these and other risks associated with our international operations. Any of these risks could harm our
international operations and reduce our sales, adversely affecting our business, results of operations, financial condition and growth
prospects.
We may not realize the anticipated benefits of acquisitions and strategic initiatives.
We may face significant challenges in effectively integrating entities and businesses that we acquire, including the acquisitions of Impact
Biomedicines, Inc. and Juno Therapeutics, Inc. in the first quarter of 2018, and we may not realize the benefits anticipated from such
acquisitions. Achieving the anticipated benefits of our acquired businesses will depend in part upon whether we can integrate our
businesses in an efficient and effective manner. Our integration of acquired businesses involves a number of risks, including:
• demands on management related to the increase in our size after an acquisition;
• the diversion of management’s attention from daily operations to the integration of acquired businesses and personnel;
• higher than anticipated integration costs;
• failure to achieve expected synergies and costs savings;
• difficulties in the assimilation and retention of employees;
• difficulties in the assimilation of different cultures and practices, as well as in the assimilation of broad and geographically
dispersed personnel and operations; and
• difficulties in the integration of departments, systems, including accounting systems, technologies, books and records and
procedures, as well as in maintaining uniform standards and controls, including internal control over financial reporting, and
related procedures and policies.
In addition, we may not be able to realize the projected benefits of corporate strategic initiatives we may pursue in the future.

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We may not be able to continue to attract and retain highly qualified managerial, scientific, manufacturing and commercial talent.
The success of our business depends, in large part, on our continued ability to attract and retain highly qualified managerial, scientific,
medical, manufacturing, commercial and other professional personnel, and competition for these types of personnel is intense. We cannot
be sure that we will be able to attract or retain skilled personnel or that the costs of doing so will not materially increase.
Risks associated with using hazardous materials in our business could subject us to significant liability.
We use certain hazardous materials in our research, development, manufacturing and other business activities. If an accident or
environmental discharge occurs, or if we discover contamination caused by prior owners and operators of properties we acquire, we could
be liable for remediation obligations, damages and fines that could exceed our insurance coverage and financial resources. Additionally,
the cost of compliance with environmental and safety laws and regulations may increase in the future, requiring us to expend more
financial resources either in compliance or in purchasing supplemental insurance coverage.
We are subject to various legal proceedings, claims and investigative demands in the ordinary course of our business, the ultimate
outcome of which may result in significant expense, payments and penalties.
We and certain of our subsidiaries are involved in various legal proceedings that include patent, product liability, consumer, commercial,
antitrust and other claims that arise from time to time in the ordinary course of our business. Litigation is inherently unpredictable.
Although we believe we have substantial defenses in these matters, we could in the future be subject to adverse judgments, enter into
settlements of claims or revise our expectations regarding the outcomes of certain matters, and such developments could have a material
adverse effect on our results of operations in the period in which such judgments are received or settlements occur. For more information
regarding settlement of certain legal proceedings, see Note 19 of Notes to Consolidated Financial Statements contained elsewhere in this
report.
Our activities relating to the sale and marketing and the pricing of our products are subject to extensive regulation under the U.S. Federal
Food, Drug, and Cosmetic Act, the Medicaid Drug Rebate Program, the False Claims Act, the Foreign Corrupt Practices Act and other
federal and state statutes, including those discussed elsewhere in this report, as well as anti-kickback and false claims laws, and similar
laws in international jurisdictions. Like many companies in our industry, we have from time to time received inquiries and subpoenas
and other types of information demands from government authorities, and been subject to claims and other actions related to our business
activities brought by governmental authorities, as well as by consumers, third-party payers, stockholders and others. There can be no
assurance that existing or future proceedings will not result in significant expense, civil payments, fines or other adverse consequences.
For more information relating to governmental investigations and other legal proceedings and recent settlements of legal proceedings, see
Product liability claims could adversely affect our business, results of operations and financial condition.
Product liability claims could result in significant damage awards or settlements. Such claims can also be accompanied by consumer
fraud claims or claims by third-party payers seeking reimbursement of the cost of our products. In addition, adverse determinations or
settlements of product liability claims may result in suspension or withdrawal of a product marketing authorization or changes to our
product labeling, including restrictions on therapeutic indications, inclusion of new contra-indications, warnings or precautions, which
would have a material adverse effect on sales of such product. We have historically purchased product liability coverage from third-party
carriers for a portion of our potential liability. Such insurance has become increasingly difficult and costly to obtain. In this context and
in light of the strength of our balance sheet we now self-insure these risks beginning in 2016. Product liability claims, regardless of
their merits or ultimate outcome, are costly, divert management's attention, may harm our reputation and can impact the demand for our
products. There can be no assurance that we will be able to recover under any existing third-party insurance policy or that such coverage
will be adequate to fully cover all risks or damage awards or settlements. Additionally, if we are unable to meet our self-insurance
obligations for claims that are more than we estimated or reserved for that require substantial expenditures, there could be a material
adverse effect on our financial statements and results of operations.
Changes in our effective income tax rate could adversely affect our results of operations.
We are subject to income taxes in both the United States and various foreign jurisdictions and our domestic and international tax
liabilities are largely dependent upon the distribution of income among these different jurisdictions. Various factors may have favorable
or unfavorable effects on our effective income tax rate. These factors include interpretations of existing tax laws, the

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accounting for stock options and other share-based compensation, changes in tax laws and rates, future levels of research and
development spending, changes in accounting standards, changes in the mix of earnings in the various tax jurisdictions in which we
operate, the outcome of examinations by the U.S. Internal Revenue Service and other tax authorities, the accuracy of our estimates for
unrecognized tax benefits and realization of deferred tax assets and changes in overall levels of pre-tax earnings. See ‘Liquidity and
Capital Resources’ within Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations" as well as
Currency fluctuations and changes in exchange rates could adversely affect our revenue growth, increase our costs and cause our
profitability to decline.
We collect and pay a substantial portion of our sales and expenditures in currencies other than the U.S. dollar. Therefore, fluctuations
in foreign currency exchange rates affect our operating results. We utilize foreign currency forward contracts, a combination of foreign
currency put and call options, and occasionally purchased put options, all of which are derivative instruments, to manage foreign currency
risk. We use these derivative instruments to hedge certain forecasted transactions, manage exchange rate volatility in the translation of
foreign earnings and reduce exposures to foreign currency fluctuations of certain balance sheet items denominated in foreign currencies.
The use of these derivative instruments is intended to mitigate a portion of the exposure of these risks with the intent to reduce our risk
or cost, but generally would not fully offset any change in operating results as a consequence of fluctuations in foreign currencies. Any
significant foreign exchange rate fluctuations could adversely affect our financial condition and results of operations. See Note 6 of Notes
to Consolidated Financial Statements and Item 7A. "Quantitative and Qualitative Disclosures About Market Risk" contained elsewhere
in this report.
We may experience an adverse market reaction if we are unable to meet our financial reporting obligations.
As we continue to expand at a rapid pace, the development of new and/or improved automated systems will remain an ongoing priority.
During this expansion period, our internal control over financial reporting may not prevent or detect misstatements in our financial
reporting. Such misstatements may result in litigation and/or negative publicity and possibly cause an adverse market reaction that may
negatively impact our growth plans and the value of our common stock.
Impairment charges or write downs in our books and changes in accounting standards could have a significant adverse effect on our
results of operations and financial condition.
The value allocated to certain of our assets could be substantially impaired due to a number of factors beyond our control. Also, if any
of our strategic equity investments decline in value, we may be required to write down such investments. In addition, new or revised
accounting standards, rules and interpretations could result in changes to the recognition of income and expense that may materially and
adversely affect our financial results.
The price of our common stock may fluctuate significantly.
The market for our shares of common stock may fluctuate significantly. The following key factors may have an adverse impact on the
market price of our common stock:
• results of our clinical trials or adverse events associated with our marketed products;
• fluctuations in our commercial and operating results;
• announcements of technical or product developments by us or our competitors;
• market conditions for pharmaceutical and biotechnology stocks in particular;
• changes or anticipated changes in laws and governmental regulations, including changes in tax, healthcare, environmental,
competition and patent laws;
• new accounting pronouncements or regulatory rulings;
• public announcements regarding medical advances in the treatment of the disease states that we are targeting;
• patent or proprietary rights developments;

• changes in pricing and third-party reimbursement policies for our products;
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• the outcome of litigation involving our products, processes or intellectual property;
• the existence and outcome of governmental investigations and proceedings;
• regulatory actions that may impact our products or potential products;
• disruptions in our manufacturing processes or supply chain;
• failure of our collaboration partners to successfully develop potential drug candidates;
• competition; and
• investor reaction to announcements regarding business or product acquisitions.
In addition, a market downturn in general and/or in the biopharmaceutical sector in particular, may adversely affect the market price of
our securities, which may not necessarily reflect the actual or perceived value of our Company.
Our business would be adversely affected if we are unable to service our debt obligations.
We have incurred various forms of indebtedness, including senior notes, commercial paper and a senior unsecured credit facility. Our
ability to pay interest and principal amounts when due, comply with debt covenants or repurchase the senior notes if a change of control
occurs, will depend upon, among other things, continued commercial success of our products and other factors that affect our future
financial and operating performance, including prevailing economic conditions and financial, business and regulatory factors, many of
which are beyond our control.
If we are unable to generate sufficient cash flow to service the debt service requirements under our debt instruments, we may be forced
to take remedial actions such as:
• restructuring or refinancing our debt;
• seeking additional debt or equity capital;
• reducing or delaying our business activities, acquisitions, investments or capital expenditures, including research and
development expenditures; or
• selling assets, businesses, products or other potential revenue streams.
Such measures might not be successful and might not enable us to service our debt obligations. In addition, any such financing,
refinancing or sale of assets might not be available on economically favorable terms, if at all.
A breakdown or breach of our information technology systems and cyber security efforts could subject us to liability, reputational
damage or interrupt the operation of our business.
We rely upon our information technology systems and infrastructure for our business. The size and complexity of our computer systems
make them potentially vulnerable to breakdown and unauthorized intrusion. We could also experience a business interruption, theft
of confidential information, or reputational damage from industrial espionage attacks, malware or other cyber-attacks, which may
compromise our system infrastructure or lead to data leakage, either internally or at our third-party providers. Similarly, data privacy
breaches by those who access our systems may pose a risk that sensitive data, including intellectual property, trade secrets or personal
information belonging to us, our patients, employees, customers or other business partners, may be exposed to unauthorized persons or
to the public. Although the aggregate impact on our operations and financial condition has not been material to date, we have been the
target of events of this nature and expect them to continue. We continuously monitor our data, information technology systems (and those
of our third-party providers where appropriate) and our personnel's usage of these systems to reduce these risks and potential threats.
However, cyber-attacks are increasing in their frequency, sophistication and intensity, and have become increasingly difficult to detect.
There can be no assurance that our efforts to protect our data and information technology systems will prevent breakdowns or breaches
in our systems (or that of our third-party providers) that could adversely affect our business and result in financial and reputational harm
to us, theft of trade secrets and other proprietary information, legal claims or proceedings, liability under laws that protect the privacy of
personal information, and regulatory penalties.

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The illegal distribution and sale by third parties of counterfeit versions of our products or stolen products could have a negative impact
on our reputation and business.
Third parties might illegally distribute and sell counterfeit or unfit versions of our products, which do not meet our rigorous manufacturing
and testing standards. A patient who receives a counterfeit or unfit drug may be at risk for a number of dangerous health consequences.
Our reputation and business could suffer harm as a result of counterfeit or unfit drugs sold under our brand name. In addition, thefts
of inventory at warehouses, plants or while in-transit, which are not properly stored and which are sold through unauthorized channels,
could adversely impact patient safety, our reputation and our business.
We have certain charter and by-law provisions that may deter a third party from acquiring us and may impede the stockholders’ ability
to remove and replace our management or board of directors.
Our board of directors has the authority to issue, at any time, without further stockholder approval, up to 5.0 million shares of preferred
stock and to determine the price, rights, privileges and preferences of those shares. An issuance of preferred stock could discourage a
third party from acquiring a majority of our outstanding voting stock. Additionally, our by-laws contain provisions intended to strengthen
the board’s position in the event of a hostile takeover attempt. These provisions could impede the stockholders’ ability to remove and
replace our management and/or board of directors. Furthermore, we are subject to the provisions of Section 203 of the Delaware General
Corporation Law, an anti-takeover law, which may also dissuade a potential acquirer of our common stock.
In addition to the risks relating to our common stock, holders of our CVRs are subject to additional risks.
On October 15, 2010, we acquired all of the outstanding common stock of Abraxis BioScience, Inc. (Abraxis) and in connection with
our acquisition, contingent value rights (Abraxis CVRs) were issued entitling each holder of an Abraxis CVR to a pro rata portion of
certain net sales payments if certain specified conditions are satisfied. In addition to the risks relating to our common stock, Abraxis CVR
holders are subject to additional risks, including:
• an active public market for the Abraxis CVRs may not continue to exist or the Abraxis CVRs may trade at low volumes, both of
which could have an adverse effect on the market price of the Abraxis CVRs;
• if the net sales targets specified in the Abraxis CVR Agreement are not achieved within the time periods specified, no payment
will be made and the Abraxis CVRs will expire valueless;
• since the U.S. federal income tax treatment of the Abraxis CVRs is unclear, any part of an Abraxis CVR payment could be
treated as ordinary income and the tax thereon may be required to be paid prior to the receipt of the Abraxis CVR payment;
• any payments in respect of the Abraxis CVRs are subordinated to the right of payment of certain of our other indebtedness;
• we may under certain circumstances redeem the Abraxis CVRs; and
• upon expiration of our obligations under the Abraxis CVR Agreement to continue to commercialize ABRAXANE® or any of
the other Abraxis pipeline products, we may discontinue such efforts, which would have an adverse effect on the value of the
Abraxis CVRs.
Risks Related to our Proposed Acquisition by Bristol-Myers Squibb
Our proposed acquisition by Bristol-Myers Squibb is subject to various closing conditions, including regulatory and stockholder
approvals as well as other uncertainties, and there can be no assurances as to whether and when it may be completed.
On January 2, 2019, we entered into an Agreement and Plan of Merger (which we refer to as the “merger agreement”), with Bristol-
Myers Squibb and a wholly owned subsidiary of Bristol-Myers Squibb (which we refer to as the “merger sub”). Under the terms and
subject to the conditions set forth in the merger agreement, merger sub will merge with and into Celgene (the “merger”) and Celgene will
become a wholly-owned subsidiary of Bristol-Myers Squibb. Upon completion of the merger, each outstanding share of Celgene common
stock, other than excluded stock or dissenting stock, will automatically be canceled and converted into the right to receive (i) $50.00 in
cash without interest thereon, (ii) one share of Bristol-Myers Squibb common stock, and (iii) one Contingent Value Right (Bristol-Myers
Squibb CVR), which will entitle the holder to receive a payment for the achievement of future regulatory milestones.
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Completion of the merger is subject to customary closing conditions, a number of which are not within our or Bristol-Myers Squibb’s
control, and it is possible that such conditions may prevent, delay or otherwise materially adversely affect the completion of the merger.
These conditions include, among other things: (i) adoption of the merger agreement by our stockholders, (ii) approval of the stock
issuance by the stockholders of Bristol-Myers Squibb, (iii) approval for the listing on the New York Stock Exchange (NYSE) of the
shares of Bristol-Myers Squibb common stock and Bristol-Myers Squibb CVRs to be issued in the merger, (iv) absence of any injunction
or order that prohibits completion of the transaction, (v) accuracy of the representations and warranties made in the merger agreement
by the other party, subject to certain materiality qualifications, (vi) performance in all material respects by the other party of the material
obligations required to be performed by it at or prior to completion of the merger and (vii) no stop order suspending the effectiveness of
the registration statement and no proceedings for such purpose are pending before the SEC.
In addition, completion of the merger is conditioned upon the expiration or termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of approvals under the antitrust laws of certain
specified foreign jurisdictions. The governmental authorities from which these authorizations are required have broad discretion in
administering the governing laws and regulations, and may take into account various facts and circumstances in their consideration of
the merger, including other potential transactions in the health care industry or other industries. These governmental authorities may
initiate proceedings seeking to prevent, or otherwise seek to prevent, the merger. As a condition to authorization of the merger or related
transactions, these governmental authorities also may impose requirements, limitations or costs, require divestitures or place restrictions
on the conduct of Bristol-Myers Squibb’s business after completion of the merger. Under the terms of the merger agreement, Bristol-
Myers Squibb is not required, and we are not permitted without Bristol-Myers Squibb’s consent, to take any actions or agree to any terms
or conditions that would have, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the
financial condition, business or results of operations of Celgene, Bristol-Myers Squibb and their respective subsidiaries, taken as a whole,
after giving effect to the completion of the merger.
We can provide no assurance that all required consents and approvals will be obtained or that all closing conditions will otherwise be
satisfied (or waived, if applicable), and, if all required consents and approvals are obtained and all closing conditions are satisfied (or
waived, if applicable), we can provide no assurance as to the terms, conditions and timing of such consents and approvals or the timing
of the completion of the merger. Many of the conditions to completion of the merger are not within either our or Bristol-Myers Squibb’s
control, and neither company can predict when or if these conditions will be satisfied (or waived, if applicable). Any delay in completing
the merger could cause us not to realize some or all of the benefits that we expect to achieve if the merger is successfully completed
within its expected timeframe.
Failure to complete the merger could negatively impact our stock price and future business and financial results.
If the merger is not completed for any reason, including as a result of our stockholders failing to adopt the merger agreement or Bristol-
Myers Squibb stockholders failing to approve the stock issuance, we will remain an independent public company. Our ongoing business
may be materially and adversely affected and we would be subject to a number of risks, including the following:
• we may experience negative reactions from the financial markets, including negative impacts on trading prices of our common
stock and other securities, and from our customers, collaborators, suppliers, regulators and employees;
• we may be required to pay Bristol-Myers Squibb a termination fee of $2.2 billion if the merger agreement is terminated under
certain circumstances;
• we will be required to pay certain transaction expenses and other costs incurred in connection with the merger, whether or not the
merger is completed, including certain fees and expenses of Bristol-Myers Squibb, subject to a cap of $40 million, in connection
with our fee reimbursement obligation;
• the merger agreement places certain restrictions on the conduct of our business prior to completion of the merger, and such
restrictions, the waiver of which is subject to the consent of Bristol-Myers Squibb, may prevent us from making certain
acquisitions, taking certain other specified actions or otherwise pursuing business opportunities during the pendency of the
merger that we would have made, taken or pursued if these restrictions were not in place; and
• matters relating to the merger (including integration planning) will require substantial commitments of time and resources by
our management and the expenditure of significant funds in the form of fees and expenses, which would otherwise have been
devoted to day-to-day operations and other opportunities that may have been beneficial to us as an independent company.

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In addition, we could be subject to litigation related to any failure to complete the merger or related to any proceeding to specifically
enforce our performance obligations under the merger agreement.
If any of these risks materialize, they may materially and adversely affect our business, financial condition, financial results, ratings, stock
prices and/or note prices.
If the merger agreement is terminated, we may, under certain circumstances, be obligated to pay a termination fee to Bristol-Myers
Squibb.
If the merger agreement is terminated, in certain circumstances, we would be required to pay a termination fee of $2.2 billion and certain
expenses to Bristol-Myers Squibb. If the merger agreement is terminated under such circumstances, the termination fee we may be
required to pay under the merger agreement may require us to use available cash that would have otherwise been available for general
corporate purposes and other uses. For these and other reasons, termination of the merger agreement could materially adversely affect our
business operations and financial results, which in turn would materially and adversely affect the price of our common stock.
Because the exchange ratio is fixed and the market price of shares of Bristol-Myers Squibb common stock has fluctuated and will
continue to fluctuate, and because of the uncertainty of the fair market value of, and the ultimate realization on, the Bristol-Myers
Squibb CVRs, our stockholders cannot be sure of the value of the merger consideration they will receive in the merger.
Upon completion of the merger, each share of our common stock outstanding immediately prior to the effective time of the merger will
be converted into the right to receive $50.00 in cash without interest thereon, one share of Bristol-Myers Squibb common stock and
one Bristol-Myers Squibb CVR. Because the exchange ratio of one share of Bristol-Myers Squibb common stock is fixed, the value
of the share consideration will depend on the market price of shares of Bristol-Myers Squibb common stock at the time the merger is
completed. The market price of shares of Bristol-Myers Squibb common stock has fluctuated since the date of the announcement of
the merger agreement and will continue to fluctuate from the date of this report until the date the merger is completed, which could
occur a considerable amount of time after the date hereof. There is also uncertainty regarding the fair market value of the Bristol-Myers
Squibb CVRs and whether any payment will ultimately be realized on the Bristol-Myers Squibb CVRs. Stock price changes may result
from a variety of factors, including, among others, general market and economic conditions, changes in Bristol-Myers Squibb’s and
Celgene’s respective businesses, operations and prospects, risks inherent in their respective businesses, changes in market assessments
of the likelihood that the merger will be completed and/or the value that may be generated by the merger, and changes with respect to
expectations regarding the timing of the merger and regulatory considerations. Many of these factors are beyond our control.
While the merger is pending, we are subject to business uncertainties and contractual restrictions that could materially adversely
affect our operating results, financial position and/or cash flows or result in a loss of employees, customers, collaborators or suppliers.
The definitive merger agreement includes restrictions on the conduct of our business prior to the completion of the merger or termination
of the merger agreement, generally requiring us to conduct our business in the ordinary course consistent with past practice. Without
limiting the generality of the foregoing, we are subject to a variety of specified restrictions. Unless we obtain Bristol-Myers Squibb’s
prior written consent (which consent may not be unreasonably withheld, conditioned or delayed) and except (i) as required or expressly
contemplated by the merger agreement, (ii) as required by applicable law or (iii) as set forth in the confidential disclosure schedule
delivered by Celgene to Bristol-Myers Squibb, we may not, among other things, incur additional indebtedness, issue additional shares
of our common stock outside of our equity incentive plans, repurchase our common stock, pay dividends, acquire assets, securities or
property (subject to certain exceptions, including without limitation, acquisitions up to a specified individual amount and an aggregate
limitation), dispose of businesses or assets, enter into material contracts or make certain additional capital expenditures. We may find
that these and other contractual restrictions in the merger agreement delay or prevent us from responding, or limit our ability to respond,
effectively to competitive pressures, industry developments and future business opportunities that may arise during such period, even if
our management believes they may be advisable. The pendency of the proposed merger may also divert management’s attention and our
resources from ongoing business and operations.
Our employees, customers, collaborators and suppliers may experience uncertainties about the effects of the merger. In connection
with the pending merger, it is possible that some customers, collaborators, suppliers and other parties with whom we have a business
relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationship
with us as a result of the merger. Similarly, current and prospective employees may experience uncertainty about their future roles with
us following completion of the merger, which may materially adversely affect our ability to attract and retain key employees. If any of
these effects were to occur, it could materially and adversely impact our operating results, financial position and/or cash flows and/or our
stock price.
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Lawsuits have been filed against us and Bristol-Myers Squibb and other lawsuits may be filed against us and/or Bristol-Myers Squibb
challenging the transactions contemplated by the merger agreement. An adverse ruling in any such lawsuit may delay or prevent the
proposed acquisition from being completed.
Between February 4, 2019 and February 20, 2019, six putative class actions and three individual actions were filed against us, our board
of directors, and in four cases, Bristol-Myers Squibb Company and/or Burgundy Merger Sub, Inc. Three complaints, Bernstein v. Celgene
Corporation, et al., 2:19-cv-04804; Lowinger v. Celgene Corporation, et al., 2:19-cv-04752; and Wang v. Celgene Corporation, et al.,
2:19-cv-04865, were filed in the U.S. District Court for the District of New Jersey. Three complaints, Gerold v. Celgene Corporation,
et al., 1:19-cv-00233-UNA; Sbriglio v. Celgene Corporation, et al., 1:19-cv-00277-UNA; and Grayson v. Celgene Corporation, et al.,
No. 1:19-cv-00332, were filed in the U.S. District Court for the District of Delaware. Two complaints, Rogers v. Celgene Corporation,
et al., 1:19-cv-01275; and Woods v. Celgene Corporation, et al., No. 1:19-cv-01597, were filed in the U.S. District Court for the
Southern District of New York. One complaint, Ciavarella v. Alles, No. 2019-0133-AGB, was filed in the Court of Chancery of the
State of Delaware. The federal complaints generally allege that defendants prepared and filed a false or misleading registration statement
regarding the proposed merger in violation of Section 14(a) and Section 20(a) of the Exchange Act, and Rule 14a-9 promulgated under
the Exchange Act. Specifically, the federal complaints allege that the registration statement misstated or omitted material information
regarding the parties’ financial projections and the analyses performed by the parties’ financial advisors. Some of the federal complaints
also allege that the registration statement misstated or omitted material information regarding potential conflicts of interest faced by
Celgene directors and executives. The federal complaints further allege that our board of directors and/or Bristol-Myers Squibb are liable
for these violations as “controlling persons” of Celgene under Section 20(a) of the Exchange Act. The federal complaints seek, among
other relief, injunctive relief to prevent consummation of the merger until the alleged disclosure violations are cured, damages in the
event the merger is consummated, and an award of attorney’s fees. The Ciavarella complaint alleges that Celgene’s directors breached
their fiduciary duties by failing to maximize the value of Celgene and that Bristol-Myers Squibb aided and abetted those breaches. It
seeks, among other things, injunctive relief to prevent consummation of the merger, damages in the event the merger is consummated,
and an award of attorney’s fees.
In addition, a complaint, Landers, et al. v. Caforio, et al., No. 2019-0125-AGB, was filed in the Court of Chancery of the State of
Delaware. Landers is styled as a putative class action on behalf of Bristol-Myers Squibb stockholders and names members of the
Bristol-Myers Squibb board of directors as defendants, alleging that they breached their fiduciary duties by failing to disclose material
information about the merger.
Additional lawsuits arising out of or relating to the definitive merger agreement, the registration statement and/or the proposed
acquisition of us by Bristol-Myers Squibb may be filed in the future.
One of the conditions to completion of the proposed acquisition is the absence of any applicable injunction or other order being in effect
that prohibits completion of the proposed acquisition. Accordingly, if a plaintiff is successful in obtaining an injunction, then such order
may prevent the proposed acquisition from being completed, or from being completed within the expected timeframe.
We may have difficulty attracting, motivating and retaining executives and other key employees in light of the merger.
Uncertainty about the effect of the merger on our employees may have an adverse effect on our business. This uncertainty may impair
our ability to attract, retain and motivate key personnel. Employee retention may be particularly challenging during the pendency of the
merger, as our employees may experience uncertainty about their future roles in the combined business. No assurance can be given that
we will be able to attract or retain key employees to the same extent that we have been able to attract or retain employees in the past.
Additional information on these risks
Additional information concerning these risks, uncertainties and assumptions can be found in the section entitled “Risk Factors”
beginning on page 39 of our joint proxy statement/prospectus filed February 22, 2019 with the SEC.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.

32

ITEM 2. PROPERTIES
Our corporate headquarters are located in Summit, New Jersey and our international headquarters are located in Boudry, Switzerland.
Summarized below are the locations, primary usage and approximate square footage of the facilities we own worldwide:
Approximate
Location Primary Usage Square Feet
Summit, New Jersey (two locations) Administration, marketing, research 1,933,000
Phoenix, Arizona Manufacturing and warehousing 254,000
Boudry, Switzerland Manufacturing, administration and warehousing 253,000
Couvet, Switzerland Manufacturing, administration and warehousing 191,000
Bothell, Washington Manufacturing, administration and warehousing 68,000
Zofingen, Switzerland Manufacturing 4,500
We occupy the following facilities, located in the United States, under operating lease arrangements, none of which are individually
material to us. Under these lease arrangements, we may be required to reimburse the lessors for real estate taxes, insurance, utilities,
maintenance and other operating costs. All leases are with unaffiliated parties.
Approximate
Location Primary Usage Square Feet
Seattle, Washington Office space and research 331,400
San Diego, California Office space and research 285,400
Warren, New Jersey Office space and research 181,200
Cambridge, Massachusetts Office space and research 145,300
Berkeley Heights, New Jersey Office space 138,400
Brisbane, California Office space and research 112,200
San Francisco, California Office space and research 55,800
Waltham, Massachusetts Office space and research 20,100
Overland Park, Kansas Office space 20,000
Bothell, Washington Warehouse 19,400
Allentown, Pennsylvania Warehouse 15,100
Emeryville, California Office space and research 4,900
Los Angeles, California Office space 3,800
Washington, D.C. Office space 3,500
Dallas, Texas Office space 3,100
We also lease a number of offices under various lease agreements outside of the United States for which the minimum annual rents may
be subject to specified annual rent increases. As of December 31, 2018, the non-cancelable lease terms for our operating leases expire at
various dates between 2019 and 2029 and in some cases include renewal options. The total amount of rent expense recorded for all leased
facilities in 2018 was $80 million.
ITEM 3. LEGAL PROCEEDINGS
See Note 19 of Notes to Consolidated Financial Statements contained elsewhere in this report.
ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.
33

PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
MARKET AND STOCKHOLDER INFORMATION
Our common stock is traded on the NASDAQ Global Select Market under the symbol "CELG." As of February 21, 2019, there were
approximately 360 holders of record of our common stock.
PERFORMANCE GRAPH
The below chart sets forth a comparison of cumulative total returns per share for the periods indicated:
Cumulative Total Return

12/13 12/14 12/15 12/16 12/17 12/18
Celgene
Corporation $ 100.00 $ 132.40 $ 141.75 $ 137.01 $ 123.53 $ 75.86
S&P 500 100.00 113.68 115.24 129.02 157.17 150.27
NASDAQ
Composite 100.00 114.83 122.99 134.02 173.86 168.98
NASDAQ
Biotechnology 100.00 134.40 150.22 118.15 143.74 131.00
* $100 Invested on 12/31/13 in Stock or Index – Including Reinvestment of Dividends, Fiscal Year Ended December 31.

DIVIDEND POLICY
We have never declared or paid any cash dividends on our common stock and have no present intention to pay a cash dividend on our
common stock.
REPURCHASE OF EQUITY SECURITIES

From April 2009 through December 31, 2018, our Board of Directors approved purchases of up to $28.5 billion of our common stock,
including increases of $5.0 billion and $3.0 billion approved by our Board of Directors in February and May 2018, respectively. Approved
amounts exclude share purchase transaction fees.
34

As part of the existing Board authorized share repurchase program, in May 2018 we entered into an Accelerated Share Repurchase (ASR)
agreement with an investment bank to repurchase an aggregate of $2.0 billion of our common stock. As part of the ASR agreement we
received an initial delivery of 17,987,922 shares in May 2018 and a final delivery of 5,956,747 shares in August 2018. The total number
of shares repurchased under the ASR agreement was 23,944,669 at a weighted average price of $83.53 per share.
There were no shares repurchased during the three-month period ended December 31, 2018. As of December 31, 2018, we had a
remaining purchase authorization of approximately $2.8 billion.
During the period covered by this report, we did not sell any of our equity shares that were not registered under the Securities Act of
1933, as amended.
ITEM 6. SELECTED FINANCIAL DATA
The following Selected Consolidated Financial Data should be read in conjunction with our Consolidated Financial Statements and
the related Notes thereto, Management's Discussion and Analysis of Financial Condition and Results of Operations and other financial
information included in this Annual Report on Form 10-K. The data set forth below with respect to our Consolidated Statements of
Income for the years ended December 31, 2018, 2017 and 2016 and the Consolidated Balance Sheet data as of December 31, 2018
and 2017 are derived from our Consolidated Financial Statements which are included in this Annual Report on Form 10-K and are
qualified by reference to such Consolidated Financial Statements and related Notes thereto. The data set forth below with respect to our
Consolidated Statements of Income for the years ended December 31, 2015 and 2014 and the Consolidated Balance Sheet information
as of December 31, 2016, 2015 and 2014 are derived from our Consolidated Financial Statements, which are not included in this Annual
Report on Form 10-K (amounts in millions, except per share data).
Years ended December 31,

2018(1) 2017 (2) 2016 2015 2014
Consolidated Statements of Income:
Total revenue $ 15,281 $ 13,003 $ 11,229 $ 9,256 $ 7,670
Costs and operating expenses 10,090 8,296 8,063 7,001 5,151
Operating income 5,191 4,707 3,166 2,255 2,519
Interest and investment income, net 45 105 30 31 28
Interest (expense) (741) (522) (500) (311) (176)
Other income (expense), net 337 24 (324) 48 (44)
Income before income taxes 4,832 4,314 2,372 2,023 2,327
Income tax provision 786 1,374 373 421 327
Net income $ 4,046 $ 2,940 $ 1,999 $ 1,602 $ 2,000
Net income per share:
Basic $ 5.65 $ 3.77 $ 2.57 $ 2.02 $ 2.49
Diluted $ 5.51 $ 3.64 $ 2.49 $ 1.94 $ 2.39
Weighted average shares:
Basic 716.3 779.2 777.2 792.2 802.7
Diluted 733.8 808.7 803.3 824.9 836.0
As of December 31,
2018 2017 2016 2015 2014
Consolidated Balance Sheets Data:
Cash and cash equivalents, Debt securities available-for-
sale and Equity investments with readily determinable fair
values(1) $ 6,042 $ 12,042 $ 7,970 $ 6,552 $ 7,547
Total assets(3) 35,480 30,141 28,086 26,964 17,291

Short-term borrowings and current portion of long-term
debt 501 — 501 — 606
Long-term debt, net of discount(3) 19,769 15,838 13,789 14,161 6,217
Retained earnings 17,559 13,061 10,074 8,075 6,473
Total stockholders' equity 6,161 6,921 6,600 5,919 6,525
35

(1) Accounting Standards Update No. 2016-01, “Financial Instruments-Overall: Recognition and Measurement of Financial Assets and
Financial Liabilities” was effective for us on January 1, 2018. ASU 2016-01 requires changes in the fair value of equity investments
with readily determinable fair values and changes in observable prices of equity investments without readily determinable fair values to
be recorded in net income. For the year ended December 31, 2018, a net gain of $317 million was recorded in Other income (expense),
net. Certain prior year Consolidated Balance Sheet amounts have been reclassified to conform to the current year's presentation. See
Note 1 of Notes to Consolidated Financial Statements contained elsewhere in this report for additional information.
(2) The Income tax provision for fiscal 2017 includes income tax expense of approximately $1,269 million as a result of U.S. tax reform
legislation, formerly known as the Tax Cuts and Jobs Act (2017 Tax Act), which was enacted on December 22, 2017. In addition, the
Income tax provision also includes $290 million of excess tax benefits arising from share-based compensation awards that vested or were
exercised during 2017, and are recorded in the income tax provision following the adoption of ASU 2016-09, "Compensation-Stock
Compensation". See 'Liquidity and Capital Resources’ within Item 7. "Management’s Discussion and Analysis of Financial Condition
and Results of Operations" as well as Note 17 of Notes to Consolidated Financial Statements contained elsewhere in this report for
additional details related to the 2017 Tax Act.
(3) Total assets and Long-term debt, net of discount have been restated as of December 31, 2015 and 2014 to reflect the retroactive
reclassification of debt issuance costs in accordance with ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs."
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s discussion and analysis of financial condition and results of operations is intended to help the reader understand our results
of operations and financial condition. This discussion and analysis is provided as a supplement to, and should be read in conjunction with,
our audited Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements. Certain statements
in this Item 7 of Part II of this Annual Report on Form 10-K constitute forward-looking statements. Various risks and uncertainties,
including those discussed in "Forward-Looking Statements" and Item 1A, “Risk Factors,” may cause our actual results and cash generated
from operations to differ materially from these forward-looking statements. Our Consolidated Financial Statements have been prepared
in accordance with U.S. generally accepted accounting principles (GAAP) and are presented in U.S. dollars.
(In all accompanying tables, amounts of dollars expressed in millions, except per share amounts, unless otherwise noted)
Executive Summary
Merger Agreement with Bristol-Myers Squibb Company
On January 2, 2019 Bristol-Myers Squibb Company (Bristol-Myers Squibb) and Celgene entered into a definitive merger agreement
under which Bristol-Myers Squibb will acquire Celgene in a cash and stock transaction with an equity value of approximately $74 billion,
based on the closing price of Bristol-Myers Squibb shares of $52.43 on January 2, 2019. Under the terms of the agreement, Celgene
shareholders will receive 1.0 Bristol-Myers Squibb share and $50.00 in cash for each share of Celgene. Celgene shareholders will also
receive one tradeable Bristol-Myers Squibb CVR for each share of Celgene, which will entitle the holder to receive a payment for the
achievement of future regulatory milestones. The Boards of Directors of both companies have approved the merger agreement. The
definitive merger agreement includes restrictions on the conduct of our business prior to the completion of the merger or termination
limitation), dispose of businesses or assets, enter into material contracts or make certain additional capital expenditures. See Item 1A.
"Risk Factors - While the merger is pending, we are subject to business uncertainties and contractual restrictions that could materially
adversely affect our operating results, financial position and/or cash flows or result in a loss of employees, customers, collaborators or
suppliers.”

36

Based on the closing price of Bristol-Myers Squibb stock of $52.43 on January 2, 2019, the cash and stock consideration to be received
by Celgene shareholders at closing is valued at $102.43 per Celgene share and one Bristol-Myers Squibb CVR. Each Bristol-Myers
Squibb CVR will entitle its holder to receive a one-time potential payment of $9.00 in cash upon U.S. Food and Drug Administration
(FDA) approval of all three of ozanimod (by December 31, 2020), liso-cel (JCAR017) (by December 31, 2020) and bb2121 (by March
31, 2021), in each case for a specified indication. Upon completion of the merger, Bristol-Myers Squibb shareholders are expected to
own approximately 69% of the company, and Celgene shareholders are expected to own approximately 31% based on shares
outstanding for each of Bristol-Myers Squibb and Celgene.
The transaction is not subject to a financing condition. The cash portion will be funded through a combination of cash on hand and debt
financing. Bristol-Myers Squibb has obtained fully committed debt financing from Morgan Stanley Senior Funding, Inc. and MUFG
Bank, Ltd.
The transaction is subject to approval by Bristol-Myers Squibb and Celgene shareholders and the satisfaction of customary closing
conditions and regulatory approvals. Bristol-Myers Squibb and Celgene expect to complete the transaction in the third quarter of 2019.
If the merger agreement is terminated under specified circumstances, Celgene may be required to pay Bristol-Myers Squibb a termination
fee of $2.2 billion, and if the merger agreement is terminated under certain other circumstances, Bristol-Myers Squibb may be required
to pay Celgene a termination fee of $2.2 billion.
We continue to invest substantially in research and development in support of multiple ongoing proprietary clinical development
programs which support our existing products and pipeline of new product candidates. Our clinical trial activity includes trials across the
disease areas of hematology, oncology, and inflammation and immunology. REVLIMID® is being evaluated in phase III trials covering
a range of hematological malignancies that include lymphomas. In July 2018, the phase III trial (AUGMENTTM) for REVLIMID® in
combination with rituximab (R2), for the treatment of relapsed and/or refractory follicular or marginal zone lymphoma achieved its
primary endpoint. In December 2018, we submitted a U.S. supplemental New Drug Application (NDA) for REVLIMID® in combination
with rituximab in relapsed and/or refractory indolent non-Hodgkin lymphoma (NHL) and in January 2019 we submitted an application
with the European Medicines Agency (EMA) for approval in Europe. Also, within hematological malignancies, POMALYST® is in phase
III and post-approval trials for relapsed and/or refractory multiple myeloma (RRMM). In solid tumors, ABRAXANE® is currently being
investigated in pancreatic cancer, breast and non-small cell lung cancers. In inflammation and immunology in 2018, we submitted a U.S.
supplemental NDA and Japan NDA for OTEZLA® in Behçet’s disease following positive results from the phase III trial (RELIEFTM).
Patients with active Behçet’s disease showed statistically significant reductions in oral ulcers with OTEZLA® when compared to placebo.
Also in 2018, the phase IIIb study (STYLETM) for OTEZLA® in patients with moderate to severe scalp psoriasis showed statistically
significant improvement of the Scalp Physician’s Global Assessment (ScPGA) response compared with placebo. OTEZLA® is also being
evaluated in a phase III trial in pediatric psoriasis (SPROUT®), while continuing to be studied in psoriatic arthritis and plaque psoriasis.
We also have a growing number of potential products in phase III trials or that have completed phase III across multiple diseases. In the
inflammation and immunology therapeutic area, we completed two phase III trials (RADIANCETM and SUNBEAMTM) for ozanimod in
relapsing multiple sclerosis (RMS). Both RADIANCETM and SUNBEAMTM achieved their primary endpoints in reducing the annualized
relapse rate in patients with RMS. Enrollment is currently ongoing for the phase III TRUENORTHTM trial in ulcerative colitis (UC) and
the phase III YELLOWSTONETM trial in Crohn’s Disease (CD). In hematology, we submitted a U.S. NDA for fedratinib for the treatment
of patients with myelofibrosis in January 2019. In June and July 2018, Celgene and Acceleron Pharma, Inc. (Acceleron) announced that
luspatercept achieved all primary and key secondary endpoints in the phase III MEDALISTTM and BELIEVETM trials in patients with
low-to-intermediate risk myelodysplastic syndromes (MDS) and transfusion-dependent beta-thalassemia, respectively. In collaboration
with bluebird bio, the pivotal study (KarMMaTM) evaluating bb2121 in RRMM is ongoing and enrollment was completed in the fourth
quarter. The clinical program evaluating bb2121 in earlier lines of multiple myeloma (MM) is also advancing. In the second quarter of
2018 we initiated the pivotal TRANSCEND WORLD trial evaluating liso-cel (lisocabtagene maraleucel) (JCAR017) in relapsed and/
or refractory diffuse large B-cell lymphoma (DLBCL). Phase III trials are also underway for CC-486 in MDS, acute myeloid leukemia
(AML), and angioimmunoblastic T-Cell lymphoma (AITL). In solid tumors, we are supporting a phase III study of marizomib in newly
diagnosed glioblastoma, sponsored by the European Organization for Research and the Treatment of Cancer (EORTC) in collaboration
with the Canadian Cancer Trials Group (CCTG). In 2018, our partner BeiGene initiated phase III trials for tislelizumab (BGB-A317) in
1L hepatocellular carcinoma, 2L/3L hepatocellular carcinoma, and 2L/3L non-small cell lung cancer.
37

Beyond our phase III programs, we have access to a growing early-to-mid-stage pipeline of novel potential therapies to address significant
unmet medical needs that consists of new product candidates and cell therapies developed in-house, licensed from other companies or
able to be optioned from collaboration partners. We believe that continued use of our primary commercial stage products, participation in
research and development collaboration arrangements, depth of our product pipeline, potential regulatory approvals of new products and
new indications for existing products will provide the catalysts for future growth.
Recent Developments
The following tables present significant developments in our pivotal and phase III clinical trials and regulatory approval requests that
occurred during the three-month period ended December 31, 2018, as well as developments that are expected to occur if the future
occurrence is material and reasonably certain:
Regulatory Approval Requests in Major Markets:
Disease Indication/
Product New Formulation Major Market Regulatory Agency Action
REVLIMID® Relapsed and/or refractory indolent U.S. FDA Q4 2018 (submitted)
non-Hodgkin lymphoma
REVLIMID® Relapsed and/or refractory indolent Europe EMA Q1 2019 (submitted)
non-Hodgkin lymphoma
Fedratinib Myelofibrosis U.S. FDA Q1 2019 (submitted)
Pivotal and Phase III Trials:
Product Candidate Trial Disease Indication Action

CC-10004-PPSO-003
OTEZLA® Pediatric psoriasis Initiated
(SPROUT®)
OR-CL-LYM - LYSARC-13134
CC-486 AITL Initiated
(ORACLE)
Financial Update
The following table summarizes net product sales, total revenue and earnings for the years ended December 31, 2018, 2017 and 2016
(dollar amounts in millions, except per share data):
% Change
Years Ended December 31,
2018 versus 2017 versus
2018 2017 2016 2017 2016
Net product sales $ 15,265 $ 12,973 $ 11,185 17.7% 16.0%
Total revenue 15,281 13,003 11,229 17.5% 15.8%
Net income 4,046 2,940 1,999 37.6% 47.1%
Diluted earnings per share $ 5.51 $ 3.64 $ 2.49 51.4% 46.2%
Total net product sales for 2018 increased by approximately $2.3 billion, or 17.7%, to approximately $15.3 billion compared to the year
ended December 31, 2017. The increase was comprised of net volume increases of approximately $2.0 billion, or 15.2%, and net price
increases of $369 million, or 2.9%. The increase in volume was primarily driven by increased unit sales of REVLIMID®, OTEZLA® and
POMALYST®/IMNOVID®. The price impact was primarily attributable to net price increases in the U.S., which were partially offset
by net price decreases in international markets. Changes in foreign currency exchange rates including the impact of foreign exchange
hedging activity unfavorably impacted Net product sales by $51 million, or 0.4%.
Total net product sales for 2017 increased by approximately $1.8 billion, or 16.0%, to approximately $13.0 billion compared to 2016.
The increase was comprised of net volume increases of approximately $1.5 billion, or 13.6%, and net price increases of $369 million, or

3.3%. The increase in volume was primarily driven by increased unit sales of REVLIMID®, POMALYST®/IMNOVID® and OTEZLA®.
The price impact was primarily attributable to price increases in the U.S., which were partially offset
38

by price decreases in Europe. Changes in foreign currency exchange rates, including the impact of foreign exchange hedging activity,
unfavorably impacted net product sales by $98 million, or 0.9%.
Total revenue increased by approximately $2.3 billion, or 17.5%, in 2018 compared to 2017 primarily due to the continued growth in
sales of REVLIMID®, POMALYST®/IMNOVID® and OTEZLA® reflecting increases of approximately $1.7 billion, or 20.4%, in the
United States and $579 million, or 12.4%, in international markets.
Total revenue increased by approximately $1.8 billion, or 15.8%, in 2017 compared to 2016 primarily due to the continued growth in
sales of REVLIMID®, POMALYST®/IMNOVID® and OTEZLA® reflecting increases of approximately $1.3 billion, or 18.7%, in the
United States and $460 million, or 10.9%, in international markets.
In addition to the increase in total revenue discussed above, notable items impacting net income and diluted earnings per share for the
years ended December 31, 2018, 2017 and 2016 are as follows:

Income Statement Classification 2018 2017 2016
Research and development asset acquisition expenses (see Note 3*) Research and development $ 1,125 $ 325 $ 893
Collaboration arrangements (see Note 18*) Research and development 632 833 927
In-process research & development (IPR&D) asset impairment charge
Research and development
related to GED-0301 (see Note 5*) — 1,620 —
Clinical trial & development activity wind-down (income) expense
related to GED-0301 (see Note 5*) (60) 188 —
Litigation-related loss contingency accrual expense (see Note 19*) Selling, general and administrative 96 315 199
Cost of goods sold, Research and
Share-based compensation expense (see Notes 3 and 15*)(1) development, and Selling, general
and administrative 1,114 644 606
Amortization of acquired intangible
Amortization of acquired intangible assets (see Note 11*)
assets 468 329 459
Acquisition related charges (gains)
Juno Therapeutics, Inc. (Juno) acquisition costs
and restructuring, net 93 — —
Reduction in contingent consideration liabilities related to GED-0301 Acquisition related charges (gains)
(see Note 5*) and restructuring, net — (1,397) —
Fair value adjustments on equity investments (see Notes 1 and 5*) Other income (expense), net 317 — —
Investment impairment charges Other income (expense), net — (54) (394)
2017 Tax Act (see Note 17*) Income tax provision (43) 1,269 —
(1)
Includes share-based compensation expense related to the acquisition of Juno post-combination service period of $320 million and
$208 million, which was recorded in Research and development and Selling, general and administrative, respectively, for the year ended
December 31, 2018.
* References to Notes in this table are to the Notes to Consolidated Financial Statements contained elsewhere in this report.
39

Results of Operations - Fiscal Years Ended December 31, 2018, 2017 and 2016
Net Product Sales and Other Revenue
Net product sales and other revenue for 2018, 2017 and 2016 were as follows:
REVLIMID®
Percent Change
2018 2017 2016 2017 2016
U.S. $ 6,469 $ 5,426 $ 4,417 19.2% 22.8%
International 3,216 2,761 2,557 16.5% 8.0%
Worldwide $ 9,685 $ 8,187 $ 6,974 18.3% 17.4%
REVLIMID® net sales increased by approximately $1.5 billion, or 18.3%, to approximately $9.7 billion for 2018 compared to 2017. Sales
growth was primarily volume-driven due to global increases in treatment duration and market share. In the U.S., sales growth increased
due to increases in both price and unit sales from market penetration and treatment duration of patients using REVLIMID®. International
volume growth was partially offset by net price decreases.
REVLIMID® net sales increased by approximately $1.2 billion, or 17.4%, to approximately $8.2 billion in 2017 compared to 2016,
primarily due to increased sales in both U.S. and international markets. U.S. sales growth increased due to both price increases and, an
increase in unit sales from market penetration and treatment duration of patients using REVLIMID®. In addition, unit sales increased
across all international regions, primarily in Europe and Japan, driven by increased duration of use and market share gains. International
volume growth was partially offset by net price decreases.
POMALYST®/IMNOVID®
Percent Change
2018 2017 2016 2017 2016
U.S. $ 1,391 $ 1,008 $ 778 38.0% 29.6%
International 649 606 533 7.1% 13.7%
Worldwide $ 2,040 $ 1,614 $ 1,311 26.4% 23.1%
POMALYST®/IMNOVID® net sales increased by $426 million, or 26.4%, to approximately $2.0 billion for 2018 compared to 2017,
primarily due to increased sales in the U.S. market. In the U.S., sales growth increased due to both unit sales and price increases. Increases
in market share and treatment duration contributed to the increase in U.S. unit sales. In addition, international unit sales increased,
primarily due to sales growth in Europe as a result of increased treatment duration. International volume growth was partially offset by
net price decreases.
POMALYST®/IMNOVID® net sales increased by $303 million, or 23.1%, to approximately $1.6 billion in 2017 compared to 2016,
primarily due to increased sales in the U.S. and to a lesser extent international markets. In the U.S., sales growth increased primarily
due to an increase in unit sales and price increases. In addition, unit sales increased across all international regions, primarily in Europe.
Increases in market share and treatment duration contributed to the increases in U.S. and international regions. International volume
growth was partially offset by net price decreases.
OTEZLA®
Percent Change
2018 2017 2016 2017 2016
U.S. $ 1,275 $ 1,058 $ 904 20.5% 17.0%
International 333 221 113 50.7% 95.6%
Worldwide $ 1,608 $ 1,279 $ 1,017 25.7% 25.8%

40

OTEZLA® net sales increased by $329 million, or 25.7%, to approximately $1.6 billion for 2018 compared to 2017, due to increased
worldwide sales. In the U.S., sales growth increased primarily due to unit sales increases as a result of managed care contracts executed
in 2017 and 2018, which contributed to higher gross-to-net charges. Volume increased in all international markets led by Japan, where it
was launched in 2017.
OTEZLA® net sales increased by $262 million, or 25.8% to approximately $1.3 billion in 2017 compared to 2016, primarily due to
increased worldwide unit sales. Net sales in the U.S. were volume driven reflecting increased market share and expanding patient access.
International volume growth was partially offset by net price decreases.
ABRAXANE®
Percent Change
2018 2017 2016 2017 2016
U.S. $ 663 $ 607 $ 634 9.2% (4.3)%
International 399 385 339 3.6% 13.6 %
Worldwide $ 1,062 $ 992 $ 973 7.1% 2.0 %
ABRAXANE® net sales increased by $70 million, or 7.1%, to approximately $1.1 billion for 2018 compared to 2017, primarily due to
unit sales and price increases in the U.S. market. International volume growth was partially offset by net price decreases.
ABRAXANE® net sales increased by $19 million, or 2.0% to $992 million in 2017 compared to 2016, primarily due to increases in unit
sales in international markets. The increase was partially offset by decreased unit sales in the U.S. The decrease in U.S. unit sales reflects
the continuing competition in breast cancer and lung cancer indications.
OTHER PRODUCT NET SALES
Percent Change
2018 2017 2016 2017 2016
U.S. $ 217 $ 211 $ 248 2.8 % (14.9)%
International 653 690 662 (5.4)% 4.2 %
Worldwide $ 870 $ 901 $ 910 (3.4)% (1.0)%
All other product net sales, which include IDHIFA®, VIDAZA®, generic azacitidine for injection, THALOMID®, and ISTODAX®,
decreased by $31 million in 2018 compared to 2017, primarily due to decreases in net sales from VIDAZA®, THALOMID®, ISTODAX®
and generic azacitidine for injection, partially offset by increased net sales from IDHIFA®, which launched in the third quarter of 2017.
All other product sales, decreased by $9 million in 2017 compared to 2016, primarily due to decreases in generic azacitidine for injection
and THALOMID® net sales, which were partially offset by increases in net sales from the launch of IDHIFA® and VIDAZA® net sales.
Other Revenue: Other revenue decreased by $14 million to $16 million for 2018 compared to 2017. Beginning in 2018, we were no
longer entitled to receive royalties from Novartis AG (Novartis) on sales of RITALIN® and FOCALIN XR®, which primarily contributed
to the decrease in Other revenue.
Other revenue decreased by $14 million to $30 million for 2017 compared to 2016. This decrease is primarily due to a reduction in royalty
revenue from Novartis based upon its sales of both RITALIN® and FOCALIN XR®, both of which have been unfavorably impacted by
generic competition in certain markets.
41

Gross-to-Net Sales Accruals: We record gross-to-net sales accruals for government rebates, chargebacks, distributor service fees, other
rebates and administrative fees, sales returns and allowances and sales discounts.
REVLIMID REMS® and POMALYST REMS® programs, respectively. These are proprietary risk-management distribution programs
tailored specifically to provide for the safe and appropriate distribution and use of REVLIMID® and POMALYST®. Internationally,
REVLIMID® and IMNOVID® are distributed under mandatory risk-management distribution programs tailored to meet local authorities’
specifications to provide for the product’s safe and appropriate distribution and use. These programs may vary by country and, depending
upon the country and the design of the risk-management program, the product may be sold through hospitals or retail pharmacies.
OTEZLA®, ABRAXANE® and VIDAZA® are distributed through the more traditional pharmaceutical industry supply chain and are not
subject to the same risk-management distribution programs as REVLIMID® and POMALYST®/IMNOVID®.
Government rebate accruals are based on estimated payments due to governmental agencies for purchases made by third parties under
various governmental programs. U.S. Medicaid rebate accruals are generally based on historical payment data and estimates of future
Medicaid beneficiary utilization applied to the Medicaid unit rebate formula established by the Center for Medicaid and Medicare
Services. The Medicaid rebate percentage was increased and extended to Medicaid Managed Care Organizations in March 2010. The
accrual of the rebates associated with Medicaid Managed Care Organizations is calculated based on estimated historical patient data
related to Medicaid Managed Care Organizations. We also analyze actual billings received from the states to further support the accrual
rates. Manufacturers of pharmaceutical products are responsible for 50% of the patient’s cost of branded prescription drugs related to
the Medicare Part D Coverage Gap (70% beginning in 2019). In order to estimate the cost to us of this coverage gap responsibility, we
analyze data for eligible Medicare Part D patients against data for eligible Medicare Part D patients treated with our products as well as
the historical invoices. This expense is recognized throughout the year as costs are incurred. In certain international markets government-
sponsored programs require rebates to be paid based on program specific rules and, accordingly, the rebate accruals are determined
primarily on estimated eligible sales.
Rebates or administrative fees are offered to certain wholesale customers, group purchasing organizations and end-user customers,
consistent with pharmaceutical industry practices. Settlement of rebates and fees may generally occur from one to 15 months from the
date of sale. We record a provision for rebates at the time of sale based on contracted rates and historical redemption rates. Assumptions
used to establish the provision include level of wholesaler inventories, contract sales volumes and average contract pricing. We regularly
review the information related to these estimates and adjust the provision accordingly.
Chargeback accruals are based on the differentials between product acquisition prices paid by wholesalers and lower government contract
pricing paid by eligible customers covered under federally qualified programs. Distributor service fee accruals are based on contractual
fees to be paid to the wholesale distributor for services provided. TRICARE is a health care program of the U.S. Department of Defense
Military Health System that provides civilian health benefits for military personnel, military retirees and their dependents. TRICARE
rebate accruals are included in chargeback accruals and are based on estimated Department of Defense eligible sales multiplied by the
TRICARE rebate formula.
Sales discount accruals are based on payment terms extended to customers.
We base our sales returns allowance on estimated on-hand retail/hospital inventories, measured end-customer demand as reported by
third-party sources, actual returns history and other factors, such as the trend experience for lots where product is still being returned or
inventory centralization and rationalization initiatives conducted by major pharmacy chains, as applicable. If the historical data we use
to calculate these estimates do not properly reflect future returns, then a change in the allowance would be made in the period in which
such a determination is made and revenues in that period could be materially affected. Under this methodology, we track actual returns
by individual production lots. Returns on closed lots, that is, lots no longer eligible for return credits, are analyzed to determine historical
returns experience. Returns on open lots, that is, lots still eligible for return credits, are monitored and compared with historical return
trend rates. Any changes from the historical trend rates are considered in determining the current sales return allowance. As noted above,
REVLIMID® and POMALYST®/IMNOVID® are distributed primarily through hospitals and contracted pharmacies, which are typically
subject to tighter controls of inventory quantities within the supply channel and, thus, resulting in lower returns activity.
See Critical Accounting Estimates and Significant Accounting Policies below for further discussion of gross-to-net sales accruals.
42

Gross-to-net sales accruals and the balance in the related allowance accounts for the years ended December 31, 2018, 2017 and 2016
were as follows:
Chargebacks
and
Government Distributor Sales Returns
Rebates Service Fees Sales Discounts and Allowances Total
Balance as of December 31, 2015 $ 225 $ 142 $ 12 $ 17 $ 396
Allowances for sales during prior periods 20 (14) — (6) —
Allowances for sales during 2016 668 764 153 17 1,602
Credits/deductions issued for prior year sales (175) (56) (10) (6) (247)
Credits/deductions issued for sales during 2016 (367) (646) (139) (4) (1,156)
Allowances for sales during prior periods 9 (28) — (5) (24)
Allowances for sales during 2017 881 1,102 193 13 2,189
Credits/deductions issued for sales during 2017 (407) (898) (172) (3) (1,480)
Allowances for sales during prior periods (38) 4 — — (34)
Allowances for sales during 2018 1,114 1,637 243 45 3,039
Credits/deductions issued for sales during 2018 (587) (1,315) (222) (5) (2,129)
Balance as of December 31, 2018 $ 678 $ 429 $ 22 $ 47 $ 1,176
A comparison of provisions for allowances for sales within each of the four categories noted above for 2018 and 2017 follows:
2018 compared to 2017: Government rebate provisions increased by $186 million for 2018 compared to 2017, due to a $124 million
increase in international government rebates and a $62 million increase in the U.S. market. The increase in international government
rebates was primarily driven by higher sales volumes and increased rebate rates. The increase in the U.S. market was primarily due to
higher sales volumes and increased rebate rates, with $57 million due to an increase in Medicaid rebates (primarily in the managed care
channel) and $5 million due to an increase in expense related to Medicare Part D Coverage Gap. In 2019, we expect the rebate provision
for the Medicare Part D Coverage Gap to increase as a result of a planned increase in the portion manufacturers of pharmaceutical
products are responsible for.
Chargebacks and distributor service fees provisions increased by $567 million for 2018 compared to 2017. Chargebacks increased by
$245 million and distributor service fees increased by $322 million. The increase in chargebacks was primarily due to higher sales
volumes and a greater portion of sales qualifying for chargeback rebates, including a $7 million increase related to the TRICARE program
driven by higher sales volumes. The distributor service fee increase was primarily attributable to increased sales volumes and new
managed care contracts for OTEZLA®, which accounted for $268 million of the increase, as well as a $30 million increase in commercial
copayment program expense and a $16 million increase in the distributor service fee expense, both of which also were attributable to
higher sales volumes.
Discount provisions increased by $50 million for 2018 compared to 2017, primarily due to higher sales volumes. The increase was
primarily comprised of an increase of $25 million related to REVLIMID® as well as increases related to OTEZLA® and POMALYST®.
Provisions for sales returns increased by $37 million in 2018 compared to 2017, as the current year period included a $32 million increase
in the OTEZLA® returns reserve, primarily related to $30 million in the fourth quarter of 2018 due to an anticipated increase in returns
resulting from the sales of shorter-dated inventory in early to mid 2018. In addition, the provision for ABRAXANE® returns increased
by $5 million compared to 2017.
A comparison of provisions for allowances for sales within each of the four categories noted above for 2017 and 2016 follows:

2017 compared to 2016: Government rebate provisions increased by $202 million in 2017 compared to 2016, which was primarily due
to a $122 million increase in the U.S. market and an $80 million increase in international government rebates. The increase
43

in the U.S. market was primarily due to higher sales volumes and increased rebate rates, with $120 million due to an increase in Medicaid
rebates (primarily in the managed care channel) and $2 million due to an increase in expense related to Medicare Part D Coverage Gap.
The increase in international government rebates was primarily driven by higher sales volumes and increased rebate rates.
Chargebacks and distributor service fees provisions increased by $324 million in 2017 compared to 2016. Chargebacks increased by
approximately $127 million and distributor service fees increased by approximately $197 million. The increase in chargebacks was
primarily due to higher sales volumes and a greater portion of sales qualifying for chargeback rebates, including a $13 million increase
related to the TRICARE program driven by higher sales volumes. The distributor service fee increase was primarily attributable to
increased sales volumes and new managed care contracts effective January 1, 2017 for OTEZLA®, which accounted for $154 million of
the increase, as well as a $22 million increase in commercial copayment program expense and a $14 million increase in the distributor
service fee expense, both of which also were attributable to higher sales volumes.
Discount provisions increased by $40 million in 2017 compared to 2016, which was primarily due to a $37 million increase in the U.S.
market and a $3 million increase in international discounts, both due to higher sales volumes. The U.S. market increase was comprised
of an increase of $24 million related to REVLIMID® as well as increases related to OTEZLA® and POMALYST®.
Provisions for sales returns decreased by $3 million in 2017 compared to 2016, primarily due to a reduction in the ABRAXANE® returns
reserve allowance.
Cost of Goods Sold (excluding amortization of acquired intangible assets): Cost of goods sold and related percentages for the years ended
December 31, 2018, 2017 and 2016 were as follows:
2018 2017 2016

Cost of goods sold (excluding amortization of acquired intangible assets) $ 587 $ 461 $ 438
Increase from prior year $ 126 $ 23 $ 18
Percent increase from prior year 27.3% 5.3% 4.3%
Percent of net product sales 3.8% 3.6% 3.9%
Cost of goods sold (excluding amortization of acquired intangible assets) increased by $126 million to $587 million in 2018 compared to
2017. The increase was primarily due to the higher level of net product sales of REVLIMID®, POMALYST® and OTEZLA®. As a percent
of net product sales, cost of goods sold (excluding amortization of acquired intangible assets) increased to 3.8% for 2018 compared to
3.6% for 2017, primarily due to raw materials charges recorded during 2018.
Cost of goods sold (excluding amortization of acquired intangible assets) increased by $23 million to $461 million in 2017 compared
to 2016. The increase was primarily due to the higher level of net product sales. As a percent of net product sales, cost of goods
sold (excluding amortization of acquired intangible assets) decreased to 3.6% for 2017 compared to 3.9% for 2016, primarily due to
REVLIMID®, POMALYST® and OTEZLA®, which have lower cost, making up a higher percentage of net product sales, while sales
of ABRAXANE®, VIDAZA® and generic azacitidine for injection, which have higher cost, made up a lower percentage of net product
sales.
Research and Development: Research and development costs are expensed as incurred and primarily include salary and benefit costs,
third-party grants and fees paid to clinical research organizations, supplies, upfront and milestone payments resulting from collaboration
arrangements and expenses for research and development asset acquisitions.
Research and development expenses and related percentages for the years ended December 31, 2018, 2017 and 2016 were as follows:
2018 2017 2016

Research and development $ 5,673 $ 5,915 $ 4,470
(Decrease) increase from prior year $ (242) $ 1,445 $ 773
Percent (decrease) increase from prior year (4.1)% 32.3% 20.9%
Percent of total revenue 37.1 % 45.5% 39.8%
Research and development expenses decreased by $242 million to approximately $5.7 billion in 2018, compared to 2017. The decrease
was primarily due to an IPR&D asset impairment charge in 2017 of approximately $1,620 million as well as other one-time charges of
approximately $188 million related to estimated wind-down costs and certain development activities associated

44

with the discontinuation of the GED-0301 clinical trials in CD. In 2018, we recorded an adjustment of $60 million related to the clinical
trial and development activity wind-down costs associated with the discontinuation of the GED-0301 clinical trials in CD. The decrease
was also attributable to a decrease of expenses related to collaboration agreements in 2018 of $201 million. These decreases were partially
offset by higher research and development asset acquisition expense related to our purchase of Impact Biomedicines, Inc. (Impact) for
approximately $1.1 billion in 2018 as compared to $325 million for two acquisitions in 2017. Additionally, these decreases were also
offset by an increase of $967 million of incremental research and development expense related to the acquisition of Juno, including $320
million of share-based compensation expense. See Note 5, Note 3, and Note 18 of Notes to Consolidated Financial Statements contained
elsewhere in this report for additional details related to the discontinuation of the GED-0301 clinical trials in CD, our acquisitions, and
our collaboration arrangements, respectively. Our research and development expenses may fluctuate from period-to-period based on the
volume and timing of closing asset acquisitions and collaboration arrangements and associated obligations pursuant to such arrangements.
Research and development expenses increased by approximately $1.4 billion to approximately $5.9 billion in 2017, compared to 2016.
The increase was primarily due to an IPR&D asset impairment charge of approximately $1,620 million as well as other one-time charges
of approximately $188 million related to wind-down costs and certain development activities associated with the discontinuation of
the GED-0301 clinical trials in CD. See Note 5 of Notes to Consolidated Financial Statements contained elsewhere in this report for
additional details related to the discontinuation of the trials. In addition, there was an increase of $253 million in clinical trial and drug
discovery and development activity. These increases were partially offset by a decrease of $568 million of research and development
asset acquisition expenses. See Note 3 of Notes to Consolidated Financial Statements contained elsewhere in this report for additional
details related to our acquisitions. Our research and development expenses may fluctuate from period-to-period based on the volume and
timing of closing asset acquisitions and collaboration arrangements and associated obligations pursuant to such arrangements.
The following table provides a breakdown of research and development expenses:
Increase (Decrease)
2018 2017 2016 2017 2016
Human pharmaceutical clinical programs $ 2,087 $ 1,334 $ 1,136 $ 753 $ 198
Other pharmaceutical programs 1,102 870 824 232 46
(Benefit) charges related to GED-0301 Trials (see Note
5*) (60) 1,808 — (1,868) 1,808
Drug discovery and development 787 745 690 42 55
Collaboration arrangements (see Note 18*) 632 833 927 (201) (94)
Research and development asset acquisitions (see Note
3*) 1,125 325 893 800 (568)
Total $ 5,673 $ 5,915 $ 4,470 $ (242) $ 1,445
We make significant investments in research and development in support of multiple ongoing proprietary clinical development programs
which support both our existing products and pipeline of new product candidates. See Item 1. "Business" for a table summarizing the
current stage of development of both our commercial stage products and new product candidates. See Note 3 and Note 18 of Notes
to Consolidated Financial Statements contained elsewhere in this report for additional details related to certain of our acquisitions and
collaboration arrangements, respectively.
We do not collect costs on a project basis or for any category of projects for the majority of costs involved in carrying out research
projects. While we do perform cost calculations to facilitate our internal evaluation of individual projects, these calculations include
significant estimations and allocations that are not relevant to, or included in, our external financial reporting mechanisms. As a
consequence, we do not report research and development costs at the project level.
Selling, General and Administrative: Selling, general and administrative expenses primarily include salary and benefit costs for
employees included in our sales, marketing, finance, legal and administrative organizations, costs related to the launch of new products
or those approved for new indications, outside professional services, donations to independent non-profit patient assistance organizations
in the United States and facilities costs.
45

Selling, general and administrative expenses and related percentages for the years ended December 31, 2018, 2017 and 2016 were as
follows:
2018 2017 2016

Selling, general and administrative $ 3,250 $ 2,941 $ 2,658
Increase from prior year $ 309 $ 283 $ 353
Percent increase from prior year 10.5% 10.6% 15.3%
Percent of total revenue 21.3% 22.6% 23.7%
Selling, general and administrative expenses increased by $309 million to approximately $3.3 billion for 2018 compared to 2017. The
increase is primarily due to incremental expense of $312 million related to the acquisition of Juno, including $208 million of share-based
compensation expense. The increase was also due to an increase of approximately $160 million of marketing related expenses and an
increase of $75 million in donations to independent non-profit patient assistance organizations in the U.S. These increases were partially
offset by a decrease in litigation-related loss contingency accrual expense of $219 million primarily related to the previously disclosed
resolution of the Brown Action, which was recorded in the second quarter of 2017. See Note 3 and Note 19 of Notes to Consolidated
Financial Statements contained elsewhere in this report for additional details related to our acquisition of Juno and legal proceedings,
respectively.
Selling, general and administrative expenses increased by $283 million to approximately $2.9 billion in 2017 compared to 2016. The
increase was primarily due to higher litigation-related loss contingency accrual expenses incurred in 2017. During 2017, we recorded
a litigation-related loss contingency accrual expense of $315 million related to the Brown Action, which represented our probable and
reasonably estimable risk of loss. We reached a settlement agreement with respect to the Brown Action during the third quarter of 2017.
During 2016, we recorded a $199 million litigation-related loss contingency accrual expense with respect to the lawsuit filed against us
by Children's Medical Center Corporation (CMCC), which represented our probable and reasonably estimable risk of loss at that time.
Subsequently, we reached a settlement agreement with CMCC during the first quarter of 2017. See Note 19 of Notes to Consolidated
Financial Statements contained elsewhere in this report for additional information related to these legal matters. The increase was also
due to an increase of $70 million in donations to independent non-profit patient assistance organizations in the U.S. and approximately a
$40 million increase in selling and marketing activities.
Amortization of Acquired Intangible Assets:
2018 2017 2016

Amortization of acquired intangible assets $ 468 $ 329 $ 459
Increase (decrease) from prior year $ 139 $ (130) $ 180
Percent increase (decrease) from prior year 42.2% (28.3)% 64.5%
Amortization of intangible assets acquired as a result of business combinations is summarized below for the years ended December 31,
2018, 2017 and 2016:
2018 2017 2016

Abraxis $ 301 $ 151 $ 152
Avila — 10 139
Gloucester 23 92 92
Juno 70 — —
Pharmion 2 4 4
Quanticel 72 72 72
Total amortization $ 468 $ 329 $ 459
Amortization of acquired intangible assets increased by $139 million to $468 million in 2018 compared to 2017. Effective for the second
quarter of 2018, we reduced the remaining estimated useful life of our ABRAXANE® intangible assets as a result of recent settlements
of patent-related proceedings, which resulted in approximately $150 million of accelerated amortization. Amortization expense also
increased by $70 million as a result of the technology platform asset acquired through our acquisition of Juno. These increases were
partially offset by reductions in amortization expense as the Gloucester Pharmaceuticals, Inc. (Gloucester) and Avila Therapeutics, Inc.
(Avila) intangible assets were fully amortized in the first quarter of 2018 and the second quarter of 2017, respectively. See Note 19 and

Note 3 of Notes to Consolidated Financial Statements contained elsewhere in this report for additional information regarding the recent
settlements regarding patent litigation and our acquisition of Juno, respectively.
46

Amortization of acquired intangible assets decreased by $130 million to $329 million in 2017 compared to 2016. The decrease in
amortization expense was primarily related to the prior year accelerated amortization expense and impairment charge to write down the
technology platform asset obtained in the acquisition of Avila.
Acquisition Related Charges (Gains) and Restructuring, net: Acquisition related charges (gains) and restructuring, net is summarized
below for the years ended December 31, 2018, 2017 and 2016:
2018 2017 2016

Acquisition related charges (gains) and restructuring, net $ 112 $ (1,350) $ 38
Increase (decrease) from prior year $ 1,462 $ (1,388) $ (262)
Acquisition related charges (gains) and restructuring, net was a net charge of $112 million in 2018, compared to a net gain of
approximately $1.4 billion in 2017. The net charge in 2018 primarily relates to $93 million of acquisition and restructuring costs
associated with the acquisition of Juno. In addition, the net charge in 2018 includes a charge of $48 million related to a current period
net change in fair value of legacy Juno success payment liabilities, partially offset by a gain due to the decrease in the fair value of our
liability related to publicly traded Abraxis CVRs of $23 million that were issued as part of the acquisition of Abraxis BioScience, Inc.
(Abraxis). The net gain in 2017 primarily related to a decrease in the fair value of our contingent liabilities associated with the acquisition
of Nogra Pharma Limited (Nogra) due to the discontinuance of the GED-0301 trials in the fourth quarter of 2017. See Note 3 and Note 5
of Notes to Consolidated Financial Statements contained elsewhere in this report for additional details related to our acquisition of Juno
and contingent consideration liabilities, respectively.
Acquisition related charges (gains) and restructuring, net was a net gain of approximately $1.4 billion in 2017, compared to a net charge
of $38 million in 2016. The net gain in 2017 primarily relates to an approximate $1.3 billion net gain recorded in 2017 for the reduction
of the Nogra contingent liability due to the discontinuation of the GED-0301 Trials. See Note 5 of Notes to Consolidated Financial
Statements contained elsewhere in this report for details related to the change in fair value of the Nogra contingent consideration liability.
Interest and Investment Income, Net: Interest and investment income, net is summarized below for the years ended December 31, 2018,
2017 and 2016:
2018 2017 2016

Interest and investment income, net $ 45 $ 105 $ 30
(Decrease) increase from prior year $ (60) $ 75 $ (1)
Percentage (decrease) increase from prior year (57.1)% 250.0% (3.2)%
Interest and investment income, net which includes the net income associated with our debt securities available-for-sale, decreased by
$60 million to $45 million in 2018 compared to 2017 primarily due to lower investment balances as compared to the prior year.
Interest and investment income, net increased by $75 million to $105 million in 2017 compared to 2016 primarily due to higher
investment balances and higher yields compared to the prior year.
Interest (Expense): Interest (expense) is summarized below for the years ended December 31, 2018, 2017 and 2016:
2018 2017 2016

Interest (expense) $ (741) $ (522) $ (500)
(Increase) from prior year $ (219) $ (22) $ (189)
Percentage increase from prior year 42.0% 4.4% 60.8%
Interest expense increased by $219 million to $741 million in 2018 compared to 2017 primarily due to the interest expense associated
with the issuance of $4.5 billion of senior notes during February of 2018 as well as the issuance of $3.5 billion of senior notes during the
second half of 2017. For more information related to our debt issuances, see “Liquidity and Capital Resources” and Note 12 of Notes to
Consolidated Financial Statements contained elsewhere in this report.
Interest expense increased by $22 million to $522 million in 2017 compared to 2016 primarily due to interest expense associated with the
issuance of $500 million of senior notes in August 2017 and $3.0 billion of senior notes in November 2017.

47

Other Income (Expense), Net: Other income (expense), net is summarized below for the years ended December 31, 2018, 2017 and 2016:
2018 2017 2016

Foreign exchange gains (losses), including foreign exchange derivative instruments
not designated as hedging instruments (see Note 6*) $ 3 $ 21 $ (2)
Fair value adjustments on equity investments (see Notes 1 and 5*) 317 — —
Investment impairment charges — (54) (394)
Fair value adjustments of forward point amounts (see Notes 1 and 6*) — — 17
Gain on sale of marketable equity securities — 44 —
Gain on sale of LifebankUSA business (see Note 3*) — — 38
Other gains 17 13 17
Total other income (expense), net $ 337 $ 24 $ (324)
Increase (decrease) from prior year $ 313 $ 348 $ (372)
Income Tax Provision: The income tax provision decreased by approximately $588 million to approximately $786 million for 2018
compared to 2017, primarily from the impact of applying the provisions of the 2017 Tax Act. The effective tax rate for 2018 was 16.3%,
a decrease of 15.5 percentage points from our effective tax rate of 31.8% for 2017. The decrease in our effective tax rate was primarily
due to a 30.3 percentage point decrease related to the one-time tax effects of the 2017 Tax Act and a decrease related to the reduction
in the U.S. statutory tax rate from 35% to 21%, partially offset by U.S. tax on Global Intangible Low-Taxed Income (GILTI) (subject
to taxation at an effective statutory tax rate of 10.5%), lower excess tax benefits from employee stock compensation deductions, non-
deductible research expenses incurred in our acquisition of Impact, lower U.S. research and development and orphan drug tax credits,
and a decrease in tax benefits of lower statutory tax rates on pre-tax income earned outside the U.S.
Our effective tax rate is a function of the distribution of our pre-tax income earned inside and outside of the U.S. Our pre-tax income
earned in the U.S. is taxed at a U.S. statutory tax rate of 21%. Our pre-tax income earned outside the U.S. is taxed both in the U.S. at an
effective federal statutory tax rate of 10.5% and in the foreign jurisdictions where we have operations at lower effective tax rates. Our
global pre-tax income is also subject to taxation in most U.S. states. Our future effective tax rate can be materially impacted by shifts in
the distribution of our pre-tax income among the jurisdictions where we operate, the amount of research tax credits, the amount of foreign
tax credits, the timing and amount of tax benefits from employee stock compensation, payments to collaboration partners, acquisitions,
divestitures, changes in tax laws, audit settlements, and many other factors which are difficult to forecast.
The income tax provision increased by approximately $1.0 billion to approximately $1.4 billion for 2017 compared to 2016, primarily
from the impact of applying the provisions of the 2017 Tax Act. The effective tax rate for 2017 was 31.8%, an increase of 16.1 percentage
points from our effective tax rate of 15.7% for 2016. The increase in our effective tax rate was primarily due to a 29.4 percentage point
increase related to the one-time tax effects of the 2017 Tax Act. This increase was partially offset by excess tax benefits from employee
stock compensation deductions, higher U.S. research and development and orphan drug tax credits, and an increase in pre-tax earnings
from jurisdictions with lower statutory tax rates, all of which were partially offset by a non-recurring prior year tax benefit related to
a loss on our investment in Avila. The tax benefits recognized in 2017 for U.S. research and development and orphan drug tax credits
were the result of a change in estimate upon completion of a comprehensive analysis. See Note 17 of Notes to Consolidated Financial
Statements contained elsewhere in this report.
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Liquidity and Capital Resources
The following table summarizes the components of our financial condition for the years ended December 31, 2018, 2017 and 2016:
Increase (Decrease)
2018 2017 2016 2017 2016
Financial assets:
Cash and cash equivalents $ 4,234 $ 7,013 $ 6,170 $ (2,779) $ 843
Debt securities available-for-sale 496 3,219 909 (2,723) 2,310
Equity investments with readily determinable fair
values 1,312 1,810 891 (498) 919
Total financial assets $ 6,042 $ 12,042 $ 7,970 $ (6,000) $ 4,072
Debt:
Short-term borrowings and current portion of long-term
debt $ 501 $ — $ 501 $ 501 $ (501)
Long-term debt, net of discount 19,769 15,838 13,789 3,931 2,049
Total debt $ 20,270 $ 15,838 $ 14,290 $ 4,432 $ 1,548
Working capital1 $ 5,083 $ 11,980 $ 7,964 $ (6,897) $ 4,016

1 Includes Cash and cash equivalents, Debt securities available-for-sale, Equity investments with readily determinable fair values, Accounts
receivable, net of allowances, Inventory and Other current assets, less Short-term borrowings and current portion of long-term debt, Accounts
payable, Accrued expenses and other current liabilities, and the current portion of Income taxes payable.
We rely primarily on positive cash flows from operating activities, proceeds from sales of debt securities available-for-sale and
borrowings in the form of long-term notes payable and short-term commercial paper to provide for our liquidity requirements. We expect
continued growth in our expenditures, particularly those related to research and development, clinical trials, commercialization of new
products, international expansion and capital investments. However, we anticipate that existing cash and cash equivalent balances, debt
securities available-for-sale, cash generated from operations and existing sources of and access to financing are adequate to fund our
operating needs, capital expenditures, debt service requirements and pursue strategic business initiatives for the foreseeable future. The
definitive merger agreement includes restrictions on the conduct of our business prior to the completion of the merger or termination
limitation), dispose of businesses or assets, enter into material contracts or make certain additional capital expenditures. See Item 1A.
"Risk Factors - While the merger is pending, we are subject to business uncertainties and contractual restrictions that could materially
adversely affect our operating results, financial position and/or cash flows or result in a loss of employees, customers, collaborators or
suppliers.”
Many of our operations are conducted outside the United States and significant portions of our cash, cash equivalents and short-term
investments are held internationally. As of December 31, 2018, we held approximately $2.8 billion of these short-term funds in foreign
tax jurisdictions. As a result of the 2017 Tax Act’s favorable U.S. tax treatment of repatriated foreign earnings as well as our capital
contribution reserves outside the U.S., we expect to have access to our offshore earnings with minimal to no additional U.S. or foreign tax
costs. Therefore, we no longer consider these funds permanently reinvested offshore. The amount of funds held in U.S. tax jurisdictions
can fluctuate due to the timing of receipts and payments in the ordinary course of business, including intercompany transactions, as well
as for other reasons, such as repurchases of our common stock, internal reorganizations, business-development activities, restrictions on
distributions out of foreign tax jurisdictions and debt issuances. As part of our ongoing liquidity assessments, we regularly monitor the
mix of domestic and international cash flows (both inflows and outflows). Under the 2017 Tax Act, a company’s post-1986 previously

untaxed foreign earnings and profit (E&P) was mandatorily deemed to be repatriated and taxed, which is also referred to as the toll
charge. We have elected to pay the toll charge in annual installments over eight years through 2025.
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Share Repurchase Program: In February and May 2018, our Board of Directors approved increases of $5.0 billion and $3.0 billion to our
authorized share repurchase program, respectively, bringing the total amount authorized since April 2009 to an aggregate of up to $28.5
billion for our common stock repurchase program of which we have approximately $2.8 billion remaining for future share repurchases as
of December 31, 2018, after deducting $2.0 billion paid in May 2018 pursuant to an ASR agreement. During the year ended December
31, 2018, we used $6.1 billion of cash for purchases of our common stock measured on a settlement date basis including the $2.0 billion
paid for the ASR for which we have received full delivery of shares.
Components of Working Capital
Cash and Cash Equivalents, Debt Securities Available-for-Sale and Equity Investments with Readily Determinable Fair Values: From
time to time, we invest our excess cash primarily in money market funds, repurchase agreements, time deposits, commercial paper,
U.S. Treasury securities, U.S. government-sponsored agency securities, U.S. government-sponsored agency mortgage-backed securities
(MBS), ultra-short income fund investments, global corporate debt securities and asset backed securities. All liquid investments with
maturities of three months or less from the date of purchase are classified as cash equivalents and all investments with maturities
of greater than three months from the date of purchase are classified as Debt securities available-for-sale. See Note 7 of Notes
to Consolidated Financial Statements contained elsewhere in this report. The approximate $6.0 billion decrease in Cash and cash
equivalents, Debt securities available-for-sale and Equity investments with readily determinable fair values as of December 31, 2018
compared to December 31, 2017 was primarily due to approximately $8.6 billion of payments for the acquisition of Juno, net of cash
acquired, and approximately $6.1 billion of payments under our share repurchase program, partially offset by approximately $4.5 billion
in proceeds from the February 2018 issuance of senior notes and approximately $5.2 billion of cash from operating activities.
Accounts Receivable, Net: Accounts receivable, net increased by $145 million to approximately $2.1 billion as of December 31, 2018
compared to December 31, 2017. Sales made outside the United States typically have payment terms that are greater than 60 days, thereby
extending collection periods beyond those in the United States. We expect our accounts receivable balance to grow as our international
sales continue to expand.
We continue to monitor economic conditions, including the volatility associated with international economies, the sovereign debt situation
in certain European countries and associated impacts on the financial markets and our business. Our current business model in these
markets is typically to sell our hematology and oncology products directly to principally government owned or controlled hospitals,
which in turn directly deliver critical care to patients. Many of our products are used to treat life-threatening diseases and we believe
this business model enables timely delivery and adequate supply of products. Many of the outstanding receivable balances are related to
government-funded hospitals and we believe the receivable balances are ultimately collectible. Similarly, we believe that future sales to
these customers will continue to be collectible.
Inventory: Inventory balances decreased by $83 million to $458 million at the end of 2018 compared to 2017 primarily due to raw
materials charges recorded during 2018.
Other Current Assets: Other current assets increased by $113 million to $501 million at the end of 2018 compared to 2017 primarily due
to increases of $53 million in the fair value of derivative instruments, $38 million in prepaid taxes and $36 million earned but unbilled
revenue associated with contract assets (See Note 2 of Notes to Consolidated Financial Statements contained elsewhere in this report).
These increases were partially offset by $14 million of net other decreases.
Commercial Paper: We have a commercial paper program (Program) under which we issue unsecured commercial paper notes
(Commercial Paper) on a private placement basis, the proceeds of which are used for general corporate purposes. As of December 31,
2018, we had available capacity to issue up to $2.0 billion of Commercial Paper and there were no borrowings under the Program. The
maturities of the Commercial Paper may vary, but may not exceed 270 days from the date of issue. The Commercial Paper is sold under
customary terms to a dealer or in the commercial paper market and is issued at a discount from par or, alternatively, is sold at par and
bears varying interest rates on a fixed or floating basis. Borrowings under the Program, if any, are accounted for as short-term borrowings.
Senior Unsecured Credit Facility: We maintain a senior unsecured revolving credit facility (Credit Facility) that provides revolving credit
in the aggregate amount of $2.0 billion. During the second quarter of 2018, we amended our Credit Facility to extend the expiration
date to April 25, 2023. Amounts may be borrowed in U.S. Dollars for general corporate purposes. The Credit Facility currently serves as
backup liquidity for our Commercial Paper borrowings. As of December 31, 2018, there was no outstanding borrowing against the Credit
Facility.
The Credit Facility and the Revolving Credit Agreement contain affirmative and negative covenants, including certain customary
financial covenants. We were in compliance with all financial covenants as of December 31, 2018.

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Accounts Payable, Accrued Expenses and Other Current Liabilities: Accounts payable, accrued expenses and other current liabilities
increased by $577 million to approximately $3.4 billion at the end of 2018 compared to 2017. The increase was primarily due to increases
of $293 million for sales adjustment accruals related to government rebates and chargebacks and distributor service fees, $113 million
for accounts payable, $70 million related to success payment obligations assumed through our acquisition of Juno, $65 million for
accrued interest expense, $62 million related to collaboration agreement accruals, $60 million related to the current portion of contingent
consideration and success payment liabilities assumed through our acquisition of Juno, $39 million related to accrued legal expenses,
$38 million for clinical trials and research and development expense accruals, and $33 million for compensation related accruals. These
increases were partially offset by a decrease of $185 million associated with the payment/adjustment of clinical trial and development
activity wind-down costs associated with the discontinuance of GED-0301 clinical trials in Crohn's disease which was settled.
Income Taxes Payable (Current and Non-Current): Income taxes payable decreased by $306 million to approximately $2.3 billion at the
end of 2018 compared to 2017, primarily due to income tax payments of approximately $1.2 billion, which were partially offset by the
current provision for income taxes of $754 million and an increase in income taxes payable related to acquisitions.
Senior Notes: We have an aggregate of $20.350 billion principal amount of senior notes outstanding with varying maturity dates from
2019 through 2048. See Note 12 of Notes to Consolidated Financial Statements contained elsewhere in this report for additional details.
Cash flows from operating, investing and financing activities for the years ended December 31, 2018, 2017 and 2016 were as follows:
Variance
2018 2017 2016 2017 2016
Net cash provided by operating activities $ 5,171 $ 5,246 $ 4,165 $ (75) $ 1,081
Net cash used in investing activities $ (6,418) $ (2,891) $ (1,002) $ (3,527) $ (1,889)
Net cash used in by financing activities $ (1,540) $ (1,584) $ (1,834) $ 44 $ 250
Operating Activities: Net cash provided by operating activities decreased by $75 million to approximately $5.2 billion in 2018 compared
to 2017. The decrease in net cash provided by operating activities was primarily driven by the approximate $1.1 billion initial payment
made in 2018 for the acquisition of Impact compared to $325 million for two acquisitions in 2017 as well as an increase of $690
million in cash paid for income taxes. These decreases were partially offset by 2017 payments totaling $315 million for litigation-
related loss contingency accruals related to the previously disclosed Brown Action and a decrease of $201 million in payments related
to collaboration arrangements in 2018 as compared to 2017. See Note 3, Note 19 and Note 18 of Notes to Consolidated Financial
Statements contained elsewhere in this report for additional details related to the Impact acquisition, legal proceedings and collaboration
arrangements, respectively.
Net cash provided by operating activities increased by approximately $1.1 billion to approximately $5.2 billion in 2017 compared to
2016. The increase in net cash provided by operating activities was primarily attributable to an increase in net income of $941 million in
2017 compared to 2016.
Investing Activities: Net cash used in investing activities increased by approximately $3.5 billion in 2018 compared to 2017. The increase
in net cash used in investing activities was primarily due to approximately $8.6 billion of payments for the acquisition of Juno, net
of cash acquired, partially offset by approximately $2.7 billion of net sales of debt securities available-for-sale in 2018 compared to
approximately $2.3 billion of net purchases of debt securities available-for-sale in 2017. See Note 3 of Notes to Consolidated Financial
Statements contained elsewhere in this report for additional details related to the Juno acquisition.
Net cash used in investing activities increased by approximately $1.9 billion in 2017 compared to 2016. The increase in net cash used in
investing activities was primarily due to the approximately $2.3 billion of net purchases of debt securities available-for-sale during 2017
compared to $473 million of net purchases of debt securities available-for-sale during 2016.
Financing Activities: Net cash used in financing activities decreased by $44 million in 2018 compared to 2017. This decrease in net cash
used in financing activities was primarily due to proceeds from the February 2018 debt issuance, which provided approximately $4.5
billion compared to proceeds from the August 2017 and November 2017 debt issuances partially offset by principal repayments in August
2017 and debt redemptions in December 2017 which provided approximately $1.6 billion. In
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February 2018, we issued $500 million principal amount of 2.875% senior notes due 2021, $1.000 billion principal amount of 3.250%
senior notes due 2023, $1.500 billion principal amount of 3.900% senior notes due 2028 and $1.500 billion principal amount of 4.550%
senior notes due 2048. See Note 12 of Notes to Consolidated Financial Statements contained elsewhere in this report for additional details.
This increase was partially offset by approximately $6.1 billion of payments under our share repurchase program during 2018 compared
to approximately $3.8 billion of payments under our share repurchase program during 2017. See Note 4 of Notes to Consolidated
Financial Statements contained elsewhere in this report for additional details.
Net cash used in financing activities decreased by $250 million in 2017 compared to 2016. The decrease in net cash used in financing
activities was primarily attributable to proceeds from the August 2017 and November 2017 debt issuances partially offset by principal
repayments in August 2017 and debt redemptions in December 2017. In August 2017, we issued an additional $500 million principal
amount of 2.250% senior notes due 2021 and received net cash proceeds of approximately $496 million. In August 2017, we repaid the
1.900% senior notes with a principal amount of $500 million upon maturity. In November 2017, we issued an additional $3.0 billion
principal amount of senior notes consisting of $750 million principal amount of 2.750% due 2023, $1.0 billion principal amount of
3.450% due 2027 and $1.250 billion principal amount of 4.350% due 2047 and received net cash proceeds of approximately $3.0 billion.
In December 2017, we paid approximately $1.4 billion to redeem all of the outstanding $1.0 billion aggregate principal amount of 2.125%
senior notes and $400 million aggregate principal amount of 2.300% senior notes, each matured in August 2018. See Note 12 of Notes
to Consolidated Financial Statements contained elsewhere in this report for additional details. In addition to the debt activity, net cash
used in financing activities decreased due to the approximately $3.8 billion of payments under our share repurchase program during 2017
compared to approximately $2.2 billion of payments under our share repurchase program during 2016.
Contractual Obligations
The following table sets forth our contractual obligations as of December 31, 2018:
Payment Due By Period

Less than More than
1 Year 1 to 3 Years 3 to 5 Years 5 Years Total
Senior notes $ 1,273 $ 4,439 $ 5,665 $ 19,669 $ 31,046
Operating leases 92 159 104 68 423
Other contract commitments 175 140 95 117 527
2017 Tax Act - Federal toll charge liability — 8 412 807 1,227
Total $ 1,540 $ 4,746 $ 6,276 $ 20,661 $ 33,223
Senior Notes: The senior note obligation amounts include future principal of $20.350 billion and interest payments for both current and
non-current obligations as of December 31, 2018. See Note 12 of Notes to Consolidated Financial Statements contained elsewhere in this
report for additional details.
Operating Leases: We lease office and research facilities under various operating lease agreements in the United States and various
international markets as well as automobiles and certain equipment in these same markets. The non-cancelable lease terms for operating
leases expire at various dates between 2019 and 2029 and include renewal options. In general, we are also required to reimburse the
lessors for real estate taxes, insurance, utilities, maintenance and other operating costs associated with the leases. Effective January 1,
2019, these lease obligations will be discounted and presented on our Consolidated Balance Sheet as a right-of-use asset and lease liability
for leases with a duration of greater than one year. See Note 1 of Notes to Consolidated Financial Statements contained elsewhere in this
report for additional details related to this upcoming change in accounting standard. For more information on the major facilities that we
occupy under lease arrangements refer to Part I, Item 2. "Properties" of this report.
Other Contract Commitments: Other contract commitments of $527 million as of December 31, 2018 primarily included $495 million in
contractual obligations related to product supply contracts. The non-cancelable contract terms for product supply expire at various dates
between 2019 and 2027 and include renewal options. In addition, we have committed to invest an aggregate $32 million in investment
funds, which are callable at any time.
2017 Tax Act: Under the 2017 Tax Act, a company’s post-1986 previously untaxed foreign E&P was mandatorily deemed to be repatriated
and taxed, which is also referred to as the toll charge. We have elected to pay the toll charge in installments over eight years, or through
2025. However, the toll charge liability is not discounted on our financial statements. As such, we have recorded approximately $1.2

billion as a non-current income tax liability, included in Income taxes payable on the Consolidated Balance Sheet as of December 31,
2018.
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Collaboration Arrangements and Acquired Research and Development Assets: We have entered into certain research and development
collaboration agreements and have acquired research and development assets or rights to products and technologies from third parties
with the potential for future milestone and royalty payments upon the achievement of pre-established developmental, regulatory and/
or commercial targets. Due to the nature of these arrangements, the future potential payments related to the attainment of specified
development, regulatory approval and sales-based milestones over a period of several years are inherently uncertain, and accordingly,
no amounts have been recorded for these future potential payments in our Consolidated Balance Sheets as of December 31, 2018 and
2017 contained in this Annual Report on Form 10-K. Potential milestone payments (not including potential royalty payments) total
approximately $19.7 billion, including approximately $9.2 billion contingent on the achievement of various research, development and
regulatory approval milestones and approximately $10.5 billion in sales-based milestones. These potential milestone payments relate to
arrangements in which we have obtained rights, either through a license, co-development arrangement or asset acquisition, to certain
programs. However, our obligation to fund these efforts is contingent upon continued involvement in the programs and/or the lack of any
adverse events which could cause the discontinuance of the programs. For additional information regarding certain of these relationships,
see Note 3 and Note 18 of Notes to Consolidated Financial Statements contained elsewhere in this report.
Uncertain Tax Positions: We are unable to predict the timing of tax settlements related to our obligations for uncertain tax positions as
tax audits can involve complex issues and the resolution of those issues may span multiple years, particularly if subject to negotiation or
litigation. Accordingly, we have not included obligations for uncertain tax positions in our table of contractual obligations (see Note 17
of Notes to Consolidated Financial Statements contained elsewhere in this report).
New Accounting Standards
For a discussion of new accounting standards please see Note 1 of Notes to Consolidated Financial Statements contained elsewhere in
this report.
Critical Accounting Estimates and Significant Accounting Policies
A critical accounting policy is one that is both important to the portrayal of our financial condition and results of operation and requires
management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters
that are inherently uncertain. While our significant accounting policies are more fully described in Note 1 of Notes to Consolidated
Financial Statements included in this report, we believe the following accounting estimates and policies to be critical:
Revenue Recognition: Revenue from the sale of products is recognized in a manner that depicts the transfer of those promised goods
to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for these goods or services.
To achieve this core principle, we follow a five-step model that includes identifying the contract with a customer, identifying the
performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations
and recognizing revenue when, or as, we satisfy a performance obligation. In addition, we recognize revenue from other product sales
and royalties based on licensees' sales of our products or products using our technologies. We do not consider royalty revenue to be a
material source of our consolidated revenue.
Gross-to-Net Sales Accruals: We record gross-to-net sales accruals for government rebates, chargebacks, distributor service fees, other
rebates and administrative fees, sales returns and allowances and sales discounts.
REVLIMID REMS® and POMALYST REMS®, respectively. These are proprietary risk-management distribution programs tailored
specifically to provide for the safe and appropriate distribution and use of REVLIMID® and POMALYST®. Internationally, REVLIMID®
and IMNOVID® are distributed under mandatory risk-management distribution programs tailored to meet local authorities’ specifications
to provide for the product’s safe and appropriate distribution and use. These programs may vary by country and, depending upon the
country and the design of the risk-management program, the product may be sold through hospitals or retail pharmacies. OTEZLA®,
ABRAXANE® and VIDAZA® are distributed through the more traditional pharmaceutical industry supply chain and are not subject to
the same risk-management distribution programs as REVLIMID® and POMALYST®/IMNOVID®.
Government rebate accruals are based on estimated payments due to governmental agencies for purchases made by third parties under
various governmental programs. U.S. Medicaid rebate accruals are generally based on historical payment data and estimates of future
Medicaid beneficiary utilization applied to the Medicaid unit rebate formula established by the Center for Medicaid and Medicare
Services. The Medicaid rebate percentage was increased and extended to Medicaid Managed Care Organizations in March 2010. The
accrual of the rebates associated with Medicaid Managed Care Organizations is calculated based on estimated

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historical patient data related to Medicaid Managed Care Organizations. We also analyze actual billings received from the states to further
support the accrual rates. Manufacturers of pharmaceutical products are responsible for 50% of the patient’s cost of branded prescription
drugs related to the Medicare Part D Coverage Gap (70% beginning in 2019). In order to estimate the cost to us of this coverage gap
responsibility, we analyze data for eligible Medicare Part D patients against data for eligible Medicare Part D patients treated with our
products as well as the historical invoices. This expense is recognized throughout the year as costs are incurred. In certain international
markets government-sponsored programs require rebates to be paid based on program specific rules and, accordingly, the rebate accruals
are determined primarily on estimated eligible sales.
consistent with pharmaceutical industry practices. Settlement of rebates and fees may generally occur from one to 15 months from the
date of sale. We record a provision for rebates at the time of sale based on contracted rates and historical redemption rates. Assumptions
used to establish the provision include level of wholesaler inventories, contract sales volumes and average contract pricing. We regularly
review the information related to these estimates and adjust the provision accordingly.
Sales discount accruals are based on payment terms extended to customers.
third-party sources, actual returns history and other factors, such as the trend experience for lots where product is still being returned or
inventory centralization and rationalization initiatives conducted by major pharmacy chains, as applicable. If the historical data we use
to calculate these estimates do not properly reflect future returns, then a change in the allowance would be made in the period in which
such a determination is made and revenues in that period could be materially affected. Under this methodology, we track actual returns
by individual production lots. Returns on closed lots, that is, lots no longer eligible for return credits, are analyzed to determine historical
returns experience. Returns on open lots, that is, lots still eligible for return credits, are monitored and compared with historical return
trend rates. Any changes from the historical trend rates are considered in determining the current sales return allowance. As noted above,
REVLIMID® and POMALYST®/IMNOVID® are distributed primarily through hospitals and contracted pharmacies, which are typically
subject to tighter controls of inventory quantities within the supply channel and, thus, resulting in lower returns activity.
Allowance for Doubtful Accounts: We estimate an allowance for doubtful accounts primarily based on historical payment patterns, aging
of receivable balances and general economic conditions, including publicly available information on the credit worthiness of countries
themselves and provinces or areas within such countries where they are the ultimate customers.
Income Taxes: We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and
liabilities are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities
using enacted tax rates in effect for years in which the temporary differences are expected to reverse. We provide a valuation allowance
when it is more likely than not that some portion or all of a deferred tax asset will not be realized.
We account for interest and penalties related to uncertain tax positions as part of our provision for income taxes. These unrecognized
tax benefits relate primarily to issues common among multinational corporations in our industry. We apply a variety of methodologies
in making these estimates which include studies performed by independent economists, advice from industry and subject matter experts,
evaluation of public actions taken by the U.S. Internal Revenue Service and other taxing authorities, as well as our own industry
experience. We provide estimates for unrecognized tax benefits. If our estimates are not representative of actual outcomes, our results of
operations could be materially impacted.
We periodically evaluate the likelihood of the realization of deferred tax assets, and reduce the carrying amount of these deferred tax
assets by a valuation allowance to the extent we believe a portion will not be realized. We consider many factors when assessing
the likelihood of future realization of deferred tax assets, including our recent cumulative earnings experience by taxing jurisdiction,
expectations of future taxable income, carryforward periods available to us for tax reporting purposes, various income tax strategies and
other relevant factors. Significant judgment is required in making this assessment and, to the extent future expectations change, we would
have to assess the recoverability of our deferred tax assets at that time. As of December 31, 2018, it was more likely than not that we
would realize our deferred tax assets, net of valuation allowances.

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We recognize the tax on GILTI as a period expense in the period the tax is incurred. Under this policy, we have not provided deferred
taxes on temporary differences that upon their reversal will affect the amount of income subject to GILTI in the period.
Share-Based Compensation: We utilize share-based compensation in the form of stock options, restricted stock units, or RSUs, and
performance-based restricted stock units, or PSUs. Compensation expense is recognized in the Consolidated Statements of Income based
on the estimated fair value of the awards at grant date. Compensation expense recognized reflects an estimate of the number of awards
expected to vest after taking into consideration an estimate of award forfeitures based on actual experience and is recognized on a straight-
line basis over the requisite service period, which is generally the vesting period required to obtain full vesting. Management expectations
related to the achievement of performance goals associated with PSU grants is assessed regularly and that assessment is used to determine
whether PSU grants are expected to vest. If performance-based milestones related to PSU grants are not met or not expected to be met,
any compensation expense recognized to date associated with grants that are not expected to vest will be reversed.
Other-Than-Temporary Impairments of Debt Securities Available-For-Sale: A decline in the market value of any debt security available-
for-sale below its cost that is deemed to be other-than-temporary results in a reduction in carrying amount to fair value. The impairment
is charged to operations and a new cost basis for the security established. The determination of whether a debt security available-for-
sale is other-than-temporarily impaired requires significant judgment and requires consideration of available quantitative and qualitative
evidence in evaluating the potential impairment. Factors evaluated to determine whether the investment is other-than-temporarily
impaired include: significant deterioration in the issuer's earnings performance, credit rating, asset quality, business prospects of the
issuer, adverse changes in the general market conditions in which the issuer operates, length of time that the fair value has been below
our cost, our expected future cash flows from the security, our intent not to sell, an evaluation as to whether it is more likely than not that
we will not have to sell before recovery of our cost basis, and issues that raise concerns about the issuer's ability to continue as a going
concern. Assumptions associated with these factors are subject to future market and economic conditions, which could differ from our
assessment.
Derivatives and Hedging Activities: All derivative instruments are recognized on the balance sheet at their fair value. Changes in the fair
value of derivative instruments are recorded each period in current earnings or Other comprehensive income (loss) (OCI), depending on
whether a derivative instrument is designated as part of a hedging transaction and, if it is, the type of hedging transaction. For a derivative
to qualify as a hedge at inception and throughout the hedged period, we formally document the nature and relationships between the
hedging instruments and hedged item. We assess, both at inception and on an on-going basis, whether derivative instruments are highly
effective in offsetting the changes in the fair value or cash flows of hedged items. If we determine that a forecasted transaction is no
longer probable of occurring, we discontinue hedge accounting and any related unrealized gain or loss on the derivative instrument is
recognized in Other income (expense), net in our Consolidated Statements of Income. We use derivative instruments, including those not
designated as part of a hedging transaction, to manage our exposure to movements in foreign exchange, our stock price and interest rates.
The use of these derivative instruments modifies the exposure of these risks with the intent to reduce our risk or cost.
Prior to the adoption of Accounting Standards Update No. 2017-12, "Derivatives and Hedging" (ASU 2017-12), we were required to
separately measure and reflect the amount by which the hedging instrument did not offset the changes in the fair value or cash flows of
hedged items, which was referred to as the ineffective amount. We assessed hedge effectiveness on a quarterly basis and recorded the gain
or loss related to the ineffective portion of derivative instruments, if any, in Other income (expense), net in the Consolidated Statements of
Income. Pursuant to the provisions of ASU 2017-12, we are no longer required to separately measure and recognize hedge ineffectiveness.
Upon adoption of ASU 2017-12, we no longer recognize hedge ineffectiveness in our Consolidated Statements of Income, but we instead
recognize the entire change in the fair value of:
• cash flow hedges included in the assessment of hedge effectiveness in OCI. The amounts recorded in OCI will subsequently be
reclassified to earnings in the same line item in the Consolidated Statements of Income as impacted by the hedged item when
the hedged item affects earnings; and
• fair value hedges included in the assessment of hedge effectiveness in the same line item in the Consolidated Statements of
Income that is used to present the earnings effect of the hedged item.
Prior to the adoption of ASU 2017-12, we excluded option premiums and forward points (excluded components) from our assessment
of hedge effectiveness for our foreign exchange cash flow hedges. We recognized all changes in fair value of the excluded components
in Other income (expense), net in the Consolidated Statements of Income. The amendments in ASU 2017-12 continue to allow those
components to be excluded from the assessment of hedge effectiveness, which we have elected to continue to apply. Pursuant to the
provisions of ASU 2017-12, we no longer recognize changes in the fair value of the excluded components in Other income (expense),
net, but we instead recognize the initial value of the excluded component on a straight-line basis over

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the life of the derivative instrument, within the same line item in the Consolidated Statements of Income that is used to present the
earnings effect of the hedged item.
Beginning on April 1, 2018, all new cash flow hedging relationships are accounted for using the forward method. As a result, the entire
fair value of the hedging instrument is recorded in OCI as no amounts are excluded from the assessment of hedge effectiveness. In
addition, the initial value of the excluded component is recognized in OCI and not in the Consolidated Statements of Income.
Investments in Other Entities: We hold a portfolio of investments in equity securities and certain investment funds that are accounted
for under either the equity method, as equity investments with readily determinable fair values, or as equity investments without readily
determinable fair values. Investments in companies or certain investment funds over which we have significant influence but not a
controlling interest are accounted for using the equity method, with our share of earnings or losses reported in Other income (expense), net
in the Consolidated Statements of Income. Our equity investments with readily determinable fair values are primarily equity investments
in the publicly traded common stock of companies, including common stock of companies with whom we have entered into collaboration
agreements. Prior to Accounting Standards Update No. 2016-01, “Financial Instruments-Overall: Recognition and Measurement of
Financial Assets and Financial Liabilities” (ASU 2016-01), which we adopted on January 1, 2018, unrealized gains and losses on
these investments, which were deemed to be temporary, were reported as a separate component of stockholder's equity, net of tax.
Realized gains and losses as well as other-than-temporary impairment charges related to these investments were included in Other income
(expense), net in the Consolidated Statements of Income. Following the adoption of ASU 2016-01, these investments are measured at
fair value with changes in fair value recognized in Other income (expense), net in the Consolidated Statements of Income and are no
longer subject to impairment. Also prior to the adoption of ASU 2016-01, equity investments without readily determinable fair values
were recorded at cost minus other-than-temporary impairment, with other-than-temporary impairment charges included in Other income
(expense), net in the Consolidated Statements of Income. Following the adoption of ASU 2016-01, these investments are measured at
cost adjusted for changes in observable prices minus impairment or at net asset value (NAV), as a practical expedient, if available, with
changes in measurement recognized in Other income (expense), net in the Consolidated Statements of Income. Investments in equity
investments without readily determinable fair values of companies that become publicly traded and are not classified as equity method
investments are accounted for as equity investments with readily determinable fair values prospectively from the date of such companies'
initial public offering. Our equity method investments and equity investments without readily determinable fair values are included in
Other non-current assets on the Consolidated Balance Sheets.
All equity method investments and investments without a readily determinable fair value are reviewed on a regular basis for possible
impairment. If an equity method investment's fair value is determined to be less than its net carrying value and the decline is determined
to be other-than-temporary, the investment is written down to its fair value. Investments without a readily determinable fair value that do
not qualify for the practical expedient to estimate fair value using NAV per share are written down to fair value if a qualitative assessment
indicates that the investment is impaired and the fair value of the investment is less than its carrying value. Such evaluation is judgmental
and dependent on specific facts and circumstances. Factors considered in determining whether an other-than-temporary decline in value
or impairment has occurred include: market value or exit price of the investment based on either market-quoted prices or future rounds
of financing by the investee; length of time that the market value was below its cost basis; financial condition and business prospects of
the investee; our intent and ability to retain the investment for a sufficient period of time to allow for recovery in market value of the
investment; a bona fide offer to purchase, an offer by the investee to sell, or a completed auction process for the same or similar security
for an amount less than the carrying amount of the investment; issues that raise concerns about the investee's ability to continue as a going
concern; and any other information that we may be aware of related to the investment.
Accounting for Long-Term Incentive Plans: We have established a Long-Term Incentive Plan, or LTIP, designed to provide key officers
and executives with performance-based incentive opportunities contingent upon achievement of pre-established corporate performance
objectives covering a three-year period. As of December 31, 2018, we had recorded liabilities for three separate three-year performance
cycles running concurrently and ending December 31, 2018, 2019 and 2020. Performance measures for each of the performance cycles
are based on the following components: 37.5% on non-GAAP earnings per share (as defined in the LTIP); 37.5% on total non-GAAP
revenue (as defined in the LTIP); and 25% on relative total shareholder return, which is a measurement of our stock price performance
during the applicable three-year period compared with a group of other companies in the biopharmaceutical industry.
Threshold, target and maximum cash payout levels are calculated as a percentage between 0% to 200% of each participant’s base salary
at the time the LTIP was approved by the Compensation Committee. Such awards are payable in cash or common stock or a mixture of
cash and common stock, which will be determined by the Compensation Committee at the time of award delivery. Share-based payout
levels are calculated using the cash-based threshold, target and maximum levels, divided by the average closing price of Celgene stock
for the 30 trading days prior to the commencement of each performance cycle. Therefore, final share-based award values are reflective of
the stock price at the end of the measurement period. The Compensation Committee may determine

56

that payments made in common stock are restricted from trading for a period of time. We accrue the long-term incentive liability over
each three-year cycle. Prior to the end of a three-year cycle, the accrual is based on an estimate of our level of achievement during the
cycle. Upon a change in control, participants will be entitled to an immediate payment equal to their target award or, if higher, an award
based on actual performance through the date of the change in control.
Accruals recorded for the LTIP entail making certain assumptions concerning future non-GAAP earnings per share, non-GAAP revenues
and relative total shareholder return, as defined; the actual results of which could be materially different than the assumptions used.
Accruals for the LTIP are reviewed on a regular basis and revised accordingly so that the liability recorded reflects updated estimates of
future payouts. In estimating the accruals, management considers actual results to date for the performance period, expected results for
the remainder of the performance period, operating trends, product development, pricing and competition.
Valuation of Goodwill, Acquired Intangible Assets, Other Assets and IPR&D: We have recorded goodwill, acquired intangible assets
and IPR&D through acquisitions accounted for as business combinations. When identifiable intangible assets, including IPR&D and
technology platforms are acquired, we determine the fair values of these assets as of the acquisition date. Discounted cash flow models
are typically used in these valuations if quoted market prices are not available, and the models require the use of significant estimates and
assumptions including but not limited to:
• projecting regulatory approvals;

• estimating future cash flows from product sales resulting from completed products and in-process projects or estimating future
cash flows expected to be collected; and
• developing appropriate discount rates and probability rates.
Goodwill represents the excess of purchase price over fair value of net assets acquired in a business combination accounted for by the
acquisition method of accounting and is not amortized, but is subject to impairment testing. We test our goodwill for impairment at least
annually or when a triggering event occurs that could indicate a potential impairment by assessing qualitative factors or performing a
quantitative analysis in determining whether it is more likely than not that the fair value of net assets are below their carrying amounts.
Intangible assets with definite useful lives are amortized to their estimated residual values over their estimated useful lives and reviewed
for impairment if certain events occur. Intangible assets related to IPR&D product rights are treated as indefinite-lived intangible assets
and not amortized until the product is approved for sale by regulatory authorities in specified markets. At that time, we will determine the
useful life of the asset, reclassify the asset out of IPR&D and begin amortization. Impairment testing is also performed at least annually
or when a triggering event occurs that could indicate a potential impairment. Such test entails completing an updated discounted cash
flow model to estimate the fair value of the IPR&D asset. If required, the impairment test for intangible assets with definite useful lives
is completed by comparing an updated non-discounted cash flow model to the book value of the intangible asset.
Valuation of Contingent Consideration Resulting from a Business Combination: We record contingent consideration resulting from a
business combination at its fair value on the acquisition date, and for each subsequent reporting period revalue these obligations and
record increases or decreases in their fair value as an adjustment to operating earnings in the Consolidated Statements of Income. Changes
to contingent consideration obligations can result from movements in publicly traded share prices of Abraxis CVRs, adjustments to
discount rates and periods, updates in the assumed achievement or timing of any development milestones or changes in the probability
of certain clinical events and changes in the assumed probability associated with regulatory approval. The assumptions related to
determining the value of a contingent consideration include a significant amount of judgment and any changes in the assumptions could
have a material impact on the amount of contingent consideration expense recorded in any given period. Our contingent consideration
liabilities were recorded in the acquisitions of Gloucester, Abraxis, Avila, Nogra, and Quanticel Pharmaceuticals, Inc. (Quanticel). In
addition, in connection with our acquisition of Juno in the first quarter of 2018, we assumed Juno's contingent consideration and success
payment liabilities. The fair values of the Gloucester, Avila, Nogra, Quanticel, and Juno contingent consideration liabilities are based
on the discount rate, probability and estimated timing of cash milestone payments to the former shareholders of each business. The fair
value of the Abraxis contingent consideration liability is based on the quoted market price of the publicly traded Abraxis CVRs. Success
payment obligations assumed through our acquisition of Juno are also recorded at their estimated fair value and are revalued quarterly
with changes in fair value recognized in Acquisition related charges (gains) and restructuring, net in the Consolidated Statements of
Income.
57

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The following discussion provides forward-looking quantitative and qualitative information about our potential exposure to market risk.
Market risk represents the potential loss arising from adverse changes in the value of financial instruments. The risk of loss is assessed
based on the likelihood of adverse changes in fair values, cash flows or future earnings.
We have established guidelines relative to the diversification and maturities of investments to maintain safety and liquidity. These
guidelines are reviewed periodically and may be modified depending on market conditions. Although investments may be subject to
credit risk, our investment policy specifies credit quality standards for our investments and limits the amount of credit exposure from any
single issue, issuer or type of investment. As of December 31, 2018, our market risk sensitive instruments consisted of debt securities
available-for-sale and equity investments with readily determinable fair values, our long-term debt and certain derivative contracts (See
Notes 7, 12 and 6 of Notes to Consolidated Financial Statements contained elsewhere in this report for additional details, respectively).
Debt Securities Available-for-Sale
As of December 31, 2018, the principal amounts, fair values and related weighted-average interest rates of our investments in debt
securities classified as Debt securities available-for-sale were as follows (dollar amounts in millions):
Duration
Less than 1 Year 1 to 3 Years 3 to 5 Years Total
Principal amount $ 496 $ — $ — $ 496
Fair value $ 496 $ — $ — $ 496
Weighted average interest rate 2.7% —% —% 2.7%
Equity Investments with Readily Determinable Fair Values
Our Equity investments with readily determinable fair values are primarily equity investments in the publicly traded common stock of
companies, including common stock of companies with whom we have entered into collaboration arrangements. Realized and
unrealized gains and losses related to such securities are included in Other income (expense), net on the Consolidated Statements of
Income.
Debt Obligations
Short-Term Borrowings and Current Portion of Long-Term Debt: We had no outstanding short-term borrowing as of December 31,
2018 or December 31, 2017. The carrying value of the current portion of long-term debt outstanding as of December 31, 2018 and
December 31, 2017 includes (in millions):
2018 2017
2.250% senior notes due 2019 $ 501 $ —
Total short-term debt $ 501 $ —
58

Long-Term Debt: Our outstanding senior notes with maturity dates in excess of one year after December 31, 2018 have an aggregate
principal amount of $19.850 billion with varying maturity dates and interest rates. The principal amounts and carrying values of these
senior notes as of December 31, 2018 are summarized below (in millions):
Principal Carrying
Amount Value
2.875% senior notes due 2020 $ 1,500 $ 1,497
3.950% senior notes due 2020 500 509
2.250% senior notes due 2021 500 498
2.875% senior notes due 2021 500 498
3.250% senior notes due 2022 1,000 1,034
3.550% senior notes due 2022 1,000 996
2.750% senior notes due 2023 750 747
3.250% senior notes due 2023 1,000 994
4.000% senior notes due 2023 700 730
3.625% senior notes due 2024 1,000 1,000
3.875% senior notes due 2025 2,500 2,478
3.450% senior notes due 2027 1,000 986
3.900% senior notes due 2028 1,500 1,490
5.700% senior notes due 2040 250 247
5.250% senior notes due 2043 400 393
4.625% senior notes due 2044 1,000 987
5.000% senior notes due 2045 2,000 1,975
4.350% senior notes due 2047 1,250 1,234
4.550% senior notes due 2048 1,500 1,476
Total long-term debt $ 19,850 $ 19,769
As of December 31, 2018, the fair value of our senior notes outstanding was $19.331 billion.
MARKET RISK MANAGEMENT
Our revenue and earnings, cash flows and fair values of assets and liabilities can be impacted by fluctuations in foreign exchange rates
and interest rates. We actively manage the impact of foreign exchange rate and interest rate movements through operational means and
through the use of various financial instruments, including derivative instruments such as foreign currency option contracts, foreign
currency forward contracts, treasury rate lock agreements and interest rate swap contracts. In instances where these financial instruments
are accounted for as cash flow hedges or fair value hedges we may from time to time terminate the hedging relationship. If a hedging
relationship is terminated, we generally either settle the instrument or enter into an offsetting instrument.
Foreign Currency Risk Management
We maintain a foreign exchange exposure management program to mitigate the impact of volatility in foreign exchange rates on future
foreign currency cash flows, translation of foreign earnings and changes in the fair value of assets and liabilities denominated in foreign
currencies.
Through our revenue hedging program, we endeavor to reduce the impact of possible unfavorable changes in foreign exchange rates
on our future U.S. Dollar cash flows that are derived from foreign currency denominated sales. To achieve this objective, we hedge a
portion of our forecasted foreign currency denominated sales that are expected to occur in the foreseeable future, typically within the next
three years, with a maximum of five years. We manage our anticipated transaction exposure principally with foreign currency forward
contracts, a combination of foreign currency zero-cost collars, and occasionally purchased foreign currency put options.
59

Foreign Currency Forward Contracts: We use foreign currency forward contracts to hedge specific forecasted transactions denominated
in foreign currencies, manage exchange rate volatility in the translation of foreign earnings, and reduce exposures to foreign currency
fluctuations of certain assets and liabilities denominated in foreign currencies.
We manage a portfolio of foreign currency forward contracts to protect against changes in anticipated foreign currency cash flows
resulting from changes in foreign currency exchange rates, primarily associated with non-functional currency denominated revenues and
expenses of foreign subsidiaries. The foreign currency forward hedging contracts outstanding as of December 31, 2018 and December 31,
2017 had settlement dates within 30 months and 20 months, respectively. The spot rate components of these foreign currency forward
contracts are designated as cash flow hedges and any unrealized gains or losses are reported in OCI and reclassified to the Consolidated
Statements of Income in the same periods during which the underlying hedged transactions affect earnings. If a hedging relationship is
terminated with respect to a foreign currency forward contract, accumulated gains or losses associated with the contract remain in OCI
until the hedged forecasted transaction occurs and are reclassified to operations in the same periods during which the underlying hedged
transactions affect earnings. We recognize in earnings the initial value of the forward point components on a straight-line basis over the
life of the derivative instrument within the same line item in the Consolidated Statements of Income that is used to present the earnings
effect of the hedged item.
Foreign currency forward contracts entered into to hedge forecasted revenue and expenses were as follows as of December 31, 2018 and
December 31, 2017:
Notional Amount
Foreign Currency: 2018 2017
Australian Dollar $ 46 $ 61
British Pound 82 97
Canadian Dollar 158 227
Euro 1,381 954
Japanese Yen 424 356
Total $ 2,091 $ 1,695
We consider the impact of our own and the counterparties’ credit risk on the fair value of the contracts as well as the ability of each party
to execute its obligations under the contract on an ongoing basis. As of December 31, 2018, credit risk did not materially change the fair
value of our foreign currency forward contracts.
We also manage a portfolio of foreign currency contracts to reduce exposures to foreign currency fluctuations of certain recognized assets
and liabilities denominated in foreign currencies and, from time to time, we enter into foreign currency contracts to manage exposure
related to translation of foreign earnings. These foreign currency forward contracts have not been designated as hedges and, accordingly,
any changes in their fair value are recognized on the Consolidated Statements of Income in Other income (expense), net in the current
period. The aggregate notional amount of the foreign currency forward non-designated hedging contracts outstanding as of December 31,
2018 and December 31, 2017 were $347 million and $885 million, respectively.
Although not predictive in nature, we believe a hypothetical 10% threshold reflects a reasonably possible near-term change in foreign
currency rates. Assuming that the December 31, 2018 exchange rates were to change by a hypothetical 10%, the fair value of the foreign
currency forward contracts would change by approximately $228 million. However, since the contracts either hedge specific forecasted
intercompany transactions denominated in foreign currencies or relate to assets and liabilities denominated in currencies other than the
entities' functional currencies, any change in the fair value of the contract would be either reported in OCI and reclassified to earnings
in the same periods during which the underlying hedged transactions affect earnings or re-measured through earnings each period along
with the underlying asset or liability.
Foreign Currency Option Contracts: From time to time, we may hedge a portion of our future foreign currency exposure by utilizing a
strategy that involves both a purchased local currency put option and a written local currency call option that are accounted for as hedges
of future sales denominated in that local currency. Specifically, we sell (or write) a local currency call option and purchase a local currency
put option with the same expiration dates and local currency notional amounts but with different strike prices. The premium collected
from the sale of the call option is equal to the premium paid for the purchased put option, resulting in no net premium being paid. This
combination of transactions is generally referred to as a “zero-cost collar.” The expiration dates and notional amounts correspond to the
amount and timing of forecasted foreign currency sales. The foreign currency zero-cost collar contracts outstanding as of December 31,

2018 and December 31, 2017 had settlement dates within 24 months and 36 months, respectively. If the U.S. Dollar weakens relative to
the currency of the hedged anticipated sales, the
60

purchased put option value reduces to zero and we benefit from the increase in the U.S. Dollar equivalent value of our anticipated foreign
currency cash flows; however, this benefit would be capped at the strike level of the written call, which forms the upper end of the collar.
Outstanding foreign currency zero-cost collar contracts entered into to hedge forecasted revenue were as follows as of December 31,
2018 and December 31, 2017:
Notional Amount1
2018 2017
Foreign currency zero-cost collar contracts designated as hedging activity:
Purchased Put $ 1,933 $ 3,319
Written Call $ 2,216 $ 3,739
1 U.S. Dollar notional amounts are calculated as the hedged local currency amount multiplied by the strike value of the foreign currency option. The
local currency notional amounts of our purchased put and written call that are designated as hedging activities are equal to each other.
We also have entered into foreign currency purchased put option contracts to hedge forecasted revenue which were not part of a collar
strategy. Such purchased put option contracts had a notional value of nil and $258 million as of December 31, 2018 and December 31,
2017, respectively. We de-designated all of our purchased put option contracts as of December 31, 2018.
Assuming that the December 31, 2018 exchange rates were to change by a hypothetical 10%, the fair value of the foreign currency
option contracts would increase by approximately $108 million if the U.S. Dollar were to strengthen and decrease by approximately $113
million if the U.S. Dollar were to weaken. However, since the contracts hedge specific forecasted intercompany transactions denominated
in foreign currencies, any change in the fair value of the contract would be reported in other comprehensive income and reclassified to
earnings in the same periods during which the underlying hedged transactions affect earnings.
Interest Rate Risk Management
Forward Starting Interest Rate Swaps and Treasury Rate Locks: In anticipation of issuing fixed-rate debt, we may use forward starting
interest rate swaps (forward starting swaps) or treasury rate lock agreements (treasury rate locks) that are designated as cash flow hedges
to hedge against changes in interest rates that could impact expected future issuances of debt. To the extent these hedges of cash flows
related to anticipated debt are effective, any realized or unrealized gains or losses on the forward starting swaps or treasury rate locks are
reported in OCI and are recognized in income over the life of the anticipated fixed-rate notes. As of December 31, 2018 and December
31, 2017, we did not have any outstanding forward starting swaps or treasury rate locks.
Interest Rate Swap Contracts: From time to time we hedge the fair value of certain debt obligations through the use of interest rate
swap contracts. The interest rate swap contracts are designated hedges of the fair value changes in the notes attributable to changes in
benchmark interest rates. Gains or losses resulting from changes in fair value of the underlying debt attributable to the hedged benchmark
interest rate risk are recorded on the Consolidated Statements of Income within Interest (expense) with an associated offset to the carrying
value of the notes recorded on the Consolidated Balance Sheets. Since the specific terms and notional amount of the swap are intended to
match those of the debt being hedged all changes in fair value of the swap are recorded on the Consolidated Statements of Income within
Interest (expense) with an associated offset to the derivative asset or liability on the Consolidated Balance Sheets. Consequently, there is
no net impact recorded in income. Any net interest payments made or received on interest rate swap contracts are recognized as interest
expense on the Consolidated Statements of Income. If a hedging relationship is terminated for an interest rate swap contract, accumulated
gains or losses associated with the contract are measured and recorded as a reduction or increase of current and future interest expense
associated with the previously hedged debt obligations.
The following table summarizes the notional amounts of our outstanding interest rate swap contracts as of December 31, 2018 and
December 31, 2017:
Notional Amount
2018 2017
Interest rate swap contracts entered into as fair value hedges of the following fixed-rate senior notes:
3.875% senior notes due 2025 $ 200 $ 200
3.450% senior notes due 2027 450 250

3.900% senior notes due 2028 200 —
Total $ 850 $ 450
61

We have entered into swap contracts that were designated as hedges of certain of our fixed rate notes in 2018 and 2017, and also
terminated the hedging relationship by settling certain of those swap contracts during 2018 and 2017. We settled $250 million and $200
million notional amount of certain swap contracts in 2018 and 2017, respectively. The settlement of swap contracts resulted in the receipt
of net proceeds of $2 million and $3 million during the years ended December 31, 2018 and 2017, respectively, which are accounted for
as a reduction of current and future interest expense associated with these notes. See Note 12 for additional details related to reductions
of current and future interest expense.
A sensitivity analysis to measure potential changes in the market value of our debt and interest rate swap contracts from a change in
interest rates indicated that a one percentage point increase in interest rates as of December 31, 2018 would have reduced the aggregate
fair value of our net payable by $1.3 billion. A one percentage point decrease as of December 31, 2018 would have increased the
aggregate fair value of our net payable by $1.5 billion.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CELGENE CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm 63
Consolidated Balance Sheets as of December 31, 2018 and 2017 64
Consolidated Statements of Income – Years Ended December 31, 2018, 2017 and 2016 65
Consolidated Statements of Comprehensive Income – Years Ended December 31, 2018, 2017 and 2016 66
Consolidated Statements of Cash Flows – Years Ended December 31, 2018, 2017 and 2016 67
Consolidated Statements of Stockholders' Equity – Years Ended December 31, 2018, 2017 and 2016 69
Notes to Consolidated Financial Statements 70
Financial Statement Schedule
Schedule II – Valuation and Qualifying Accounts 143
62

Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders
Celgene Corporation:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Celgene Corporation and subsidiaries (the Company) as of December
31, 2018 and 2017, and the related consolidated statements of income, comprehensive income, cash flows, and stockholders’ equity for
each of the years in the three-year period ended December 31, 2018, the related notes, and the consolidated financial statement schedule,
“Schedule II - Valuation and Qualifying Accounts” (collectively, the “consolidated financial statements”). In our opinion, the consolidated
financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and
the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2018, in conformity with
U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”),
the Company’s internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control -
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated
February 26, 2019 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Change in Accounting Principle
As discussed in Note 1 to the consolidated financial statements, on January 1, 2018, the Company adopted on a prospective basis
FASB Accounting Standards Update No. 2016-01, "Financial Instruments-Overall: Recognition and Measurement of Financial Assets
and Financial Liabilities" and Accounting Standards Update No. 2018-03, “Technical Corrections and Improvements to Financial
Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities" which requires accounting for certain
equity investments and financial liabilities under the fair value option with changes in fair value recognized in Net income. The Company
recognized a cumulative effect adjustment of $731 million to Retained Earnings on January 1, 2018 due to the adoption of these new
accounting standards.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on
a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating
the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ KPMG LLP
We have served as the Company’s auditor since 1986.
Short Hills, New Jersey

February 26, 2019
63

CONSOLIDATED BALANCE SHEETS
(Dollars in millions, except per share amounts)
December 31,
2018 2017
Assets
Current assets:
Cash and cash equivalents $ 4,234 $ 7,013
Debt securities available-for-sale 496 3,219
Equity investments with readily determinable fair values 1,312 1,810
Accounts receivable, net of allowances of $38 and $36 as of December 31, 2018 and 2017, respectively 2,066 1,921
Inventory 458 541
Other current assets 501 388
Total current assets 9,067 14,892
Property, plant and equipment, net 1,367 1,070
Intangible assets, net 16,213 8,436
Goodwill 8,003 4,866
Other non-current assets 830 877
Total assets $ 35,480 $ 30,141
Liabilities and Stockholders' Equity

Current liabilities:
Short-term borrowings and current portion of long-term debt $ 501 $ —
Accounts payable 418 305
Accrued expenses and other current liabilities 2,987 2,523
Income taxes payable 78 84
Current portion of deferred revenue 73 75
Total current liabilities 4,057 2,987
Deferred revenue, net of current portion 73 34
Income taxes payable 2,190 2,490
Deferred income tax liabilities 2,753 1,327
Other non-current liabilities 477 544
Long-term debt, net of discount 19,769 15,838
Total liabilities 29,319 23,220
Commitments and Contingencies (Note 19)
Stockholders' Equity:
Preferred stock, $.01 par value per share, 5.0 million shares authorized; none outstanding as of December 31, 2018 and
2017, respectively — —
Common stock, $.01 par value per share, 1,150.0 million shares authorized; issued 981.5 million and 971.7 million
shares as of December 31, 2018 and 2017, respectively 10 10
Common stock in treasury, at cost; 281.3 million and 212.4 million shares as of December 31, 2018 and 2017,
respectively (26,336) (20,243)
Additional paid-in capital 14,978 13,806
Retained earnings 17,559 13,061
Accumulated other comprehensive (loss) income (50) 287
Total stockholders' equity 6,161 6,921
Total liabilities and stockholders' equity $ 35,480 $ 30,141

See accompanying Notes to Consolidated Financial Statements
64

CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)

2018 2017 2016
Revenue:
Net product sales $ 15,265 $ 12,973 $ 11,185
Other revenue 16 30 44
Total revenue 15,281 13,003 11,229
Expenses:
Cost of goods sold (excluding amortization of acquired intangible assets) 587 461 438
Research and development 5,673 5,915 4,470
Selling, general and administrative 3,250 2,941 2,658
Amortization of acquired intangible assets 468 329 459
Acquisition related charges (gains) and restructuring, net 112 (1,350) 38
Total costs and expenses 10,090 8,296 8,063
Operating income 5,191 4,707 3,166
Other income and (expense):
Interest and investment income, net 45 105 30
Interest (expense) (741) (522) (500)
Other income (expense), net 337 24 (324)
Income before income taxes 4,832 4,314 2,372
Income tax provision 786 1,374 373
Net income $ 4,046 $ 2,940 $ 1,999

Basic $ 5.65 $ 3.77 $ 2.57
Diluted $ 5.51 $ 3.64 $ 2.49
Basic 716.3 779.2 777.2
Diluted 733.8 808.7 803.3
65

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in millions)

2018 2017 2016
Net income $ 4,046 $ 2,940 $ 1,999
Other comprehensive income (loss):
Foreign currency translation adjustments (28) 70 (26)
Pension liability adjustment (6) 16 (24)
Net unrealized gains (losses) related to cash flow hedges:

Unrealized holding gains (losses) 245 (434) 145
Tax benefit (expense) 1 6 (13)
Unrealized holding gains (losses), net of tax 246 (428) 132
Reclassification adjustment for losses (gains) included in net income 7 (178) (300)
Tax (benefit) (1) (3) (3)
Reclassification adjustment for losses (gains) included in net income, net of tax 6 (181) (303)
Excluded component related to cash flow hedges:

Amortization of excluded component (gains) (20) (15) —
Reclassification of realized excluded component losses to net income 28 18 —
Net reclassification adjustment included in net income 8 3 —
Net unrealized (losses) gains on available for sale debt / marketable securities (see Note
1):
Unrealized holding (losses) gains (9) 611 (563)
Tax benefit (expense) 2 (216) 203
Unrealized holding (losses) gains, net of tax (7) 395 (360)
Reclassification adjustment for losses included in net income 18 37 358

Tax (benefit) (4) (14) (126)
Reclassification adjustment for losses included in net income, net of tax 14 23 232
Total other comprehensive income (loss) 233 (102) (349)
Comprehensive income $ 4,279 $ 2,838 $ 1,650
66

CONSOLIDATED STATEMENTS OF CASH FLOWS
2018 2017 2016
Cash flows from operating activities:
Net income $ 4,046 $ 2,940 $ 1,999
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 160 134 121
Amortization 475 337 384
Impairment charges 31 1,679 489
Deferred income taxes 32 (1,330) (344)
Change in value of contingent consideration and success payments 19 (1,350) 21
Gain on sale of business — — (38)
Net loss (gain) on sales of debt securities available-for-sale and equity investments 18 (61) (7)
Fair value adjustments on equity investments (317) — —
Share-based compensation expense 921 644 606
Share-based employee benefit plan expense 33 34 40
Derivative instruments 3 72 169
Other, net (15) (24) (10)
Change in current assets and liabilities, excluding the effect of acquisitions:
Accounts receivable (178) (236) (222)
Inventory 82 (42) (55)
Other operating assets (55) (73) 94
Accounts payable and other operating liabilities 290 273 619
Income tax payable (393) 2,229 301
Payment of contingent consideration (22) — (9)
Deferred revenue 41 20 7
Net cash provided by operating activities 5,171 5,246 4,165
Cash flows from investing activities:
Proceeds from sales of debt securities available-for-sale 3,388 5,872 633
Purchases of debt securities available-for-sale (675) (8,163) (1,106)
Capital expenditures (330) (279) (236)
Proceeds from sales of equity investment securities 96 116 15
Purchases of equity investment securities (249) (410) (307)
Payments for acquisition of businesses, net of cash acquired (8,648) — —
Other — (27) (1)
Net cash used in investing activities (6,418) (2,891) (1,002)
Cash flows from financing activities:
Payment for treasury shares (6,096) (3,833) (2,160)
Proceeds from short-term borrowing 5,709 — 100
Principal repayments on short-term borrowing (5,709) — (100)
Proceeds from the issuance of long-term debt 4,452 3,468 —
Repayments of long-term debt — (1,904) —
Net proceeds from common equity put options — — 8

Payment of contingent consideration (40) — (41)
Net proceeds from share-based compensation arrangements 144 685 359
Net cash used in financing activities (1,540) (1,584) (1,834)
Effect of currency rate changes on cash and cash equivalents 8 72 (39)
Net (decrease) increase in cash and cash equivalents (2,779) 843 1,290
Cash and cash equivalents at beginning of period 7,013 6,170 4,880
Cash and cash equivalents at end of period $ 4,234 $ 7,013 $ 6,170
67

CONSOLIDATED STATEMENTS OF CASH FLOWS – (Continued)
2018 2017 2016
Supplemental schedule of non-cash investing and financing activity:
Change in net unrealized loss (gain) on debt securities available-for-sale/marketable securities
available-for-sale $ 9 $ (611) $ 563
Investment in Human Longevity, Inc. common stock — — 40
Investment in Celularity, Inc. common stock — 22 —
Supplemental disclosure of cash flow information:
Interest paid $ 689 $ 539 $ 527
Income taxes paid 1,165 475 373
68

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Additional Accumulated Other
Common Treasury Paid-in Retained Comprehensive Stockholders'
Years Ended December 31, 2018, 2017 and 2016 Stock Stock Capital Earnings Income (Loss) Equity
Balances as of December 31, 2015 $ 9 $ (14,052) $ 11,119 $ 8,075 $ 768 $ 5,919
Net income — — — 1,999 — 1,999
Other comprehensive (loss) — — — — (349) (349)

Exercise of stock options and conversion of restricted
stock units 1 (105) 453 — — 349
Shares purchased under share repurchase program — (2,160) — — — (2,160)
Issuance of common stock for employee benefit plans — 36 15 — — 51
Expense related to share-based compensation — — 606 — — 606
Income tax benefit upon exercise of stock options — — 185 — — 185
Net income — — — 2,940 — 2,940
Other comprehensive (loss) — — — — (102) (102)

Exercise of stock options and conversion of
restricted stock units — (83) 776 — — 693
Adoption of ASU 2016-09 and ASU 2017-12 — — — 47 (30) 17
Net income — — — 4,046 — 4,046
Other comprehensive income — — — — 233 233

Exercise of stock options and conversion of
restricted stock units — (104) 248 — — 144

Adoption of ASU 2014-09, ASU 2016-01, ASU2018-03,
ASU 2018-02 and ASU 2016-16 (Note 1) — — — 452 (570) (118)
Balances as of December 31, 2018 $ 10 $ (26,336) $ 14,978 $ 17,559 $ (50) $ 6,161
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in millions, except per share amounts, unless otherwise indicated)
1. Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies

In addition, we earn revenue from other product sales and licensing arrangements.
The consolidated financial statements include the accounts of Celgene Corporation and its subsidiaries. Investments in limited
partnerships and interests where we have an equity interest of 50% or less and do not otherwise have a controlling financial interest are
accounted for by one of three methods: the equity method, as an investment without a readily determinable fair value or as an investment
with a readily determinable fair value.
We operate in a single segment engaged in the discovery, development, manufacturing, marketing, distribution and sale of innovative
therapies for the treatment of cancer and inflammatory diseases. Consistent with our operational structure, our Chief Executive Officer
(CEO), as the chief operating decision maker, manages and allocates resources at the global corporate level. Our global research and
development organization is responsible for discovery of new product candidates and supports development and registration efforts for
potential future products. Our global supply chain organization is responsible for the manufacturing and supply of products. Regional/
therapeutic area commercial organizations market, distribute and sell our products. The business is also supported by global corporate
staff functions. Managing and allocating resources at the global corporate level enables our CEO to assess both the overall level of
resources available and how to best deploy these resources across functions, therapeutic areas, regional commercial organizations and
research and development projects in line with our overarching long-term corporate-wide strategic goals, rather than on a product or
franchise basis. Consistent with this decision-making process, our CEO uses consolidated, single-segment financial information for
purposes of evaluating performance, allocating resources, setting incentive compensation targets, as well as forecasting future period
financial results.
The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect reported
amounts and disclosures. Actual results could differ from those estimates. We are subject to certain risks and uncertainties related to,
among other things, product development, regulatory approval, market acceptance, scope of patent and proprietary rights, competition,
outcome of legal and governmental proceedings, credit risk, technological change and product liability.
Certain prior year amounts have been reclassified to conform to the current year's presentation. During the first quarter of 2018, we
adopted Accounting Standards Update No. 2016-01, “Financial Instruments-Overall: Recognition and Measurement of Financial Assets
and Financial Liabilities” (ASU 2016-01). As such, we have recast our previously reported marketable securities available-for-sale of
$5,029 million on our Consolidated Balance Sheet as of December 31, 2017 to conform to the current year presentation as shown in the
table below. There were no changes to Total current assets or Total assets as a result of this reclassification.
December 31, 2017

As Reported As Revised
Marketable securities available-for-sale $ 5,029 N/A
Debt securities available-for-sale N/A $ 3,219
Equity investments with readily determinable fair values N/A 1,810
In addition, as a result of adopting ASU 2016-01, we have also recast certain activity within our previously reported Consolidated
Statement of Cash Flows for the years ended December 31, 2017 and December 31, 2016 to conform to the current year presentation as

shown in the table below. There were no changes to Net cash provided by operating activities, Net cash used in investing activities and
Net cash used in financing activities as a result of this reclassification.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Year Ended December 31, Year Ended December 31,

2017 2016
As Reported As Revised As Reported As Revised
Purchases of marketable securities available for sale $ (8,478) N/A $ (1,281) N/A
Purchases of investment securities (95) N/A (132) N/A
Purchases of debt securities available-for-sale N/A $ (8,163) N/A $ (1,106)
Purchases of equity investment securities N/A (410) N/A (307)
Proceeds from sales of marketable securities available-for-sale 5,968 N/A 633 N/A
Proceeds from sales of investment securities 20 N/A 15 N/A
Proceeds from sales of debt securities available-for-sale N/A 5,872 N/A 633
Proceeds from sales of equity investment securities N/A 116 N/A 15
The following is a summary of our significant accounting policies.
Financial Instruments: Certain financial instruments reflected in the Consolidated Balance Sheets, (e.g., cash, cash equivalents, accounts
receivable, certain other assets, accounts payable, short-term borrowings and certain other liabilities) are recorded at cost, which
approximates fair value due to their short-term nature. The fair values of financial instruments other than debt securities available-
for-sale and equity investments with readily determinable fair values are determined through a combination of management estimates
and information obtained from third parties using the latest market data. The fair value of debt securities available-for-sale and equity
investments with readily determinable fair values is determined utilizing the valuation techniques appropriate to the type of security. See
Note 5.
Derivative Instruments and Hedges: All derivative instruments are recognized on the Consolidated Balance Sheets at their fair value.
Changes in the fair value of derivative instruments are recorded each period in current earnings or Other comprehensive income (loss)
(OCI), depending on whether a derivative instrument is designated as part of a hedging transaction and, if it is, the type of hedging
transaction. For a derivative to qualify as a hedge at inception and throughout the hedged period, we formally document the nature
and relationships between the hedging instruments and hedged item. We assess, both at inception and on an on-going basis, whether
derivative instruments are highly effective in offsetting the changes in the fair value or cash flows of hedged items. If we determine that
a forecasted transaction is no longer probable of occurring, we discontinue hedge accounting and any related unrealized gain or loss on
the derivative instrument is recognized in Other income (expense), net in our Consolidated Statements of Income. We use derivative
instruments, including those not designated as part of a hedging transaction, to manage our exposure to movements in foreign exchange,
our stock price and interest rates. The use of these derivative instruments modifies the exposure of these risks with the intent to reduce
our risk or cost.
Prior to Accounting Standards Update No. 2017-12, "Targeted Improvements to Accounting for Hedging Activities" (ASU 2017-12),
which we adopted on August 31, 2017 (Adoption Date), with an application date of January 1, 2017 (Application Date), we were required
to separately measure and reflect the amount by which the hedging instrument did not offset the changes in the fair value or cash flows of
hedged items, which was referred to as the ineffective amount. We assessed hedge effectiveness on a quarterly basis and recorded the gain
or loss related to the ineffective portion of derivative instruments, if any, in Other income (expense), net in the Consolidated Statements of
Income. Pursuant to the provisions of ASU 2017-12, we are no longer required to separately measure and recognize hedge ineffectiveness.
Upon adoption of ASU 2017-12, we no longer recognize hedge ineffectiveness in our Consolidated Statements of Income, but we instead
• cash flow hedges included in the assessment of hedge effectiveness in OCI. The amounts recorded in OCI will subsequently be
reclassified to earnings in the same line item in the Consolidated Statements of Income as impacted by the hedged item when
the hedged item affects earnings; and
• fair value hedges included in the assessment of hedge effectiveness in the same line item in the Consolidated Statements of
Income that is used to present the earnings effect of the hedged item.
Prior to the adoption of ASU 2017-12, we excluded option premiums and forward points (excluded components) from our assessment
of hedge effectiveness for our foreign exchange cash flow hedges. We recognized all changes in fair value of the excluded components

in Other income (expense), net in the Consolidated Statements of Income. The amendments in ASU 2017-12 continue to allow those
components to be excluded from the assessment of hedge effectiveness, which we have elected to continue to apply. Pursuant to the
provisions of ASU 2017-12, we no longer recognize changes in the fair value of the excluded components in Other income (expense),
net, but we instead recognize the initial value of the excluded component on a straight-line basis over
71

the life of the derivative instrument, within the same line item in the Consolidated Statements of Income that is used to present the
earnings effect of the hedged item. Beginning on April 1, 2018, all new cash flow hedging relationships are accounted for using the
forward method. As a result, the entire fair value of the hedging instrument is recorded in OCI as no amounts are excluded from
the assessment of hedge effectiveness. In addition, the initial value of the excluded component is recognized in OCI and not in the
Consolidated Statements of Income.
In accordance with the transition provisions of ASU 2017-12, the Company is required to eliminate the separate measurement of
ineffectiveness for its cash flow hedging instruments existing as of the Adoption Date through a cumulative effect adjustment to retained
earnings as of the Application Date. We did not record a cumulative-effect adjustment to eliminate ineffectiveness amounts as all such
amounts were not material to the Company's previously issued Consolidated Financial Statements. In addition, we did not have any
ineffectiveness during fiscal year 2017.
Also in accordance with the transition provisions of ASU 2017-12, we modified the recognition model for the excluded component from a
mark-to-market approach to an amortization approach for all hedges existing as of the Adoption Date with a cumulative-effect adjustment
of $30 million that reduced Accumulated other comprehensive (loss) income (AOCI) with a corresponding adjustment that increased
Retained earnings as of the Application Date.
Cash, Cash Equivalents and Debt Securities Available-for-Sale: We invest our excess cash primarily in money market funds, repurchase
agreements, time deposits, commercial paper, U.S. Treasury securities, U.S. government-sponsored agency securities, U.S. government-
sponsored agency mortgage-backed securities (MBS), ultra-short income fund investments, global corporate debt securities and asset
backed securities. All liquid investments with maturities of three months or less from the date of purchase are classified as cash
equivalents and all investments with maturities of greater than three months from the date of purchase are classified as debt securities
available-for-sale. We determine the appropriate classification of our investments in marketable debt securities at the time of purchase.
We invest in debt securities that are carried at fair value, held for an unspecified period of time and are intended for use in meeting our
ongoing liquidity needs. Unrealized gains and losses on debt securities available-for-sale, which are deemed to be temporary, are reported
as a separate component of stockholders' equity, net of tax. The cost of debt securities is adjusted for amortization of premiums and
accretion of discounts to maturity. The amortization, along with realized gains and losses and other-than-temporary impairment charges
related to debt securities, is included in Interest and investment income, net.
A decline in the market value of any debt security available-for-sale below its carrying value that is determined to be other-than-temporary
would result in a charge to earnings and decrease in the debt security's carrying value down to its newly established fair value. Factors
evaluated to determine if an investment is other-than-temporarily impaired include significant deterioration in earnings performance,
credit rating, asset quality or business prospects of the issuer; adverse changes in the general market condition in which the issuer
operates; our intent to hold to maturity and an evaluation as to whether it is more likely than not that we will not have to sell before
recovery of its cost basis; our expected future cash flows from the debt security; and issues that raise concerns about the issuer's ability
to continue as a going concern.
Concentration of Credit Risk: Cash, cash equivalents and debt securities available-for-sale are financial instruments that potentially
subject the Company to concentration of credit risk. We invest our excess cash primarily in money market funds, repurchase agreements,
time deposits, commercial paper, U.S. Treasury securities, U.S. government-sponsored agency securities, U.S. government-sponsored
agency MBS, ultra-short income fund investments, global corporate debt securities and asset backed securities (see Note 7). We
have established guidelines relative to diversification and maturities to maintain safety and liquidity. These guidelines are reviewed
periodically and may be modified to take advantage of trends in yields and interest rates.
We sell our products in the United States primarily through wholesale distributors and specialty contracted pharmacies. Therefore,
wholesale distributors and large pharmacy chains account for a large portion of our U.S. trade receivables and net product revenues (see
Note 20). While most international sales, primarily in Europe, are made directly to hospitals, clinics and retail chains, many of which in
Europe are government owned and have extended their payment terms in recent years given the economic pressure these countries are
facing, sales in other international regions are also made to wholesalers and distributors. We continuously monitor the creditworthiness
of our customers, including these governments, and have internal policies regarding customer credit limits. We estimate an allowance
for doubtful accounts primarily based on historical payment patterns, aging of receivable balances and general economic conditions,
including publicly available information on the credit worthiness of countries themselves and provinces or areas within such countries
where they are the ultimate customers.

We continue to monitor economic conditions, including the volatility associated with international economies, the sovereign debt situation
in certain European countries and associated impacts on the financial markets and our business. Our current business model in these
markets is typically to sell our hematology and oncology products directly to principally government owned or
72

controlled hospitals, which in turn directly deliver critical care to patients. Many of our products are used to treat life-threatening diseases
and we believe this business model enables timely delivery and adequate supply of products. Many of the outstanding receivable balances
are related to government-funded hospitals and we believe the receivable balances are ultimately collectible. Similarly, we believe that
future sales to these customers will continue to be collectible.
Inventory: Inventories are recorded at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. We
periodically review the composition of inventory in order to identify excess, obsolete, slow-moving or otherwise non-saleable items. If
non-saleable items are observed and there are no alternate uses for the inventory, we will record a write-down to net realizable value in
the period that the decline in value is first recognized. Included in inventory are raw materials used in the production of preclinical and
clinical products, which are charged to research and development expense when consumed.
We capitalize inventory costs associated with certain products prior to regulatory approval of products, or for inventory produced in new
production facilities, when management considers it highly probable that the pre-approval inventories will be saleable. The determination
to capitalize is based on the particular facts and circumstances relating to the expected regulatory approval of the product or production
facility being considered, and accordingly, the time frame within which the determination is made varies from product to product.
The assessment of whether or not the product is considered highly probable to be saleable is made on a quarterly basis and includes,
but is not limited to, how far a particular product or facility has progressed along the approval process, any known safety or efficacy
concerns, potential labeling restrictions and other impediments. We could be required to write down previously capitalized costs related
to pre-launch inventories upon a change in such judgment, or due to a denial or delay of approval by regulatory bodies, a delay in
commercialization or other potential factors. As of December 31, 2018, the carrying value of pre-approval inventory was not material.
Property, Plant and Equipment, Net: Property, plant and equipment, net is stated at cost less accumulated depreciation. Depreciation of
plant and equipment is recorded using the straight-line method. Building improvements are depreciated over the remaining useful life of
the building. Leasehold improvements are depreciated over the lesser of the economic useful life of the asset or the remaining term of
the lease, including anticipated renewal options. Capitalized software costs incurred in connection with developing or obtaining software
are amortized over their estimated useful life from the date the systems are ready for their intended use. The estimated useful lives of
capitalized assets are as follows:
Buildings 40 years
Building and operating equipment 15 years
Manufacturing machinery and equipment 10 years
Other machinery and equipment 5 years
Furniture and fixtures 5 years
Computer equipment and software 3-7 years
Maintenance and repairs are charged to operations as incurred, while expenditures for improvements which extend the life of an asset are
capitalized.
Investments in Other Entities: We hold a portfolio of investments in equity securities and certain investment funds that are accounted
for under either the equity method, as equity investments with readily determinable fair values, or as equity investments without readily
determinable fair values. Investments in companies or certain investment funds over which we have significant influence but not a
controlling interest are accounted for using the equity method, with our share of earnings or losses reported in Other income (expense), net
in the Consolidated Statements of Income. Our equity investments with readily determinable fair values are primarily equity investments
in the publicly traded common stock of companies, including common stock of companies with whom we have entered into collaboration
agreements. Prior to ASU 2016-01, which we adopted on January 1, 2018, unrealized gains and losses on these investments, which
were deemed to be temporary, were reported as a separate component of stockholder's equity, net of tax. Realized gains and losses
as well as other-than-temporary impairment charges related to these investments were included in Other income (expense), net in
the Consolidated Statements of Income. Following the adoption of ASU 2016-01, these investments are measured at fair value with
changes in fair value recognized in Other income (expense), net in the Consolidated Statements of Income and are no longer subject
to impairment. Also prior to the adoption of ASU 2016-01, equity investments without readily determinable fair values were recorded
at cost minus other-than-temporary impairment, with other-than-temporary impairment charges included in Other income (expense), net
in the Consolidated Statements of Income. Following the adoption of ASU 2016-01, these investments are measured at cost adjusted
for changes in observable prices minus impairment or at net asset value (NAV), as a practical expedient, if available, with changes in
measurement recognized in Other income (expense), net in the Consolidated Statements of Income. Investments in equity investments

without readily determinable fair values of companies that become publicly traded and are not classified as equity method investments
are accounted for as equity investments with
73

readily determinable fair values prospectively from the date of such companies' initial public offering. Our equity method investments
and equity investments without readily determinable fair values are included in Other non-current assets on the Consolidated Balance
Sheets.
All equity method investments and investments without a readily determinable fair value are reviewed on a regular basis for possible
impairment. If an equity method investment's fair value is determined to be less than its net carrying value and the decline is determined
to be other-than-temporary, the investment is written down to its fair value. Investments without a readily determinable fair value that do
not qualify for the practical expedient to estimate fair value using NAV per share are written down to fair value if a qualitative assessment
indicates that the investment is impaired and the fair value of the investment is less than its carrying value. Such evaluation is judgmental
and dependent on specific facts and circumstances. Factors considered in determining whether an other-than-temporary decline in value
or impairment has occurred include: market value or exit price of the investment based on either market-quoted prices or future rounds
of financing by the investee; length of time that the market value was below its cost basis; financial condition and business prospects of
the investee; our intent and ability to retain the investment for a sufficient period of time to allow for recovery in market value of the
investment; a bona fide offer to purchase, an offer by the investee to sell, or a completed auction process for the same or similar security
for an amount less than the carrying amount of the investment; issues that raise concerns about the investee's ability to continue as a going
concern; and any other information that we may be aware of related to the investment.
Other Intangible Assets: Intangible assets with definite useful lives are amortized to their estimated residual values over their estimated
useful lives and reviewed for impairment if certain events or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. Amortization is initiated for in-process research and development (IPR&D) intangible assets when their useful lives
have been determined. IPR&D intangible assets which are determined to have had a drop in their fair value are adjusted downward and
an expense recognized in Research and development in the Consolidated Statements of Income. These IPR&D intangible assets are tested
at least annually or when a triggering event occurs that could indicate a potential impairment.
Goodwill: Goodwill represents the excess of purchase price over fair value of net assets acquired in a business combination accounted for
by the acquisition method of accounting and is not amortized, but is subject to impairment testing. We test our goodwill for impairment at
least annually or when a triggering event occurs that could indicate a potential impairment by assessing qualitative factors or performing
a quantitative analysis in determining whether it is more likely than not that the fair value of net assets are below their carrying amounts.
Impairment of Long-Lived Assets: Long-lived assets, such as property, plant and equipment and certain other long-term assets are tested
for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated
undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of the assets exceed their
estimated future undiscounted net cash flows, an impairment charge is recognized for the amount by which the carrying amount of the
assets exceed the fair value of the assets.
Contingent Consideration from Business Combinations: Subsequent to the acquisition date, we measure contingent consideration
arrangements at fair value for each period with changes in fair value recognized in income as Acquisition related charges (gains) and
restructuring, net in the Consolidated Statements of Income. Changes in contingent consideration obligation values can result from
movements in publicly listed prices of our Contingent Value Rights issued in connection with our acquisition of Abraxis BioScience,
Inc. (Abraxis) (Abraxis CVRs), adjustments to discount rates, updates in the assumed achievement or timing of milestones or changes in
the probability of certain clinical events and changes in the assumed probability associated with regulatory approval. In the absence of
new information, changes in fair value reflect only the passage of time as development work towards the achievement of the milestones
progresses, and is accrued based on an accretion schedule.
Foreign Currency Translation: Operations in non-U.S. entities are recorded in the functional currency of each entity. For financial
reporting purposes, the functional currency of an entity is determined by a review of the source of an entity's most predominant cash
flows. The results of operations for non-U.S. dollar functional currency entities are translated from functional currencies into U.S. dollars
using the average currency rate during each month, which approximates the results that would be obtained using actual currency rates on
the dates of individual transactions. Assets and liabilities are translated using currency rates at the end of the period. Adjustments resulting
from translating the financial statements of our foreign entities into the U.S. dollar are excluded from the determination of net income
and are recorded as a component of OCI. Transaction gains and losses are recorded in Other income (expense), net in the Consolidated
Statements of Income.

74

Advertising Costs: Advertising costs are expensed when incurred and are recorded in Selling, general and administrative in the
Consolidated Statements of Income. Advertising costs consist of direct-to-consumer advertising and were $174 million, $119 million and
$95 million for the years ended December 31, 2018, 2017 and 2016, respectively.
Research and Development Costs: Research and development costs are expensed as incurred. These include all internal and external costs
related to services contracted by us. Upfront and milestone payments made to third parties in connection with research and development
collaborations are expensed as incurred up to the point of regulatory approval. Milestone payments made to third parties upon regulatory
approval are capitalized and amortized over the remaining useful life of the related product. Upfront payments are recorded when
incurred, and milestone payments are recorded when the specific milestone has been achieved. Asset acquisition expenses, including
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, are recorded as incurred.
Income Taxes: We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and
liabilities are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities
using enacted tax rates in effect for years in which the temporary differences are expected to reverse. A valuation allowance is provided
when it is more likely than not that some portion or all of a deferred tax asset will not be realized. We recognize the benefit of an uncertain
tax position that we have taken or expect to take on income tax returns we file if such tax position is more likely than not to be sustained.
We recognize the tax on Global Intangible Low-Taxed Income (GILTI) as a period expense in the period the tax is incurred. Under this
policy, we have not provided deferred taxes on temporary differences that upon their reversal will affect the amount of income subject to
GILTI in the period.
Revenue Recognition: Revenue from the sale of products is recognized in a manner that depicts the transfer of those promised goods
to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for these good or services.
To achieve this core principle, we follow a five-step model that includes identifying the contract with a customer, identifying the
performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations
and recognizing revenue when, or as, we satisfy a performance obligation. In addition, we recognize revenue from other product sales
and royalties based on licensees' sales of our products or products using our technologies. We do not consider royalty revenue to be a
material source of our consolidated revenue.
We record gross-to-net sales accruals for government rebates, chargebacks, distributor services fees, other rebates and administrative
fees, sales returns and allowances and sales discounts. See Note 2 for further detail on gross-to-net sales accruals and revenue recognition
disclosures.
Share-Based Compensation: We utilize share-based compensation in the form of stock options, restricted stock units (RSUs) and
performance-based restricted stock units (PSUs). Compensation expense is recognized in the Consolidated Statements of Income based
on the estimated fair value of the awards at grant date. Compensation expense recognized reflects an estimate of the number of awards
expected to vest after taking into consideration an estimate of award forfeitures based on actual experience and is recognized on a straight-
line basis over the requisite service period, which is generally the vesting period required to obtain full vesting. Management expectations
related to the achievement of performance goals associated with PSU grants is assessed regularly and that assessment is used to determine
whether PSU grants are expected to vest. If performance-based milestones related to PSU grants are not met or not expected to be met,
any compensation expense recognized to date associated with grants that are not expected to vest will be reversed.
The fair values of stock option grants are estimated as of the date of grant using a Black-Scholes option valuation model. The fair values
of RSU and PSU grants that are not based on market performance are based on the market value of our common stock on the date of grant.
Certain of our PSU grants are measured based on the achievement of specified performance and market targets, including non-GAAP
(Generally Accepted Accounting Principles) revenue, non-GAAP earnings per share, and relative total shareholder return. The grant date
fair value for the portion of the PSUs related to non-GAAP revenue and non-GAAP earnings per share is estimated using the fair market
value of our common stock on the grant date. The grant date fair value for the portion of the PSUs related to relative total shareholder
return is estimated using the Monte Carlo valuation model.
Earnings Per Share: Basic earnings per share is computed by dividing net income by the weighted-average number of common shares
outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average number of
common shares outstanding during the period, assuming potentially dilutive common shares resulting from option exercises, RSUs,
PSUs, warrants and other incentives had been issued and any proceeds thereof used to repurchase common stock at the average market

price during the period. The assumed proceeds used to repurchase common stock is the sum of the amount to be paid to us upon exercise
of options and the amount of compensation cost attributed to future services and not yet recognized.
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New accounting standards which have been adopted
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, "Revenue from
Contracts with Customers" (ASU 2014-09) and has subsequently issued a number of amendments to ASU 2014-09. The new standard,
as amended, provides a single comprehensive model to be used in the accounting for revenue arising from contracts with customers
and supersedes previous revenue recognition guidance, including industry-specific guidance. The standard’s stated core principle is
that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle,
ASU 2014-09 includes provisions within a five step model that includes identifying the contract with a customer, identifying the
performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations,
and recognizing revenue when, or as, an entity satisfies a performance obligation. In addition, the standard requires disclosure of the
nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. See Note 2 for revenue
recognition disclosures.
The new standard was effective for us on January 1, 2018 and we elected to adopt it using a modified retrospective transition method,
which required a cumulative effect adjustment to opening retained earnings as of January 1, 2018. The implementation of ASU 2014-09
using the modified retrospective transition method did not have a material quantitative impact on our consolidated financial statements as
the timing of revenue recognition did not significantly change. We also elected the following practical expedients, which were available
to us as a result of utilizing the modified retrospective transition method:
• We applied the provisions of the standard only to contracts that were not completed as of January 1, 2018; and
• We did not retrospectively restate contracts for contract modifications executed before the beginning of the earliest period
presented.
In accordance with the transition provisions of ASU 2014-09, we recorded a cumulative effect adjustment of $4 million to increase
Retained earnings (net of a $1 million tax effect). In limited instances, the new standard permits us to recognize revenue earlier than
under the previous revenue recognition guidance. Historically, we deferred certain revenue where the transaction price pursuant to the
underlying customer arrangement was not fixed or determinable. Under the new standard, such customer arrangements are accounted for
as variable consideration, which results in revenue being recognized earlier provided we can reliably estimate the ultimate price expected
to be realized from the customer. In addition, ASU 2014-09 requires companies who elect to adopt the standard using the modified
retrospective transition method to disclose within the footnotes the effects of applying the provisions of the previous standards to current
year financial statements. Revenue and Net income for the year ended December 31, 2018, do not differ materially from amounts that
would have resulted from application of the previous standards.
In January 2016 and February 2018, the FASB issued ASU 2016-01 and Accounting Standards Update No. 2018-03, "Technical
Corrections and Improvements to Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial
Liabilities" (ASU-2018-03), respectively. ASU 2016-01 changes accounting for equity investments, financial liabilities under the fair
value option, and presentation and disclosure requirements for financial instruments. ASU 2016-01 does not apply to equity investments
in consolidated subsidiaries or those accounted for under the equity method of accounting. In addition, the FASB clarified guidance
related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-
sale debt securities. Equity investments with readily determinable fair values will be measured at fair value with changes in fair value
recognized in Net income. We have elected to measure all of our equity investments without readily determinable fair values at cost
adjusted for changes in observable prices minus impairment or at NAV, as a practical expedient, if available. Changes in measurement of
equity investments without readily determinable fair values will be recognized in Net income. The guidance related to equity investments
without readily determinable fair values, in which the practical expedient has not been elected, will be applied prospectively to equity
investments that exist as of the date of adoption. For equity investments without a readily determinable fair value in which the NAV
per share practical expedient is elected, ASU 2018-03 clarified that the transition should not be performed prospectively, but rather as a
cumulative effect adjustment to opening Retained earnings as of the beginning of the fiscal year of adoption. Equity investments without
readily determinable fair values are recorded within Other non-current assets on the Consolidated Balance Sheets. We have not elected the
fair value option for financial liabilities with instrument-specific credit risk. Companies must assess valuation allowances for deferred tax
assets related to available-for-sale debt securities in combination with their other deferred tax assets. ASU 2016-01 was effective for us on
January 1, 2018 which required a cumulative effect adjustment to opening Retained earnings to be recorded for equity investments with
readily determinable fair values and equity investments without readily determinable fair values in which the NAV per share practical
expedient was elected. As of the adoption date, we held publicly traded equity investments with a fair value of approximately $1.8 billion
in a net unrealized gain position of $875 million, and having an associated deferred tax liability of $188 million. We recorded a cumulative

effect adjustment of $687 million to decrease AOCI with a corresponding increase to Retained earnings for the amount of unrealized
gains or losses, net of tax as of the beginning of fiscal year 2018. In addition, we held an equity investment without a readily determinable
fair value in which we elected the NAV per share practical expedient. As such, on January 1, 2018,
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we recorded an additional cumulative effect adjustment of $59 million to increase equity investments without readily determinable fair
values as the NAV was in excess of our cost basis as of the adoption date with a corresponding increase to Retained earnings of $44
million, net of the tax effect of $15 million. As a result of the implementation of ASU 2016-01, effective on January 1, 2018 unrealized
gains and losses in Equity investments with readily determinable fair values and equity investments without readily determinable fair
values for which observable price changes for identical or similar (e.g. dividend rights, voting rights, etc.) investments occur are recorded
on the Consolidated Balance Sheets within Other income (expense), net. We recorded a net gain of $317 million in Other income
(expense), net for the year ended December 31, 2018 as a result of adopting this standard. The implementation of ASU 2016-01 is
expected to increase volatility in our net income as the volatility previously recorded in OCI related to changes in the fair market value
of available-for-sale equity investments will now be reflected in Net income effective with the adoption date.
In February 2018, the FASB issued Accounting Standards Update No. 2018-02, "Income Statement-Reporting Comprehensive Income:
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" (ASU 2018-02). The new standard is effective
on January 1, 2019 with early adoption permitted. The guidance permits a reclassification from AOCI to Retained earnings for stranded
tax effects resulting from U.S. tax reform legislation enacted in December 2017 (2017 Tax Act). We elected to early adopt ASU 2018-02
on January 1, 2018. We use a specific identification approach to release the income tax effects in AOCI. We have recast our previously
reported Marketable securities available-for-sale on our Consolidated Balance Sheet as of December 31, 2017 to conform to the current
year presentation as outlined earlier in this Note 1. As a result of adopting this standard, we recorded a cumulative effect adjustment to
increase AOCI by $117 million with a corresponding decrease to Retained earnings. We recorded the impacts of adopting ASU 2018-02
prior to recording the impacts of adopting ASU 2016-01 and included state income tax related effects in the amounts reclassified to
Retained earnings.
In August 2016, the FASB issued Accounting Standards Update No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of
Certain Cash Receipts and Cash Payments" (ASU 2016-15). ASU 2016-15 clarifies how companies present and classify certain cash
receipts and cash payments in the statement of cash flows where diversity in practice exists. ASU 2016-15 was effective for us in our first
quarter of fiscal 2018 and did not result in any changes to the presentation of our Consolidated Statements of Cash Flows upon adoption.
In October 2016, the FASB issued Accounting Standards Update No. 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory”
(ASU 2016-16). ASU 2016-16 requires the income tax consequences of intra-entity transfers of assets other than inventory to be
recognized as current period income tax expense or benefit and removes the requirement to defer and amortize the consolidated tax
consequences of intra-entity transfers. The new standard was effective for us on January 1, 2018. As of the adoption date, we had net
prepaid tax assets of $166 million related to intra-entity transfers of assets other than inventory which was recorded in Other non-current
assets. Using the modified retrospective approach, we recorded a cumulative effect adjustment of $166 million to decrease Retained
earnings with a corresponding decrease in prepaid tax assets as of the beginning of fiscal year 2018.
In January 2017, the FASB issued Accounting Standards Update No. 2017-01, "Business Combinations" (ASU 2017-01). ASU 2017-01
provides guidance for evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The
guidance provides a screen to determine when an integrated set of assets and activities (a "set") does not qualify to be a business. The
screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in an identifiable
asset or a group of similar identifiable assets, the set is not a business. If the screen is not met, the guidance requires a set to be considered
a business to include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs
and removes the evaluation as to whether a market participant could replace the missing elements. The new standard was effective for us
on January 1, 2018 and was adopted on a prospective basis. In the first quarter of 2018, we acquired Impact Biomedicines Inc. (Impact)
and Juno Therapeutics Inc. (Juno) which were accounted for as an asset acquisition and a business combination, respectively. See Note
3 for further information on the acquisitions of Impact and Juno. We anticipate that the adoption of this standard will result in more
acquisitions being accounted for as asset acquisitions.
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The following table presents a summary of cumulative effect adjustments to Retained earnings and AOCI due to the adoption of new
accounting standards on January 1, 2018 as noted above:
Retained Earnings AOCI

Increase / (Decrease) Increase / (Decrease)
ASU 2014-09 $ 4 $ —
ASU 2016-01 687 (687)
ASU 2018-03 44 —
ASU 2018-02 (117) 117
ASU 2016-16 (166) —
Net cumulative effect adjustments to Retained earnings and AOCI on January 1, 2018
due to the adoption of new accounting standards $ 452 $ (570)
New accounting standards which have not yet been adopted
In February 2016, the FASB issued Accounting Standards Update No. 2016-02, "Leases" (ASU 2016-02). ASU 2016-02 provides
accounting guidance for both lessee and lessor accounting models. Among other things, lessees will recognize a right-of-use asset and a
lease liability for leases with a duration of greater than one year. For income statement purposes, ASU 2016-02 will require leases to be
classified as either an operating or finance lease. Operating leases will result in straight-line expense while finance leases will result in a
front-loaded expense pattern. The new standard will be effective for us on January 1, 2019. In July 2018, the FASB issued Accounting
Standards Update No. 2018-11, "Leases" (ASU 2018-11), which offers a transition option to entities adopting the new lease standard.
Under the transition option, entities can elect to apply the new guidance using a modified retrospective approach at the beginning of the
year in which the new lease standard is adopted, rather than to the earliest comparative period presented in their financial statements.
We will adopt the standard using the modified retrospective method and intend to elect the available practical expedients on adoption.
We anticipate adoption of the new standard will increase total assets by $280 million - $310 million, with an offsetting increase to
total liabilities of $310 million - $340 million on our consolidated balance sheet and result in additional lease-related disclosures in the
footnotes to our consolidated financial statements. Adoption of the standard has required changes to our business processes, systems and
controls to comply with the provisions of the standard. We have implemented a system from a third-party service provider to assist in the
adoption of the standard. We are in the process of finalizing our testing of the system. In addition, we have designed and implemented
internal controls that became operational during the first quarter of 2019 to ensure our readiness.
In June 2016, the FASB issued Accounting Standards Update No. 2016-13, "Financial Instruments - Credit Losses: Measurement of
Credit Losses on Financial Instruments" (ASU 2016-13). ASU 2016-13 requires that expected credit losses relating to financial assets
measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU
2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value
exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. The new standard will be
effective for us on January 1, 2020. Early adoption will be available on January 1, 2019. We are currently evaluating the effect that the
updated standard will have on our consolidated financial statements and related disclosures.
In November 2018, the FASB issued Accounting Standards Update No. 2018-18, “Collaboration Arrangements: Clarifying the Interaction
between Topic 808 and Topic 606” (ASU 2018-18). The issuance of ASU 2014-09 raised questions about the interaction between
the guidance on collaborative arrangements and revenue recognition. ASU 2018-18 addresses this uncertainty by (1) clarifying that
certain transactions between collaborative arrangement participants should be accounted for as revenue under ASU 2014-09 when the
collaboration arrangement participant is a customer, (2) adding unit of account guidance to assess whether the collaboration arrangement
or a part of the arrangement is with a customer and (3) precluding a company from presenting transactions with collaboration arrangement
participants that are not directly related to sales to third parties together with revenue from contracts with customers. The new standard
will be effective for us on January 1, 2020 with early adoption permitted. We are currently evaluating the effect that the updated standard
will have on our consolidated financial statements and related disclosures.
2. Revenue
Subsequent to January 1, 2018 we account for revenue in accordance with ASU 2014-09, which we adopted using the modified
retrospective method. See Note 1 for further discussion of the adoption, including the impact on our consolidated financial statements.

The majority of our revenue is derived from product sales. Our primary commercial stage products include REVLIMID®,
POMALYST®/IMNOVID®, OTEZLA®, ABRAXANE® and VIDAZA®. In addition, we recognize revenue from
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other product sales and royalties based on licensees’ sales of our products or products using our technologies. We do not consider royalty
revenue to be a material source of our consolidated revenue. As such, the following disclosure only relates to revenue associated with net
product sales.
Performance Obligations
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the
current revenue standard. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue
when, or as, the performance obligation is satisfied.
At contract inception, we assess the goods promised in our contracts with customers and identify a performance obligation for each
promise to transfer to the customer a good that is distinct. When identifying our performance obligations, we consider all goods promised
in the contract regardless of whether explicitly stated in the customer contract or implied by customary business practices. Generally, our
contracts with customers require us to transfer an individual distinct product, which would represent a single performance obligation.
In limited situations, our contracts with customers will require us to transfer two or more distinct products, which would represent
multiple performance obligations for each distinct product. For contracts with multiple performance obligations, we allocate the contract’s
transaction price to each performance obligation on a relative standalone selling price basis. In determining our standalone selling prices
for our products, we utilize observable prices for our goods sold separately in similar circumstances and to customers in the same
geographical region or market. Our performance obligations with respect to our product sales are satisfied at a point in time, which
transfer control upon delivery of product to our customers. We consider control to have transferred upon delivery because the customer
has legal title to the asset, we have transferred physical possession of the asset, the customer has significant risks and rewards of
ownership of the asset, and in most instances we have a present right to payment at that time. The aggregate dollar value of unfulfilled
orders as of December 31, 2018 was not material.
Distribution
REVLIMID® and POMALYST® are distributed in the United States primarily through contracted pharmacies under the REVLIMID Risk
Evaluation and Mitigation Strategy (REMS) and POMALYST REMS® programs, respectively. These are proprietary risk-management
distribution programs tailored specifically to provide for the safe and appropriate distribution and use of REVLIMID® and POMALYST®.
Internationally, REVLIMID® and IMNOVID® are distributed under mandatory risk-management distribution programs tailored to meet
local authorities’ specifications to provide for the product’s safe and appropriate distribution and use. These programs may vary by
country and, depending upon the country and the design of the risk-management program, the product may be sold through hospitals or
retail pharmacies. OTEZLA®, ABRAXANE® and VIDAZA® are distributed through the more traditional pharmaceutical industry supply
chain and are not subject to the same risk-management distribution programs as REVLIMID ® and POMALYST®/IMNOVID®.
Significant Payment Terms
Our contracts with our customers state the terms of the sale including the description, quantity, and price for each product purchased as
well as the payment and shipping terms. Our contractual payment terms vary by jurisdiction. In the United States, our contractual payment
terms are typically due in no more than 30 days. Sales made outside the United States typically have payment terms that are greater than
60 days, thereby extending collection periods beyond those in the United States. The period between when we transfer control of the
promised goods to a customer and when we receive payment from such customer is expected to be one year or less. Any exceptions to
this are either not material or we collect interest from the customer for the time period between the invoice due date and the payment
date. As such, we do not adjust the invoice amount for the effects of a significant financing component as the impact is not material to
our consolidated financial statements.
Contract Balances
When the timing of our delivery of product is different from the timing of payments made by the customers, we recognize either a contract
asset (performance precedes the contractual due date) or a contract liability (customer payment precedes performance). There were no
significant changes in our contract asset or liability balances during the year ended December 31, 2018 other than from transactions in
the ordinary course of operating activities as described above.
Contract Assets

In limited situations, certain customer contractual payment terms require us to bill in arrears; thus, we satisfy some or all of our
performance obligations before we are contractually entitled to bill the customer. In these situations, billing occurs subsequent to revenue
recognition, which results in a contract asset. We reflect these contract assets as Other current assets on the Consolidated
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Balance Sheet. For example, certain of our contractual arrangements do not permit us to bill until the product is sold through to the end-
customer. As of December 31, 2018, such contract assets were $36 million.
Contract Liabilities
In other limited situations, certain customer contractual payment terms allow us to bill in advance; thus, we receive customer cash
payment before satisfying some or all of its performance obligations. In these situations, billing occurs in advance of revenue recognition,
which results in contract liabilities. We reflect these contract liabilities in Deferred revenue on our Consolidated Balance Sheet. For
example, certain of our contractual arrangements provide the customer with free product after the customer has purchased a contractual
minimum amount of product. We concluded the free product represents a future performance obligation in the form of a contractual
material right. As such, we defer a portion of the transaction price as a contract liability upon each sale of product until the contractual
minimum volume is achieved. As we satisfy our remaining performance obligations we release a portion of the deferred revenue balance.
Revenue recognized for the year ended December 31, 2018 that was reflected in the deferred revenue balance at the beginning of the year
was $51 million. As of December 31, 2018, such contract liabilities were $137 million.
Gross-to-Net Sales Adjustments
We record gross-to-net sales accruals for government rebates, chargebacks, distributor service fees, other rebates and administrative fees,
sales returns and allowances, and sales discounts. Provisions for discounts, early payments, rebates, sales returns, distributor service fees
and chargebacks under terms customary in the industry are provided for in the same period the related sales are recorded. We record
estimated reductions to revenue for volume-based discounts and rebates at the time of the initial sale based upon the sales terms, historical
experience and trend analysis. We estimate these accruals using an expected value approach based primarily upon our historical rebate
and discount payments made and the provisions included in current customer contracts and government regulations.
Government Rebates, including Medicaid and Medicare Rebates
Government rebate accruals are based on estimated payments due to governmental agencies for purchases made by third parties
under various governmental programs. In the U.S., we participate in state government Medicaid programs and other Federal and state
government programs, which require rebates to participating government entities. U.S. Medicaid rebate accruals are generally based on
historical payment data and estimates of future Medicaid beneficiary utilization applied to the Medicaid unit rebate formula established
by the Center for Medicaid and Medicare Services. The Medicaid rebate percentage was increased and extended to Medicaid Managed
Care Organizations in March 2010. The accrual of the rebates associated with Medicaid Managed Care Organizations is calculated based
on estimated historical patient data related to Medicaid Managed Care Organizations. We also analyze actual billings received from the
states to further support the accrual rates. Manufacturers of pharmaceutical products are responsible for 50% of the patient’s cost of
branded prescription drugs related to the Medicare Part D Coverage Gap (70% beginning in 2019). In order to estimate the cost to us of
this coverage gap responsibility, we analyze data for eligible Medicare Part D patients against data for eligible Medicare Part D patients
treated with our products as well as the historical invoices. This expense is recognized throughout the year as costs are incurred. In certain
international markets government-sponsored programs require rebates to be paid based on program specific rules and, accordingly, the
rebate accruals are determined primarily on estimated eligible sales.
Chargebacks, Distributor Service Fees, Other Rebates and Administrative Fees
consistent with pharmaceutical industry practices. Settlement of rebates and administrative fees may generally occur from one to
15 months from the date of sale. We record a provision for rebates at the time of sale based on contracted rates and historical redemption
rates. Assumptions used to establish the provision include level of wholesaler inventories, contract sales volumes and average contract
pricing. We regularly review the information related to these estimates and adjust the provision accordingly.

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Returns, Refunds and Warranties
third-party sources, actual returns history and other factors, such as the trend experience for lots where product is still being returned
or inventory centralization and rationalization initiatives conducted by major pharmacy chains, as applicable. If the historical data we
use to calculate these estimates do not properly reflect future returns, then a change in the allowance would be made in the period in
which such a determination is made and revenues in that period could be materially affected. Under this methodology, we track actual
returns by individual production lots. Returns on closed lots, that is, lots no longer eligible for return credits, are analyzed to determine
historical returns experience. Returns on open lots, that is, lots still eligible for return credits, are monitored and compared with historical
return trend rates. Any changes from the historical trend rates are considered in determining the current sales return allowance. We do
not provide warranties on our products to our customers unless the product is defective as manufactured or damaged in transit within a
reasonable period of time after receipt of the product by the customer.
Sales Discounts
Sales discounts are based on payment terms extended to customers, which are generally offered as an incentive for prompt payment. We
record our best estimate of sales discounts to which customers are likely to be entitled based on both historical information and current
trends.
The reconciliation of gross product sales to net product sales by each significant category of gross-to-net adjustments was as follows:

2018 2017 2016
Gross Product Sales $ 18,270 $ 15,138 $ 12,787
Gross-to-Net Adjustments:
Government Rebates (1,076) (890) (688)
Chargebacks and Distributor Services Fees (1,641) (1,074) (750)
Sales Discounts (243) (193) (153)
Sales Returns and Allowances (45) (8) (11)
Total Gross-to-Net Adjustments (3,005) (2,165) (1,602)
Net Product Sales $ 15,265 $ 12,973 $ 11,185
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Total revenues from external customers by our franchises (Hematology / Oncology and Inflammation & Immunology), product and
geography for the years ended December 31, 2018, 2017 and 2016 were as follows:

2018 2017 2016
Hematology / Oncology:
REVLIMID®
U.S. $ 6,469 $ 5,426 $ 4,417
International 3,216 2,761 2,557
Worldwide 9,685 8,187 6,974
® ®
POMALYST /IMNOVID
U.S. 1,391 1,008 778
International 649 606 533
Worldwide 2,040 1,614 1,311
®
ABRAXANE
U.S. 663 607 634
Worldwide 1,062 992 973
®
VIDAZA
U.S. 9 8 12
Worldwide 594 628 608
All Other
U.S. 208 203 236
Total Hematology / Oncology:
U.S. 8,740 7,252 6,077
Worldwide 13,657 11,694 10,168
Inflammation & Immunology:

OTEZLA®
U.S. 1,275 1,058 904
Worldwide 1,608 1,279 1,017
Total net product sales

U.S. 10,015 8,310 6,981
Worldwide 15,265 12,973 11,185
Total revenue $ 15,281 $ 13,003 $ 11,229

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3. Acquisitions and Divestitures
Acquisitions in 2018:
Impact Biomedicines, Inc. (Impact): On February 12, 2018, we acquired all of the outstanding shares of Impact, a privately held
biotechnology company which was developing fedratinib, a highly selective JAK2 kinase inhibitor, for myelofibrosis.
The consideration included an initial payment of approximately $1.1 billion. In addition, the sellers of Impact are eligible to receive
contingent consideration based upon regulatory approvals of up to $1.4 billion and contingent consideration of up to $4.5 billion based
upon the achievement of sales in any four consecutive calendar quarters between $1.0 billion and $5.0 billion. The acquisition of Impact
was concentrated in one single identifiable asset and thus, for accounting purposes, we have concluded that the acquired assets do
not meet the accounting definition of a business. The initial payment was allocated primarily to fedratinib, resulting in a $1.1 billion
research and development asset acquisition expense and the balance of approximately $7 million was allocated to the remaining net assets
acquired.
Juno Therapeutics, Inc. (Juno): On March 6, 2018 (Acquisition Date), we acquired all of the outstanding shares of Juno, resulting in Juno
becoming our wholly-owned subsidiary. Juno is developing CAR (chimeric antigen receptor) T and TCR (T cell receptor) therapeutics
with a broad, novel portfolio evaluating multiple targets and cancer indications. The acquisition added a novel scientific platform and
scalable manufacturing capabilities including JCAR017 and JCARH125, both directed CAR T therapeutics currently in programs for
relapsed and/or refractory diffuse large B-cell lymphoma and relapsed and/or refractory multiple myeloma, respectively.
Total consideration for the acquisition was approximately $10.4 billion, consisting of $9.1 billion for common stock outstanding, $966
million for the fair value of our investment in Juno and $367 million for the portion of equity compensation attributable to the pre-
combination service period. In addition, the fair value of the awards attributed to post-combination service period was $666 million,
which will be recognized as compensation expense over the requisite service period in our post-combination financial statements. We
recognized $528 million of post-combination share-based compensation for the year ended December 31, 2018.
The acquisition has been accounted for as a business combination using the acquisition method of accounting which requires that assets
acquired and liabilities assumed be recognized at their fair values as of the acquisition date and requires the fair value of acquired IPR&D
to be classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development
efforts.
The total consideration for the acquisition of Juno was $10.4 billion, which consisted of the following:
Total Consideration
Cash paid for outstanding common stock at $87.00 per share $ 9,101
Celgene investment in Juno at $87.00 per share (1) 966
Cash for equity compensation attributable to pre-combination service (2) 367
Total consideration $ 10,434
(1)The Company recognized a gain of $458 million during the first quarter of 2018, as a result of remeasuring to fair value the equity
interest in Juno held by us before the business combination, which was recorded in Other income (expense), net within the Consolidated
Statement of Income. See Note 1 for further information on the adoption of ASU 2016-01.
(2) All equity compensation attributable to pre-combination service was paid during the first quarter of 2018.
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The purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities assumed at the
Acquisition Date based upon their respective fair values summarized below. The determination of fair value was finalized in the fourth
quarter of 2018. During the second and fourth quarters of 2018, the Company recorded certain measurement period adjustments that were
not material.
Amounts
Recognized as of the
Acquisition Date
Working capital (1) $ 452
IPR&D 6,980
Technology platform intangible asset 1,260
Property, plant and equipment, net 144
Other non-current assets 32
Deferred tax liabilities, net (1,530)
Other non-current liabilities (41)
Total identifiable net assets 7,297
Goodwill 3,137
Total net assets acquired $ 10,434
(1) Includes cash and cash equivalents, debt securities available-for-sale, accounts receivable, net of allowances, other current assets,
accounts payable, accrued expenses and other current liabilities (including accrued litigation). See Note 19 for litigation matters related
to Juno.
The fair value assigned to acquired IPR&D was based on the present value of expected after-tax cash flows attributable to JCAR017,
which is in a pivotal phase II trial and JCARH125. The present value of expected after-tax cash flows attributable to JCAR017
and JCARH125 assigned to IPR&D was determined by estimating the after-tax costs to complete development of JCAR017 and
JCARH125 into commercially viable products, estimating future revenue and ongoing expenses to produce, support and sell JCAR017
and JCARH125, on an after-tax basis, and discounting the resulting net cash flows to present value. The revenue and costs projections
used were reduced based on the probability that products at similar stages of development will become commercially viable products. The
rate utilized to discount the net cash flows to their present value reflects the risk associated with the intangible asset and is benchmarked
to the cost of equity. Acquired IPR&D will be accounted for as indefinite-lived intangible assets until regulatory approvals for JCAR017
and JCARH125 in a major market or discontinuation of development.
The fair value of the technology platform intangible asset is equal to the present value of the expected after-tax cash flows attributable to
the intangible asset, which was calculated based on the multi-period excess earnings method of the income approach. The multi-period
excess earnings method of the income approach included estimating probability adjusted annual after-tax net cash flows through the
cycle of development and commercialization of potential products generated by the technology platform then discounting the resulting
probability adjusted net post-tax cash flows using a discount rate commensurate with the risk of our overall business operations to arrive
at the net present value.
The excess of purchase price over the fair value amounts assigned to identifiable assets acquired and liabilities assumed represents the
goodwill amount resulting from the acquisition. The goodwill recorded as part of the acquisition is primarily attributable to the broadening
of our product portfolio and research capabilities in the hematology and oncology therapeutic area, the assembled workforce and the
deferred tax consequences of the IPR&D asset recorded for financial statement purposes. We do not expect any portion of this goodwill to
be deductible for tax purposes. The goodwill attributable to the acquisition has been recorded as a non-current asset in our Consolidated
Balance Sheets and is not amortized, but is subject to review for impairment annually.
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Juno actual results from the Acquisition Date through December 31, 2018, which are included in the Consolidated Statements of Income
are as follows:
Acquisition Date Through

Classification in the Consolidated Statements of Income December 31, 2018
Other revenue $ 2
Research and development (1) 967
Selling, general and administrative (1) 312
Amortization of acquired intangible assets 70
Acquisition related charges (gains) and restructuring, net (2) 98
Interest and investment income, net 5
Other income (expense), net 10
Income tax provision (260)
Total $ (1,170)
(1) Includes share-based compensation expense related to the post-combination service period of $320 million and $208 million, which
was recorded in Research and development and Selling, general and administrative, respectively, for the period from the Acquisition Date
through December 31, 2018.
(2) Consists of acquisition related compensation expense, transaction costs and the change in fair value of contingent consideration and
success payment liabilities. In addition, we incurred incremental acquisition costs related to Juno of $41 million for the year ended
December 31, 2018.
Pro Forma Financial Information:
The following table provides unaudited pro forma financial information for the years ended December 31, 2018 and 2017 as if the
acquisition of Juno had occurred on January 1, 2017.

2018 2017
Total revenue $ 15,291 $ 13,029
Net income 4,058 2,151
Net income per common share: basic $ 5.67 $ 2.76

Net income per common share: diluted $ 5.53 $ 2.66
The unaudited pro forma financial information was prepared using the acquisition method of accounting and was based on the historical
financial information of Celgene and Juno. The supplemental pro forma financial information reflects primarily the following pro forma
adjustments:
• Elimination of research related cost sharing transactions between Celgene and Juno;
• The pro forma financial information assumes that the acquisition related transaction fees and costs, including post combination
share-based compensation related to the acquisition, were removed from the year ended December 31, 2018 and were assumed
to have been incurred during the first quarter of 2017;
• The pro forma financial information assumes that the gain recognized as a result of remeasuring to fair value the equity interest
we held in Juno prior to the business combination was removed from the year ended December 31, 2018 and was assumed to
have been recognized during the first quarter of 2017;
• Additional interest expense and amortization of debt issuance costs for a portion of the $4.5 billion of debt that was issued in
February 2018 to partially finance the acquisition;
• Additional amortization expense on the acquired technology platform asset; and
• Statutory tax rates were applied, as appropriate, to each pro forma adjustment based on the jurisdiction in which the adjustment
occurred.

The unaudited pro forma results do not reflect any operating efficiencies or potential cost savings that may result from the combined
operations of Celgene and Juno. Accordingly, these unaudited pro forma results are presented for illustrative purposes and are not
intended to represent or be indicative of the actual results of operations of the combined company that would have been achieved
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had the acquisition occurred at the beginning of the periods presented, nor are they intended to represent or be indicative of future results
of operations.
Delinia, Inc. (Delinia): On February 3, 2017, we acquired all of the outstanding shares of Delinia, a privately held biotechnology
company focused on developing novel therapeutics for the treatment of autoimmune diseases. The transaction expands our Inflammation
and Immunology pipeline primarily through the acquisition of Delinia’s lead program, DEL-106, as well as related second generation
programs. DEL-106 is a novel IL-2 mutein Fc fusion protein designed to preferentially upregulate regulatory T cells (Tregs), immune
cells that are critical to maintaining natural self-tolerance and immune system homeostasis.
The consideration included an initial payment of $302 million. In addition, the sellers of Delinia are eligible to receive up to $475
million in contingent development, regulatory and commercial milestones. The acquisition did not include any significant processes and
thus, for accounting purposes, we have concluded that the acquired assets did not meet the definition of a business. The initial payment
was allocated primarily to the DEL-106 program, resulting in a $300 million research and development asset acquisition expense and
approximately $2 million of net assets acquired.
Other acquisitions: In addition, during the first quarter of 2017, we acquired all of the outstanding shares of a privately held biotechnology
company for total initial consideration of $26 million. The sellers are also eligible to receive up to $210 million in contingent development
and regulatory approval milestones. The acquisition did not include any significant processes and thus, for accounting purposes, we
have concluded that the acquired assets did not meet the definition of a business. The consideration transferred resulted in a $25 million
research and development asset acquisition expense and $1 million of net assets acquired.
Divestitures in 2017:
Celgene Pharmaceutical (Shanghai) Co. Ltd. (Celgene China): On August 31, 2017, we completed the sale of our Celgene commercial
operations in China to BeiGene, Ltd. (BeiGene). The transaction resulted in an immaterial loss on disposal that was recorded on our
Consolidated Statement of Income in Other income (expense), net during the third quarter of 2017. In conjunction with the sale, we
contemporaneously entered into both a product supply agreement and strategic collaboration arrangement with BeiGene. See Note 18 for
additional details related to the collaboration arrangement with BeiGene.
EngMab AG (EngMab): On September 27, 2016, we acquired all of the outstanding shares of EngMab, a privately held biotechnology
company focused on T-cell bi-specific antibodies. EngMab’s lead molecule, EM901 is a preclinical T-cell bi-specific antibody targeting
B-cell maturation antigen (BCMA). The acquisition also included another early stage program.
The consideration included an initial payment of approximately 607 million Swiss Francs (CHF) (approximately $625 million at the time
of acquisition), contingent development and regulatory milestones of up to CHF 150 million (approximately $155 million at the time of
the acquisition) and contingent commercial milestones of up to CHF 2.3 billion (approximately $2.3 billion at the time of the acquisition)
based on cumulative sales levels of between $1 billion and $40 billion. The acquisition of EngMab did not include any significant
processes and thus, for accounting purposes, we have concluded that the acquired assets did not meet the definition of a business. The
initial payment was allocated primarily to the EM901 molecule and another early stage program, resulting in a $623 million research and
development asset acquisition expense and $2 million of net working capital acquired.
Acetylon Pharmaceuticals, Inc. (Acetylon): On December 16, 2016, we acquired all of the remaining outstanding equity interests we
did not already own (approximately 86%) in Acetylon, a privately held biotechnology company focused on developing next-generation
selective small molecule histone deacetylase (HDAC) inhibitors, which allow for epigenetic regulation of gene and protein function.
Acetylon’s lead molecule, ACY-241 is a HDAC6 inhibitor in phase I trials for relapsed and/or refractory multiple myeloma. The
acquisition also included another early stage molecule. Prior to the acquisition, we had an equity interest equal to approximately 14% of
Acetylon’s total capital stock with a carrying value of approximately $30 million.
The consideration transferred included an initial payment of approximately $196 million. In addition, the sellers of Acetylon are eligible
to receive contingent regulatory milestones of up to $375 million per eligible product, contingent commercial milestones of up to $1.5
billion based on achieving annual net sales in excess of $1 billion and tiered royalties on annual net sales of eligible products. The

acquisition did not include any significant processes and thus, for accounting purposes, we have concluded that the acquired assets did
not meet the definition of a business. The initial payment and carrying value of our previous equity interest were allocated primarily to
ACY-241 and another early stage molecule, resulting in a $226 million research and development asset acquisition expense.
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Triphase Research and Development I Corporation (Triphase): On November 17, 2016, we acquired from Triphase Accelerator, L.P.
(Sellers) all of the outstanding shares of Triphase by exercising the option we acquired on October 22, 2012. Triphase was a privately held,
biotechnology company focusing on the development of marizomib for glioblastoma and relapsed and/or refractory multiple myeloma.
The consideration transferred was valued at approximately $42 million including the value of the exercised option of $18 million.
In addition, the sellers are eligible to receive contingent development and regulatory milestones of up to $125 million, contingent
commercial milestones of up to $300 million based on achieving annual net sales equal in excess of $1 billion and royalties on annual net
sales. The acquisition did not include any significant processes and thus, for accounting purposes, we have concluded that the acquired
assets did not meet the definition of a business. The consideration transferred was allocated primarily to the marizomib asset, resulting in
a $44 million research and development asset acquisition expense and $1 million of net liabilities acquired.
LifebankUSA: In February 2016, we completed the sale of certain assets of Celgene Cellular Therapeutics (CCT) comprising CCT's
biobanking business known as LifebankUSA, CCT’s biomaterials portfolio of assets, including Biovance®, and CCT's rights to PSC-100,
a placental stem cell program, to Human Longevity, Inc. (HLI), a genomics and cell therapy-based diagnostic and therapeutic company
based in San Diego, California. We received 3.4 million shares of HLI Class A common stock with a fair value of approximately $40
million as consideration in the transaction. The fair value of the shares common stock we received was determined based on the most
recent preferred share offering and reduced for the estimated value of the liquidation preference not offered to common share-holders.
The transaction generated a $38 million gain that was recorded on our Consolidated Statements of Income in Other income (expense),
net. As of December 31, 2018, our total investment in HLI represents approximately 14% of HLI's outstanding capital stock.
4. Earnings Per Share
(Amounts in millions, except per share)
2018 2017 2016

Net income $ 4,046 $ 2,940 $ 1,999
Weighted-average shares:
Basic 716.3 779.2 777.2
Effect of dilutive securities:
Options, RSUs, PSUs, warrants and other 17.5 29.5 26.1
Diluted 733.8 808.7 803.3
Basic $ 5.65 $ 3.77 $ 2.57
Diluted $ 5.51 $ 3.64 $ 2.49
The total number of potential shares of common stock excluded from the diluted earnings per share computation because their inclusion
would have been anti-dilutive was 44.8 million in 2018, 24.5 million in 2017 and 23.8 million in 2016.
Share Repurchase Program: In February and May 2018, our Board of Directors approved increases of $5.0 billion and $3.0 billion,
respectively to our authorized share repurchase program, bringing the total amount authorized since April 2009 to $28.5 billion of our
common stock. As part of the existing Board authorized share repurchase program, in May 2018, we entered into an Accelerated Share
Repurchase (ASR) agreement with a bank to repurchase an aggregate of $2.0 billion of our common stock. As part of the ASR agreement,
we received an initial delivery of approximately 18.0 million shares in May 2018 and a final delivery of approximately 6.0 million shares
in August 2018. The total number of shares repurchased under the ASR agreement was approximately 24.0 million shares at a weighted
average price of $83.53 per share.
As part of the management of our share repurchase program, we may, from time to time, sell put options on our common stock with strike
prices that we believe represent an attractive price to purchase our shares. If the trading price of our shares exceeds the strike price of the
put option at the time the option expires, we will have economically reduced the cost of our share repurchase program by the amount of

the premium we received from the sale of the put option. If the trading price of our stock is below the strike price of the put option at the
time the option expires, we would purchase the shares covered by the option at the strike price
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of the put option. During 2018 and 2017, we did not sell any put options on our common stock. During 2016, we recorded net gains of
$8 million from selling put options on our common stock on the Consolidated Statements of Income in Other income (expense), net. As
of December 31, 2018 and 2017, we had no outstanding put options.
We repurchased 67.8 million shares of common stock under the share repurchase program from all sources during 2018 at a total cost of
$6.0 billion As of December 31, 2018, we had a remaining share repurchase authorization of approximately $2.8 billion.
5. Financial Instruments and Fair Value Measurement

The table below presents information about assets and liabilities that are measured at fair value on a recurring basis as of December 31,
2018 and 2017, and the valuation techniques we utilized to determine such fair value.
• Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Our level 1 assets consist of
equity investments with readily determinable fair values. Our level 1 liability relates to our publicly traded Abraxis CVRs. See
Note 19 for a description of the Abraxis CVRs.
• Level 2 inputs utilize observable quoted prices for similar assets and liabilities in active markets and observable quoted prices
for identical or similar assets in markets that are not very active. From time to time, our level 2 assets consist primarily
of U.S. Treasury securities, U.S. government-sponsored agency securities, U.S. government-sponsored agency MBS, global
corporate debt securities, asset backed securities, ultra short income fund investments, time deposits and repurchase agreements
with original maturities of greater than three months. We also have derivative instruments including foreign currency forward
contracts, purchased currency options, zero-cost collar currency contracts and interest rate swap contracts, which may be in an
asset or liability position.
• Level 3 inputs utilize unobservable inputs and include valuations of assets or liabilities for which there is little, if any, market
activity. We do not have any level 3 assets. Our level 3 liabilities consist of contingent consideration related to undeveloped
product rights and technology platforms resulting from the acquisitions of Gloucester Pharmaceuticals, Inc. (Gloucester), Nogra
Pharma Limited (Nogra), Avila Therapeutics, Inc. (Avila) and Quanticel Pharmaceuticals, Inc. (Quanticel). In addition, in
connection with our acquisition of Juno in the first quarter of 2018, we assumed Juno's contingent consideration and success
payment liabilities.
Our contingent consideration obligations are recorded at their estimated fair values and we revalue these obligations each reporting
period until the related contingencies are resolved. The fair value measurements are estimated using probability-weighted discounted
cash flow approaches that are based on significant unobservable inputs related to product candidates acquired in business combinations
and are reviewed quarterly. These inputs include, as applicable, estimated probabilities and timing of achieving specified development
and regulatory milestones, estimated annual sales and the discount rate used to calculate the present value of estimated future payments.
Significant changes which increase or decrease the probabilities of achieving the related development and regulatory events, shorten
or lengthen the time required to achieve such events, or increase or decrease estimated annual sales would result in corresponding
increases or decreases in the fair values of these obligations. The fair value of our contingent consideration as of December 31, 2018 and
December 31, 2017 was calculated using the following significant unobservable inputs:
Ranges (weighted average) utilized as of:

Inputs December 31, 2018 December 31, 2017
Discount rate 3.6 to 4.8% (4.3%) 2.7% to 12.0% (3.5%)
Probability of payment 0% to 68% (5%) 0% to 20% (4%)
Projected year of payment for development and regulatory milestones 2020 to 2029 (2024) 2020 to 2029 (2024)
Projected year of payment for sales-based milestones and other amounts calculated
as a percentage of annual sales N/A 2024 to 2030 (2028)
The maximum remaining potential payments related to the contingent consideration from the acquisitions of Gloucester, Avila, Quanticel
and those assumed in our acquisition of Juno are estimated to be $120 million, $475 million, $214 million, and $286 million, respectively,
and $1.8 billion plus other amounts calculated as a percentage of annual sales pursuant to the license agreement with Nogra.

Success payment obligations assumed through our acquisition of Juno are also recorded at their estimated fair values and are revalued
quarterly. Changes in the fair value of contingent consideration and success payment obligations are recognized in Acquisition related
charges (gains) and restructuring, net in the Consolidated Statements of Income.
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Effective January 1, 2018, we adopted ASU 2016-01. Among other provisions, the new standard required modifications to existing
presentation and disclosure requirements on a prospective basis. Certain disclosures as of December 31, 2017 below conform to the
disclosure requirements of ASU 2016-01. See Note 1 for additional information related to the adoption of ASU 2016-01.
The following tables present the Company's hierarchy for its assets and liabilities measured at fair value on a recurring basis as
of December 31, 2018 and 2017:
Quoted Price in Significant Significant

Active Markets for Other Observable Unobservable
Balance at December Identical Assets Inputs Inputs
31, 2018 (Level 1) (Level 2) (Level 3)
Assets:
Debt securities available-for-sale $ 496 $ — $ 496 $ —
values 1,312 1,312 — —
Forward currency contracts 78 — 78 —
Total assets $ 1,886 $ 1,312 $ 574 $ —
Liabilities:
Contingent value rights $ (19) $ (19) $ — $ —
Interest rate swaps (10) — (10) —
Zero-cost collar currency contracts (1) — (1) —
Other acquisition related contingent consideration
and success payments (163) — — (163)
Total liabilities $ (193) $ (19) $ (11) $ (163)
Quoted Price in Significant Significant

Active Markets for Other Observable Unobservable
Balance at December Identical Assets Inputs Inputs
Assets:
Debt securities available-for-sale $ 3,219 $ — $ 3,219 $ —
values 1,810 1,810 — —
Total assets $ 5,029 $ 1,810 $ 3,219 $ —
Liabilities:
Forward currency contracts (42) — (42) —
Zero-cost collar currency contracts (136) — (136) —
Other acquisition related contingent consideration (80) — — (80)
As a result of the implementation of ASU 2016-01 and ASU 2018-03, effective on January 1, 2018, we measure equity investments
without a readily determinable fair value at cost, less any impairment, plus or minus changes resulting from observable price changes
in orderly transactions for an identical or similar investment of the same issuer or at NAV, as a practical expedient, if available. We
record upward adjustments and downward adjustments and impairments of equity investments without readily determinable fair values
within Other income (expense), net on the Consolidated Statements of Income. The following table represents a roll-forward of equity
investments without readily determinable fair values:

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Year Ended December 31, 2018

Balance as of December 31, 2017 $ 513
Cumulative effect adjustment for the adoption of ASU 2018-03 (See Note 1) 59
Purchases 105
Upward adjustments 66
Sales (23)
Downward adjustments and impairments (134)
Transfer to readily determinable fair value (41)
For equity investments with and without readily determinable fair values held as of December 31, 2018, we recorded a net unrealized loss
of $201 million within Other income (expense), net on the Consolidated Statements of Income for the year ended December 31, 2018.
There were no security transfers between levels 1, 2 and 3 during the years ended December 31, 2018 and 2017. The following tables
represent a roll-forward of the fair value of level 3 instruments:
Year Ended
December 31, 2018
Liabilities:
Balance as of December 31, 2017 $ (80)
Amounts acquired from Juno, including measurement period adjustments (116)
Net change in fair value (39)
Settlements, including transfers to Accrued expenses and other current liabilities 72
Year Ended
December 31, 2017
Liabilities:
Balance as of December 31, 2016 $ (1,490)
Net change in fair value 1,348
Discontinuance of Certain GED-0301 Phase III Trials: On October 19, 2017, we announced our decision to discontinue the GED-0301
phase III REVOLVE (CD-002) trial in Crohn’s disease (CD) and the SUSTAIN (CD-004) extension trial (the Trials). At that time,
we concluded we would record a significant impairment of our GED-0301 IPR&D asset, incur wind-down costs associated with
discontinuing the Trials and certain development activities, and record a benefit related to the significant reduction of GED-0301
contingent consideration liabilities. At the date GED-0301 was acquired by Celgene, a phase II trial of GED-0301 in patients with active
CD had been completed and a multi-year clinical program designed to support global registrations of GED-0301 in CD was planned,
while other indications were not as advanced. As such, substantially all of the IPR&D asset and contingent consideration liabilities were
attributed to the development and commercialization of GED-0301 for the treatment of CD. As a result of the discontinuance of the Trials,
the Company recorded a net pre-tax charge to earnings of approximately $411 million during the fourth quarter of 2017. The net pre-tax
charge was comprised of the following:
• An impairment charge relating to the entire GED-0301 IPR&D asset of approximately $1,620 million;
• Other one-time charges of approximately $188 million that will require cash payments primarily related to wind-down costs
associated with discontinuing the Trials and certain development activities; and
• A reduction in contingent consideration liabilities of approximately $1,397 million related to GED-0301.

During 2018, we recorded an adjustment related to the clinical trial and development activity wind-down costs which resulted in a benefit
of $60 million being recorded in Research and development within the Consolidated Statement of Income. In addition, all of these wind-
down costs have been paid.
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6. Derivative Instruments and Hedging Activities
Our revenue and earnings, cash flows and fair values of assets and liabilities can be impacted by fluctuations in foreign exchange rates
and interest rates. We actively manage the impact of foreign exchange rate and interest rate movements through operational means and
through the use of various financial instruments, including derivative instruments such as foreign currency option contracts, foreign
currency forward contracts, treasury rate lock agreements and interest rate swap contracts. In instances where these financial instruments
are accounted for as cash flow hedges or fair value hedges we may from time to time terminate the hedging relationship. If a hedging
relationship is terminated we generally either settle the instrument or enter into an offsetting instrument.
We maintain a foreign exchange exposure management program to mitigate the impact of volatility in foreign exchange rates on future
foreign currency cash flows, translation of foreign earnings and changes in the fair value of assets and liabilities denominated in foreign
currencies.
Through our revenue hedging program, we endeavor to reduce the impact of possible unfavorable changes in foreign exchange rates
on our future U.S. Dollar cash flows that are derived from foreign currency denominated sales. To achieve this objective, we hedge a
portion of our forecasted foreign currency denominated sales that are expected to occur in the foreseeable future, typically within the next
three years, with a maximum of five years. We manage our anticipated transaction exposure principally with foreign currency forward
contracts, a combination of foreign currency zero-cost collars, and occasionally purchased foreign currency put options.
Foreign Currency Forward Contracts: We use foreign currency forward contracts to hedge specific forecasted transactions denominated
in foreign currencies, manage exchange rate volatility in the translation of foreign earnings, and reduce exposures to foreign currency
We manage a portfolio of foreign currency forward contracts to protect against changes in anticipated foreign currency cash flows
resulting from changes in foreign currency exchange rates, primarily associated with non-functional currency denominated revenues and
expenses of foreign subsidiaries. The foreign currency forward hedging contracts outstanding as of December 31, 2018 and December 31,
2017 had settlement dates within 30 months and 20 months, respectively. The spot rate components of these foreign currency forward
contracts are designated as cash flow hedges and any unrealized gains or losses are reported in OCI and reclassified to the Consolidated
Statements of Income in the same periods during which the underlying hedged transactions affect earnings. If a hedging relationship is
terminated with respect to a foreign currency forward contract, accumulated gains or losses associated with the contract remain in OCI
until the hedged forecasted transaction occurs and are reclassified to operations in the same periods during which the underlying hedged
transactions affect earnings. We recognize in earnings the initial value of the forward point components on a straight-line basis over the
life of the derivative instrument within the same line item in the Consolidated Statements of Income that is used to present the earnings
Foreign currency forward contracts entered into to hedge forecasted revenue and expenses were as follows as of December 31, 2018 and
December 31, 2017:
Notional Amount
British Pound 82 97
Euro 1,381 954
Total $ 2,091 $ 1,695
We consider the impact of our own and the counterparties’ credit risk on the fair value of the contracts as well as the ability of each party
to execute its obligations under the contract on an ongoing basis. As of December 31, 2018, credit risk did not materially change the fair
value of our foreign currency forward contracts.

We also manage a portfolio of foreign currency contracts to reduce exposures to foreign currency fluctuations of certain recognized assets
and liabilities denominated in foreign currencies and, from time to time, we enter into foreign currency contracts to manage
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exposure related to translation of foreign earnings. These foreign currency forward contracts have not been designated as hedges and,
accordingly, any changes in their fair value are recognized on the Consolidated Statements of Income in Other income (expense), net in
the current period. The aggregate notional amount of the foreign currency forward non-designated hedging contracts outstanding as of
December 31, 2018 and December 31, 2017 were $347 million and $885 million, respectively.
Foreign Currency Option Contracts: From time to time, we may hedge a portion of our future foreign currency exposure by utilizing a
strategy that involves both a purchased local currency put option and a written local currency call option that are accounted for as hedges
of future sales denominated in that local currency. Specifically, we sell (or write) a local currency call option and purchase a local currency
put option with the same expiration dates and local currency notional amounts but with different strike prices. The premium collected
from the sale of the call option is equal to the premium paid for the purchased put option, resulting in no net premium being paid. This
combination of transactions is generally referred to as a “zero-cost collar.” The expiration dates and notional amounts correspond to the
amount and timing of forecasted foreign currency sales. The foreign currency zero-cost collar contracts outstanding as of December 31,
2018 and December 31, 2017 had settlement dates within 24 months and 36 months, respectively. If the U.S. Dollar weakens relative to
the currency of the hedged anticipated sales, the purchased put option value reduces to zero and we benefit from the increase in the U.S.
Dollar equivalent value of our anticipated foreign currency cash flows; however, this benefit would be capped at the strike level of the
written call, which forms the upper end of the collar.
Outstanding foreign currency zero-cost collar contracts entered into to hedge forecasted revenue were as follows as of December 31,
2018 and December 31, 2017:
Notional Amount1
2018 2017
Written Call 2,216 3,739
1 U.S. Dollar notional amounts are calculated as the hedged local currency amount multiplied by the strike value of the foreign currency option. The
local currency notional amounts of our purchased put and written call that are designated as hedging activities are equal to each other.
We also have entered into foreign currency purchased put option contracts to hedge forecasted revenue which were not part of a collar
strategy. Such purchased put option contracts had a notional value of nil and $258 million as of December 31, 2018 and December 31,
2017, respectively. We de-designated all of our purchased put option contracts prior to December 31, 2018.

Forward Starting Interest Rate Swaps and Treasury Rate Locks: In anticipation of issuing fixed-rate debt, we may use forward starting
interest rate swaps (forward starting swaps) or treasury rate lock agreements (treasury rate locks) that are designated as cash flow hedges
to hedge against changes in interest rates that could impact expected future issuances of debt. To the extent these hedges of cash flows
related to anticipated debt are effective, any realized or unrealized gains or losses on the forward starting swaps or treasury rate locks are
reported in OCI and are recognized in income over the life of the anticipated fixed-rate notes. As of December 31, 2018 and December
Interest Rate Swap Contracts: From time to time we hedge the fair value of certain debt obligations through the use of interest rate
swap contracts. The interest rate swap contracts are designated hedges of the fair value changes in the notes attributable to changes in
benchmark interest rates. Gains or losses resulting from changes in fair value of the underlying debt attributable to the hedged benchmark
interest rate risk are recorded on the Consolidated Statements of Income within Interest (expense) with an associated offset to the carrying
value of the notes recorded on the Consolidated Balance Sheets. Since the specific terms and notional amount of the swap are intended to
match those of the debt being hedged all changes in fair value of the swap are recorded on the Consolidated Statements of Income within
Interest (expense) with an associated offset to the derivative asset or liability on the Consolidated Balance Sheets. Consequently, there is
no net impact recorded in income. Any net interest payments made or received on interest rate swap contracts are recognized as interest
expense on the Consolidated Statements of Income. If a hedging relationship is terminated for an interest rate swap contract, accumulated
gains or losses associated with the contract are measured and recorded as a reduction or increase of current and future interest expense
associated with the previously hedged debt obligations.

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The following table summarizes the notional amounts of our outstanding interest rate swap contracts as of December 31, 2018 and
December 31, 2017:
Notional Amount
2018 2017
Interest rate swap contracts entered into as fair value hedges of the following fixed-rate senior notes:
3.875% senior notes due 2025 $ 200 $ 200
3.450% senior notes due 2027 450 250
Total $ 850 $ 450
We have entered into swap contracts that were designated as hedges of certain of our fixed rate notes in 2018 and 2017, and also
terminated the hedging relationship by settling certain of those swap contracts during 2018 and 2017. We settled $250 million and $200
million notional amount of certain swap contracts in 2018 and 2017, respectively. The settlement of swap contracts resulted in the receipt
of net proceeds of $2 million and $3 million during the years ended December 31, 2018 and 2017, respectively, which are accounted for
as a reduction of current and future interest expense associated with these notes. See Note 12 for additional details related to reductions
of current and future interest expense.
The following table summarizes the fair value and presentation in the Consolidated Balance Sheets for derivative instruments as of
December 31, 2018 and 2017:
December 31, 2018

Fair Value
Instrument Balance Sheet Location Asset Derivatives Liability Derivatives
Derivatives designated as hedging instruments:
Foreign exchange contracts1 Other current assets $ 63 $ 18
Interest rate swap agreements Other current assets 7 —
Other non-current assets 1 —
Derivatives not designated as hedging instruments:
Foreign exchange contracts1 Other current assets 21 5
Accrued expenses and other current 2 12
liabilities
Interest rate swap agreements Other current assets 2 3
Total $ 159 $ 92
1Derivative instruments in this category are subject to master netting arrangements and are presented on a net basis on the Consolidated Balance
Sheets in accordance with Accounting Standards Codification (ASC) 210-20.
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December 31, 2017

Fair Value
Balance Sheet
Instrument Location Asset Derivatives Liability Derivatives
Accrued expenses and other current liabilities 30 79
Other non-current liabilities — 11
Accrued expenses and other current liabilities 4 22
Total $ 93 $ 278
1 Derivative instruments in this category are subject to master netting arrangements and are presented on a net basis in the Consolidated Balance Sheets
in accordance with ASC 210-20.
As of December 31, 2018 and December 31, 2017, the following amounts were recorded on the Consolidated Balance Sheets related to
cumulative basis adjustments for fair value hedges:
Cumulative Amount of Fair Value Hedging

Adjustment Included in the Carrying Amount
Carrying Amount of the Hedged Liability of the Hedged Liability
Consolidated Balance Sheet Classification in
Which the Hedged Item Is Included December 31, 2018(1) December 31, 2017(1) December 31, 2018(2) December 31, 2017(2)
Current portion of long-term debt, net of
discount $ 501 $ — $ 2 $ —
Long-term debt, net of discount 8,227 7,270 90 128
(1)The current portion of long-term debt, net of discount includes $501 million of carrying value with discontinued hedging relationships as of
December 31, 2018. The long-term debt, net of discount includes approximately $3.3 billion and $3.8 billion of carrying value with discontinued hedging
relationships as of December 31, 2018 and December 31, 2017, respectively.
(2)The current portion of long-term debt, net of discount includes $2 million of hedging adjustments on discontinued hedging relationships as of
December 31, 2018. The long-term debt, net of discount includes $107 million and $139 million of hedging adjustment on discontinued hedging
relationships on long-term debt as of December 31, 2018 and December 31, 2017, respectively.
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The following tables summarizes the effect of derivative instruments designated as cash-flow hedging instruments in AOCI for the years
ended December 31, 2018 and 2017:
2018
Amount of
Classification of Gain/(Loss)
Gain/(Loss) Recognized in
Classification of Amount of Recognized in Income on
Amount of Gain/(Loss) Gain/(Loss) Income Related to Derivative Related to
Gain/(Loss) Reclassified from Reclassified from Amount Excluded Amount Excluded
Recognized in OCI Accumulated OCI Accumulated OCI from Effectiveness from Effectiveness
Instrument on Derivative(1) into Income into Income Testing Testing
Foreign exchange
contracts $ 249 Net product sales $ (2) Net product sales $ (8)
Treasury rate lock
agreements (4) Interest (expense) (5) N/A
1 Net gains of $35 million are expected to be reclassified from AOCI into income in the next 12 months.
2017
Classification of Amount of Amount of
Amount of Gain/(Loss) Gain/(Loss) Classification of Gain/(Loss)
Gain/(Loss) Reclassified from Reclassified from Gain/(Loss) Recognized in
Recognized in OCI Accumulated OCI Accumulated OCI Recognized in Income on
Instrument on Derivative(1) into Income into Income Income on Derivative Derivative
Foreign exchange
contracts $ (419) Net product sales $ 184 Net product sales $ (3)
Treasury rate lock
agreements (2) Interest (expense) (5) N/A
Forward starting interest
rate swaps (13) Interest (expense) (1) N/A
(1) For the year ended December 31, 2017, the straight-line amortization of the initial value of the amount excluded from the assessment of
hedge effectiveness for our foreign exchange contracts recognized in OCI was a loss of $15 million which $18 million related to the cumulative
effect adjustment related to the adoptions of ASU 2017-12. There were no excluded components for our treasury rate lock and interest rate
swap agreements.
The following table summarizes the effect of derivative instruments designated as fair value hedging instruments on the Consolidated
Statements of Income for the years ended December 31, 2018 and 2017:
Amount of Gain
Recognized in Income
Classification of Gain
on Derivative
Instrument on Derivative 2018 1 2017 1
Interest rate swap agreements Interest (expense) 29 $ 35
1 The amounts include a benefit of $32 million and $35 million relating to the amortization of the cumulative amount of fair value hedging
adjustments included in the carrying amount of the hedged liability for discontinued hedging relationships for the years ended December 31,
2018 and December 31, 2017, respectively.
The following table summarizes the effect of derivative instruments not designated as hedging instruments on the Consolidated
Statements of Income for the years ended December 31, 2018 and 2017:
Classification of Gain/(Loss) Classification of Gain/(Loss)

Recognized in Income Recognized in Income
on Derivative on Derivative

Instrument 2018 2017
Foreign exchange contracts Other income (expense), net $ 16 $ (52)
The impact of gains and losses on foreign exchange contracts not designated as hedging instruments related to changes in the fair value
of assets and liabilities denominated in foreign currencies are generally offset by net foreign exchange gains and losses, which are also
included on the Consolidated Statements of Income in Other income (expense), net for all periods presented. When we enter into foreign
exchange contracts not designated as hedging instruments to mitigate the impact of exchange rate volatility
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in the translation of foreign earnings, gains and losses will generally be offset by fluctuations in the U.S. Dollar translated amounts of
each Consolidated Statements of Income account in current and/or future periods.
Classification and Amount of Gain or (Loss) Recognized in

Income on Fair Value and Cash Flow Hedging Relationships
2018
Other income
Net product sales Interest (expense) (expense), net
Total amounts of income and expense line items presented in the Consolidated
Statements of Income in which the effects of fair value or cash flow hedges are
recorded $ 15,265 $ (741) $ 337
The effects of fair value and cash flow hedging:

Gain (loss) on fair value hedging relationships
Interest rate swap agreements:
Hedged items — 6 —
Derivatives designated as hedging instruments (1) — 29 —
Gain (loss) on cash flow hedging relationships

Foreign exchange contracts:
Amount of gain or (loss) reclassified from AOCI into income (2) — —
Amount excluded from effectiveness testing recognized using a systematic
and rational amortization approach / changes in fair value 20 — —
Reclassification adjustment for excluded component (loss) gain (28) — —
Treasury rate lock agreements:
Amount of gain or (loss) reclassified from AOCI into income — (5) —
Amount of gain or (loss) reclassified from AOCI into income — — —
(1)
The amounts include a benefit of $32 million relating to the amortization of the cumulative amount of fair value hedging adjustments included in the
carrying amount of the hedged liability for discontinued hedging relationships for the year ended December 31, 2018.
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Classification and Amount of Gain or (Loss) Recognized in

Income on Fair Value and Cash Flow Hedging Relationships
2017
Other income
Net product sales Interest (expense) (expense), net
Total amounts of income and expense line items presented in the Consolidated
Statements of Income in which the effects of fair value or cash flow hedges are
recorded $ 12,973 $ (522) $ 24


Amount of gain or (loss) reclassified from AOCI into income 184 — —
Amount excluded from effectiveness testing recognized using a systematic
and rational amortization approach / changes in fair value 15 — —
Reclassification adjustment for excluded component (loss) gain (18) — —
(1)
The amounts include a benefit of $35 million relating to the amortization of the cumulative amount of fair value hedging adjustments included in the
carrying amount of the hedged liability for discontinued hedging relationships for the year ended December 31, 2017.
7. Cash, Cash Equivalents, Debt Securities Available-for-Sale and Equity Investments with Readily Determinable Fair Values
Time deposits, repurchase agreements, and commercial paper instruments with original maturities less than three months and money
market funds are included in Cash and cash equivalents. As of December 31, 2018, the carrying value of our time deposits and repurchase
agreements was $276 million and money market funds was $2.9 billion, all of which are included in Cash and cash equivalents. As of
December 31, 2017, the carrying value of our time deposits and repurchase agreements was $1.2 billion, commercial paper instruments
was $35 million, and money market funds was $4.5 billion, all of which were included in Cash and cash equivalents. The carrying values
approximated fair value as of December 31, 2018 and December 31, 2017.
Effective January 1, 2018, we adopted ASU 2016-01. Among other provisions, the new standard required modifications to existing
presentation and disclosure requirements on a prospective basis. As such, certain disclosures as of December 31, 2017 below conform to
the disclosure requirements prior to the adoption of ASU 2016-01. See Note 1 for additional information related to the adoption of ASU
2016-01.
The amortized cost, gross unrealized holding gains, gross unrealized holding losses and estimated fair value of debt securities available-
for-sale by major security type and class of security and equity investments with readily determinable fair values as of as of December 31,
2018 and 2017 were as follows:
Gross Gross Estimated

Amortized Unrealized Unrealized Fair
December 31, 2018 Cost Gain Loss Value
Ultra short income fund $ 450 $ — $ — $ 450

Time deposits(1) and Repurchase agreements(1) 46 — — 46
Total debt securities available-for-sale $ 496 $ — $ — $ 496
(1)
Have original maturities of greater than three months.
97


U.S. Treasury securities $ 445 $ — $ (3) $ 442
U.S. government-sponsored agency securities 42 — — 42
U.S. government-sponsored agency MBS 17 — — 17
Corporate debt - global 2,080 — (5) 2,075
Asset backed securities 203 — (1) 202
Ultra short income fund 352 — — 352
Time deposits(1) and Repurchase agreements (1) 89 — — 89
Total debt securities available-for-sale $ 3,228 $ — $ (9) $ 3,219
Equity securities with readily determinable fair values $ 935 $ 881 $ (6) $ 1,810
(1)
U.S. Treasury securities include government debt instruments issued by the U.S. Department of the Treasury. U.S. government-sponsored
agency securities include general unsecured obligations either issued directly by or guaranteed by U.S. government sponsored enterprises.
U.S. government-sponsored agency MBS include mortgage-backed securities issued by the Federal National Mortgage Association,
the Federal Home Loan Mortgage Corporation and the Government National Mortgage Association. Corporate debt-global includes
obligations issued by investment-grade corporations, including some issues that have been guaranteed by governments and government
agencies. Asset backed securities consist of triple-A rated securities with cash flows collateralized by credit card receivables and auto
loans. Ultra short income fund includes investments in certificates of deposit, repurchase agreements, commercial paper and corporate
notes. Time deposits and repurchase agreements in the tables above have original maturities greater than three months. Our repurchase
agreements are collateralized by U.S. government securities, cash, bonds, commercial paper and bank certificates of deposit. As of
December 31, 2018, all of our time deposits and repurchase agreements had original maturities less than one year.
Equity securities with readily determinable fair values, which consist of investments in publicly traded equity securities, were
approximately $1.3 billion as of December 31, 2018.
Duration periods of debt securities available-for-sale as of December 31, 2018 were as follows:
Amortized Fair
Cost Value
Duration of one year or less $ 496 $ 496
8. Inventory
A summary of inventories by major category as of December 31, 2018 and 2017 follows:
2018 2017
Raw materials $ 252 $ 289
Work in process 79 89
Finished goods 127 163
Total $ 458 $ 541
The decrease in total inventory from December 31, 2017 to December 31, 2018 is primarily due to raw materials charges recorded during
2018.
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9. Property, Plant and Equipment, Net
Property, plant and equipment, net as of December 31, 2018 and 2017 consisted of the following:
2018 2017
Land $ 81 $ 77
Buildings 639 525
Building and operating equipment 170 54
Leasehold improvements 236 153
Machinery and equipment 426 310
Furniture and fixtures 79 64
Computer equipment and software 563 496
Construction in progress 166 224
Subtotal 2,360 1,903
Less: accumulated depreciation and amortization 993 833
Total $ 1,367 $ 1,070
The increase in total property, plant, and equipment from December 31, 2017 to December 31, 2018 primarily relates to the Juno
acquisition as well as the manufacturing facility in Couvet, Switzerland and renovations of our two campuses in Summit, New Jersey.
See Note 3 for further information related to the acquisition of Juno.
10. Other Financial Information
Other current assets as of December 31, 2018 and 2017 consisted of the following:
2018 2017
Other receivables $ 113 $ 80
Derivative assets 67 14
Other prepaid taxes 140 102
Prepaid maintenance and software licenses 54 42
Other 127 150
Total $ 501 $ 388
Accrued expenses and other current liabilities as of December 31, 2018 and 2017 consisted of the following:
2018 2017
Rebates, distributor chargebacks and distributor services $ 1,107 $ 814
Compensation 391 358
Clinical trial costs and grants 475 622
Interest 238 173
Sales, use, value added, and other taxes 66 59
Milestones payable — 62
Success payment liability 70 —
Short-term contingent consideration and success payments 60 —
Royalties, license fees and collaboration agreements 114 52
Other 466 383
Total $ 2,987 $ 2,523

99

Other non-current liabilities as of December 31, 2018 and 2017 consisted of the following:
2018 2017
Contingent consideration (see Note 5) $ 103 $ 80
Deferred compensation and long-term incentives 243 240
Contingent value rights (see Notes 5 and 19) 19 42
Derivative contracts 21 134
Other 91 48
Total $ 477 $ 544
11. Intangible Assets and Goodwill
Intangible Assets: Our finite lived intangible assets primarily consist of developed product rights and technology obtained from the
Pharmion Corp. (Pharmion), Gloucester, Abraxis BioScience, Inc. (Abraxis), Avila, Quanticel, and Juno acquisitions. The remaining
weighted-average amortization period for finite-lived intangible assets not fully amortized is approximately 8.8 years. Our indefinite lived
intangible assets consist of acquired IPR&D product rights from the Receptos, Inc. (Receptos), Gloucester and Juno acquisitions.
Intangible assets outstanding as of December 31, 2018 and 2017 are summarized as follows:
Gross Intangible
Carrying Accumulated Assets,
December 31, 2018 Value Amortization Net
Amortizable intangible assets:
Acquired developed product rights $ 3,406 $ (2,261) $ 1,145
Technology 1,743 (552) 1,191
Licenses 66 (35) 31
Other 54 (39) 15
5,269 (2,887) 2,382
Non-amortized intangible assets:
Acquired IPR&D product rights 13,831 — 13,831
Total intangible assets $ 19,100 $ (2,887) $ 16,213
Gross Intangible
Technology 483 (410) 73
Licenses 66 (30) 36
Other 43 (34) 9
3,998 (2,413) 1,585
The increase in the gross carrying value of intangible assets during the year ended December 31, 2018 was primarily due to the addition
of approximately $7.0 billion of IPR&D and $1.3 billion of a technology platform asset from the Juno acquisition. The economic useful
life of the technology platform asset is 15 years (see Note 3).

Amortization expense was $474 million, $336 million and $466 million for the years ended December 31, 2018, 2017 and 2016,
respectively. Effective for the second quarter of 2018, we reduced the remaining estimated useful life of our ABRAXANE® intangible
assets, which will result in full amortization by 2022 in conjunction with the recent settlements of patent-related proceedings (see Note
19). Assuming no changes in the gross carrying amount of finite-lived intangible assets, the future annual
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amortization expense related to finite-lived intangible assets is expected to be approximately $442 million in 2019, $440 million in 2020,
$438 million in 2021, $179 million in 2022 and $93 million in 2023.
Goodwill: The carrying value of Goodwill increased to approximately $8.0 billion as of December 31, 2018 compared to $4.9 billion as
of December 31, 2017 due to the acquisition of Juno (see Note 3).
12. Debt
Short-Term Borrowings and Current Portion of Long-Term Debt: We had no outstanding short-term borrowings as of December 31, 2018
and 2017. The current portion of long-term debt outstanding as of December 31, 2018 and 2017 includes:
2018 2017
2.250% senior notes due 2019 $ 501 $ —
Long-Term Debt: Our outstanding senior notes with maturity dates in excess of one year after December 31, 2018 have an aggregate
principal amount of $19.850 billion with varying maturity dates and interest rates. The carrying values of the long-term portion of these
senior notes as of December 31, 2018 and 2017 are summarized below:
2018 2017
2.250% senior notes due 2019 $ — $ 505
2.875% senior notes due 2020 1,497 1,495
3.950% senior notes due 2020 509 514
2.250% senior notes due 2021 498 497
3.250% senior notes due 2022 1,034 1,044
3.550% senior notes due 2022 996 994
2.750% senior notes due 2023 747 746
4.000% senior notes due 2023 730 737
3.625% senior notes due 2024 1,000 1,001
3.875% senior notes due 2025 2,478 2,478
3.450% senior notes due 2027 986 991
3.900% senior notes due 2028 1,490 —
5.700% senior notes due 2040 247 247
5.250% senior notes due 2043 393 393
4.625% senior notes due 2044 987 987
5.000% senior notes due 2045 1,975 1,975
4.350% senior notes due 2047 1,234 1,234
4.550% senior notes due 2048 1,476 —
As of December 31, 2018 and 2017, the fair value of our outstanding Senior Notes was approximately $19.3 billion and $16.6 billion,
respectively, and represented a level 2 measurement within the fair value measurement hierarchy.
Debt Issuance: In February 2018, we issued $500 million principal amount of 2.875% senior notes due 2021 (2021 Notes), $1.000 billion
principal amount of 3.250% senior notes due 2023 (2023 Notes), $1.500 billion principal amount of 3.900% senior notes due 2028 (2028
Notes) and $1.500 billion principal amount of 4.550% senior notes due 2048 (2048 Notes). The 2021 Notes, 2023 Notes, 2028 Notes
and 2048 Notes were issued at 99.954%, 99.758%, 99.656% and 99.400% of par, respectively, and the discount is being amortized as
additional interest expense over the period from issuance through maturity. Offering costs of approximately $32 million were recorded

as a direct deduction from the carrying amount of the 2021 Notes, 2023 Notes, 2028 Notes and 2048 Notes on our Consolidated Balance
Sheets. The offering costs are being amortized as additional interest expense using the effective interest rate method over the period from
issuance through maturity. Interest on the 2021 Notes is payable semi-annually in arrears on February 19 and August 19 of each year,
beginning August 19, 2018 and the principal is due in full at the maturity date. Interest on the 2023 Notes, 2028 Notes and 2048 Notes is
payable semi-annually in arrears on February 20 and August 20 of each year, beginning August 20, 2018 and the principal is due in full
at the maturity date. The 2021 Notes, 2023 Notes, 2028 Notes and 2048
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Notes may be redeemed at our option, in whole or in part, at any time at a redemption price equaling accrued and unpaid interest plus
the greater of 100% of the principal amount of the Notes to be redeemed or the sum of the present values of the remaining schedule
payments of interest and principal discounted to the date of redemption on a semi-annual basis plus 10 basis points for the 2021 Notes,
15 basis points for the 2023 Notes, 20 basis points for the 2028 Notes and 25 basis points for the 2048 Notes. If we experience a change
of control accompanied by a downgrade of the debt to below investment grade, we will be required to offer to repurchase the 2021 Notes,
2023 Notes, 2028 Notes and 2048 Notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest. We
are subject to covenants which limit our ability to pledge properties as security under borrowing arrangements and limit our ability to
perform sale and leaseback transactions involving our property.
In November 2017, we issued an additional $750 million principal amount of 2.750% senior notes due 2023 (2023 Notes), $1.000 billion
principal amount of 3.450% senior notes due 2027 (2027 Notes) and $1.250 billion principal amount of 4.350% senior notes due 2047
(2047 Notes). The 2023 Notes, 2027 Notes and 2047 Notes were issued at 99.944%, 99.848% and 99.733% of par, respectively and
the discount is being amortized as additional interest expense over the period from issuance through maturity. Aggregate offering costs
of approximately $23 million have been recorded as a direct deduction from the carrying amount of the 2023 Notes, 2027 Notes and
2047 Notes on our Consolidated Balance Sheets. The offering costs are being amortized as additional interest expense using the effective
interest rate method over the period from issuance through maturity. Interest on the 2023 Notes is payable semi-annually in arrears on
February 15 and August 15 of each year, beginning on February 15, 2018 and the principal is due in full at the maturity date. Interest
on the 2027 Notes and 2047 Notes is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on May 15,
2018 and the principal is due in full at the maturity date. The 2023 Notes, 2027 Notes and 2047 Notes may be redeemed at our option, in
whole or in part, at any time at a redemption price equaling accrued and unpaid interest plus the greater of 100% of the principal amount
of the notes to be redeemed or the sum of the present values of the remaining schedule payments of interest and principal discounted to
the date of redemption on a semi-annual basis plus 12.5 basis points for the 2023 Notes, 20 basis points for the 2027 Notes and 25 basis
points for the 2047 Notes. If we experience a change of control, we will be required to offer to repurchase the 2023 Notes, 2027 Notes
and 2047 Notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest. We are subject to covenants
which limit our ability to pledge properties as security under borrowing arrangements and limit our ability to perform sale and leaseback
transactions involving our property.
In August 2017, we issued an additional $500 million principal amount of 2.250% senior notes due 2021 (2021 Notes). The 2021 Notes
were issued at 99.706% of par, and the discount is being amortized as additional interest expense over the period from issuance through
maturity. Offering costs of approximately $2 million have been recorded as a direct deduction from the carrying amount of the 2021 Notes
on our Consolidated Balance Sheets. The offering costs are being amortized as additional interest expense using the effective interest rate
method over the period from issuance through maturity. Interest on the 2021 Notes is payable semi-annually in arrears on February 15 and
August 15 of each year, beginning on February 15, 2018 and the principal on the 2021 Notes is due in full at the maturity date. The 2021
Notes may be redeemed at our option, in whole or in part, at any time at a redemption price equaling accrued and unpaid interest plus the
greater of 100% of the principal amount of the 2021 Notes to be redeemed or the sum of the present values of the remaining schedule
payments of interest and principal discounted to the date of redemption on a semi-annual basis plus 15 basis points. If we experience a
change of control accompanied by a downgrade of the debt to below investment grade, we will be required to offer to repurchase the 2021
Notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest. We are subject to covenants which limit
our ability to pledge properties as security under borrowing arrangements and limit our ability to perform sale and leaseback transactions
involving our property.
Debt Redemption: On November 9, 2017, we announced the redemption of all of the outstanding $1.000 billion aggregate principal
amount of 2.125% senior notes and $400 million aggregate principal amount of 2.300% senior notes, each maturing in August 2018. On
December 11, 2017, we paid cash of approximately $1.4 billion, including accrued interest of $10 million, to complete the redemption
resulting in a loss on extinguishment of debt of $4 million, which was recorded in Other income (expense), net in the Consolidated
Statements of Income during the fourth quarter of 2017. The charge is comprised of the make-whole-premium and write-off of
unamortized premium, discount and debt issuance costs related to the redeemed notes.
Debt Repayment: In August 2017, we repaid the 1.900% senior notes with a principal amount of $500 million upon maturity.
From time to time, we have used treasury rate locks and forward starting interest rate swap contracts to hedge against changes in interest
rates in anticipation of issuing fixed-rate notes. As of December 31, 2018 and 2017, a balance of $31 million in losses for both periods
remained in AOCI related to the settlement of these derivative instruments and will be recognized as interest expense over the life of the
notes.

As of December 31, 2018 and 2017, we were party to pay-floating, receive-fixed interest rate swap contracts designated as fair value
hedges of fixed-rate notes as described in Note 6. Our swap contracts outstanding as of December 31, 2018 effectively convert the hedged
portion of our fixed-rate notes to floating rates. From time to time, we terminate the hedging relationship on
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certain of our swap contracts by settling the contracts or by entering into offsetting contracts. Any net proceeds received or paid in these
settlements are accounted for as a reduction or increase of current and future interest expense associated with the previously hedged notes.
As of December 31, 2018 and 2017, we had balances of $109 million and $139 million, respectively, of unamortized gains recorded as a
component of our debt as a result of past swap contract settlements, including $2 million and $3 million related to the settlement of swap
contracts during 2018 and 2017, respectively. See Note 6 for additional details related to interest rate swap contract activity.
Commercial Paper: As of both December 31, 2018 and 2017, we had available capacity to issue up to $2.0 billion of Commercial Paper
and there were no borrowings under the Program.
Senior Unsecured Credit Facility: We maintain a senior unsecured revolving credit facility (Credit Facility) that provides revolving credit
in the aggregate amount of $2.0 billion. During the second quarter of 2018, we amended our Credit Facility to extend the expiration date to
April 25, 2023. Amounts may be borrowed in U.S. dollars for general corporate purposes. The Credit Facility currently serves as backup
liquidity for our Commercial Paper borrowings. As of both December 31, 2018 and 2017, there were no outstanding borrowings against
the Credit Facility. The Credit Facility contains affirmative and negative covenants, including certain customary financial covenants. We
were in compliance with all financial covenants as of December 31, 2018.
13. Stockholders' Equity
Preferred Stock: Our Board of Directors is authorized to issue, at any time, without further stockholder approval, up to 5.0 million shares
of preferred stock, and to determine the price, rights, privileges and preferences of such shares.
Common Stock: As of December 31, 2018, we were authorized to issue up to 1.150 billion shares of common stock of which shares of
common stock issued totaled 981.5 million.
Treasury Stock: During the period of April 2009 through December 2018, our Board of Directors has approved repurchases of up to an
aggregate $28.5 billion of our common stock, including increases of $5.0 billion and $3.0 billion in February and May 2018, respectively.
We repurchased $6.0 billion, $3.9 billion and $2.2 billion of treasury stock under the program in 2018, 2017 and 2016, respectively,
excluding transaction fees. As of December 31, 2018, an aggregate 272.7 million common shares were repurchased under the program at
an average price of $94.22 per common share and total cost of $25.7 billion.
Other: When employee awards of RSUs vest and are settled net in order to fulfill minimum statutory tax withholding requirements, the
shares withheld are reflected as treasury stock.
A summary of changes in common stock issued and treasury stock is presented below (in millions of shares):
Common Stock
Common Stock in Treasury
Balances as of December 31, 2015 940.1 (153.5)
Exercise of stock options and conversion of restricted stock units 14.0 (1.0)
Issuance of common stock for employee benefit plans — 0.4
Shares repurchased under share repurchase program — (21.4)

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14. Accumulated Other Comprehensive Income
During the third quarter of 2017, we adopted ASU 2017-12 on a modified retrospective basis. As a result of applying the new guidance
during the nine-month period ended September 30, 2017, we recorded a cumulative effect adjustment of $30 million to decrease AOCI
as of the beginning of fiscal year 2017.
The components of other comprehensive income (loss) consist of changes in pension liability, changes in net unrealized gains (losses) on
debt securities available-for-sale and equity investments with readily determinable fair values in 2017 and debt securities available-for-
sale in 2018, change in net unrealized gains (losses) related to cash flow hedges, the amortization of the excluded component related to
cash flow hedges and changes in foreign currency translation adjustments.
The accumulated balances related to each component of other comprehensive income (loss), net of tax, are summarized as follows:
Net
Net Unrealized Unrealized Amortization of
Gains (Losses) Gains Excluded
On Available- (Losses) Component Foreign Accumulated
Pension for-Sale Related to Related to Cash Currency Other
Liability Marketable Cash Flow Flow Hedges Translation Comprehensive
Adjustment Securities (1) Hedges (See Note 1) Adjustments Income (Loss)
Balances as of December 31, 2016 $ (38) $ 144 $ 415 $ — $ (102) $ 419
Cumulative effect adjustment for the
adoption of ASU 2017-12 (See Note 1) — — (12) (18) — (30)
Other comprehensive income (loss)
before reclassifications, net of tax 16 395 (428) (15) 70 38
Reclassified losses (gains) from
accumulated other comprehensive
income (loss), net of tax — 23 (181) 18 — (140)
Net current-period other comprehensive
income (loss), net of tax 16 418 (609) 3 70 (102)
Balances as of December 31, 2017 $ (22) $ 562 $ (206) $ (15) $ (32) $ 287
Cumulative effect adjustment for the
adoption of ASU 2016-01 and ASU
2018-02 (See Note 1) — (566) (4) — — (570)
Other comprehensive (loss) income
before reclassifications, net of tax (6) (7) 246 (20) (28) 185
Reclassified losses from accumulated
other comprehensive income (loss), net
of tax — 14 6 28 — 48
Net current-period other comprehensive
(loss) income, net of tax (6) 7 252 8 (28) 233
Balances as of December 31, 2018 $ (28) $ 3 $ 42 $ (7) $ (60) $ (50)
(1)Balances as of December 31, 2017 are prior to the adoption of ASU 2016-01 and, as such, include equity securities with readily
determinable fair values. Upon adoption of ASU 2016-01, we recorded a cumulative effect adjustment for our net unrealized gains related
to our equity securities with readily determinable fair values as of January 1, 2018. Therefore, the unrealized gains (losses) position as of
December 31, 2018 solely relate to debt securities available-for-sale. See Note 1 for further information related to the adoption of ASU
2016-01.
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Gains (Losses) Reclassified Out of Accumulated

Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Affected Line Item in the Consolidated
Income (Loss) Components Statements of Income 2018 2017 2016
Gains (losses) related to cash-flow hedges:
Foreign exchange contracts Net product sales $ (2) $ 184 $ 307
Treasury rate lock agreements Interest (expense) (5) (5) (5)
Interest rate swap agreements Interest (expense) — (1) (2)
Income tax provision 1 3 3
Excluded component related to cash-flow hedges:
Foreign exchange contracts Net product sales (8) (3) —
Gains (losses) on available-for-sale debt securities / marketable securities (1):
Realized gain (loss) on sales of
marketable securities Interest and investment income, net (18) (37) (358)
Total reclassification, net of tax $ (28) $ 155 $ 71
(1) (Losses)gains reclassified out of Accumulated other comprehensive (loss) income prior to December 31, 2017 are prior to the adoption
of ASU 2016-01 and, as such, include equity securities with readily determinable fair values. Upon adoption of ASU 2016-01, we
recorded a cumulative effect adjustment for our net unrealized gains related to our equity securities with readily determinable fair values
as of January 1, 2018. Therefore, unrealized gains (losses) for the twelve-month period ended December 31, 2018 solely relate to debt
securities available-for-sale. See Note 1 for further information related to the adoption of ASU 2016-01.
15. Share-Based Compensation
We have stockholder-approved stock incentive plans, the Celgene Corporation 2017 Stock Incentive Plan and the 2014 Equity Incentive
Plan (formerly known as the Juno Therapeutics, Inc. 2014 Equity Incentive Plan) (collectively, the Plans) that provide for the granting of
options, RSUs, PSUs and other share-based and performance-based awards to our employees, officers and non-employee directors. The
Management Compensation and Development Committee of the Board of Directors (Compensation Committee) may determine the type,
amount and terms, including vesting, of any awards made under the Plans.
On June 14, 2017, our stockholders approved an amendment of the Plan, which included the following key modifications: adoption of an
aggregate share reserve of approximately 275.3 million shares of Common Stock, which includes 10.0 million new shares of Common
Stock; increase the maximum individual payment under performance-based cash awards for 3 years performance periods to $15 million;
provide that stock options and stock appreciation rights granted under the Plan may receive or retain dividends or dividend equivalents
unless the underlying common stock subject to such award vests or are no longer subject to forfeiture restrictions; provide that, in the
event of a change in control, allow for accelerated vesting or lapse of restrictions; provide that, if any performance-based award is subject
to vesting after an involuntary termination of employment within the two-year period following a change in control, any vesting of such
award shall be determined based on the higher of (A) Committee’s determination and certification of the extent to which the applicable
performance goals have been achieved, and (B) the deemed achievement of all relevant performance goals at the “target” level prorated
based on service during the performance period prior to the change in control. The term of the Plan is through April 18, 2027.
With respect to options granted under the Plan, the exercise price may not be less than the market closing price of the common stock on
the date of grant. In general, options granted under the Plan vest over periods ranging from immediate vesting to four-year vesting and
expire ten years from the date of grant, subject to earlier expiration in case of termination of employment unless the participant meets
the retirement provision under which the option would have a maximum of three additional years to vest. The vesting period for options
granted under the Plan is subject to certain acceleration provisions if a change in control, as defined in the Plan, occurs. Plan participants
may elect to exercise options at any time during the option term. However, any shares so purchased which have not vested as of the date
of exercise shall be subject to forfeiture, which will lapse in accordance with the established vesting time period.

We issue PSUs to certain executive officers that are payable in shares of our common stock at the end of a three-year performance
measurement period. The number of shares to be issued at the end of the measurement period will vary, based on performance, from 0%
to 200% of the target number of PSUs granted, depending on the achievement of specified performance and market
105

targets for non-GAAP revenue (37.5% weighting), non-GAAP earnings per share (37.5% weighting) and relative total shareholder return
(25% weighting). All shares delivered upon PSU vesting are restricted from trading for one year and one day from the vesting date.
The grant date fair value for the portion of the PSUs related to non-GAAP revenue and non-GAAP earnings per share was estimated
using the fair market value of our common stock on the grant date. The grant date fair value for the portion of the PSUs related to relative
total shareholder return was estimated using the Monte Carlo valuation model.
Shares of common stock available for future share-based grants under all plans were 27.7 million at December 31, 2018.
The following table summarizes the components of share-based compensation expense in the Consolidated Statements of Income for the
years ended December 31, 2018, 2017 and 2016:
2018 2017 2016

Cost of goods sold $ 36 $ 29 $ 33
Research and development 575 268 253
Selling, general and administrative 503 347 320
Total share-based compensation expense 1,114 644 606
Tax benefit related to share-based compensation expense 151 180 167
Reduction in net income $ 963 $ 464 $ 439
The tax benefit related to share-based compensation expense above excludes excess tax benefits of $22 million, $290 million, and $189
million from share-based compensation awards that vested or were exercised during the years ended December 31, 2018, 2017 and 2016,
respectively.
Included in share-based compensation expense for the years ended December 31, 2018, 2017 and 2016 was compensation expense related
to non-qualified stock options of $421 million, $347 million and $357 million, respectively. Share-based compensation expense for the
year ended December 31, 2018 also includes $193 million of cash paid for accelerated vesting of equity awards related to the acquisition
of Juno. These awards are a component of the $666 million fair value of equity compensation attributable to the post-combination service
period. See Note 3 for additional information related to the acquisition of Juno. Net proceeds received from share-based compensation
arrangements for the years ended December 31, 2018, 2017 and 2016 were $144 million, $685 million and $359 million, respectively.
Prior to the adoption of ASU 2016-09, we did not recognize a deferred tax asset for excess tax benefits that had not been realized and had
applied the tax law method as our accounting policy regarding the ordering of tax benefits to determine whether an excess tax benefit has
been realized.
Stock Options: As of December 31, 2018, there was $530 million of total unrecognized compensation cost related to stock options granted
under the plans. That cost will be recognized over an expected remaining weighted-average period of 2.1 years.
The weighted-average grant date fair value of the stock options granted during the years ended December 31, 2018, 2017 and 2016 was
$28.93 per share, $32.42 per share and $32.49 per share, respectively. We estimated the fair value of options granted using a Black-
Scholes option pricing model with the following assumptions:
2018 2017 2016

Risk-free interest rate 2.51% - 2.96% 1.70% - 2.22% 1.03% - 2.08%
Expected volatility 29% - 32% 24% - 30% 29% - 35%
Weighted average expected volatility 30% 27% 32%
Expected term (years) 5.05 - 5.10 5.03 - 5.06 5.04 - 5.06
Expected dividend yield 0% 0% 0%
The risk-free interest rate is based on the U.S. Treasury zero-coupon curve. Expected volatility of stock option awards is estimated based
on the implied volatility of our publicly traded options with settlement dates of six months. The use of implied volatility was based upon
the availability of actively traded options on our common stock and the assessment that implied volatility is more representative of future
stock price trends than historical volatility. The expected term of an employee share option is the period of time for which the option is

expected to be outstanding. We made a determination of expected term by analyzing employees' historical exercise experience from its
history of grants and exercises in our option database and management estimates. Forfeiture rates are estimated based on historical data.
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The following table summarizes all stock option activity for the year ended December 31, 2018:
Weighted
Weighted Average Remaining Aggregate
Options Average Exercise Contractual Intrinsic Value
(in Millions) Price Per Option Term (Years) (in Millions)
Outstanding as of December 31, 2017 67.8 $ 82.53 6.1 $ 1,823
Changes during the Year:
Conversion of Juno awards 3.7 34.01
Granted 10.3 89.26
Exercised (6.4) 38.95
Forfeited (3.1) 103.83
Expired (1.2) 106.27
Outstanding as of December 31, 2018 71.1 $ 83.57 5.6 $ 539
Vested as of December 31, 2018 or
expected to vest in the future 69.9 $ 83.28 5.6 $ 539
Vested as of December 31, 2018 46.1 $ 74.43 4.3 $ 500
The total fair value of shares vested during the years ended December 31, 2018, 2017 and 2016 was $490 million, $346 million and $335
million, respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2018, 2017 and 2016 was
$297 million, $1.2 billion and $747 million, respectively. We primarily utilize newly issued shares to satisfy the exercise of stock options.
Restricted Stock Units: We issue RSUs, under our equity program in order to provide an effective incentive award with a strong retention
component. Equity awards may, at the option of employee participants, be divided between stock options and RSUs. The employee may
choose between alternate Company defined mixes of stock options and RSUs, with the number of options to be granted reduced by four
for every one RSU to be granted.
Information regarding the Company's RSUs for the year ended December 31, 2018 is as follows (shares in millions):
Weighted Average Grant

Nonvested RSUs Share Equivalent Date Fair Value
Nonvested as of December 31, 2017 7.7 $ 109.55
Changes during the period:
Granted 5.7 79.38
Vested (3.2) 104.09
As of December 31, 2018, there was $607 million of total unrecognized compensation cost related to non-vested RSU awards. That cost
is expected to be recognized over a weighted-average period of 1.8 years. The Company primarily utilizes newly issued shares to satisfy
the vesting of RSUs.
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Performance-Based Restricted Stock Units: We grant performance-based restricted stock units that vest contingent upon the achievement
of pre-determined performance-based milestones that are either related to product development or the achievement of specified
performance and market targets, including non-GAAP revenue, non-GAAP earnings per share and relative total shareholder return. The
following table summarizes the Company's performance-based restricted stock unit activity for the year ended December 31, 2018 (shares
in thousands):
Weighted Average Grant

Nonvested Performance-Based RSUs Share Equivalent Date Fair Value
Nonvested as of December 31, 2017 558 $ 116.27
Conversion of Juno awards 336 89.17
Granted 163 86.14
Vested (315) 101.80
Forfeited (82) 109.66
Non-vested as of December 31, 2018 660 $ 106.98
As of December 31, 2018, there was $30 million of total unrecognized compensation cost related to non-vested awards of performance-
based RSUs that is expected to be recognized over a weighted-average period of 1.1 years.
16. Employee Benefit Plans
We sponsor an employee savings and retirement plan, which qualifies under Section 401(k) of the Internal Revenue Code, as amended
(the Code) for our U.S. employees. Our contributions to the U.S. savings plan are discretionary and have historically been made in the
form of our common stock (see Note 13). Such contributions are based on specified percentages of employee contributions up to 6% of
eligible compensation or a maximum permitted by law. Total expense for contributions to the U.S. savings plans were $33 million, $34
million and $40 million in 2018, 2017 and 2016, respectively.
We also sponsor defined contribution plans in certain foreign locations. Participation in these plans is subject to the local laws that are
in effect for each country and may include statutorily imposed minimum contributions. We also maintain defined benefit plans in certain
foreign locations for which the obligations and the net periodic pension costs were determined not to be material as of and for the year
ended December 31, 2018.
In 2000, our Board of Directors approved a deferred compensation plan. The plan was frozen effective as of December 31, 2004, and no
additional contributions or deferrals can be made to that plan. Accrued benefits under the frozen plan will continue to be governed by the
terms under the tax laws in effect prior to the enactment of American Jobs Creation Act of 2004, Section 409A (Section 409A).
In February 2005, our Board of Directors adopted the Celgene Corporation 2005 Deferred Compensation Plan, effective as of January 1,
2005, and amended the plan in February 2008. This plan operates as our ongoing deferred compensation plan and is intended to comply
with Section 409A. Eligible participants, which include certain top-level executives as specified by the plan, can elect to defer up to an
amended 90% of the participant's base salary, 100% of cash bonuses and equity compensation allowed under Section 409A. Company
contributions to the deferred compensation plan represent a match to certain participants' deferrals up to a specified percentage, which
currently ranges from 10% to 20%, depending on the employee's position as specified in the plan, of the participant's base salary.
Expenses related to our contributions to the deferred compensation plans in 2018, 2017 and 2016, were not material. The Company's
matches are fully vested upon contribution. All other Company contributions to the plan do not vest until the specified requirements
are met. As of December 31, 2018 and 2017, we had a deferred compensation liability included in other non-current liabilities in the
Consolidated Balance Sheets of approximately $152 million and $156 million, respectively, which included the participant's elected
deferral of salaries and bonuses, the Company's matching contribution and earnings on deferred amounts as of that date. The plan provides
various alternatives for the measurement of earnings on the amounts participants defer under the plan. The measurement alternatives are
based on returns of a variety of funds that offer plan participants the option to spread their risk across a diverse group of investments.
We have established a Long-Term Incentive Plan, or LTIP, designed to provide key officers and executives with performance-based
incentive opportunities contingent upon achievement of pre-established corporate performance objectives covering a three-year period.
As of December 31, 2018, we had recorded liabilities for three separate three-year performance cycles running concurrently and ending

December 31, 2018, 2019 and 2020. Performance measures for each of the performance cycles are based on the following components:
37.5% on non-GAAP earnings per share (as defined in the LTIP); 37.5% on total non-GAAP revenue
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(as defined in the LTIP); and 25% on relative total shareholder return, which is a measurement of our stock price performance during the
applicable three-year period compared with a group of other companies in the biopharmaceutical industry.
Threshold, target and maximum cash payout levels are calculated as a percentage between 0% to 200% of each participant’s base salary at
the time the LTIP was approved by the Compensation Committee. Such awards are payable in cash or common stock or a mixture of cash
and common stock, which will be determined by the Compensation Committee at the time of award delivery. Share-based payout levels
are calculated using the cash-based threshold, target and maximum levels, divided by the average closing price of Celgene stock for the
30 trading days prior to the commencement of each performance cycle. Therefore, final share-based award values are reflective of the
stock price at the end of the measurement period. The Compensation Committee may determine that payments made in common stock are
restricted from trading for a period of time. The estimated payout value for the three-year performance cycle ended December 31, 2018
is $8 million, which is included in Accrued expenses and other current liabilities as of December 31, 2018, and the maximum potential
cash-based payout, assuming maximum objectives are achieved for performance cycles ending in 2019, 2020 and 2021 are $10 million,
$10 million and $14 million, respectively. We accrue the long-term incentive liability over each three-year cycle. Prior to the end of a
three-year cycle, the accrual is based on an estimate of our level of achievement during the cycle. Upon a change in control, participants
will be entitled to an immediate payment equal to their target award or, if higher, an award based on actual performance through the
date of the change in control. For the years ended December 31, 2018, 2017 and 2016, we recognized expense related to the LTIP of $4
million, $5 million and $13 million, respectively.
In December 2018, we adopted an executive severance plan, pursuant to which our executive officers are entitled to severance benefits
on an involuntary termination without cause or a resignation for good reason (each, a “qualifying termination”), subject to the executive
signing a release agreement. Under the plan, if the executive experiences a qualifying termination, he or she is entitled to (1) a cash
payment equal to 1.5 times (or 2 times for our CEO) the sum of base salary and target annual bonus, (2) COBRA benefit continuation
coverage for up to 18 months (or 24 months for our CEO) at active employee rates, and (3) 18 months’ outplacement services. However,
if the qualifying termination occurs on or within 2 years after a change in control of Celgene, or in certain circumstances otherwise in
connection with such change in control, the executive is entitled to (1) a cash payment equal to 2.5 times (or 3 times for our CEO) the
sum of base salary and target annual bonus, (2) COBRA benefit continuation coverage for up to 30 months (or 36 months for our CEO)
at active employee rates, (3) 18 months’ outplacement services, (4) a pro-rated annual bonus for year of termination, and (5) full vesting
of outstanding equity awards.
In January 2019, we adopted an additional severance plan that covers all full-time and part-time US employees who are not already
covered by another change in control severance plan. Pursuant to this plan, eligible employees are entitled to receive severance benefits
if he or she experiences a qualifying termination on or within 2 years after a change in control of Celgene, or in certain circumstances
otherwise in connection with such change in control, subject to the employee signing a release. Severance benefits are generally equal
to a specified percentage of base salary and target bonus and benefit continuation coverage under COBRA at active employee rates for
the applicable severance period. The severance amounts are determined based on an employee’s grade level and tenure. Our executive
officers are not eligible to participate under this plan.
17. Income Taxes
We adopted ASU 2016-01, ASU 2016-16 and ASU 2018-02, effective January 1, 2018. See Note 1 for additional information related to
the adoption of these accounting standard updates.
U.S. tax reform legislation (2017 Tax Act) was enacted on December 22, 2017, which reduced the U.S. statutory tax rate from 35% to
21% beginning in 2018. The 2017 Tax Act requires companies to pay a one-time toll charge on earnings of certain foreign subsidiaries
that were previously tax deferred and introduces a new U.S. tax on certain off-shore earnings referred to as GILTI beginning in 2018.
We applied the guidance issued by the Securities and Exchange Commission (SEC) in Staff Accounting Bulletin (SAB) 118 when
accounting for the enactment-date effects of the 2017 Tax Act. The guidance provides for a measurement period up to one year in which
provisional amounts may be adjusted as income tax expense or benefit in the period the adjustment is determined. At December 31, 2017
and throughout 2018, we recorded provisional amounts for certain enactment-date effects of the 2017 Tax Act by applying the guidance
of SAB 118 because we had not yet completed our enactment-date accounting of these effects. After further analysis of the 2017 Tax Act
and guidance released by U.S. federal and state tax authorities, we recorded a tax benefit of $43 million in our 2018 income tax provision
to adjust the amounts recorded as of December 31, 2017. As of December 22, 2018, we have now completed our accounting for all of the
enactment-date income tax effects of the 2017 Tax Act.

The FASB allows companies to adopt an accounting policy to either recognize deferred taxes for GILTI or treat such as a tax cost in the
year incurred. We have elected to recognize the tax on GILTI as a period expense in the period the tax is incurred. Under
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this policy, we have not provided deferred taxes on temporary differences that upon their reversal will affect the amount of income subject
to GILTI in the period.
Income (loss) before income taxes is as follows:
2018 2017 2016

U.S. $ (600) $ 445 $ 735
Non-U.S. 5,432 3,869 1,637
Income before income taxes $ 4,832 $ 4,314 $ 2,372
For the years ended December 31, 2018, 2017 and 2016, U.S. income before income taxes reflects charges related to share-based
compensation, upfront collaboration payments, asset impairments, acquisitions and interest expense which in the aggregate, increased
from 2016 to 2018. The decrease in U.S. income before income taxes in 2018 as compared to 2017 included research and other expenses
related to Juno and Impact. Many of these charges are not deductible for U.S. income tax purposes. Non-U.S. income before income taxes
reflects the results of our commercial, research and manufacturing operations outside the U.S.
The provision (benefit) for taxes on income is as follows:
2018 2017 2016

United States:
Taxes currently payable:
Federal $ 571 $ 2,545 $ 569
State and local 65 52 43
Total U.S. tax provision 669 1,266 269
International:
Taxes currently payable 118 107 106
Deferred income taxes (1) 1 (2)
Total international tax provision 117 108 104
Total provision $ 786 $ 1,374 $ 373
Amounts are reflected in the preceding tables based on the location of the taxing authorities.
Deferred taxes arise because of different treatment between financial statement accounting and tax accounting, known as temporary
differences. We record the tax effect on these temporary differences as deferred tax assets (generally items that can be used as a tax
deduction or credit in future periods) or deferred tax liabilities (generally items for which we received a tax deduction but have not yet
recorded in the Consolidated Statements of Income and the tax effects of acquisition related temporary differences). We evaluate the
likelihood of the realization of deferred tax assets and record a valuation allowance if it is more likely than not that all or a portion
of the asset will not be realized. We consider many factors when assessing the likelihood of future realization of deferred tax assets,
including our recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income, the carryforward
periods available to us for tax reporting purposes, tax planning strategies and other relevant factors. Significant judgment is required in
making this assessment. As of December 31, 2018 and 2017, it was more likely than not that we would realize our deferred tax assets, net
of valuation allowances. The $82 million net decrease in the valuation allowance from 2017 to 2018 relates primarily to certain foreign
net operating loss (NOL) carryforwards. As a result of the 2017 Tax Act, we recorded an income tax benefit of $621 million primarily
related to the remeasurement of our deferred tax liabilities and assets as of December 31, 2017.
We no longer consider our earnings from operations conducted outside the U.S. to be permanently reinvested offshore. As a result of the
2017 Tax Act’s favorable U.S. tax treatment of repatriated foreign earnings as well as our capital contribution reserves outside the U.S.,
we expect to have access to our offshore earnings with minimal to no additional U.S. or foreign tax costs. Further, as we have no plans to
dispose of any of our international subsidiaries, we consider any residual basis differences in the stock of those subsidiaries that exceeds
the basis differences related to earnings, to be permanently reinvested. It is not practicable to compute the deferred tax liability that would

be recorded if the excess basis differences in international subsidiaries that are not related to earnings were to reverse upon a disposition
of our international subsidiaries.
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As of December 31, 2018 and 2017 the tax effects of temporary differences that give rise to deferred tax assets and liabilities were as
follows:
2018 2017
Assets Liabilities Assets Liabilities
NOL carryforwards $ 242 $ — $ 249 $ —
Tax credit carryforwards 44 — 11 —
Share-based compensation 380 — 317 —
Other assets and liabilities 59 (59) 38 (52)
Intangible assets 425 (3,795) 333 (2,008)
Accrued and other expenses 316 — 278 —
Unrealized (gains) on securities — (146) — (193)
Subtotal 1,466 (4,000) 1,226 (2,253)
Valuation allowance (195) — (277) —
Total deferred taxes $ 1,271 $ (4,000) $ 949 $ (2,253)
Net deferred tax (liability) $ (2,729) $ (1,304)
As of December 31, 2018 and 2017, deferred tax assets and liabilities were classified on our Consolidated Balance Sheets as follows:
2018 2017
Other non-current assets $ 24 $ 23
Deferred income tax liabilities (2,753) (1,327)
Reconciliation of the U.S. statutory income tax rate to the Company's effective tax rate is as follows:
Percentages 2018 2017 2016

U.S. statutory rate 21.0 % 35.0 % 35.0 %
Tax rate differences on foreign operations (11.2)% (28.8)% (21.1)%
State taxes, net of federal benefit 1.4 % 0.6 % 0.8 %
Change in valuation allowance 0.3 % 0.8 % 0.5 %
Acquisition and collaboration related differences 6.0 % 2.1 % (0.7)%
Changes in uncertain tax positions (0.1)% 0.1 % (0.4)%
Stock compensation excess tax benefits (0.5)% (6.7)% —%
2017 Tax Act (0.9)% 29.4 % —%
Other 0.3 % (0.7)% 1.6 %
Effective income tax rate 16.3 % 31.8 % 15.7 %
Our reconciliation of the U.S. statutory income tax rate to our effective tax rate includes tax rate differences on our foreign operations
which are subject to income taxes at different rates than the U.S. and in 2018 we were subject to U.S. tax on GILTI which is subject to an
effective federal statutory tax rate of 10.5% less any foreign tax credits. The tax rate differences from foreign operations were lower in
2018 as compared to 2017 and 2016 primarily due to the reduction in the U.S. federal tax rate from 35% to 21% and the provision for U.S.
tax on GILTI. The provision for U.S. tax on GILTI reduced our tax rate differences on foreign operations in 2018 by approximately 9.3
percentage points. The benefit related to our tax rate differences on foreign operations primarily results from our commercial operations in
Switzerland, which include significant research and development and manufacturing for worldwide markets. We operate under an income
tax agreement in Switzerland that provides an exemption from most Swiss income taxes on our operations in Switzerland through 2024.
The difference between the maximum statutory Swiss income tax rate of approximately 15.6% and our Swiss income tax rate under the
tax agreement resulted in a reduction in our 2018, 2017 and 2016 effective tax rates of 23.6, 14.8 and 20.5 percentage points, respectively.

The impact of acquisition and collaboration related differences on our effective tax rate was higher in 2018 compared to 2017 and 2016
primarily due to nondeductible research expenses incurred in our acquisition of Impact in 2018 and a non-recurring tax benefit related to
a loss on our investment in Avila in 2016. The increase in tax benefits from stock compensation in 2018 and
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2017 compared to 2016 is related to excess tax benefits from employee stock compensation upon adoption of ASU 2016-09 in 2017. The
reconciliation also includes the effect of changes in uncertain tax positions, which include the effect of settlements, expirations of statutes
of limitations, and other changes in prior year tax positions.
As of December 31, 2018, we had U.S. federal NOL carryforwards of approximately $620 million and state NOL carryforwards
of approximately $1.3 billion that will expire in the years 2019 through 2038. We also have U.S. federal and state research and
experimentation credit carryforwards of approximately $72 million that will expire in the years 2020 through 2038. Deferred tax assets for
certain of our U.S. federal and state carryforwards and all of our foreign carryforwards are subject to a full valuation allowance. Prior to
the adoption of ASU 2016-09, excess tax benefits related to share-based compensation deductions incurred after December 31, 2005 were
required to be recognized in the period in which the tax deduction was realized through a reduction of income taxes payable. As a result,
we had not recorded deferred tax assets for these share-based compensation deductions included in our NOL carryforwards and research
and experimentation credit carryforwards. ASU 2016-09 was effective for us on January 1, 2017. Among other provisions, the new
standard requires that excess tax benefits and tax deficiencies that arise upon vesting or exercise of share-based payments be recognized
as income tax benefits and expenses in the income tax provision. Previously, such amounts were recorded to additional paid-in-capital.
This aspect of the new guidance was required to be adopted prospectively, and accordingly, the income tax provision for 2018 and 2017
includes $22 million and $290 million, respectively, of excess tax benefits arising from share-based compensation awards that vested
or were exercised during the period. In addition, at January 1, 2017, the Company recorded a cumulative-effect adjustment to Retained
earnings, with a corresponding increase to net deferred tax assets, in the amount of $17 million related to previously unrecognized excess
tax benefits. We realized excess tax benefits related to share-based compensation in 2016 for income tax purposes as an increase to
additional paid-in capital in the amount of approximately $185 million.
Prior to the adoption of ASU 2016-01, the income tax effects of unrealized gains or losses on certain equity investments were required to
be recorded to AOCI. We recorded deferred income tax expense in 2017 of $227 million and deferred income tax benefits in 2016 of $61
million primarily related to net unrealized gains/losses on securities, as a component of AOCI.
During the third quarter of 2017, we completed an updated analysis of our current and prior year estimates of our U.S. research and
development and orphan drug tax credits. The analysis resulted in additional net income tax benefits of approximately $65 million
including $55 million related to prior year estimated tax credits, which were recorded on our Consolidated Statements of Income within
Income tax provision. The effect of the change in estimate increased net income by approximately $65 million. On a per share basis, this
increased both of the Company’s basic and diluted income per share by $0.08.
In 2015, we acquired all of the outstanding common stock of Receptos. The acquisition was accounted for using the acquisition method
of accounting, and we recorded a deferred tax liability of $2.5 billion related to the acquisition. Upon integration of the acquired assets
into our offshore research, manufacturing, and commercial operations, the deferred tax liability was reclassified to a non-current tax
liability which represented an estimate of income tax that may have been incurred in the future upon successful development of the
acquired IPR&D into a commercially viable product. Upon enactment of the 2017 Tax Act, the non-current tax liability was reclassified
to a deferred tax liability and remeasured for the enacted change in tax rates that are expected to apply when the temporary difference
reverses.
Our tax returns are under routine examination in many taxing jurisdictions. The scope of these examinations includes, but is not limited
to, the review of our taxable presence in a jurisdiction, our deduction of certain items, our claims for research and development tax credits,
our compliance with transfer pricing rules and regulations and the inclusion or exclusion of amounts from our tax returns as filed. Our
U.S. federal income tax returns have been audited by the Internal Revenue Service (IRS) through the year ended December 31, 2008. Tax
returns for the years ended December 31, 2009, 2010, and 2011 are currently under examination by the IRS. We are also subject to audits
by various state and foreign taxing authorities, including, but not limited to, most U.S. states and major European and Asian countries
where we have operations.
We regularly reevaluate our tax positions and the associated interest and penalties, if applicable, resulting from audits of federal, state and
foreign income tax filings, as well as changes in tax law (including regulations, administrative pronouncements, judicial precedents, etc.)
that would reduce the technical merits of the position to below more likely than not. We believe that our accruals for tax liabilities are
adequate for all open years. Many factors are considered in making these evaluations, including past history, recent interpretations of tax
law and the specifics of each matter. Because tax regulations are subject to interpretation and tax litigation is inherently uncertain, these
evaluations can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. We apply
a variety of methodologies in making these estimates and assumptions, which include studies performed by independent economists,
advice from industry and subject matter experts, evaluation of public actions taken by the IRS and other taxing authorities, as well as

our industry experience. These evaluations are based on estimates and assumptions that have been deemed reasonable by management.
However, if management's estimates are not representative of actual outcomes, our results of operations could be materially impacted.
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Unrecognized tax benefits, generally represented by liabilities on the consolidated balance sheet and all subject to tax examinations, arise
when the estimated benefit recorded in the financial statements differs from the amounts taken or expected to be taken in a tax return
because of the uncertainties described above. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as
follows:
2018 2017
Balance as of beginning of year $ 896 $ 414
Increases related to prior year tax positions 124 67
Decreases related to prior year tax positions (30) —
Increases related to current year tax positions 218 426
Settlements — —
Lapses of statutes of limitations (5) (11)
Balance as of end of year $ 1,203 $ 896
These unrecognized tax benefits relate primarily to issues common among multinational corporations. If recognized, unrecognized tax
benefits of approximately $1.1 billion would have a net impact on the effective tax rate. We account for interest and penalties related to
uncertain tax positions as part of our provision for income taxes. Accrued interest as of December 31, 2018 and 2017 is approximately
$90 million and $60 million, respectively.
We have recorded changes in the liability for unrecognized tax benefits related to income tax audits, new information, and expirations
of statutes of limitations in various taxing jurisdictions. The liability for unrecognized tax benefits is expected to increase in the next
twelve months relating to operations occurring in that period. Any settlements of examinations with taxing authorities or expirations of
statutes of limitations would likely result in a decrease in our liability for unrecognized tax benefits and a corresponding increase in taxes
paid or payable and/or a decrease in income tax expense. It is reasonably possible that the amount of the liability for unrecognized tax
benefits could change by a significant amount during the next twelve-month period as a result of settlements or expirations of statutes of
limitations. Finalizing examinations with the relevant taxing authorities can include formal administrative and legal proceedings and, as a
result, it is difficult to estimate the timing and range of possible change related to the Company’s unrecognized tax benefits. An estimate
of the range of the possible change cannot be made until issues are further developed or examinations close. Our estimates of tax benefits
and potential tax benefits may not be representative of actual outcomes, and variation from such estimates could materially affect our
financial statements in the period of settlement or when the statutes of limitations expire.
18. Collaboration Agreements

We enter into collaborative arrangements for the research and development, license, manufacture and/or commercialization of products
and/or product candidates. In addition, we also acquire product candidates and research and development technology rights and establish
research and development collaborations with third parties to enhance our strategic position within our industry by strengthening and
diversifying our research and development capabilities, product pipeline and marketed product base. These arrangements may include
non-refundable, upfront payments, payments by us for options to acquire rights to products and product candidates and other rights,
as well as contingent obligations by us for potential development, regulatory and commercial performance milestone payments, cost
sharing arrangements, royalty payments, profit sharing and equity investments (including equity investments in the event of an initial
public offering of equity by our partners). The activities under these collaboration agreements are performed with no guarantee of either
technological or commercial success. Although we do not consider any individual alliance to be material, certain of the more notable
alliances are described below. Summarized financial information for each of our alliances is presented in tabular format after the alliance
description:
Acceleron Pharma (Acceleron):
We have worldwide strategic collaboration agreements with Acceleron for the joint development and commercialization of sotatercept
(ACE-011) and luspatercept (ACE-536). In June and July 2018, Celgene and Acceleron announced that luspatercept achieved all
primary and key secondary endpoints in the phase III MEDALISTTM and BELIEVETM trials in patients with low-to-intermediate risk
myelodysplastic syndromes (MDS) and transfusion-dependent beta-thalassemia, respectively.

On January 1, 2013, we became responsible for the payment of all development costs related to sotatercept and luspatercept and have
recognized development expenses as research and development expense as they were incurred.
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With respect to the sotatercept program, Acceleron is eligible to receive up to $367 million in development, regulatory approval and sales-
based milestones and up to an additional $348 million for each of three specific discovery stage programs. We also agreed to co-promote
the developed products in North America. Acceleron will receive tiered royalties on worldwide net sales upon the commercialization of
a development compound.
With respect to the luspatercept program, we have an exclusive, worldwide, royalty-bearing license to luspatercept and future Acceleron
products for the treatment of anemia. We also agreed to co-promote the products in the United States, Canada and Mexico. Acceleron
is eligible to receive development, regulatory approval and sales-based milestones of up to $218 million for luspatercept and up to
an additional $171 million for the first discovery stage program, $149 million for the second discovery stage program and $125
million for each additional discovery stage program thereafter. Acceleron will receive tiered royalties on worldwide net sales upon the
commercialization of a development compound.
The sotatercept and luspatercept agreements may be terminated by us, at our sole discretion, at any time or by either party, among other
things, upon a material breach by the other party.
In September 2017, we amended and restated the collaboration agreement with Acceleron for the joint development and
commercialization of sotatercept. Under the amended and restated collaboration agreement, Acceleron has the right to fund and conduct
all research and development activities for sotatercept in the pulmonary hypertension field. Should sotatercept be approved for an
indication in the pulmonary hypertension field, Acceleron will be responsible for global commercialization and Celgene will be eligible
to receive royalties on global net sales in that field. The original collaboration deal terms will remain in place with respect to development
and commercialization outside of the pulmonary hypertension field.
Summarized financial information related to Acceleron is presented below:
Years Ended December 31, As of December 31,1

Research and Development Expense
Amortization Equity
Extension/ of Prepaid Investments Intangible Equity
Upfront Termination of Research and Made During Asset Investment Percentage of
Fees Milestones Agreements Development Period Balance Balance Outstanding Equity
2018 $ — $ — $ — $ — $ — $ — $ 268 13.3%
2017 — — — — 28 — 261 13.6%
2016 — 15 — — 32
2015 and
prior 70 45 — — 93
1 Year-end balance and percentage of outstanding equity are presented for the current and prior years.
Agios Pharmaceuticals, Inc. (Agios):
During 2010, we entered into a discovery and development collaboration and license agreement with Agios (2010 Collaboration
Agreement) that focused on cancer metabolism targets and the discovery, development and commercialization of associated therapeutics.
With respect to each product that we choose to license, Agios could receive up to approximately $120 million upon achievement
of certain milestones and other payments plus royalties on worldwide sales, and Agios may also participate in the development and
commercialization of certain products in the United States.
In June 2014, we exercised our option to license AG-221 (enasidenib), now IDHIFA®, from Agios on an exclusive worldwide basis, with
Agios retaining the right to conduct a portion of commercialization activities for enasidenib in the United States. Enasidenib is currently
in a phase III study in patients that present an isocitrate dehydrogenase-2 (IDH2) mutation in relapsed refractory acute myeloid leukemia
(rrAML). A New Drug Application (NDA) was submitted to the U.S. Food and Drug Administration (FDA) in the fourth quarter of 2016
based on phase I/II data generated in the rrAML population. IDHIFA® was approved in August 2017 for the treatment of adult patients
with relapsed or refractory acute myeloid leukemia with an isocitrate dehydrogenase (IDH2) detected by and FDA-approved companion
diagnostic.

In January 2015, we exercised our option to an exclusive license from Agios to AG-120, an orally available, selective inhibitor of the
mutated isocitrate dehydrogenase-1 (IDH1) protein for the treatment of patients with cancers that harbor an IDH1 mutation, outside the
United States, with Agios retaining the right to conduct development and commercialization within the United States. In May 2016, we
agreed to return to Agios the AG-120 lead development candidate. As a result, Agios obtained global rights to
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AG-120 and the IDH1 program. Neither Agios nor Celgene have any continuing financial obligation, including royalties or milestone
payments, to the other concerning AG-120 or the IDH1 program.
In April 2015, we and Agios entered into a new joint worldwide development and profit share collaboration for AG-881. AG-881 is a
small molecule that has shown in preclinical studies to fully penetrate the blood brain barrier and inhibit IDH1 and IDH2 mutant cancer
cells. Under the terms of the AG-881 collaboration, Agios is eligible to receive contingent payments of up to $70 million based on the
attainment of specified regulatory goals. We and Agios will jointly collaborate on the worldwide development program for AG-881,
sharing development costs equally. The two companies will share profits equally, with Celgene recording commercial sales worldwide.
Agios will lead commercialization in the U.S. with both companies sharing equally in field-based commercial activities, and we will
lead commercialization ex-U.S. with Agios providing one third of field-based commercial activities in the major European Union (EU)
markets.
In May 2016, we and one of our subsidiaries entered into a new global collaboration agreement with Agios (2016 Collaboration
Agreement), focused on the research and development of immunotherapies against certain metabolic targets that exert their antitumor
efficacy primarily via the immune system. In addition to new programs identified under the 2016 Collaboration Agreement, we and Agios
have also agreed that all future development and commercialization of two programs that were conducted under the 2010 Collaboration
Agreement will now be governed by the 2016 Collaboration Agreement.
During the term of the 2016 Collaboration Agreement, Agios plans to conduct research programs focused on discovering compounds
that are active against metabolic targets in the immuno-oncology (I/O) field. The initial four-year term will expire in May 2020. We may
extend the term for up to two additional one-year terms or in specified cases, up to four additional years.
Under the 2016 Collaboration Agreement, Agios has granted us exclusive options to obtain development and commercialization rights
for each program that we have designated for further development. We may exercise each such option beginning on the designation of
a development candidate for such program (or on the designation of such program as a continuation program) and ending on the earlier
of the end of a specified period after Agios has furnished us with specified information for such program, or January 1, 2030. Programs
that have applications in the inflammation or autoimmune (I&I) field that may result from the 2016 Collaboration Agreement will also
be subject to the exclusive options described above.
In September 2018, we terminated our joint worldwide development and profit share collaboration with Agios for AG-881 entered
into during 2015. Our 2016 collaboration agreement with Agios remains in effect, which focuses on the research and development of
immunotherapies against certain metabolic targets that exert their antitumor efficacy primarily via the immune system. We have retained
our equity interest in Agios and exclusive license to IDHIFA® (enasidenib).
Summarized financial information related to Agios is presented below:

Amortization of Equity
Extension/ Prepaid Investments Intangible Equity
Termination of Research and Made During Asset Investment Percentage of
Upfront Fees Milestones Agreements Development Period Balance Balance Outstanding Equity
2018 $ — $ 15 $ — $ — $ 57 $ — $ 310 11.5%
2017 8 — — — 31 — 335 12.0%
2016 200 25 — 1 —
2015 and
prior 130 — 60 — 89
BeiGene, Ltd. (BeiGene):
On July 5, 2017, we entered into a strategic collaboration to develop and commercialize BeiGene’s investigational anti-programmed cell
death protein-1 (PD-1) inhibitor, BGB-A317, for patients with solid tumor cancers in the United States, Europe, Japan and the rest of the
world outside of Asia. BeiGene will retain exclusive rights for the development and commercialization of BGB-A317 for hematological

malignancies globally and for solid tumors in Asia (with the exception of Japan). BeiGene acquired our commercial operations in China
and gained an exclusive license to commercialize our approved therapies in China - ABRAXANE®, REVLIMID® and VIDAZA®. See
Note 3 for additional details related to the divestiture of Celgene China. In addition, BeiGene was granted licensing rights in China to
CC-122, under the same terms and conditions as our approved commercial products.
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CC-122 is a next generation CELMoD® agent currently in development by us for relapsed / refractory multiple myeloma, lymphoma and
hepatocellular carcinoma. This transaction closed on August 31, 2017.
The license arrangement will expire in its entirety on the later of (a) expiration of the last valid claim that covers the composition of
matter or method of use of the last licensed product, (b) expiration of regulatory exclusivity for the last licensed product or (c) twelve
years after the first commercial sale of the last licensed product.
The license agreement may be terminated by us, at our sole discretion, or by either party, among other things upon material breach by the
other party. The supply arrangement has an initial term of ten years, which can be extended upon the mutual agreement of both parties.
Summarized financial information related to BeiGene is presented below:

Amortization Equity
Extension/ of Prepaid Investments Intangible Equity Percentage of
Termination of Research and Made During Asset Investment Outstanding
Upfront Fees Milestones Agreements Development Period Balance Balance Equity
2018 $ — $ — $ — $ — $ — $ — $ 353 4.2%
2017 268 — — — 174 — 246 5.5%
bluebird bio, Inc. (bluebird):
In June 2015, we amended and restated the March 2013 collaboration agreement with bluebird. The amended and restated collaboration
focuses on the discovery, development and commercialization of novel disease-altering gene therapy product candidates targeting BCMA.
BCMA is a cell surface protein that is expressed in normal plasma cells and in most multiple myeloma cells, but is absent from other
normal tissues. The collaboration applies gene therapy technology to modify a patient’s own T cells, known as CAR T cells, to target and
destroy cancer cells that express BCMA. Under the amended and restated agreement, Celgene had an option to license any anti-BCMA
products resulting from the collaboration after the completion of a phase I clinical study by bluebird.
Under the amended and restated collaboration agreement bluebird developed the lead anti-BCMA product candidate (bb2121) through a
phase I clinical study and will develop next-generation anti-BCMA product candidates. The payment was recorded as prepaid research
and development on the balance sheet and was being recognized as expense as development work is performed. Upon exercising our
option to license a product and achievement of certain milestones, we may be obligated to pay up to $230 million per licensed product
in aggregate potential option fees and clinical and regulatory milestone payments. bluebird also has the option to participate in the
development and commercialization of any licensed products resulting from the collaboration through a 50/50 co-development and profit
share in the United States in exchange for a reduction of milestone payments. Royalties would also be paid to bluebird in regions where
there is no profit share, including in the United States, if bluebird declines to exercise their co-development and profit sharing rights. In
February 2016, we exercised our option to license bb2121. In March 2018, bluebird exercised their co-development and profit sharing
rights and we entered into a 50/50 co-development and profit share agreement in the United States for bb2121. Bluebird will receive
milestones and royalties on ex-US net sales upon the commercialization of bb2121. In September 2017, we exercised our option to license
bb21217 and entered into a license agreement for this product candidate. Bluebird has the option to enter into a 50/50 co-development
and profit share in the United States for bb21217.
After the eighteen month anniversaries of the agreements' effective dates, we have the ability to terminate the bb2121 50/50 co-
development and profit share and the bb21217 license at our discretion upon 180 days written notice to bluebird. If a product was optioned
under the amended and restated agreement, the parties entered into a pre-negotiated license agreement and, potentially, a co-development
agreement (if bluebird exercised its option to participate in the development and commercialization in the United States). The license
agreement, if not terminated sooner, would expire upon the expiration of all applicable royalty terms under the agreement with respect
to the particular product, and the co-development agreement, if not terminated sooner, would expire when the product is no longer being
developed or commercialized in the United States. Upon the expiration of a particular license agreement, we will have a fully paid-up,
royalty-free license to use bluebird intellectual property to manufacture, market, use and sell such licensed product. As of December 31,

2018, we have entered into two such license agreements with bluebird for bb2121 and bb21217, and bluebird has exercised its option to
participate in the development and commercialization in the United States for bb2121.
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Summarized financial information related to bluebird is presented below:

Extension/ Amortization of Equity
Termination Prepaid Investments Intangible Equity Percentage of
Upfront of Research and Made During Asset Investment Outstanding
Fees Milestones Agreements Development Period Balance Balance Equity
2018 $ — $ — $ — $ 3 $ — $ — $ 95 1.9%
2017 15 — — 8 37 4 171 1.9%
2016 10 — — 8 50
2015 and prior 75 — — 5 —
FORMA Therapeutics Holdings LLC (FORMA):
In April 2013, we entered into a collaboration agreement with FORMA to discover, develop and commercialize product candidates
to regulate protein homeostasis targets. Protein homeostasis, which is important in oncology, neurodegenerative and other disorders,
involves a tightly regulated network of pathways controlling the biogenesis, folding, transport and degradation of proteins.
The collaboration enables us to evaluate selected targets and lead assets in protein homeostasis pathways during the pre-clinical phase.
Based on such evaluation, we have the right to obtain exclusive licenses with respect to the development and commercialization
of multiple product candidates outside of the United States, in exchange for research and early development payments of up to
approximately $200 million to FORMA. Under the terms of the collaboration agreement, FORMA is incentivized to advance the full
complement of product candidates through phase I, while Celgene is responsible for all further global clinical development for each
licensed candidate. FORMA is eligible to receive up to an additional $315 million in potential payments based upon development,
regulatory and sales objectives for the first ex-U.S. license. FORMA is also eligible to receive potential payments for successive licenses,
which escalate for productivity, increasing up to a maximum of an additional $430 million per program. In addition, FORMA will
receive royalties on ex-U.S. sales and additional payments if multiple product candidates reach defined cumulative sales objectives. The
collaboration agreement includes provisions for Celgene to obtain rights with respect to development and commercialization of product
candidates inside the United States in exchange for additional payments.
Under the collaboration, the parties perform initial research and development for a term of four years. If, during such research term, a
product candidate meets certain criteria, then the parties enter into a pre-negotiated license agreement and the collaboration continues
until all license agreements have expired and all applicable royalty terms under the collaboration with respect to the particular products
have expired. Each license agreement, if not terminated sooner, expires upon the expiration of all applicable royalty terms under such
agreement. Upon the expiration of each license agreement, we will have an exclusive, fully-paid, royalty-free license to use the applicable
FORMA intellectual property to manufacture, market, use and sell the product developed under such agreement outside of the United
States.
On March 21, 2014, we entered into a second collaboration arrangement with FORMA (March 2014 Collaboration), pursuant to which
FORMA granted us an option to license the rights to select current and future FORMA product candidates during a term of three and
one-half years. In addition, with respect to each licensed product candidate, we have the obligation to pay designated amounts when
certain development, regulatory and sales milestone events occur, with such amounts being variable and contingent on various factors.
With respect to each licensed product candidate, we will assume responsibility for all global development activities and costs after
completion of phase I clinical trials. FORMA will retain U.S. rights to all such licensed assets, including responsibility for manufacturing
and commercialization.
During July 2017, we entered into the first of the two additional collaborations. FORMA granted us an option to license the worldwide
rights (except the U.S.) to select current and future product candidates for the next two years and three months (or through October 1,
2019). In addition, with respect to each licensed product candidate, we have the same rights and obligations as under the March 2014
Collaboration.

If we had exercised our option to enter into an additional collaboration pursuant to the March 2014 Collaboration, we would have received
an exclusive option to acquire FORMA, including the U.S. rights to all licensed product candidates, and worldwide rights to other wholly-
owned assets within FORMA at that time.
On December 28, 2018, we and FORMA mutually terminated our 2013 and 2014 collaboration arrangements resulting in the termination
of all research and development programs conducted under the two collaborations including all license agreements
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entered into under the two collaborations (the Termination Date). Celgene concurrently entered into a worldwide license agreement for
FT-1101 (a program which Celgene held EU license rights to prior to the Termination Date) and a worldwide license agreement for an
undisclosed target (an early stage program which Celgene did not have right to prior to the Termination Date). Under the arrangement,
Celgene will pay FORMA a total of $78 million in cash, of which $66 million relates to termination and expanded rights to the existing
FT-1101 program and $12 million related to an upfront fee for the early stage undisclosed target. FORMA is eligible to receive up to
an additional $305 million in potential payments and royalties based upon development, regulatory and sales objectives for the FT-1101
program and for the undisclosed target.
Summarized financial information related to FORMA is presented below:
Years Ended December 31, As of December 31,

Termination Prepaid Research Investments Intangible Equity Percentage of
of and Made During Asset Investment Outstanding
Upfront Fees Milestones Agreements Development Period Balance Balance Equity
2018 $ 12 $ — $ 66 $ — $ — $ — n/a n/a
2017 246 25 — — — — n/a n/a
2016 71 — — — —
2015 and prior 337 — — — —
Jounce Therapeutics, Inc. (Jounce):
In July 2016, we entered into a collaboration agreement with Jounce for the development and commercialization of immunotherapies
for cancer, including Jounce’s lead product candidate, JTX-2011, targeting ICOS (the Inducible T cell CO-Stimulator), up to four early
stage programs to be selected from a defined pool of B cell, T regulatory cell and tumor-associated macrophage targets emerging from
Jounce’s research platform, and a Jounce checkpoint immuno-oncology program. Under the terms of the collaboration agreement Jounce
is eligible to receive regulatory, development and net sales milestone payments.
We have the right to opt into the collaboration programs at defined stages of development. Following opt-in, the parties will share U.S.
profits and losses on the collaboration programs as follows: (a) Jounce will retain a 60% U.S. profit share of JTX-2011, with 40%
allocated to us; (b) Jounce will retain a 25% U.S. profit share on the first additional program, with 75% allocated to us; and (c) the parties
will equally share U.S. profits on up to three additional programs. Also, following opt-in to each of the foregoing programs, we will
receive exclusive ex-U.S. commercialization rights with respect to such program, Jounce will be eligible to receive tiered royalties on
sales outside the United States, and development costs will be shared by the parties in a manner that is commensurate with their respective
product rights under such program. The parties will equally share global profits from the checkpoint program.
The collaboration agreement has an initial term of four years, which may be extended up to three additional years. If the parties enter into
any pre-negotiated license or co-commercialization agreement during the initial term, the collaboration agreement will continue until all
such license and co-commercialization agreements have expired. The collaboration agreement may be terminated at our discretion upon
120 days prior written notice to Jounce and by either party upon material breach of the other party, subject to cure periods.
Summarized financial information related to Jounce is presented below:

Termination Prepaid Investments Intangible Equity Percentage of
Upfront of Research and Made During Asset Investment Outstanding
2018 $ — $ — $ — $ — $ — $ — $ 12 10.7%
2017 — — — — 10 — 44 10.7%
2016 238 — — — 24

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Lycera Corp. (Lycera):
In June 2018, our collaboration and option agreement with Lycera expired. As a result, we do not have an exclusive right to acquire
Lycera. We have retained our equity interest in Lycera, an exclusive license for Lycera’s portfolio of novel ex-vivo RORγ agonist
compounds and an exclusive license for Lycera’s RORγ antagonist compounds. Collaboration related Research and development expense
and intangible asset and equity investment balances related to Lycera are included in Other Collaboration Arrangements below.
Prothena Corporation plc (Prothena):
On March 20, 2018, we entered into a collaboration agreement with Prothena to develop new therapies for a broad range of
neurodegenerative diseases. The collaboration is focused on three proteins implicated in the pathogenesis of several neurodegenerative
diseases, including tau, TDP-43 and an undisclosed target. In addition, we purchased approximately 1.2 million of Prothena's ordinary
shares. We made a total payment of $150 million, which was accounted for as a $40 million equity investment with a readily determinable
fair value and $110 million as upfront collaboration consideration that was expensed immediately as research and development.
For each of the programs, we have an exclusive right to license clinical candidates in the U.S. at the investigational new drug (IND) filing
and if exercised, would also have a right to expand the license to global rights at the completion of Phase 1. Following the exercise of
global rights, we will be responsible for funding all further global clinical development and commercialization. Prothena may receive
future potential exercise payments and regulatory and commercial milestones for each licensed program. Prothena will also receive
additional royalties on net sales of any resulting marketed products.
The collaboration agreement has an initial term of six years, which may be extended up to two additional years. The collaboration
agreement may be terminated at our discretion upon 60 days prior written notice to Prothena and by either party upon material breach of
the other party, subject to cure periods.
Summarized financial information related to Prothena is presented below:
Year Ended December 31, As of December 31,

Equity
Extension/ Amortization of Investments Intangible Equity Percentage of
Upfront Termination of Prepaid Research and Made During Asset Investment Outstanding
Fees Milestones Arrangements Development Period Balance Balance Equity
2018 $ 110 $ — $ — $ — $ 40 $ — $ 12 2.9%
Other Collaboration Arrangements in 2018:
In addition to the collaboration arrangements described above, we entered into collaboration arrangements during 2018 that include the
potential for future milestone payments of up to $825 million related to the attainment of specified developmental, regulatory and sales
milestones over a period of several years. Our obligation to fund these efforts is contingent upon our continued involvement in the
programs and/or the lack of any adverse events which could cause the discontinuance of the programs.
Summarized financial information related to our other collaboration arrangements is presented below:

Extension/ Equity
Termination Amortization of Investments Equity Percentage of
of Prepaid Research Made During Intangible Investment Outstanding
Upfront Fees Milestones Agreements and Development Period Asset Balance Balance Equity
2018 $ 402 $ 10 $ 7 $ 7 $ 26 $ 13 $ 230 n/a
2017 229 10 20 4 43 8 749 n/a
2016 297 36 9 17 64

1 Year-end balance is presented for current year and prior years.
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19. Commitments and Contingencies

Contingent Value Rights: In connection with the acquisition of Abraxis in 2010, Abraxis CVRs were issued under a Contingent Value
Rights Agreement, or Abraxis CVR Agreement, entered into between Celgene and American Stock Transfer & Trust Company, LLC,
as trustee. The Abraxis CVRs are registered for trading on the NASDAQ Global Market under the symbol "CELGZ." The fair value of
the liability of the Company related to payments under the Abraxis CVR Agreement are subject to fluctuation based on trading prices
for the publicly traded Abraxis CVRs. Subsequent to the Abraxis acquisition date, we measured the contingent consideration represented
by the Abraxis CVRs at fair value with changes in fair value recognized in operating earnings. The fair value of our liability related to
the Abraxis CVRs was $19 million and $42 million as of December 31, 2018 and 2017, respectively, which was recorded in Other non-
current liabilities on our Consolidated Balance Sheets.
For each full one-year period ending December 31 during the term of the Abraxis CVR Agreement, which we refer to as a net sales
measuring period, each holder of an Abraxis CVR is entitled to receive a pro rata portion, based on the number of Abraxis CVRs then
outstanding, of net sales related payments, calculated as follows:
• 2.5% of the net sales of ABRAXANE® and the Abraxis pipeline products that exceed $1.0 billion but are less than or equal to
$2.0 billion for such period, plus
• an additional amount equal to 5% of the net sales of ABRAXANE® and the Abraxis pipeline products that exceed $2.0 billion
but are less than or equal to $3.0 billion for such period, plus
• an additional amount equal to 10% of the net sales of ABRAXANE® and the Abraxis pipeline products that exceed $3.0 billion
for such period.
No payments will be due under the Abraxis CVR Agreement with respect to net sales of ABRAXANE® and the Abraxis pipeline products
after December 31, 2025, which we refer to as the net sales payment termination date, unless net sales for the net sales measuring
period ending on December 31, 2025 are equal to or greater than $1.0 billion, in which case the net sales payment termination date
will be extended until the last day of the first net sales measuring period subsequent to December 31, 2025 during which net sales of
ABRAXANE® and the Abraxis pipeline products are less than $1.0 billion or, if earlier, December 31, 2030.
In addition to the above, each holder of an Abraxis CVR was entitled to receive a pro rata portion of two potential contingent milestone
payments. The first contingent milestone payment was not achieved, as the October 2012 FDA approval of ABRAXANE® for use in the
treatment of NSCLC did not result in the use of a marketing label that included a progression-free survival claim. The second contingent
milestone payment was achieved upon the FDA approval of ABRAXANE® for use in the treatment of pancreatic cancer permitting us to
market with a label that included an overall survival claim. This approval resulted in a subsequent payment of $300 million to Abraxis
CVR holders in October 2013.
Leases: We lease offices and research facilities under various operating lease agreements in the United States and international markets
as well as automobiles and certain equipment in these same markets. As of December 31, 2018, the non-cancelable lease terms for the
operating leases expire at various dates between 2019 and 2029 and include renewal options. In general, the Company is also required to
reimburse the lessors for real estate taxes, insurance, utilities, maintenance and other operating costs associated with the leases.
Future minimum lease payments under non-cancelable operating leases as of December 31, 2018 are:
Operating
Leases
2019 $ 92
2020 89
2021 70
2022 59
2023 45
Thereafter 68
Total minimum lease payments $ 423
Total rental expense under operating leases was approximately $113 million in 2018, $69 million in 2017 and $70 million in 2016.

Lines of Credit: We maintain lines of credit with several banks to support our hedging programs and to facilitate the issuance of bank
letters of credit and guarantees on behalf of our subsidiaries. Lines of credit supporting our hedging programs as of December 31, 2018
allowed us to enter into derivative contracts with settlement dates through 2028. As of December 31, 2018,
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we have entered into derivative contracts with net notional amounts totaling $7.4 billion. Lines of credit facilitating the issuance of bank
letters of credit and guarantees as of December 31, 2018 allowed us to have letters of credit and guarantees issued on behalf of our
subsidiaries totaling $168 million.
Other Commitments: Our obligations related to product supply contracts totaled $495 million at December 31, 2018. The non-cancelable
contract terms for product supply expire at various dates between 2019 and 2027 and include renewal options. In addition, we have
committed to invest an aggregate $32 million in investment funds, which are callable at any time.
2017 Tax Act: Under the 2017 Tax Act, a company’s post-1986 previously untaxed foreign Earnings & Profits was mandatorily deemed to
be repatriated and taxed, which is also referred to as the toll charge. We have elected to pay the toll charge in installments over eight years,
or through 2025. However, the toll charge liability is not discounted on our financial statements. As such, we have recorded approximately
$1.2 billion as a non-current income tax liability, included in Income taxes payable on the Consolidated Balance Sheet as of December
31, 2018.
Collaboration Arrangements: We have entered into certain research and development collaboration agreements, as identified in Note 18
above, with third parties that include the funding of certain development, manufacturing and commercialization efforts with the potential
for future milestone and royalty payments upon the achievement of pre-established developmental, regulatory and/or commercial targets.
Our obligation to fund these efforts is contingent upon continued involvement in the programs and/or the lack of any adverse events which
could cause the discontinuance of the programs. Due to the nature of these arrangements, the future potential payments are inherently
uncertain, and accordingly no amounts have been recorded for the potential future achievement of these targets in our accompanying
Consolidated Balance Sheets as of December 31, 2018 and 2017.
Contingencies: We believe we maintain insurance coverage adequate for our current needs. Our operations are subject to environmental
laws and regulations, which impose limitations on the discharge of pollutants into the air and water and establish standards for the
treatment, storage and disposal of solid and hazardous wastes. We review the effects of such laws and regulations on our operations and
modify our operations as appropriate. We believe we are in substantial compliance with all applicable environmental laws and regulations.
We have ongoing customs, duties and value-added tax (VAT) examinations in various countries that have yet to be settled. Based on our
knowledge of the claims and facts and circumstances to date, none of these matters, individually or in the aggregate, are deemed to be
material to our financial condition.
Legal Proceedings:
Like many companies in our industry, we have, from time to time, received inquiries and subpoenas and other types of information
requests from government authorities and others and we have been subject to claims and other actions related to our business activities.
While the ultimate outcome of investigations, inquiries, information requests and legal proceedings is difficult to predict, adverse
resolutions or settlements of those matters may result in, among other things, modification of our business practices, product recalls, costs
and significant payments, which may have a material adverse effect on our results of operations, cash flows or financial condition.
Pending patent proceedings include challenges to the scope, validity and/or enforceability of our patents relating to certain of our
products, uses of products or processes. Further, as certain of our products mature or they near the end of their regulatory exclusivity
periods, it is more likely that we will receive challenges to our patents, and in some jurisdictions we have received such challenges. We
are also subject, from time to time, to claims of third parties that we infringe their patents covering products or processes. Although we
believe we have substantial defenses to these challenges and claims, there can be no assurance as to the outcome of these matters and
an adverse decision in these proceedings could result in one or more of the following: (i) a loss of patent protection, which could lead
to a significant reduction of sales that could materially affect our future results of operations, cash flows or financial condition; (ii) our
inability to continue to engage in certain activities; and (iii) significant liabilities, including payment of damages, royalties and/or license
fees to any such third party.
We record accruals for loss contingencies to the extent that we conclude it is probable that a liability has been incurred and the amount of
the related loss can be reasonably estimated. We evaluate, on a quarterly basis, developments in legal proceedings and other matters that
could cause an increase or decrease in the amount of the liability that has been accrued previously.
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Among the principal matters pending are the following:
Patent-Related Proceedings:
REVLIMID®: In 2012, our European patent EP 1 667 682 (the ’682 patent) relating to certain polymorphic forms of lenalidomide
expiring in 2024 was opposed in a proceeding before the European Patent Office (EPO) by Generics (UK) Ltd. and Teva Pharmaceutical
Industries Ltd. On July 21, 2015, the EPO determined that the ’682 patent was not valid. We appealed the EPO ruling to the EPO Board
of Appeal, thereby staying any revocation of the patent until the appeal is finally adjudicated. No appeal hearing date has been set.
We believe that our patent portfolio for lenalidomide in Europe, including the composition of matter patent, which expires in 2022, is
strong. In the event that we do not prevail on the appeal relating to the ’682 patent, we still expect that we will have protection in the EU
for lenalidomide until at least 2022.
In June 2017, Accord Healthcare Ltd. (Accord) commenced lawsuits against us in the United Kingdom (UK) seeking to revoke our UK
patents protecting REVLIMID®. In June 2018, we entered into a settlement agreement with Accord resolving the lawsuits.
We received a Notice of Allegation dated June 13, 2017 from Dr. Reddy’s Laboratories Ltd. (DRL) notifying us of the filing of DRL’s
Abbreviated New Drug Submission (ANDS) with Canada’s Minister of Health, with respect to Canadian Letters Patent Nos. 2,261,762;
2,476,983; 2,477,301; 2,537,092; 2,687,924; 2,687,927; 2,688,694; 2,688,695; 2,688,708; 2,688,709; 2,741,412 and 2,741,575. DRL is
seeking to manufacture and market a generic version of 5 mg, 10 mg, 15 mg, 20 mg, and 25 mg REVLIMID® (lenalidomide) capsules
in Canada. We commenced a proceeding in the Federal Court of Canada on July 27, 2017, seeking an order prohibiting the Minister of
Health from granting marketing approval to DRL until expiry of these patents.
We received a further Notice of Allegation dated September 20, 2017 from DRL relating to the same submission, but also referencing
2.5 mg REVLIMID® (lenalidomide) capsules. DRL’s Notice of Allegation contains invalidity allegations relating to Canadian Letters
Patent Nos. 2,537,092; 2,687,924; 2,687,927; 2,688,694; 2,688,695; 2,688,708; 2,688,709; 2,741,412 and 2,741,575. We commenced a
proceeding in the Federal Court of Canada on November 2, 2017, seeking an order prohibiting the Minister of Health from granting
marketing approval to DRL until expiry of these patents. The hearings for these proceedings are scheduled for September 23-24, 2019
and September 30-October 3, 2019, respectively.
We received two Notices of Allegation on July 3, 2018 and July 6, 2018 from Natco Pharma (Canada) Inc. (Natco Canada) notifying
us of the filing of Natco Canada’s two separate ANDSs with Canada’s Minister of Health, with respect to Canadian Letters Patent
Nos. 2,476,983; 2,477,301; 2,537,092; 2,687,924; 2,687,927; 2,688,694; 2,688,695; 2,688,708; 2,688,709; 2,741,412 and 2,741,575.
Natco Canada is seeking to manufacture and market a generic version of 2.5 mg, 5 mg, 7.5 mg, 10 mg, 15 mg, 20 mg, and 25 mg
REVLIMID® (lenalidomide) capsules in Canada. We commenced infringement actions in the Federal Court of Canada on August 16,
2018, asserting all the patents, and seeking a declaration of infringement and a permanent injunction. The trial is anticipated to start on
March 30, 2020.
We received four Notices of Allegation on October 4, 2018 from Apotex Inc. (Apotex) notifying us of the filing of Apotex’s ANDS
with Canada’s Minister of Health, with respect to Canadian Letters Patent Nos. 2,476,983; 2,477,301; 2,537,092; 2,687,924; 2,687,927;
2,688,694; 2,688,695; 2,688,708; 2,688,709; 2,741,412 and 2,741,575. Apotex is seeking to manufacture and market a generic version of
2.5 mg, 5 mg, 10 mg, 15 mg, 20 mg, and 25 mg REVLIMID® (lenalidomide) capsules in Canada. We commenced infringement actions in
the Federal Court of Canada on November 15, 2018, asserting all the patents, and seeking a declaration of infringement and a permanent
injunction. The trial is anticipated to start on May 4, 2020.
We received a Notice Letter dated September 9, 2016 from DRL notifying us of its Abbreviated New Drug Application (ANDA) which
contains Paragraph IV certifications against U.S. Patent Nos. 7,465,800; 7,855,217; 7,968,569; 8,530,498; 8,648,095; 9,101,621 and
9,101,622 that are listed in the U.S. Food and Drug Administration (FDA) list of Approved Drug Products with Therapeutic Equivalence
Evaluations, commonly referred to as the Orange Book (Orange Book), for REVLIMID®. DRL is seeking to manufacture and market a
generic version of 2.5 mg, 5 mg, 10 mg, 15 mg, 20 mg, and 25 mg REVLIMID® (lenalidomide) capsules in the United States. In response
to the Notice Letter, we timely filed an infringement action against DRL in the U.S. District Court for the District of New Jersey on
October 20, 2016. As a result of the filing of our action, the FDA cannot grant final approval of DRL’s ANDA until at least the earlier
of (i) a final decision that each of the patents is invalid, unenforceable, and/or not infringed, and (ii) March 12, 2019. On November 18,
2016, DRL filed an answer and counterclaims asserting that each of the patents is invalid and/or not infringed. On December 27, 2016, we

filed our answer to DRL’s counterclaims. Fact discovery is closed. Expert discovery is ongoing. The court has not yet entered a schedule
for trial.
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We received an additional Notice Letter from DRL dated June 8, 2017 notifying us of additional Paragraph IV certifications against U.S.
Patent Nos. 7,189,740; 8,404,717 and 9,056,120 that are listed in the Orange Book for REVLIMID®. In response to that Notice Letter,
we timely filed an infringement action against DRL in the U.S. District Court for the District of New Jersey on July 20, 2017. As a result
of the filing of our action, the FDA cannot grant final approval of DRL’s ANDA until at least the earlier of (i) a final decision that each
of the patents is invalid, unenforceable, and/or not infringed, and (ii) December 9, 2019. On October 18, 2017, DRL filed an amended
answer and counterclaims asserting that each of the patents is invalid and/or not infringed. We filed our answer to DRL’s counterclaims
on November 15, 2017. Fact discovery is set to close on May 31, 2019. The court has not yet entered a schedule for expert discovery or
trial.
We received another Notice Letter from DRL dated February 26, 2018 notifying us of additional Paragraph IV certifications against U.S.
Patent Nos. 6,315,720; 6,561,977; 6,755,784; 8,315,886 and 8,626,531 that are listed in the Orange Book for REVLIMID®. In response
to the Notice Letter, we timely filed an infringement action against DRL in the U.S. District Court for the District of New Jersey on April
12, 2018. As a result of the filing of our action, the FDA cannot grant final approval of DRL’s ANDA until at least the earlier of (i) a
final decision that each of the patents is invalid, unenforceable, and/or not infringed, and (ii) August 27, 2020. DRL filed an amended
answer and counterclaims on May 31, 2018 asserting that each of the patents is invalid and/or not infringed. We filed our answer to DRL’s
counterclaims on June 28, 2018. The case is stayed until July 1, 2019, subject to renewal by agreement of the parties and the court’s
approval of same. The court has not yet entered a schedule for expert discovery or trial.
We received a Notice Letter dated February 27, 2017 from Zydus Pharmaceuticals (USA) Inc. (Zydus) notifying us of Zydus’s ANDA,
which contains Paragraph IV certifications against U.S. Patent Nos. 7,465,800; 7,855,217; 7,968,569; 8,530,498; 8,648,095; 9,101,621
and 9,101,622 that are listed in the Orange Book for REVLIMID®. Zydus is seeking to manufacture and market a generic version of 2.5
mg, 5 mg, 10 mg, 15 mg, 20 mg, and 25 mg REVLIMID® (lenalidomide) capsules in the United States. In response to the Notice Letter,
we timely filed an infringement action against Zydus in the U.S. District Court for the District of New Jersey on April 12, 2017. As a
result of the filing of our action, the FDA cannot grant final approval of Zydus’s ANDA until at least the earlier of (i) a final decision
that each of the patents is invalid, unenforceable, and/or not infringed, and (ii) August 28, 2019. On August 7, 2017, Zydus filed an
answer and counterclaims asserting that each of the patents is invalid and/or not infringed. On September 11, 2017, we filed our answer
to Zydus’s counterclaims. Fact discovery is set to close on May 31, 2019. The court has yet to enter a schedule for expert discovery and
trial.
On April 27, 2018, we filed another infringement action against Zydus in the U.S. District Court for the District of New Jersey. The
patents-in-suit are U.S. Patent Nos. 7,977,357; 8,193,219 and 8,431,598, which are patents that are not listed in the Orange Book. Zydus
filed its answer on July 9, 2018 asserting that each of the patents is invalid and/or not infringed. Fact discovery is set to close on May 31,
2019. The court has yet to enter a schedule for expert discovery and trial.
We received a Notice Letter dated June 30, 2017 from Cipla Ltd., India (Cipla) notifying us of Cipla’s ANDA which contains Paragraph
IV certifications against U.S. Patent Nos. 7,465,800; 7,855,217; 7,968,569; 8,530,498; 8,648,095; 9,101,621 and 9,101,622 that are listed
in the Orange Book for REVLIMID®. Cipla is seeking to manufacture and market a generic version of 5 mg, 10 mg, 15 mg, 20 mg,
and 25 mg REVLIMID® (lenalidomide) capsules in the United States. In response to the Notice Letter, on August 15, 2017, we timely
filed an infringement action against Cipla in the U.S. District Court for the District of New Jersey. As a result of the filing of our action,
the FDA cannot grant final approval of Cipla’s ANDA until at least the earlier of (i) a final decision that each of the patents is invalid,
unenforceable, and/or not infringed, and (ii) January 5, 2020. On October 13, 2017, Cipla filed an answer and counterclaims asserting that
each of the patents is invalid and/or not infringed. We filed our answer to Cipla’s counterclaims on November 17, 2017. Fact discovery is
set to close on May 31, 2019. The court has yet to enter a schedule for expert discovery and trial.
On May 8, 2018, we filed another infringement action against Cipla in the U.S. District Court for the District of New Jersey. The patents-
in-suit are U.S. Patent Nos. 7,977,357; 8,193,219 and 8,431,598, which are patents that are not listed in the Orange Book. Cipla filed
its answer and counterclaims on July 16, 2018 asserting that each of the patents is invalid and/or not infringed. We filed our answer to
Cipla’s counterclaims on August 20, 2018. Fact discovery is set to close on May 31, 2019. The court has yet to enter a schedule for expert
discovery and trial.
We received a Notice Letter dated July 24, 2017 from Lotus Pharmaceutical Co., Inc. (Lotus) notifying us of Lotus’s ANDA which
contains Paragraph IV certifications against U.S. Patent Nos. 5,635,517; 6,315,720; 6,561,977; 6,755,784; 7,189,740; 7,465,800;
7,855,217; 7,968,569; 8,315,886; 8,404,717; 8,530,498; 8,626,531; 8,648,095; 9,056,120; 9,101,621 and 9,101,622 that are listed in the
Orange Book for REVLIMID®. Lotus is seeking to manufacture and market a generic version of 2.5 mg, 5 mg, 10 mg, 15 mg, 20 mg,
and 25 mg REVLIMID® (lenalidomide) capsules in the United States. In response to the Notice Letter, we timely filed an infringement

action against Lotus in the U.S. District Court for the District of New Jersey on September 6, 2017. As a result of the filing of our action,
the FDA cannot grant final approval of Lotus’s ANDA until at least the earlier of (i) a final decision that each of the patents is invalid,
unenforceable, and/or not infringed, and (ii) January 25, 2020. On October 5, 2017, Lotus filed
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an answer and counterclaims asserting that each of the patents is invalid and/or not infringed. We filed our answer to Lotus’s
counterclaims on November 9, 2017. Fact discovery is set to close on May 31, 2019. The court has yet to enter a schedule for expert
On July 10, 2018, we filed another infringement action against Lotus in the U.S. District Court for the District of New Jersey. The patents-
in-suit are U.S. Patent Nos. 7,977,357; 8,193,219 and 8,431,598, which are patents that are not listed in the Orange Book. Lotus filed
its answer and counterclaims on July 18, 2018 asserting that each of the patents is invalid and/or not infringed. We filed our answer to
Lotus’s counterclaims on August 22, 2018. Fact discovery is set to close on May 31, 2019. The court has yet to enter a schedule for expert
We received a Notice Letter dated November 28, 2017 from Apotex Inc. (Apotex) notifying us of Apotex’s ANDA, which contains
Paragraph IV certifications against U.S. Patent Nos. 6,315,720; 6,561,977; 6,755,784; 7,465,800; 7,468,363; 7,855,217; 8,315,886;
8,626,531 and 8,741,929 that are listed in the Orange Book for REVLIMID®. Apotex is seeking to manufacture and market a generic
version of 2.5 mg, 5 mg, 10 mg, 15 mg, 20 mg, and 25 mg REVLIMID® (lenalidomide) capsules in the United States. In response to the
Notice Letter, we timely filed an infringement action against Apotex in the U.S. District Court for the District of New Jersey on January
11, 2018. As a result of the filing of our action, the FDA cannot grant final approval of Apotex’s ANDA until at least the earlier of (i)
a final decision that each of the patents is invalid, unenforceable, and/or not infringed, and (ii) May 29, 2020. On April 2, 2018, Apotex
responded to the complaint by filing a motion to dismiss the case for failure to join a necessary party. We filed our response on May 21,
2018. Apotex filed its reply brief on June 11, 2018. On August 15, 2018, the parties submitted a proposed stipulation resolving the motion
to dismiss. The court ordered the stipulation and the motion was terminated as moot. Apotex filed its answer on August 30, 2018. Fact
discovery is set to close on January 17, 2020. The court has yet to enter a schedule for expert discovery and trial.
We received a Notice Letter dated May 30, 2018 from Sun Pharmaceutical Industries Limited (Sun) notifying us of Sun’s ANDA, which
contains Paragraph IV certifications against U.S. Patent Nos. 7,465,800; 7,855,217 and 7,968,569 that are listed in the Orange Book
for REVLIMID®. Sun is seeking to manufacture and market a generic version of 2.5 mg, 5 mg, 10 mg, 15 mg, 20 mg, and 25 mg
REVLIMID® (lenalidomide) capsules in the United States. In response to the Notice Letter, we timely filed an infringement action against
Sun in the U.S. District Court for the District of New Jersey on July 13, 2018. As a result of the filing of our action, the FDA cannot grant
final approval of Sun’s ANDA until at least the earlier of (i) a final decision that each of the patents is invalid, unenforceable, and/or not
infringed, or (ii) November 30, 2020. On August 14, 2018, Sun filed an answer and counterclaims asserting that each of the patents is
invalid and/or not infringed. We filed our answer to Sun’s counterclaims on September 18, 2018. Fact discovery is set to close on January
17, 2020. The court has yet to enter a schedule for expert discovery and trial.
We received a Notice Letter dated November 9, 2018 from Hetero USA Inc. (Hetero) notifying us of Hetero’s ANDA, which contains
Paragraph IV certifications against U.S. Patent Nos. 7,465,800; 7,855,217; 7,468,363; and 8,741,929 that are listed in the Orange Book
for REVLIMID®. Hetero is seeking to manufacture and market a generic version of 2.5 mg, 5 mg, 10 mg, 15 mg, 20 mg, and 25 mg
REVLIMID® (lenalidomide) capsules in the United States. In response to the Notice Letter, we timely filed an infringement action
against Hetero in the U.S. District Court for the District of New Jersey on December 20, 2018. As a result of the filing of our action,
the FDA cannot grant final approval of Hetero’s ANDA until at least the earlier of (i) a final decision that each of the patents is invalid,
unenforceable, and/or not infringed, or (ii) May 12, 2021. Hetero has not yet responded to the complaint.
POMALYST®: We received a Notice Letter dated March 30, 2017 from Teva Pharmaceuticals USA, Inc. (Teva) (the Teva Notice Letter)
notifying us of Teva’s ANDA submitted to the FDA, which contains Paragraph IV certifications against U.S. Patent Nos. 6,316,471;
8,198,262; 8,673,939; 8,735,428 and 8,828,427 that are listed in the Orange Book for POMALYST®. Teva is seeking to manufacture
and market a generic version of 1 mg, 2 mg, 3 mg, and 4 mg POMALYST® (pomalidomide) capsules in the United States. We
later received similar Notice Letters (together with the Teva Notice Letter, the Pomalidomide Notice Letters) from other generic drug
manufacturers—Apotex; Hetero USA, Inc. (Hetero); Aurobindo Pharma Ltd. (Aurobindo); Mylan Pharmaceuticals Inc. (Mylan); and
Breckenridge Pharmaceutical, Inc. (Breckenridge)—relating to these and other POMALYST® patents listed in the Orange Book. In May
2018, we received a similar Notice Letter from Synthon Pharmaceuticals Inc. (the Synthon Notice Letter).
In response to the Pomalidomide Notice Letters, we timely filed infringement actions in the U.S. District Court for the District of New
Jersey against Teva on May 4, 2017 and against Apotex, Hetero, Aurobindo, Mylan, and Breckenridge on May 11, 2017. As a result of
the filing of our actions, the FDA cannot grant final approval of these ANDAs until at least the earlier of (i) a final decision that each of
the patents is invalid, unenforceable, and/or not infringed, and (ii) August 8, 2020.

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On July 13, 2017, Apotex and Hetero each filed answers and counterclaims asserting that each of the patents is invalid and/or not
infringed, and further seeking declaratory judgments of noninfringement and invalidity for additional patents listed in the Orange Book
for POMALYST®, namely U.S. Patent Nos. 6,315,720; 6,561,977; 6,755,784; 8,315,886 and 8,626,531. On August 17, 2017, we filed
replies to Apotex’s and Hetero’s counterclaims, as well as counter-counterclaims against Apotex and Hetero asserting infringement of
U.S. Patent Nos. 6,315,720; 6,561,977; 6,755,784; 8,315,886 and 8,626,531. Apotex and Hetero filed replies to our counter-counterclaims
on September 6 and September 8, 2017, respectively.
On July 31, 2017, Breckenridge filed an answer and counterclaims asserting that each of the patents is invalid and/or not infringed.
We filed our answer to Breckenridge’s counterclaims on September 5, 2017. On December 6, 2017, Breckenridge filed an amended
pleading to include counterclaims seeking declaratory judgments of noninfringement and invalidity for additional patents listed in the
Orange Book for POMALYST®, namely U.S. Patent Nos. 6,315,720; 6,561,977; 6,755,784; 8,315,886 and 8,626,531. We replied to
Breckenridge’s amended counterclaims and asserted counter-counterclaims on January 3, 2018. Breckenridge filed its answer to our
counter-counterclaims on January 24, 2018.
On August 7, 2017, Teva filed an answer and counterclaims asserting that each of the patents is invalid and/or not infringed. On
September 11, 2017, we filed our answer to Teva’s counterclaims.
On August 9, 2017, Mylan filed a motion to dismiss the complaint, and on March 2, 2018, the court denied Mylan’s motion to dismiss
without prejudice and granted our request for venue-related discovery.
On September 15, 2017, Aurobindo filed an answer and counterclaims asserting that each of the patents is invalid and/or not infringed,
and further seeking declaratory judgments of noninfringement and invalidity for additional patents listed in the Orange Book for
POMALYST®, namely U.S. Patent Nos. 6,315,720; 6,561,977; 6,755,784; 8,315,886 and 8,626,531. We filed our answer to Aurobindo’s
counterclaims and counter-counterclaims concerning U.S. Patent Nos. 6,315,720; 6,561,977; 6,755,784; 8,315,886 and 8,626,531 on
October 20, 2017. Aurobindo filed its answer to our counter-counterclaims on November 24, 2017.
In response to the Synthon Notice Letter, we timely filed an infringement action against Synthon in the U.S. District Court for the District
of New Jersey on June 19, 2018. As a result of the filing of our actions, the FDA cannot grant final approval of Synthon’s ANDA until at
least the earlier of (i) a final decision that each of the patents is invalid, unenforceable, and/or not infringed, and (ii) November 7, 2020.
On July 16, 2018, Synthon filed an answer and counterclaims asserting that each of the patents asserted in the complaint is invalid and/
or not infringed. On August 20, 2018, we filed our answer to Synthon’s counterclaims. We received a notice letter dated October 5, 2018
from Synthon notifying us of an additional Paragraph IV certification against U.S. Patent No. 9,993,467 that is listed in the Orange Book
for POMALYST®. In response to the Notice Letter, we timely filed an amended complaint against Synthon on November 20, 2018. On
December 4, 2018, Synthon filed an answer and counterclaims asserting that each of the patents in the amended complaint is invalid and/
or not infringed. On January 2, 2019, we filed our answer to Synthon’s counterclaims. Fact discovery is scheduled to close on January
10, 2020 and expert discovery is scheduled to close on August 7, 2020. Trial has not been scheduled.
We received a Notice Letter dated August 7, 2018 from Hetero notifying us of an additional Paragraph IV certification against U.S. Patent
No. 9,993,467 that is listed in the Orange Book for POMALYST®. In response to the Notice Letter, we timely filed an infringement action
against Hetero in the U.S. District Court for the District of New Jersey on September 20, 2018 (“the Hetero ’467 Action”). On November
30, 2018, Hetero filed its Answer, Affirmative Defenses, and Counterclaims. We filed our answer to Hetero’s counterclaims on January
4, 2019.
We received a Notice Letter dated August 13, 2018 from Teva notifying us of an additional Paragraph IV certification against U.S. Patent
No. 9,993,467 that is listed in the Orange Book for POMALYST®. In response to the Notice Letter, we timely filed an infringement action
against Teva in the U.S. District Court for the District of New Jersey on September 27, 2018 (“the Teva ’467 Action”). On November 14,
2018, Teva filed its Answer, Affirmative Defenses, and Counterclaims. We filed our answer to Teva’s counterclaims on December 18,
2018.
We received a Notice Letter dated August 22, 2018 from Breckenridge notifying us of an additional Paragraph IV certification against
U.S. Patent No. 9,993,467 that is listed in the Orange Book for POMALYST®. In response to the Notice Letter, we timely filed an
infringement action against Breckenridge in the U.S. District Court for the District of New Jersey on October 5, 2018 (“the Breckenridge
’467 Action”). On November 7, 2018, Breckenridge filed its Answer, Affirmative Defenses, and Counterclaims. We filed our answer to
Breckenridge’s counterclaims on December 12, 2018.

We received a Notice Letter dated September 28, 2018 from Mylan notifying us of an additional Paragraph IV certification against U.S.
Patent No. 9,993,467 that is listed in the Orange Book for POMALYST®. In response to the Notice Letter, we timely filed
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an infringement action against Mylan in the U.S. District Court for the District of New Jersey on November 9, 2018 (“the Mylan ’467
Action”). On January 22, 2019, Mylan filed its Answer.
We received a Notice Letter dated October 9, 2018 from Apotex notifying us of an additional Paragraph IV certification against U.S.
Patent No. 9,993,467 that is listed in the Orange Book for POMALYST®. In response to the Notice Letter, we timely filed an infringement
action against Apotex in the U.S. District Court for the District of New Jersey on November 21, 2018 (“the Apotex ’467 Action”). On
December 12, 2018, Apotex filed its Answer, Affirmative Defenses, and Counterclaims. We filed our answer to Apotex’s counterclaims
on January 16, 2019.
We received a Notice Letter dated November 30, 2018 from Aurobindo notifying us of an additional Paragraph IV certification against
U.S. Patent No. 9,993,467 that is listed in the Orange Book for POMALYST®. In response to the Notice Letter, we timely filed an
infringement action against Aurobindo in the U.S. District Court for the District of New Jersey on January 4, 2019 (“the Aurobindo
’467 Action”). On January 18, 2019, Aurobindo filed its Answer, Affirmative Defenses, and Counterclaims. We filed our answer to
Aurobindo's counterclaims on February 22, 2019.
On January 31, 2019, the above-referenced POMALYST® actions filed in May 2017 against (i) Teva and (ii) Apotex, Hetero, Aurobindo,
Mylan, and Breckenridge were consolidated with the Hetero ’467 Action, the Teva ’467 Action, the Breckenridge ’467 Action, the Mylan
’467 Action, the Apotex ’467 Action, and the Aurobindo ’467 Action. In the consolidated case, fact discovery is set to close on July 12,
2019, and expert discovery is set to close on January 17, 2020. The court has yet to enter a schedule for trial.
On February 14, 2019, we filed additional infringement actions in the U.S. District Court for the District of New Jersey against each of
Apotex, Aurobindo, Breckenridge, Hetero, and Mylan. The patents-in-suit are 10,093,647, 10,093,648, and 10,093,649, which patents
are not listed in the Orange Book. As of February 22, 2019, none of these defendants had responded to the Complaint.
ABRAXANE®: We received a Notice Letter dated February 23, 2016 from Actavis LLC (Actavis) notifying us of Actavis’s ANDA which
contains Paragraph IV certifications against U.S. Patent Nos. 7,820,788; 7,923,536; 8,138,229 and 8,853,260 that are listed in the Orange
Book for ABRAXANE®. We then received a Notice Letter dated October 25, 2016 from Cipla notifying us of Cipla’s ANDA, which
contains Paragraph IV certifications against the same four patents for ABRAXANE®. Actavis and Cipla are each seeking to manufacture
and market a generic version of ABRAXANE® 100 mg/vial.
On April 6, 2016, we filed an infringement action against Actavis in the U.S. District Court for the District of New Jersey. We entered into
a settlement with Actavis, effective January 23, 2018, to terminate that patent litigation and Inter Partes Review (IPR) challenges between
the parties relating to certain patents for ABRAXANE®. As part of the settlement, the parties filed a Consent Judgment with the U.S.
District Court for the District of New Jersey, which was entered on January 26, 2018, enjoining Actavis from marketing generic paclitaxel
protein-bound particles for injectable suspension before expiration of the patents-in-suit, except as provided for in the settlement. In the
settlement, we agreed to provide Actavis with a license to our patents required to manufacture and sell a generic paclitaxel protein-bound
particles for injectable suspension product in the United States beginning on March 31, 2022.
On December 7, 2016, we filed an infringement action against Cipla in the U.S. District Court for the District of New Jersey. As a result
of the filing of our action, the FDA cannot grant final approval of Cipla’s ANDA until at least the earlier of (i) a final decision that each
of the patents is invalid, unenforceable, and/or not infringed, and (ii) April 25, 2019. On January 20, 2017, Cipla filed an answer and
counterclaims asserting that each of the patents is invalid and/or not infringed. Our answer was filed on February 24, 2017. In September
2018, we entered into a settlement with Cipla to terminate this patent litigation. As part of the settlement, the parties filed a Consent
Judgment with the U.S. District Court for the District of New Jersey, which was entered on October 9, 2018, enjoining Cipla from
marketing generic paclitaxel protein-bound particles for injectable suspension before expiration of the patents-in-suit, except as provided
for in the settlement. In the settlement, we agreed to provide Cipla with a license to our patents required to manufacture and sell a generic
paclitaxel protein-bound particles for injectable suspension product in the United States beginning on September 27, 2022.
On January 13, 2017, the UK High Court of Justice handed down a ruling after a hearing held on December 20, 2016 in which we
argued that the UK Intellectual Property Office improperly rejected our request for a Supplemental Protection Certificate (SPC) to the
ABRAXANE® patent UK No. 0 961 612 (the ’612 patent). In that ruling, the High Court referred the matter to the Court of Justice for
the EU (CJEU). A hearing was held at the CJEU on June 21, 2018. On December 13, 2018, we received the opinion of the Advocate
General that urged the Court to reject Celgene’s request for an SPC. This opinion is not binding on the CJEU. We expect a decision from
the CJEU in early 2019. If the CJEU were to find in our favor, the ruling would need to be implemented in other jurisdictions in which
the proceedings are pending, potentially resulting in the grant of SPCs not only in the UK, but also

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in other jurisdictions that have previously rejected our initial request including Germany and Ireland. The ’612 patent expired in Europe
in September 2017. However, if granted, the SPCs will expire in 2022. Data exclusivity in Europe expired in January 2019.
We received a Notice of Allegation (NOA) dated March 22, 2018 from Panacea Biotec Ltd. (Panacea) notifying us of the filing of
Panacea’s ANDS with Canada’s Minister of Health, with respect to Canadian Letters Patent No. 2,509,365 (the ’365 patent). Panacea
is seeking to manufacture and market a generic version of 100 mg/vial ABRAXANE® (paclitaxel powder for injectable suspension,
nanoparticle, albumin-bound (nab®) paclitaxel) in Canada. On May 4, 2018, our subsidiaries, Abraxis BioScience, LLC and Celgene Inc.
commenced an action for patent infringement in the Federal Court of Canada seeking, among other relief, a declaration of infringement
in relation to the ’365 patent.
In June 2018, we settled certain patent disputes with Apotex involving ABRAXANE® that were triggered by Apotex filing an ANDA
in the United States, IPR patent challenges before the U.S. Patent Office (see below), and the aforementioned NOA filed by Apotex’s
marketing partner, Panacea. In addition to dismissing the patent proceedings, in the settlement we agreed to provide Apotex with a license
to our patents required to manufacture and sell a generic paclitaxel protein-bound particles for injectable suspension product in the United
States beginning on September 27, 2022, and in certain countries outside of the United States, including Canada, beginning on a later
date.
We received a Notice Letter dated November 5, 2018 from HBT Labs, Inc. (HBT) notifying us of HBT’s 505(b)(2) NDA which contains
Paragraph IV certifications against U.S. Patent Nos. 7,758,891; 7,820,788; 7,923,536; 8,034,375; 8,138,229; 8,268,348; 8,314,156;
8,853,260; 9,101,543; 9,393,318; 9,511,046 and 9,597,409 that are listed in the Orange Book for ABRAXANE®. HBT is seeking to
manufacture and market Paclitaxel Protein-Bound Particles for Injectable Suspension (Albumin-Bound), 100 mg/vial in the United States.
In response to the Notice letter, we timely filed infringement actions against HBT in the U.S. District Court for the District of New Jersey
on December 17, 2018, and in the U.S. District Court for the District of Delaware on December 19, 2018. As a result of these filings, the
FDA cannot grant final approval of HBT’s 505(b)(2) NDA until at least the earlier of (i) a final decision that each of the patents is invalid,
unenforceable, and/or not infringed, or (ii) May 6, 2021. On February 5, 2019, we filed a notice of voluntary dismissal without prejudice
in the United States District Court for the District of New Jersey. The court ordered the notice of voluntary dismissal on February 7, 2019.
On February 11, 2019, HBT filed a motion to dismiss and transfer in the United States District Court for the District of Delaware.
OTEZLA®: We received Notice Letters from each of the following company groups (individual or joint) between May 14, 2018 and
June 1, 2018: Alkem Laboratories Ltd. (Alkem); Amneal Pharmaceuticals LLC (Amneal); Annora Pharma Private Ltd. (Annora) and
Hetero USA Inc. (Hetero); Aurobindo Pharma Ltd. and Aurobindo Pharma U.S.A. Inc. (Aurobindo); Cipla Ltd. (Cipla); Dr. Reddy’s
Laboratories, Ltd. and Dr. Reddy’s Laboratories, Inc. (DRL); Emcure Pharmaceuticals Ltd. (Emcure) and Heritage Pharmaceuticals Inc.
(Heritage); Glenmark Pharmaceuticals Ltd. (Glenmark); Macleods Pharmaceuticals Ltd. (Macleods); Mankind Pharma Ltd. (Mankind);
MSN Laboratories Private Ltd. (MSN); Pharmascience Inc. (Pharmascience); Prinston Pharmaceutical Inc. (Prinston); Sandoz Inc.
(Sandoz); Shilpa Medicare Ltd. (Shilpa); Teva Pharmaceuticals USA, Inc. (Teva) and Actavis LLC (Actavis); Torrent Pharmaceuticals
Ltd. (Torrent); Unichem Laboratories, Ltd. (Unichem); and Zydus Pharmaceuticals (USA) Inc. (Zydus) notifying us of their ANDAs,
which contain Paragraph IV certifications against one or more of the following patents: U.S. Patent Nos. 6,962,940; 7,208,516; 7,427,638;
7,659,302; 7,893,101; 8,455,536; 8,802,717; 9,018,243 and 9,872,854, which are listed in the Orange Book for OTEZLA®. Each of the
companies is seeking to market a generic version of OTEZLA®. In response to the Notice Letters, we timely filed infringement actions in
the U.S. District Court for the District of New Jersey. As a result of the filing of our actions, the FDA cannot grant final approval of any
of these companies’ ANDAs until at least the earlier of (i) a final decision that each of the asserted patents is invalid, unenforceable, and/
or not infringed, and (ii) September 21, 2021.
Between August 8, 2018 and August 30, 2018, we filed amended complaints against Alkem, Amneal, Aurobindo, Cipla, DRL, Glenmark,
Pharmascience, Sandoz, Teva and Actavis, Unichem, and Zydus additionally asserting U.S. Patent No. 9,724,330, which was recently
listed in the Orange Book for OTEZLA®.
Between October 15, 2018 and November 27, 2018, we filed amended complaints against Alkem, Amneal, Annora and Hetero,
Aurobindo, Cipla, DRL, Emcure and Heritage, Glenmark, Macleods, Mankind, MSN, Pharmascience, Prinston, Sandoz, Teva and
Actavis, Torrent, Unichem, and Zydus additionally asserting U.S. Patent No. 10,092,541, which was recently listed in the Orange Book
for OTEZLA®.
Each defendant has filed an Answer disputing infringement and/or validity of the patents asserted against it. Along with their Answers,
each of Alkem, Annora and Hetero, Cipla, DRL, Emcure and Heritage, Glenmark, Macleods, Mankind, Pharmascience, Sandoz, Shilpa,

Teva and Actavis, Torrent, and Unichem filed declaratory judgment counterclaims asserting that some or all of the patents are not
infringed and/or are invalid. The court has consolidated all OTEZLA® litigations for discovery and case
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management purposes, and entered a schedule for fact discovery. The court has not yet entered a schedule for expert discovery or trial in
any of the OTEZLA® litigations.
THALOMID®: We received a Notice Letter dated July 19, 2018 from West-Ward Pharmaceuticals International Limited (West-Ward)
notifying us of West-Ward’s ANDA which contains Paragraph IV certifications against U.S. Patent Nos. 6,315,720; 6,561,977; 6,755,784;
6,869,399; 7,141,018; 7,230,012; 7,959,566; 8,315,886 and 8,626,531 that are listed in the Orange Book for THALOMID®. West-Ward
is seeking to manufacture and market a generic version of 50 mg, 100 mg, 150 mg, and 200 mg THALOMID® (thalidomide) capsules
in the United States. In response to the Notice letter, we timely filed an infringement action against West-Ward in the U.S. District Court
for the District of New Jersey on August 31, 2018. As a result of the filing of our action, the FDA cannot grant final approval of West-
Ward’s ANDA until at least the earlier of (i) a final decision that each of the patents is invalid, unenforceable, and/or not infringed, and
(ii) January 20, 2021. On February 11, 2019, West-Ward filed its answer and counterclaims, asserting that each of the patents is invalid
and/or not infringed.
Juno patent-related proceedings:
KITE: On October 18, 2017, the day on which the FDA approved Kite Pharma, Inc.’s (Kite) Yescarta™ KTE-C19 product, Juno filed a
complaint against Kite in the U.S. District Court for the Central District of California. The complaint alleged that Yescarta™ infringes
claims 1-3, 5, 7-9, and 11 of U.S. Patent No. 7,446,190 (the ’190 Patent). Kite answered the complaint on November 28, 2017, and filed
counterclaims of non-infringement and invalidity against Juno. Juno filed a motion to dismiss Kite’s counterclaims and to strike certain
affirmative defenses on December 19, 2017.
On March 8, 2018, the court granted Juno’s motion to dismiss and strike, and ordered Kite to file an amended answer and counterclaims.
On the same day, the court denied Kite’s motion to stay. On March 29, 2018, Kite filed an amended answer and counterclaims, asserting
that the ’190 Patent is invalid and/or not infringed. On April 9, 2018, we filed an answer to Kite’s counterclaims. The court held a claim
construction hearing on September 18, 2018, and issued a claim construction order on October 9, 2018. On November 12, 2018, Kite
filed a motion to dismiss Plaintiffs Memorial Sloan Kettering Cancer Center and Juno Therapeutics based on an alleged lack of standing.
Plaintiffs filed their opposition on November 26, 2018, and Kite filed its reply on December 3, 2018. The Court did not hold a hearing
and has taken the motion under submission. Kite filed a motion for summary judgment of non-infringement on January 22, 2019. We
filed our opposition to Kite’s summary judgment motion on February 19, 2019. Kite’s reply is due on March 11, 2019, and the hearing
is scheduled for April 1, 2019. Fact and expert discovery are set to close on March 29, 2019, and June 14, 2019, respectively, and trial is
scheduled to begin on December 3, 2019.
CITY OF HOPE: On August 22, 2017, City of Hope (COH) filed a lawsuit against Juno in the U.S. District Court for the Central District
of California alleging that prior to our acquisition of Juno, Juno breached an exclusive license agreement (ELA) between Juno and COH
by sublicensing COH intellectual property to us without COH’s consent and by failing to pay COH related sublicensing revenues. COH
sought damages and a judicial declaration that the ELA has terminated. In July 2018, Juno and COH entered into a confidential settlement
agreement dismissing the lawsuit and reinstating the ELA. The settlement amount was not materially different than the amount we had
previously accrued for this matter.
Proceedings involving the U.S. Patent and Trademark Office (USPTO):
REMS IPRs: Under the America Invents Act (AIA), any person may seek to challenge an issued patent by petitioning the USPTO to
institute a post grant review. On April 23, 2015, we were informed that the Coalition for Affordable Drugs VI LLC filed petitions for
IPR challenging the validity of our U.S. Patent Nos. 6,045,501 (the ’501 patent) and 6,315,720 (the ’720 patent) covering certain aspects
of our REMS program. On October 27, 2015, the USPTO Patent Trial and Appeal Board (PTAB) instituted IPR proceedings relating to
these patents. An oral hearing was held on July 21, 2016. The PTAB’s decisions, rendered on October 26, 2016, held that the ’501 and
’720 patents are invalid, primarily due to obviousness in view of certain publications. On November 25, 2016, we requested a rehearing
with respect to certain claims of these patents. On September 8, 2017, the PTAB denied our rehearing request for the ’501 patent, but
granted our rehearing request pertaining to a certain claim of the ’720 patent.
We timely appealed to the U.S. Court of Appeals for the Federal Circuit the PTAB’s determinations regarding certain claims of the ’720
patent and the ’501 patent on November 6, 2017 and on November 9, 2017, respectively. On February 26, 2018, the USPTO intervened
in our appeal. Our opening briefs were filed on May 31, 2018. The USPTO filed its briefs on August 30, 2018. Our reply briefs were filed
by October 29, 2018. The court has not yet scheduled oral argument. The ’501 and ’720 patents remain valid and enforceable pending

appeal. We retain other patents covering certain aspects of our REMS program, as well as patents that cover our products that use our
REMS system.
ABRAXANE® IPR: On April 4, 2017, Actavis filed petitions for IPRs challenging the validity of our U.S. Patent Nos. 8,138,229 (the
’229 patent); 7,923,536 (the ’536 patent); 7,820,788 (the ’788 patent) and 8,853,260 (the ’260 patent) covering certain aspects
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of our ABRAXANE® product. On October 10, 2017, the PTAB instituted IPR proceedings on the ’229, ’536, and ’788 patents and on
October 11, 2017 denied institution of the IPR on the ’260 patent. On January 29, 2018, the parties submitted a joint motion to terminate
all three IPRs in connection with the settlement entered into with Actavis mentioned above. On May 8, 2018, the PTAB granted the
parties’ joint motion to terminate.
On November 9, 2017, Apotex and Cipla each filed petitions for IPRs challenging the validity of the ’229, ’536, and ’788 patents. On
May 8, 2018, the PTAB denied institution of all IPRs.
REVLIMID® IPRs: On February 23, 2018, Apotex filed a petition for IPR challenging the validity of our U.S. Patent No. 8,741,929. On
September 27, 2018, the PTAB denied institution of the IPR. On October 29, 2018, Apotex filed a Request for Rehearing.
On August 3, 2018, DRL filed petitions for IPR challenging the validity of our U.S. Patent Nos. 9,056,120; 8,404,717 and 7,189,740.
Our preliminary responses were filed by November 14, 2018, November 30, 2018, and December 11, 2018, respectively. On February
11, 2019, the PTAB denied institution of all three IPRs.
On September 12, 2018, Lotus filed a petition for IPR challenging the validity of our U.S. Patent No. 7,968,569. Our preliminary response
was filed by December 18, 2018.
JUNO IPR: On August 13, 2015, Kite filed a petition for IPR challenging the validity of U.S. Patent No. 7,446,190 (the ’190 Patent),
exclusively licensed from Memorial Sloan Kettering Cancer Center. On February 11, 2016, the PTAB instituted the IPR proceedings. A
hearing was held before the PTAB on October 20, 2016. On December 16, 2016, the PTAB issued a final written decision upholding
all claims of the ’190 Patent. On February 16, 2017, Kite filed a notice of appeal of the PTAB’s final written decision to the U.S. Court
of Appeals for the Federal Circuit. On June 6, 2018, the Federal Circuit affirmed the decision of the Patent Trial and Appeal Board,
upholding all claims of the ’190 Patent.
Other Proceedings:
MYLAN: On April 3, 2014, Mylan filed a lawsuit against us in the U.S. District Court for the District of New Jersey alleging that we
violated various federal and state antitrust and unfair competition laws by allegedly refusing to sell samples of our THALOMID® and
REVLIMID® brand drugs so that Mylan may conduct the bioequivalence testing necessary to submit ANDAs to the FDA for approval
to market generic versions of these products. Mylan is seeking injunctive relief, damages and a declaratory judgment. We filed a motion
to dismiss Mylan’s complaint on May 25, 2014. Mylan filed its opposition to our motion to dismiss on June 16, 2014. The Federal Trade
Commission filed an amicus curiae brief in opposition to our motion to dismiss on June 17, 2014.
On December 22, 2014, the court granted our motion to dismiss (i) Mylan’s claims based on Section 1 of the Sherman Act (without
prejudice), and (ii) Mylan’s related claims arising under the New Jersey Antitrust Act. The court denied our motion to dismiss the
remaining claims which primarily relate to Section 2 of the Sherman Act. On January 6, 2015, we filed a motion to certify for
interlocutory appeal the order denying our motion to dismiss with respect to the claims relating to Section 2 of the Sherman Act, which
appeal was denied by the U.S. Court of Appeals for the Third Circuit on March 5, 2015. On January 20, 2015, we filed an answer to
Mylan’s complaint. Fact discovery closed in June 2016 and expert discovery closed in November 2016. On December 16, 2016, we
moved for summary judgment, seeking a ruling that judgment be granted in our favor on all claims. The motion for summary judgment
was argued on December 13, 2017. Supplemental briefing on the motion for summary judgment was filed on February 1, 2018. On
October 3, 2018, the Court granted in part and denied in part our motion for summary judgment. Trial has been set to begin in May 2019.
THALOMID®AND REVLIMID®ANTITRUST LITIGATION: On November 7, 2014, the International Union of Bricklayers and Allied
Craft Workers Local 1 Health Fund (IUB) filed a putative class action lawsuit against us in the U.S. District Court for the District of
New Jersey alleging that we violated various antitrust, consumer protection, and unfair competition laws by (a) allegedly securing an
exclusive supply contract with Seratec S.A.R.L. so that Barr Laboratories allegedly could not secure its own supply of thalidomide active
pharmaceutical ingredient, (b) allegedly refusing to sell samples of our THALOMID® and REVLIMID® brand drugs to various generic
manufacturers for the alleged purpose of bioequivalence testing necessary for ANDAs to be submitted to the FDA for approval to market
generic versions of these products, and (c) allegedly bringing unjustified patent infringement lawsuits in order to allegedly delay approval
for proposed generic versions of THALOMID® and REVLIMID®. IUB, on behalf of itself and a putative class of third-party payers, is
seeking injunctive relief and damages.

In February 2015, we filed a motion to dismiss IUB’s complaint, and upon the filing of a similar putative class action making similar
allegations by the City of Providence (Providence), the parties agreed that the decision in the motion to dismiss IUB’s complaint would
apply to the identical claims in Providence’s complaint. In October 2015, the court denied our motion to dismiss on all grounds.
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We filed our answers to the IUB and Providence complaints in January 2016. On June 14, 2017, a new complaint was filed by the same
counsel representing the plaintiffs in the IUB case, making similar allegations and adding three new plaintiffs - International Union of
Operating Engineers Stationary Engineers Local 39 Health and Welfare Trust Fund (Local 39), The Detectives’ Endowment Association,
Inc. (DEA) and David Mitchell. Plaintiffs added allegations that our settlements of patent infringement lawsuits against certain generic
manufacturers have had anticompetitive effects. Counsel identified the new complaint as related to the IUB and Providence cases and, on
August 1, 2017, filed a consolidated amended complaint on behalf of IUB, Providence, Local 39, DEA, and Mitchell. On September 28,
2017, the same counsel filed another complaint, which it identified as related to the consolidated case, and which made similar allegations
on behalf of an additional asserted class representative, New England Carpenters Health Benefits Fund (NEC). The NEC action has been
consolidated with the original action involving IUB, Providence, DEA, Local 39, and Mitchell into a master action for all purposes.
On October 2, 2017, the plaintiffs filed a motion for certification of two damages classes under the laws of thirteen states and the District
of Columbia and a nationwide injunction class. On February 26, 2018, we filed our opposition to the plaintiffs’ motion and a motion for
judgment on the pleadings dismissing all state law claims where the plaintiffs no longer seek to represent a class. The plaintiffs filed their
opposition to our motion for judgment on the pleadings on April 2, 2018, and we filed our reply on April 13, 2018. The plaintiffs filed
their reply in support of their class certification motion on May 18, 2018. Fact discovery in these cases closed on May 17, 2018 and expert
discovery closed on December 11, 2018. On October 30, 2018, the Court denied Plaintiffs’ Motion for Class Certification. On December
14, 2018, the plaintiffs filed a new motion for class certification. Our opposition to Plaintiff’s new motion for class certification was filed
on January 25, 2019 and the plaintiffs’ reply in support of their new motion for class certification was filed on February 15, 2019. No
trial date has been set.
USAO MASSACHUSETTS SUBPOENA: In December 2015, we received a subpoena from the U.S. Attorney’s Office for the District
of Massachusetts, and in November 2016, we received a second subpoena related to the same inquiry. The materials requested primarily
relate to patient assistance programs, including our support of 501(c)(3) organizations that provide financial assistance to eligible
patients. We are cooperating with these requests.
CANADIAN COMPETITION BUREAU ORDER: In August 2017, we received an order issued by the Federal Court in Ottawa, Ontario,
Canada at the request of the Canadian Competition Bureau, requiring that we provide certain materials and information relating to our risk
management program and requests by generic manufacturers to purchase our products in Canada. On December 18, 2018, the Canadian
Competition Bureau informed Celgene that it is discontinuing its inquiry of Celgene.
JUNO SECURITIES CLASS ACTION: In July 2016, two putative securities class action complaints (the Veljanoski Complaint and the
Wan Complaint) were filed against Juno and its chief executive officer, Hans E. Bishop, in the U.S. District Court for the Western District
of Washington. On September 7, 2016, an additional putative securities class action complaint (the Paradisco Complaint and, together
with the Veljanoski Complaint and the Wan Complaint, the Complaints) was filed against Juno, Mr. Bishop, and its chief financial officer,
Steve Harr, in the U.S. District Court for the Western District of Washington. The Complaints generally allege material misrepresentations
and omissions in public statements regarding patient deaths in Juno’s Phase II clinical trial of JCAR015 as well as, violations by all named
defendants of Sections 10(b) and 20(a) of the Securities Exchange Act. On October 7, 2016, the Complaints were consolidated into a
single action. On December 12, 2016, the court-appointed lead plaintiff and a named plaintiff filed a Consolidated Amended Complaint
(Consolidated Complaint), which includes claims against Juno, Mr. Bishop, Dr. Harr, and Juno’s chief medical officer, Dr. Mark J. Gilbert
(the Defendants). The Consolidated Complaint includes allegations similar to those in the previous Complaints, as well as additional
allegations regarding purported material misrepresentations and omissions in public statements after July 7, 2016 regarding the safety of
JCAR015. The parties mediated on May 9, 2018, following which the parties agreed to a settlement in principle of the class action. On
November 16, 2018, the court approved the parties’ settlement. The settlement amount was not materially different than the amount we
had previously accrued for this matter.
CELGENE SECURITIES CLASS ACTION: On March 29, 2018, the City of Warren General Employees’ Retirement System filed a
putative class action against us and certain of our officers in the U.S. District Court for the District of New Jersey. The complaint alleges
that the defendants violated federal securities laws by making misstatements and/or omissions concerning (1) trials of GED-0301, (2)
2020 outlook and projected sales of OTEZLA®, and (3) the new drug application for Ozanimod. On May 3, 2018, a similar putative
class action lawsuit against us and certain of our officers was filed by Charles H. Witchcoff in the U.S. District Court for the District of
New Jersey. The complaint alleges that defendants violated federal securities laws by making material misstatements and/or omissions
concerning (1) trials of GED-0301, (2) 2020 outlook and projected sales of OTEZLA®, and (3) the new drug application for Ozanimod.
On September 27, 2018, the court consolidated the two actions and appointed a lead plaintiff, lead counsel, and co-liaison counsel for
the putative class. On October 9, 2018, the court entered a scheduling order which requires lead plaintiff to file an amended complaint

by December 10, 2018; defendants to file their motion to dismiss the amended complaint by February 8, 2019; lead plaintiff to file its
opposition to the motion to dismiss by April 9, 2019; and defendants
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to file their reply by May 9, 2019. On December 10, 2018, the lead plaintiff filed its amended complaint. On February 8, 2019, defendants
filed a motion to dismiss plaintiff’s amended complaint in full.
SARATOGA DERIVATIVE ACTION: On July 12, 2018, Saratoga Advantage Trust Health and Biotechnology Portfolio filed a
shareholder derivative complaint against certain members of our board of directors in the U.S. District Court for the District of New
Jersey. The complaint alleges that (i) certain defendants made misrepresentations and omissions of material fact concerning, among
other things, trials of GED-0301, sales of OTEZLA®, 2017 and 2020 fiscal guidance, and the new drug application for Ozanimod and
(ii) all defendants failed to adequately supervise Celgene with regard to trials of GED-0301, sales of OTEZLA®, 2017 and 2020 fiscal
guidance, the new drug application for Ozanimod, and the promotion and marketing of REVLIMID®. The plaintiff has agreed to stay the
defendants’ obligation to answer or otherwise respond to the allegations in the complaint in deference to the Celgene Securities Class
Actions and subject to thirty days’ notice by either plaintiff or defendants of an intent to proceed. On August 1, 2018, the Court entered
an order staying the proceedings until the disposition of the first motion to dismiss in the Celgene Securities Class Action. The order also
administratively terminated the proceedings.
GEROLD DERIVATIVE ACTION: On October 11, 2018, Sam Baran Gerold filed a shareholder derivative complaint against certain
members of our board of directors in the Superior Court of New Jersey. The complaint alleges that (i) defendants breached certain
fiduciary duties related to, among other things, GED-0301, OTEZLA®, and the new drug application for Ozanimod and (ii) because of
that breach, the defendants caused Celgene to waste its corporate assets and the defendants were unjustly enriched. On October 29, 2018,
defendants removed this matter to the U.S. District Court for the District of New Jersey. On January 9, 2019 the court entered a stipulation
and order staying the matter until the disposition of the motion to dismiss in the Celgene Securities Class Action or at any party’s election
on 15 days’ notice to all other parties.
FISHER DERIVATIVE ACTION: On October 19, 2018, Susan Fisher filed a stockholder derivative complaint against certain of our
present and former directors or executives in the U.S. District Court of Delaware. The complaint alleged that defendants (i) violated
Section 14(a) of the Securities Exchange Act by participating in the issuance of materially misleading proxies and (ii) failed to exercise
proper oversight of Celgene, and that, because of that failure, the defendants caused Celgene to waste its corporate assets and the
defendants were unjustly enriched. On November 13, 2018, with defendants’ consent, the plaintiff dismissed her complaint without
prejudice.
HUMANA, INC (HUMANA): On May 16, 2018, Humana filed a lawsuit against us in the Pike County Circuit Court of the
Commonwealth of Kentucky. Humana’s complaint alleges we engage in unlawful off-label marketing in connection with sales of
THALOMID® and REVLIMID® and asserts claims against us for fraud, breach of contract, negligent misrepresentation, unjust
enrichment, and violations of New Jersey’s Racketeer Influenced and Corrupt Organizations Act. The complaint seeks, among other
things, treble and punitive damages, injunctive relief and attorneys’ fees and costs. On June 13, 2018, we removed Humana’s lawsuit to
the U.S. District Court for the Eastern District of Kentucky and, on July 11, 2018, filed a motion to dismiss Humana’s complaint in full.
On July 12, 2018, Humana moved to remand the case to state court. The court has not set a hearing date for the motions. The Court has
stayed the action pending a ruling on Humana’s motion to remand.
Proceedings Related to the Bristol-Myers Squibb’s Proposed Acquisition of Celgene:
Between February 4, 2019 and February 20, 2019, six putative class actions and three individual actions were filed against Celgene, the
directors of Celgene, and in four cases, Bristol-Myers Squibb Company and/or Burgundy Merger Sub, Inc. Three complaints, Bernstein v.
Celgene Corporation, et al., 2:19-cv-04804; Lowinger v. Celgene Corporation, et al., 2:19-cv-04752; and Wang v. Celgene Corporation, et
al., 2:19-cv-04865, were filed in the U.S. District Court for the District of New Jersey. Three complaints, Gerold v. Celgene Corporation,
et al., 1:19-cv-00233-UNA; Sbriglio v. Celgene Corporation, et al., 1:19-cv-00277-UNA; and Grayson v. Celgene Corporation, et al.,
No. 1:19-cv-00332, were filed in the U.S. District Court for the District of Delaware. Two complaints, Rogers v. Celgene Corporation,
et al., 1:19-cv-01275; and Woods v. Celgene Corporation, et al., No. 1:19-cv-01597, were filed in the U.S. District Court for the
Southern District of New York. One complaint, Ciavarella v. Alles, No. 2019-0133-AGB, was filed in the Court of Chancery of the
State of Delaware. The federal complaints generally allege that defendants prepared and filed a false or misleading registration statement
regarding the proposed merger in violation of Section 14(a) and Section 20(a) of the Exchange Act, and Rule 14a-9 promulgated under
the Exchange Act. Specifically, the federal complaints allege that the registration statement misstated or omitted material information
regarding the parties’ financial projections and the analyses performed by the parties’ financial advisors. Some of the federal complaints
also allege that the registration statement misstated or omitted material information regarding potential conflicts of interest faced by
Celgene directors and executives. The federal complaints further allege that the Celgene Board of Directors and/or Bristol-Myers Squibb
are liable for these violations as “controlling persons” of Celgene under Section 20(a) of the Exchange Act. The federal complaints seek,

among other relief, injunctive relief to prevent consummation of the merger until the alleged disclosure violations are cured, damages in
the event the merger is consummated, and an award of attorney’s fees. The Ciavarella complaint alleges that Celgene’s directors breached
their fiduciary duties by failing to maximize the value of Celgene and that Bristol-Myers Squibb aided and
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abetted those breaches. It seeks, among other things, injunctive relief to prevent consummation of the merger, damages in the event the
merger is consummated, and an award of attorney’s fees.
In addition, a complaint, Landers, et al. v. Caforio, et al., No. 2019-0125-AGB, was filed in the Court of Chancery of the State of
Delaware. Landers is styled as a putative class action on behalf of Bristol-Myers Squibb stockholders and names members of the
Bristol-Myers Squibb board of directors as defendants, alleging that they breached their fiduciary duties by failing to disclose material
information about the merger.
Additional lawsuits arising out of or relating to the definitive merger agreement, the registration statement and/or the proposed acquisition
of us by Bristol-Myers Squibb may be filed in the future. Celgene believes that the lawsuits are without merit and intends to defend
vigorously against them and any other lawsuits challenging the merger. However, there can be no assurance that defendants will be
successful in the outcome of the pending lawsuits or in any potential future lawsuits. One of the conditions to completion of the proposed
acquisition is the absence of any applicable injunction or other order being in effect that prohibits completion of the proposed acquisition.
Accordingly, if a plaintiff is successful in obtaining an injunction, then such order may prevent the proposed acquisition from being
completed, or from being completed within the expected timeframe.
20. Geographic and Product Information
Operations by Geographic Area: Revenues primarily consisted of sales of our primary commercial stage products including
REVLIMID®, POMALYST®/IMNOVID®, OTEZLA®, ABRAXANE® and VIDAZA®. In addition, we earn revenue from other product
sales and licensing arrangements.
Revenues 2018 2017 2016

United States $ 10,023 $ 8,324 $ 7,010
Europe 3,771 3,327 3,046
All other 1,487 1,352 1,173
Total revenues $ 15,281 $ 13,003 $ 11,229
Long-Lived Assets1 2018 2017

United States $ 1,028 $ 768
Europe 331 296
All other 8 6
Total long-lived assets $ 1,367 $ 1,070
1 Long-lived assets consist of Property, plant and equipment, net.
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Revenues by Product: Total revenues from external customers by product for the years ended December 31, 2018, 2017 and 2016 were
as follows:
2018 2017 2016

REVLIMID® $ 9,685 $ 8,187 $ 6,974
POMALYST®/IMNOVID® 2,040 1,614 1,311
OTEZLA® 1,608 1,279 1,017
ABRAXANE® 1,062 992 973
IDHIFA® 72 20 —
VIDAZA® 594 628 608
azacitidine for injection 23 36 66
THALOMID® 114 132 152
ISTODAX® 63 76 80
Other 4 9 4
Total net product sales 15,265 12,973 11,185
Total revenue $ 15,281 $ 13,003 $ 11,229
Major Customers: We sell our products primarily through wholesale distributors and specialty pharmacies in the United States, which
account for a large portion of our total revenues. International sales are primarily made directly to hospitals, clinics and retail chains,
many of which are government owned. During the three-year period of 2018, 2017 and 2016, customers that accounted for more than
10% of our total revenue in at least one of those years are summarized below. The percentage of amounts due from these customers
compared to total net accounts receivable is also summarized below as of December 31, 2018 and 2017.
Percent of Total Revenue Percent of Net Accounts Receivable

Customer 2018 2017 2016 2018 2017
McKesson Corp. 12.1% 12.0% 10.3% 10.4% 9.6%
CVS Health Corp. 11.5% 12.5% 12.0% 9.2% 9.7%
AmerisourceBergen Corp. 11.4% 10.0% 8.5% 14.4% 9.7%
21. Quarterly Results of Operations (Unaudited)
2018 1Q 2Q 3Q 4Q Year
Total revenue $ 3,538 $ 3,814 $ 3,892 $ 4,037 $ 15,281
Gross profit(1) 3,396 3,682 3,733 3,867 14,678
Income tax provision(2) 184 262 296 44 786
Net income(3) 846 1,045 1,082 1,073 4,046
Net income per share:(4)
Basic $ 1.13 $ 1.46 $ 1.54 $ 1.53 $ 5.65
Diluted $ 1.10 $ 1.43 $ 1.50 $ 1.50 $ 5.51
Basic 748.3 716.1 702.0 699.5 716.3
Diluted 768.3 732.6 719.7 713.9 733.8
133

2017 1Q 2Q 3Q 4Q Year
Total revenue $ 2,962 $ 3,271 $ 3,287 $ 3,483 $ 13,003
Gross profit(1) 2,839 3,148 3,165 3,360 12,512
Income tax provision(2) 82 77 3 1,212 1,374
Net income (loss) 932 1,101 988 (81) 2,940
Net income (loss) per share:(4)
Basic $ 1.20 $ 1.41 $ 1.26 $ (0.10) $ 3.77
Diluted $ 1.15 $ 1.36 $ 1.21 $ (0.10) $ 3.64
Basic 779.0 780.4 784.1 773.5 779.2
Diluted 811.2 811.7 815.2 773.5 808.7
1 Gross profit is computed by subtracting cost of goods sold (excluding amortization of acquired intangible assets) from net
product sales.
2 The Income tax provision in the fourth quarter of 2017 includes income tax expense of approximately $1.3 billion as a result of
the 2017 Tax Act, which was enacted on December 22, 2017. See Note 17 for additional details related to the 2017 Tax Act. In
addition, the Income tax provision for 2018 and 2017 includes $22 million and $290 million, respectively, of excess tax benefits
arising from share-based compensation awards that vested or were exercised during 2018 and 2017, respectively, as a result of
the adoption of ASU 2016-09, "Compensation - Stock Compensation" during 2017.
3 ASU 2016-01, was effective for us on January 1, 2018. ASU 2016-01 requires changes in the fair value of equity investments
with readily determinable fair values and changes in observable prices of equity investments without readily determinable fair
values to be recorded in net income. As such, a net gain of $959 million was recorded in the first quarter of 2018 which
was offset by net charges of $6 million, $123 million, and $513 million which were recorded in the second, third and fourth
quarters, respectively. See Note 1 of Notes to Consolidated Financial Statements contained elsewhere in this report for additional
information.
4 The sum of the quarters may not equal the full year due to rounding. In addition, quarterly and full year basic and diluted earnings
per share are calculated separately.
22. Subsequent Events
On January 2, 2019, Bristol-Myers Squibb and Celgene entered into a definitive merger agreement under which Bristol-Myers Squibb
will acquire Celgene in a cash and stock transaction with an equity value of approximately $74 billion, based on the closing price of
Bristol-Myers Squibb stock of $52.43 on January 2, 2019. Under the terms of the agreement, Celgene shareholders will receive 1.0
Bristol-Myers Squibb share and $50.00 in cash for each share of Celgene. Celgene shareholders will also receive one tradeable Bristol-
Myers Squibb CVR for each share of Celgene, which will entitle the holder to receive a payment for the achievement of future regulatory
milestones. The Boards of Directors of both companies have approved the merger agreement. The definitive merger agreement includes
restrictions on the conduct of our business prior to the completion of the merger or termination of the merger agreement, generally
requiring us to conduct our business in the ordinary course consistent with past practice. Without limiting the generality of the foregoing,
we are subject to a variety of specified restrictions. Unless we obtain Bristol-Myers Squibb’s prior written consent (which consent may
not be unreasonably withheld, conditioned or delayed) and except (i) as required or expressly contemplated by the merger agreement, (ii)
as required by applicable law or (iii) as set forth in the confidential disclosure schedule delivered by Celgene to Bristol-Myers Squibb, we
may not, among other things, incur additional indebtedness, issue additional shares of our common stock outside of our equity incentive
plans, repurchase our common stock, pay dividends, acquire assets, securities or property (subject to certain exceptions, including without
limitation, acquisitions up to a specified individual amount and an aggregate limitation), dispose of businesses or assets, enter into
material contracts or make certain additional capital expenditures.
Based on the closing price of Bristol-Myers Squibb stock of $52.43 on January 2, 2019, the cash and stock consideration to be received
by Celgene shareholders at closing is valued at $102.43 per Celgene share and one Bristol-Myers Squibb CVR. The Bristol-Myers
Squibb CVR will entitle its holder to receive a one-time potential payment of $9.00 in cash upon FDA approval of all three of ozanimod
(by December 31, 2020), liso-cel (JCAR017) (by December 31, 2020) and bb2121 (by March 31, 2021), in each case for a specified
indication. When completed, Bristol-Myers Squibb shareholders are expected to own approximately 69% of the company, and Celgene
shareholders are expected to own approximately 31%.

The transaction is not subject to a financing condition. The cash portion will be funded through a combination of cash on hand and debt
financing. Bristol-Myers Squibb has obtained fully committed debt financing from Morgan Stanley Senior Funding, Inc. and MUFG
Bank, Ltd.
134

The transaction is subject to approval by Bristol-Myers Squibb and Celgene shareholders and the satisfaction of customary closing
conditions and regulatory approvals. Bristol-Myers Squibb and Celgene expect to complete the transaction in the third quarter of 2019.
If the merger agreement is terminated under specified circumstances, Celgene may be required to pay Bristol-Myers Squibb a termination
fee of $2.2 billion, and if the merger agreement is terminated under certain other circumstances, Bristol-Myers Squibb may be required
to pay Celgene a termination fee of $2.2 billion.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL

DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
CONCLUSION REGARDING THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES
As of the end of the period covered by this Annual Report on Form 10-K, we carried out an evaluation, under the supervision and with
the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design
and operation of our disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) (the "Exchange
Act"). Based on the foregoing evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure
controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the
Securities and Exchange Commission and that such information is accumulated and communicated to our management (including our
Chief Executive Officer and Chief Financial Officer) to allow timely decisions regarding required disclosures.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2018 that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment
of the effectiveness of internal control over financial reporting. As defined by the Securities and Exchange Commission, internal control
over financial reporting is a process designed by, or under the supervision of, our principal executive and principal financial officers and
effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of the consolidated financial statements in accordance with U.S. generally accepted accounting principles.
Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of the consolidated financial statements in accordance with generally
accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our
management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of our assets that could have a material effect on the consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In connection with the preparation of our annual consolidated financial statements, management has undertaken an assessment of the
effectiveness of our internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control-

Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, or the COSO
Framework. Management's assessment included an evaluation of the design of our internal control over financial reporting and testing of
the operational effectiveness of those controls.
135

Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31,
2018.
KPMG LLP, the independent registered public accounting firm that audited our consolidated financial statements included in this report,
has issued their report on the effectiveness of internal control over financial reporting as of December 31, 2018, a copy of which is
included herein.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders

Opinion on Internal Control Over Financial Reporting
We have audited Celgene Corporation and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31,
2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control
over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued
by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”),
the consolidated balance sheets of the Company as of December 31, 2018 and 2017, the related consolidated statements of income,
comprehensive income, cash flows, and stockholders’ equity for each of the years in the three-year period ended December 31, 2018,
the related notes, and the consolidated financial statement schedule, “Schedule II - Valuation and Qualifying Accounts" (collectively,
the “consolidated financial statements”), and our report dated February 26, 2019 expressed an unqualified opinion on those consolidated
financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control
over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on
our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the
financial statements.
136

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ KPMG LLP
February 26, 2019
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Pursuant to Paragraph G(3) of the General Instructions to Form 10-K, the information required by Part III (Items 10, 11, 12, 13 and 14)
is being incorporated by reference herein from our definitive proxy statement (or an amendment to our Annual Report on Form 10-K)
to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2018 in connection with our 2019 Annual
Meeting of Stockholders.
ITEM 11. EXECUTIVE COMPENSATION
See Item 10.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
See Item 10.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
See Item 10.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
See Item 10.
137

PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Page
(a) 1. Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm 63
Consolidated Balance Sheets as of December 31, 2018 and 2017 64
Consolidated Statements of Income – Years Ended December 31, 2018, 2017 and 2016 65
Consolidated Statements of Comprehensive Income – Years Ended December 31, 2018, 2017 and 2016 66
Consolidated Statements of Cash Flows – Years Ended December 31, 2018, 2017 and 2016 67
Consolidated Statements of Stockholders' Equity – Years Ended December 31, 2018, 2017 and 2016 69
Notes to Consolidated Financial Statements 70
(a) 2. Financial Statement Schedule
Schedule II – Valuation and Qualifying Accounts 143
(a) 3. Exhibit Index
The following exhibits are filed with this report or incorporated by reference:
Exhibit
No. Exhibit Description
2.1 Agreement and Plan of Merger, dated as of January 21, 2018, among Celgene Corporation, Blue Magpie Corporation and Juno
Therapeutics, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed January 22, 2018).
2.2 Agreement and Plan of Merger by and among Bristol-Myers Squibb Company, Burgundy Merger Sub, Inc. and Celgene Corporation,
dated as of January 2, 2019. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed January 4,
2019).
3.1 Certificate of Incorporation of the Company, as amended June 18, 2014 (incorporated by reference to Exhibit 3.1 to the Company's
Quarterly Report on Form 10-Q filed July 29, 2014).
3.2 Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K
filed June 13, 2018).
4.1 Contingent Value Rights Agreement, dated as of October 15, 2010, between Celgene Corporation and American Stock Transfer & Trust
Company, LLC, as trustee, including the Form of CVR Certificate as Annex A (incorporated by reference to Exhibit 4.1 to the Company's
Form 8-A12B filed on October 15, 2010).
4.2 Indenture, dated as of October 7, 2010, relating to the 2.450% Senior Notes due 2015, 3.950% Senior Notes due 2020 and 5.700% Senior
Notes due 2040, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to
Exhibit 4.1 to the Company's Current Report on Form 8-K filed on October 7, 2010).
4.3 Indenture, dated as of August 9, 2012, relating to the 1.900% Senior Notes due 2017 and 3.250% Senior Notes due 2022, between the
Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company's
Current Report on Form 8-K filed on August 9, 2012).
4.4 Indenture, dated as of August 6, 2013, relating to the 2.300% Senior Notes due 2018, 4.000% Senior Notes due 2023 and the 5.250%
Senior Notes due 2043, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by
reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on August 6, 2013).
4.5 Indenture, dated as of May 15, 2014, relating to the 2.250% Senior Notes due 2019, 3.625% Senior Notes due 2024 and the 4.625%
Senior Notes due 2044, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by
reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on May 15, 2014).
4.6 Indenture, dated as of August 12, 2015, relating to the 2.125% Senior Notes due 2018, 2.875% Senior Notes due 2020, 3.550% Senior
Notes due 2022, 3.875% Senior Notes due 2025 and the 5.000% Senior Notes due 2045, between the Company and The Bank of New
York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K
filed on August 12, 2015).
4.7 Indenture, dated as of November 9, 2017, relating to the 2.750% Senior Notes due 2023, 3.450% Senior Notes due 2027 and the 4.350%
Senior Notes due 2047 between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by
reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on November 9, 2017).

4.8 Indenture, dated as of February 20, 2018, relating to the 2.875% Senior Notes due 2021, the 3.250% Senior Notes due 2023, the 3.900%
Senior Notes due 2028 and the 4.550% Senior Notes due 2048 between the Company and The Bank of New York Mellon Trust Company,
N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on February 20, 2018).
4.9 Form of 3.950% Senior Notes due 2020 (incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed on
October 7, 2010).
138

Exhibit
October 7, 2010).
August 9, 2012).
August 9, 2012).
August 6, 2013).
August 6, 2013).
August 6, 2013).
May 15, 2014).
May 15, 2014).
May 15, 2014).
August 12, 2015).
August 12, 2015).
August 12, 2015).
August 12, 2015).
August 12, 2015).
4.24 Form of 2.750% Senior Note due 2023 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on
November 9, 2017).
November 9, 2017).
November 9, 2017).
February 20, 2018).
February 20, 2018).
February 20, 2018).
February 20, 2018).
10.1+ 1992 Long-Term Incentive Plan (incorporated by reference to Exhibit A to the Company's Proxy Statement dated May 30, 1997), as
amended by Amendment No. 1 thereto, effective as of June 22, 1999 (incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2002).
10.2+ 1995 Non Employee Directors' Incentive Plan (incorporated by reference to Exhibit A to the Company's Proxy Statement, dated May 24,
1999), as amended by Amendment No. 1 thereto, effective as of June 22, 1999 (incorporated by reference to Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002), as further amended by Amendment No. 2 thereto,
effective as of April 18, 2000 (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 2002), as further amended by Amendment No. 3 thereto, effective as of April 23, 2003 (incorporated by reference to
Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2005), as further amended by Amendment
No. 4 thereto, effective as of April 5, 2005 (incorporated by reference to Exhibit 99.2 to the Company's Registration Statement on
Form S-8 (No. 333-126296)), as amended by Amendment No. 5 thereto (incorporated by reference to Exhibit 10.1 to the Company's

Quarterly Report on Form 10-Q for the quarter ended June 30, 2007), as further amended by Amendment No. 6 thereto (incorporated by
reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2008).
10.3+ Form of Indemnification Agreement between the Company and each officer and director of the Company (incorporated by reference to
Exhibit 10.12 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996).
139

Exhibit
10.4+ Amended and Restated Employment Agreement effective May 1, 2006 between the Company and Robert J. Hugin (incorporated by
reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2006), as amended by
Amendment No. 1 thereto, effective as of December 31, 2008 (incorporated by reference to Exhibit 10.8 to the Company's Annual Report
on Form 10-K for the year ended December 31, 2008), as further amended by Amendment No. 2 thereto, effective as of June 16, 2010
(incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed on June 18, 2010), as further amended by
Amendment No. 3 thereto, effective as of April 16, 2014 (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on
Form 10-Q filed on May 3, 2016), as further amended by Amendment No. 4 thereto, effective as of March 1, 2016 (incorporated by
reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q filed on May 3, 2016).
10.5+ Celgene Corporation 2017 Stock Incentive Plan (Amended and Restated as of April 19, 2017) (incorporated by reference to Exhibit 10.1
to the Company's Current Report on Form 8-K filed on June 14, 2017).
10.6 Celgene Corporation 2014 Equity Incentive Plan (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on
Form S-8 filed on March 6, 2018).
10.7 Development and License Agreement between the Company and Novartis Pharma AG, dated April 19, 2000 (incorporated by reference to
Exhibit 10.21 to the Company's Annual Report on Form 10-K for the year ended December 31, 2000).
10.8 Collaborative Research and License Agreement between the Company and Novartis Pharma AG, dated December 20, 2000 (incorporated
by reference to Exhibit 10.22 to the Company's Annual Report on Form 10-K for the year ended December 31, 2000).
10.9+ Celgene Corporation 2005 Deferred Compensation Plan, effective as of January 1, 2005 (incorporated by reference to Exhibit 10.22 to the
Company's Annual Report on Form 10-K for the year ended December 31, 2004), as amended and restated, effective January 1, 2008
(incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, filed
on May 12, 2008).
10.10 Technical Services Agreement among the Company, Celgene UK Manufacturing II, Limited (f/k/a Penn T Limited), Penn Pharmaceutical
Services Limited and Penn Pharmaceutical Holding Limited, dated October 21, 2004 (incorporated by reference to Exhibit 10.33 to the
Company's Annual Report on Form 10-K for the year ended December 31, 2004).
10.11† Distribution Services and Storage Agreement between the Company and Sharp Corporation, dated January 1, 2005 (certain portions of the
agreement have been redacted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential
treatment, which has been granted) (incorporated by reference to Exhibit 10.53 to the Company's Annual Report on Form 10-K for the
year ended December 31, 2005).
10.12 Non-Competition, Non-Solicitation and Confidentiality Agreement between Celgene Corporation and Dr. Patrick Soon-Shiong, dated as
of June 30, 2010 (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed on July 1, 2010).
10.13 Stockholders' Agreement among Celgene Corporation, Dr. Patrick Soon-Shiong, California Capital LP, Patrick Soon-Shiong 2009
GRAT 1, Patrick Soon-Shiong 2009 GRAT 2, Michele B. Soon-Shiong GRAT 1, Michele B. Soon-Shiong GRAT 2, Soon-Shiong
Community Property Revocable Trust, California Capital Trust and Michele B. Chan Soon-Shiong, dated as of June 30, 2010
(incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K filed on July 1, 2010).
10.14+ Letter Agreement between the Company and Jacqualyn A. Fouse, dated August 18, 2010 (incorporated by reference to Exhibit 99.2 to the
Company's Current Report on Form 8-K filed on August 27, 2010).
10.15 Second Amended and Restated Credit Agreement among Celgene Corporation, the lender parties named therein, and Citibank, N.A., as
administrative agent, dated as of April 17, 2015 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K
filed on April 20, 2015), as amended by FIRST AMENDMENT thereto dated as of July 29, 2015 (incorporated by reference to Exhibit
10.1 to the Company's Quarterly Report on Form 10-Q filed on May 3, 2016), as further amended by AMENDMENT NO. 2 thereto dated
as of April 18, 2016 (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed on May 3, 2016),
as further amended by AMENDMENT NO. 3 dated April 17, 2017 (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly
Report on Form 10-Q filed on April 27, 2017).
10.16+ Celgene Corporation Management Incentive Plan (incorporated by reference to Exhibit 10.19 to the Company's Annual Report on Form
10-K for the year ended December 31, 2013).
10.17+ Form of Stock Option Agreement (incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2016).
10.18+ Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K for
the year ended December 31, 2016).
10.19+ Letter agreement with Mark J. Alles (incorporated by reference to Exhibit 10. 1 to the Company’s Quarterly Report on Form 10-Q for the
quarter ended March 31, 2013).
10.20+ Letter agreement with Rupert Vessey (incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the
year ended December 31, 2016).
10.21† License Agreement among the Company, Celgene Alpine Investment Company II LLC and Nogra Pharma Limited, dated as of April 23,
2014 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed July 29, 2014).

10.22+ Letter Agreement between the Company and Peter N. Kellogg, dated May 21, 2014 (incorporated by reference to Exhibit 99.2 to the
Company’s Current Report on Form 8-K filed on May 22, 2014).
10.23+ Letter Agreement between the Company and Scott Smith dated April 1, 2017 (incorporated by reference to Exhibit 10.1 to the Company’s
Current Report on Form 10-Q filed on April 27, 2017).
140

Exhibit
10.24+ Form of Performance Stock Unit Agreement (incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K
for the year ended December 31, 2016).
10.25+ Letter Agreement between the Company and David V. Elkins dated May 29, 2018 (incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed on June 1, 2018).
10.26+ Letter Agreement between the Company and Alise Reicin dated October 4, 2018 (incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed November 2, 2018).
10.27+ Celgene Corporation Executive Severance Plan. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
filed on January 4, 2019).
21.1* List of Subsidiaries.
23.1* Consent of KPMG LLP.
24.1* Power of Attorney
31.1* Certification by the Company's Chief Executive Officer.
31.2* Certification by the Company's Chief Financial Officer.
32.1* Certification by the Company's Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
32.2* Certification by the Company's Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
101* The following materials from Celgene Corporation's Annual Report on Form 10-K for the year ended December 31, 2018, formatted in
XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income,
(iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated
Statements of Stockholders' Equity and (vi) Notes to Consolidated Financial Statements.
*Filed herewith.
† Confidential treatment requested as to certain portions, which portions have been omitted and submitted separately to the Securities and
Exchange Commission.
+ Constitutes a management contract or compensatory plan or arrangement.
ITEM 16. FORM 10-K SUMMARY

None.
141

SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.
CELGENE CORPORATION
By: /s/ Mark J. Alles
Mark J. Alles
Chief Executive Officer
(principal executive officer)
________________________________________________________________________________________________________________________
Date: February 26, 2019
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
Chairman of the Board;

/s/ Mark J. Alles Chief Executive Officer
Mark J. Alles (principal executive officer) February 26, 2019
/s/ David V. Elkins Chief Financial Officer
David V. Elkins (principal financial and accounting officer) February 26, 2019
*
Richard W. Barker Director February 26, 2019
*
Hans Bishop Director February 26, 2019
*
Michael W. Bonney Director February 26, 2019
*
Michael D. Casey Director February 26, 2019
*
Carrie S. Cox Director February 26, 2019
*
Michael A. Friedman Director February 26, 2019
*
Patricia Hemingway Hall Director February 26, 2019
*
Julia A. Haller Director February 26, 2019
*
James Loughlin Director February 26, 2019
*
Ernest Mario Director February 26, 2019
*
John H. Weiland Director February 26, 2019
*By: /s/ Mark J. Alles

Mark J. Alles
Attorney-in-fact

142

Celgene Corporation and Subsidiaries
Schedule II – Valuation and Qualifying Accounts
(In Millions)
Balance at Beginning Charged to Expense Balance at

Year ended December 31, of Year or Sales Deductions End of Year
2018:
Allowance for doubtful accounts $ 16 $ 2 $ 2 $ 16
Allowance for customer discounts 20 243 1 241 22
Subtotal 36 245 243 38
Allowance for sales returns 15 45 1 13 47
Total $ 51 $ 290 $ 256 $ 85
2017:
Allowance for doubtful accounts $ 15 $ (1) $ (2) $ 16
Subtotal 31 192 187 36
Total $ 49 $ 200 $ 198 $ 51
2016:
Allowance for doubtful accounts $ 18 $ 1 $ 4 $ 15
Subtotal 30 155 154 31
Total $ 47 $ 166 $ 164 $ 49
1 Amounts are a reduction from gross sales.
143

Exhibit 21.1
LIST OF SUBSIDIARIES
Name State or Other Jurisdiction of Incorporation

1096271 BC ULC Canada
Abraxis BioScience Australia Pty Ltd. Australia
Abraxis BioScience International Holding Company, Inc. Delaware
Abraxis BioScience Puerto Rico, LLC Puerto Rico
Abraxis BioScience, Inc. Delaware
Abraxis BioScience, LLC Delaware
AbVitro LLC Delaware
Acetylon Pharmaceuticals, Inc. Delaware
AHI Investment, LLC Delaware
Celem LLC Bermuda
Celem Ltd. Bermuda
Celgene Ab Finland
Celgene AB Sweden
Celgene Alpine Investment Co. II, LLC Delaware
Celgene Alpine Investment Co. III, LLC Delaware
Celgene Alpine Investment Co., LLC Delaware
Celgene ApS Denmark
Celgene AS Norway
Celgene Brasil Produtos Farmaceuticos Ltda Brazil
Celgene BV Netherlands
Celgene BVBA Belgium
Celgene CAR LLC Delaware
Celgene CAR Ltd Bermuda
Celgene Chemicals Sarl Switzerland
Celgene China Holdings LLC Delaware
Celgene Co Republic of Korea
Celgene d.o.o. Croatia
Celgene Distribution B.V. Netherlands
Celgene EngMab GmbH Switzerland
Celgene Europe B.V. Netherlands
Celgene Europe Limited United Kingdom
Celgene European Investment Company LLC Delaware
Celgene Financing Company, LLC Delaware
Celgene FZE United Arab Emirates
Celgene Global Holdings Sarl Switzerland
Celgene GmbH Austria

Celgene GmbH Germany
Celgene GmbH Switzerland
Celgene Holdings East Corporation New Jersey
Celgene Holdings II Sàrl Switzerland

Celgene Holdings III Sàrl Switzerland
Celgene Inc. Canada
Celgene International Holdings Corporation Delaware
Celgene International II Sàrl Switzerland
Celgene International III Sarl Switzerland
Celgene International Sarl Switzerland
Celgene International Inc. Delaware
Celgene kft Hungary
Celgene KK Japan
Celgene Limited Hong Kong
Celgene Limited Ireland
Celgene Limited New Zealand
Celgene Limited Taiwan Province of China
Celgene Limited United Kingdom
Celgene Ilac Pazarlama ve Tic. Ltd. Sti. Turkey
Celgene Logistics Sarl Switzerland
Celgene Ltd Thailand
Celgene Luxembourg Sarl Luxembourg
Celgene Management Sarl Switzerland
Celgene Netherlands BV Netherlands
Celgene Netherlands Investment BV Netherlands
Celgene NJ Investment Co New Jersey
Celgene Pharmaceutical (Shanghai) Company Limited China
Celgene PTE Ltd Singapore
Celgene Pty Limited Australia
Celgene Puerto Rico Distribution LLC Puerto Rico
Celgene Quanticel Research, Inc. Delaware
Celgene R&D Sarl Switzerland
Celgene Receptos Limited United Kingdom
Celgene Receptos Sàrl Switzerland
Celgene Research and Development Company LLC Delaware
Celgene Research and Development I ULC Canada
Celgene Research and Development II, LLC Bermuda
Celgene Research and Investment Company II, LLC Delaware
Celgene Research Incubator At Summit West, LLC Delaware
Celgene Research SLU Spain
Celgene RIVOT LLC Delaware
Celgene RIVOT Ltd Bermuda
Celgene RIVOT SRL Barbados
Celgene s.r.o Czech Republic
Celgene s.r.o. Slovakia
Celgene Sàrl AU Morocco

Celgene SAS France
Celgene Sdn Bhd Malaysia
Celgene Services Sàrl Switzerland
Celgene Sl Spain

Celgene Sociedade Unipessoal Lda. Portugal
Celgene Sp Zoo Poland
Celgene Srl Italy
Celgene Summit Investment Co New Jersey
Celgene Switzerland Holdings Sarl Switzerland
Celgene Switzerland II LLC Delaware
Celgene Switzerland Investment Sàrl Switzerland
Celgene Switzerland LLC Delaware
Celgene Switzerland Sàrl Switzerland
Celgene Tri A Holdings Ltd. Bermuda
Celgene Tri Sàrl Switzerland
Celgene UK Distribution Limited United Kingdom
Celgene UK Holdings Limited United Kingdom
Celgene UK Manufacturing (II) Limited United Kingdom
Celgene UK Manufacturing (III) Limited United Kingdom
Celgene UK Manufacturing Limited United Kingdom
Celgene, S. de R.L. de C.V. Mexico
Celmed LLC Delaware
Celmed Ltd. Bermuda
CHT I, LLC Delaware
CHT II, LLC Delaware
CHT III, LLC Delaware
CHT IV, LLC Delaware
CR Finance Company, LLC Delaware
Crosp, Ltd. Bermuda
Delinia, Inc. Delaware
Deuteria Pharmaceuticals, Inc. Delaware
EngMab Sarl Switzerland
Gloucester Pharmaceuticals, LLC Delaware
Impact Biomedicines, Inc. Delaware
JuMP Holdings, LLC Washington
Juno Therapeutics GmbH Germany
Juno Therapeutics, Inc. Delaware
Morris Avenue Investment II, LLC New Jersey
Morris Avenue Investment LLC New Jersey
Pharmion LLC Delaware
Receptos LLC Delaware
Receptos Services LLC Delaware
RedoxTherapies, Inc. Delaware
Seamair Insurance Limited Ireland
Signal Pharmaceuticals, LLC California
SPV A Holdings ULC Canada

Summit West Celgene LLC Delaware
VentiRx Pharmaceuticals Inc. Delaware
X-Body, Inc. Delaware

Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors

We consent to the incorporation by reference in the registration statements (Nos. 333-70083, 333-91977, 333-39716, 333-65908,
333-107980, 333-126296, 333-138497, 333-152655, 333-160955, 333-177669, 333-184634, 333-191996, 333-199638, 333-207840,
333-212728, 333-219505, and 333-223469) on Form S-8 and in the registration statements (Nos. 333-02517, 333-32115, 333-52963,
333-87197, 333-93759, 333-107977, 333-107978 and 333-214279) on Form S-3 of Celgene Corporation of our reports dated February
6, 2019, with respect to the consolidated balance sheets of Celgene Corporation and subsidiaries as of December 31, 2018 and 2017,
and the related consolidated statements of income, comprehensive income, cash flows, and stockholders' equity for each of the years in
the three-year period ended December 31, 2018, the related consolidated financial statement schedule, and the effectiveness of internal
control over financial reporting as of December 31, 2018, which reports appear in the December 31, 2018 annual report on Form 10-K of
Celgene Corporation and subsidiaries.
As discussed in Note 1 to the consolidated financial statements, on January 1, 2018, the Company adopted on a prospective basis
FASB Accounting Standards Update No. 2016-01, “Financial Instruments-Overall: Recognition and Measurement of Financial Assets
and Financial Liabilities” and Accounting Standards Update No. 2018-03, “Technical Corrections and Improvements to Financial
Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities" which requires accounting for certain
equity investments and financial liabilities under the fair value option with changes in fair value recognized in Net income. The Company
recognized a cumulative effect adjustment of $731 million to Retained Earnings on January 1, 2018 due to the adoption of these new
accounting standards.
/s/ KPMG LLP

February 26, 2019

Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that each person or entity whose signature appears below
constitutes and appoints Mark J. Alles and David V. Elkins, and each of them, its true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for it and in its name, place and stead, in any and all capacities, to sign any and all amendments
to this Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all contents and purposes as it might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue thereof.
Signature Title Date
/s/ Richard W. Barker

Richard W. Barker Director February 1, 2019
/s/ Hans Bishop
Hans Bishop Director February 5, 2019
/s/Michael W. Bonney
Michael W. Bonney Director February 4, 2019
/s/ Michael D. Casey
Michael D. Casey Director February 1, 2019
/s/ Carrie S. Cox
Carrie S. Cox Director February 2, 2019
/s/ Michael A. Friedman
Michael A. Friedman Director February 8, 2019
/s/ Julia A. Haller
Julia A. Haller Director February 1, 2019
/s/ Patricia Hemingway Hall
Patricia Hemingway Hall Director February 1, 2019
/s/ James Loughlin
James Loughlin Director February 1, 2019
/s/ Ernest Mario
Ernest Mario Director February 1, 2019
/s/ John H. Weiland
John H. Weiland Director February 4, 2019

Exhibit 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. Sec. 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Mark J. Alles, certify that:
1. I have reviewed this annual report on Form 10-K of Celgene Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for the periods presented in this
report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the
equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
internal control over financial reporting.

/s/ Mark J. Alles
Mark J. Alles

Exhibit 31.2
18 U.S.C. Sec. 1350,
I, David V. Elkins, certify that:
1. I have reviewed this annual report on Form 10-K of Celgene Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for the periods presented in this
report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the
equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
internal control over financial reporting.

/s/ David V. Elkins
David V. Elkins
Executive Vice President
Chief Financial Officer
(principal financial and accounting officer)

Exhibit 32.1
18 U.S.C. §1350,
In connection with the accompanying Annual Report on Form 10-K of Celgene Corporation ("the Company") for the year ended
December 31, 2018 ("the Periodic Report"), I, Mark J. Alles, Chief Executive Officer of the Company, hereby certify pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge that the Periodic
Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934 and that the information
contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: February 26, 2019 /s/ Mark J. Alles

Mark J. Alles

Exhibit 32.2
18 U.S.C. §1350,
In connection with the accompanying Annual Report on Form 10-K of Celgene Corporation ("the Company") for the year ended
December 31, 2018 ("the Periodic Report"), I, David V. Elkins, Chief Financial Officer of the Company, hereby certify pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge that the Periodic
Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934 and that the information
contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: February 26, 2019 /s/ David V. Elkins

David V. Elkins
Executive Vice President
Chief Financial Officer
(principal financial and
accounting officer)

Document and Entity 12 Months Ended
Information - USD ($) Dec. 31, 2018 Feb. 21, 2019 Jun. 30, 2018
Document and Entity Information
Entity Registrant Name CELGENE CORP /DE/
Entity Central Index Key 0000816284
Document Type 10-K
Document Period End Date Dec. 31, 2018
Amendment Flag false
Current Fiscal Year End Date --12-31
Entity Well-known Seasoned Issuer Yes
Entity Voluntary Filers No
Entity Current Reporting Status Yes
Entity Filer Category Large Accelerated Filer
Entity Public Float $ 55,804,979,945
Entity Common Stock, Shares Outstanding 702,164,345
Entity Emerging Growth Company false
Entity Small Business false
Entity Shell Company false
Document Fiscal Year Focus 2018
Document Fiscal Period Focus FY

CONSOLIDATED
BALANCE SHEETS - USD Dec. 31, Dec. 31,
($) 2018 2017
$ in Millions
Current assets:
Cash and cash equivalents $ 4,234 $ 7,013
Accounts receivable, net of allowances of $38 and $36 as of December 31, 2018 and 2017,
2,066 1,921
respectively
Inventory 458 541
Other current assets 501 388
Total current assets 9,067 14,892
Property, plant and equipment, net 1,367 1,070
Intangible assets, net 16,213 8,436
Total assets 35,480 30,141
Current liabilities:
Short-term borrowings and current portion of long-term debt 501 0
Accounts payable 418 305
Accrued expenses and other current liabilities 2,987 2,523
Income taxes payable 78 84
Current portion of deferred revenue 73 75
Total current liabilities 4,057 2,987
Deferred revenue, net of current portion 73 34
Income taxes payable 2,190 2,490
Deferred income tax liabilities 2,753 1,327
Total liabilities 29,319 23,220
Commitments and Contingencies (Note 19)
Stockholders' Equity:
Preferred stock, $.01 par value per share, 5.0 million shares authorized; none outstanding as of
0 0
December 31, 2018 and 2017, respectively
Common stock, $.01 par value per share, 1,150.0 million shares authorized; issued 981.5
10 10
million and 971.7 million shares as of December 31, 2018 and 2017, respectively
Common stock in treasury, at cost; 281.3 million and 212.4 million shares as of December 31,
(26,336) (20,243)
2018 and 2017, respectively
Additional paid-in capital 14,978 13,806
Retained earnings 17,559 13,061
Accumulated other comprehensive (loss) income (50) 287
Total stockholders' equity 6,161 6,921

Total liabilities and stockholders' equity $ $
35,480 30,141

CONSOLIDATED
BALANCE SHEETS
Dec. 31, 2018 Dec. 31, 2017
(Parenthetical) - USD ($)
$ in Millions
Statement of Financial Position [Abstract]
Accounts receivable, allowances (in dollars) $ 38 $ 36
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock, shares authorized 5,000,000.0 5,000,000.0
Preferred stock, shares outstanding 0 0
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized 1,150,000,000 1,150,000,000
Common stock, shares issued 981,500,000 971,700,000
Common stock, treasury 281,300,000 212,400,000

CONSOLIDATED 12 Months Ended
STATEMENTS OF
INCOME - USD ($) Dec. 31, Dec. 31, Dec. 31,
shares in Millions, $ in 2018 2017 2016
Millions
Revenue:
Total revenue $ 15,281 $ 13,003 $ 11,229
Expenses:
Cost of goods sold (excluding amortization of acquired intangible
587 461 438
assets)
Research and development 5,673 5,915 4,470
Selling, general and administrative 3,250 2,941 2,658
Amortization of acquired intangible assets 468 329 459
Total costs and expenses 10,090 8,296 8,063
Operating income 5,191 4,707 3,166
Other income and (expense):
Interest and investment income, net 45 105 30
Income before income taxes 4,832 4,314 2,372
Income tax provision 786 1,374 373
Net income $ 4,046 $ 2,940 $ 1,999
Basic (in dollars per share) $ 5.65 $ 3.77 $ 2.57
Diluted (in dollars per share) $ 5.51 $ 3.64 $ 2.49
Basic (in shares) 716.3 779.2 777.2
Diluted (in shares) 733.8 808.7 803.3
Net product sales
Revenue:
Total revenue $ 15,265 $ 12,973 $ 11,185
Other revenue
Revenue:
Total revenue $ 16 $ 30 $ 44

STATEMENTS OF
COMPREHENSIVE Dec. 31, Dec. 31, Dec. 31,
INCOME - USD ($) 2018 2017 2016
$ in Millions
Statement of Comprehensive Income [Abstract]
Net income $ 4,046 $ 2,940 $ 1,999
Other comprehensive income (loss):
Foreign currency translation adjustments (28) 70 (26)
Pension liability adjustment (6) 16 (24)
Net unrealized gains (losses) related to cash flow hedges:
Unrealized holding gains (losses) 245 (434) 145
Tax benefit (expense) 1 6 (13)
Unrealized holding gains (losses), net of tax 246 (428) 132
Reclassification adjustment for losses (gains) included in net income 7 (178) (300)
Tax (benefit) (1) (3) (3)
Reclassification adjustment for losses (gains) included in net income, net of
6 (181) (303)
tax
Excluded component related to cash flow hedges:
Amortization of excluded component (gains) (20) (15) 0
Reclassification of realized excluded component losses to net income 28 18 0
Net reclassification adjustment included in net income 8 3 0
Net unrealized (losses) gains on available for sale debt / marketable
securities (see Note 1):
Unrealized holding (losses) gains (9) 611 (563)
Tax benefit (expense) 2 (216) 203
Unrealized holding (losses) gains, net of tax (7) 395 (360)
Reclassification adjustment for losses included in net income 18 37 358
Tax (benefit) (4) (14) (126)
Reclassification adjustment for losses included in net income, net of tax 14 23 232
Total other comprehensive income (loss) 233 (102) (349)
Comprehensive income $ 4,279 $ 2,838 $ 1,650

STATEMENTS OF CASH
Dec. 31, Dec. 31, Dec. 31,
FLOWS - USD ($)
2018 2017 2016
$ in Millions
Cash flows from operating activities:
Net income $ 4,046 $ 2,940 $ 1,999
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation 160 134 121
Amortization 475 337 384
Impairment charges 31 1,679 489
Change in value of contingent consideration and success payments 19 (1,350) 21
Gain on sale of business 0 0 (38)
Net loss (gain) on sales of debt securities available-for-sale and equity
18 (61) (7)
investments
Fair value adjustments on equity investments (317) 0 0
Share-based compensation expense 921 644 606
Share-based employee benefit plan expense 33 34 40
Derivative instruments 3 72 169
Other, net (15) (24) (10)
Change in current assets and liabilities, excluding the effect of acquisitions:
Accounts receivable (178) (236) (222)
Inventory 82 (42) (55)
Other operating assets (55) (73) 94
Accounts payable and other operating liabilities 290 273 619
Income tax payable (393) 2,229 301
Payment of contingent consideration (22) 0 (9)
Deferred revenue 41 20 7
Net cash provided by operating activities 5,171 5,246 4,165
Cash flows from investing activities:
Capital expenditures (330) (279) (236)
Proceeds from sales of equity investment securities 96 116 15
Purchases of equity investment securities (249) (410) (307)
Payments for acquisition of businesses, net of cash acquired (8,648) 0 0
Other 0 (27) (1)
Net cash used in investing activities (6,418) (2,891) (1,002)
Cash flows from financing activities:
Payment for treasury shares (6,096) (3,833) (2,160)
Proceeds from short-term borrowing 5,709 0 100
Principal repayments on short-term borrowing (5,709) 0 (100)
Proceeds from the issuance of long-term debt 4,452 3,468 0

Repayments of long-term debt 0 (1,904) 0
Net proceeds from common equity put options 0 0 8
Payment of contingent consideration (40) 0 (41)
Net cash used in financing activities (1,540) (1,584) (1,834)
Effect of currency rate changes on cash and cash equivalents 8 72 (39)
Net (decrease) increase in cash and cash equivalents (2,779) 843 1,290
Cash and cash equivalents at beginning of period 7,013 6,170 4,880
Cash and cash equivalents at end of period 4,234 7,013 6,170
Change in net unrealized loss (gain) on debt securities available-for-sale/
9 (611) 563
marketable securities available-for-sale
Supplemental disclosure of cash flow information:
Interest paid 689 539 527
Income taxes paid 1,165 475 373
Human Longevity
Investment in Human Longevity, Inc. common stock 0 0 40
Celularity
Investment in Human Longevity, Inc. common stock $0 $ 22 $0

CONSOLIDATED
STATEMENTS OF Additional Accumulated Other
Common Treasury Retained
STOCKHOLDERS' Total Paid-in Comprehensive Income
Stock Stock Earnings
EQUITY - USD ($) Capital (Loss)
$ in Millions
Balances at beginning of period $ $
$9 $ 11,119 $ 8,075 $ 768
at Dec. 31, 2015 5,919 (14,052)
Increase (decrease) in
stockholders' equity
Other comprehensive income
(349) (349)
(loss)
Exercise of stock options and
conversion of restricted stock 349 1 (105) 453
units
Shares purchased under share
(2,160) (2,160)
repurchase program
Issuance of common stock for
51 36 15
employee benefit plans
Expense related to share-based
606 606
compensation
Income tax benefit upon
185 185
exercise of stock options
Balances at end of period at
6,600 10 (16,281) 12,378 10,074 419
Dec. 31, 2016
(102) (102)
(loss)
conversion of restricted stock 693 (83) 776
units
(3,911) (3,911)
repurchase program
40 32 8
644 644
compensation
Adoption of changes in
17 47 (30)
accounting principles
Balances at end of period at
6,921 10 (20,243) 13,806 13,061 287
Dec. 31, 2017
233 233
(loss)
conversion of restricted stock 144 (104) 248
units
(6,020) (6,020)
repurchase program
34 31 3
921 921
compensation
Adoption of changes in
(118) 452 (570)
accounting principles
Balances at end of period at $ $
$ 10 $ 14,978 $ 17,559 $ (50)
Dec. 31, 2018 6,161 (26,336)

Nature of Business, Basis of 12 Months Ended
Presentation and Summary
of Significant Accounting Dec. 31, 2018
Policies
Accounting Policies
[Abstract]
Nature of Business, Basis of Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies
Presentation and Summary of
Significant Accounting Celgene Corporation, together with its subsidiaries (collectively “we,” “our,” “us,” “Celgene” or
the “Company”), is an integrated global biopharmaceutical company engaged primarily in the
Policies discovery, development and commercialization of innovative therapies for the treatment of cancer
and inflammatory diseases through next-generation solutions in protein homeostasis, immuno-
oncology, epigenetics, immunology and neuro-inflammation. Celgene Corporation was
incorporated in the State of Delaware in 1986.
Our primary commercial stage products include REVLIMID®, POMALYST®/IMNOVID®,

OTEZLA®, ABRAXANE®, and VIDAZA®. In addition, we earn revenue from other product sales
and licensing arrangements.
The consolidated financial statements include the accounts of Celgene Corporation and its
subsidiaries. Investments in limited partnerships and interests where we have an equity interest of
50% or less and do not otherwise have a controlling financial interest are accounted for by one of
three methods: the equity method, as an investment without a readily determinable fair value or as
an investment with a readily determinable fair value.
We operate in a single segment engaged in the discovery, development, manufacturing, marketing,

distribution and sale of innovative therapies for the treatment of cancer and inflammatory diseases.
Consistent with our operational structure, our Chief Executive Officer (CEO), as the chief
operating decision maker, manages and allocates resources at the global corporate level. Our global
research and development organization is responsible for discovery of new product candidates
and supports development and registration efforts for potential future products. Our global supply
chain organization is responsible for the manufacturing and supply of products. Regional/
therapeutic area commercial organizations market, distribute and sell our products. The business
is also supported by global corporate staff functions. Managing and allocating resources at the
global corporate level enables our CEO to assess both the overall level of resources available
and how to best deploy these resources across functions, therapeutic areas, regional commercial
organizations and research and development projects in line with our overarching long-term
corporate-wide strategic goals, rather than on a product or franchise basis. Consistent with this
decision-making process, our CEO uses consolidated, single-segment financial information for
purposes of evaluating performance, allocating resources, setting incentive compensation targets,
as well as forecasting future period financial results.
The preparation of the consolidated financial statements requires management to make estimates
and assumptions that affect reported amounts and disclosures. Actual results could differ from
those estimates. We are subject to certain risks and uncertainties related to, among other things,
product development, regulatory approval, market acceptance, scope of patent and proprietary
rights, competition, outcome of legal and governmental proceedings, credit risk, technological
change and product liability.
Certain prior year amounts have been reclassified to conform to the current year's presentation.
During the first quarter of 2018, we adopted Accounting Standards Update No. 2016-01,
“Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial
Liabilities” (ASU 2016-01). As such, we have recast our previously reported marketable securities
available-for-sale of $5,029 million on our Consolidated Balance Sheet as of December 31, 2017
to conform to the current year presentation as shown in the table below. There were no changes to
Total current assets or Total assets as a result of this reclassification.

December 31, 2017
values N/A 1,810
In addition, as a result of adopting ASU 2016-01, we have also recast certain activity within our
previously reported Consolidated Statement of Cash Flows for the years ended December 31, 2017
and December 31, 2016 to conform to the current year presentation as shown in the table below.
There were no changes to Net cash provided by operating activities, Net cash used in investing
activities and Net cash used in financing activities as a result of this reclassification.
Year Ended December Year Ended December

31, 2017 31, 2016
As As As As
Reported Revised Reported Revised
Purchases of marketable securities available for
sale $ (8,478) N/A $ (1,281) N/A
Purchases of debt securities available-for-sale N/A $ (8,163) N/A $ (1,106)
Purchases of equity investment securities N/A (410) N/A (307)
Proceeds from sales of marketable securities
available-for-sale 5,968 N/A 633 N/A
Proceeds from sales of investment securities 20 N/A 15 N/A
Proceeds from sales of debt securities available-
for-sale N/A 5,872 N/A 633
Proceeds from sales of equity investment
securities N/A 116 N/A 15
The following is a summary of our significant accounting policies.
Financial Instruments: Certain financial instruments reflected in the Consolidated Balance Sheets,
(e.g., cash, cash equivalents, accounts receivable, certain other assets, accounts payable, short-term
borrowings and certain other liabilities) are recorded at cost, which approximates fair value due to
their short-term nature. The fair values of financial instruments other than debt securities available-
for-sale and equity investments with readily determinable fair values are determined through a
combination of management estimates and information obtained from third parties using the latest
market data. The fair value of debt securities available-for-sale and equity investments with readily
determinable fair values is determined utilizing the valuation techniques appropriate to the type of
security. See Note 5.
Derivative Instruments and Hedges: All derivative instruments are recognized on the Consolidated
Balance Sheets at their fair value. Changes in the fair value of derivative instruments are recorded
each period in current earnings or Other comprehensive income (loss) (OCI), depending on
whether a derivative instrument is designated as part of a hedging transaction and, if it is, the
type of hedging transaction. For a derivative to qualify as a hedge at inception and throughout
the hedged period, we formally document the nature and relationships between the hedging
instruments and hedged item. We assess, both at inception and on an on-going basis, whether
derivative instruments are highly effective in offsetting the changes in the fair value or cash
flows of hedged items. If we determine that a forecasted transaction is no longer probable
of occurring, we discontinue hedge accounting and any related unrealized gain or loss on the

derivative instrument is recognized in Other income (expense), net in our Consolidated Statements
of Income. We use derivative instruments, including those not designated as part of a hedging
transaction, to manage our exposure to movements in foreign exchange, our stock price and
interest rates. The use of these derivative instruments modifies the exposure of these risks with the
intent to reduce our risk or cost.
Prior to Accounting Standards Update No. 2017-12, "Targeted Improvements to Accounting for
Hedging Activities" (ASU 2017-12), which we adopted on August 31, 2017 (Adoption Date), with
an application date of January 1, 2017 (Application Date), we were required to separately measure
and reflect the amount by which the hedging instrument did not offset the changes in the fair
value or cash flows of hedged items, which was referred to as the ineffective amount. We assessed
hedge effectiveness on a quarterly basis and recorded the gain or loss related to the ineffective
portion of derivative instruments, if any, in Other income (expense), net in the Consolidated
Statements of Income. Pursuant to the provisions of ASU 2017-12, we are no longer required to
separately measure and recognize hedge ineffectiveness. Upon adoption of ASU 2017-12, we no
longer recognize hedge ineffectiveness in our Consolidated Statements of Income, but we instead
• cash flow hedges included in the assessment of hedge effectiveness in OCI. The amounts
recorded in OCI will subsequently be reclassified to earnings in the same line item in
the Consolidated Statements of Income as impacted by the hedged item when the hedged
item affects earnings; and
• fair value hedges included in the assessment of hedge effectiveness in the same line item
in the Consolidated Statements of Income that is used to present the earnings effect of the
hedged item.
Prior to the adoption of ASU 2017-12, we excluded option premiums and forward points (excluded
components) from our assessment of hedge effectiveness for our foreign exchange cash flow
hedges. We recognized all changes in fair value of the excluded components in Other income
(expense), net in the Consolidated Statements of Income. The amendments in ASU 2017-12
continue to allow those components to be excluded from the assessment of hedge effectiveness,
which we have elected to continue to apply. Pursuant to the provisions of ASU 2017-12, we no
longer recognize changes in the fair value of the excluded components in Other income (expense),
net, but we instead recognize the initial value of the excluded component on a straight-line basis
over the life of the derivative instrument, within the same line item in the Consolidated Statements
of Income that is used to present the earnings effect of the hedged item. Beginning on April 1,
2018, all new cash flow hedging relationships are accounted for using the forward method. As
a result, the entire fair value of the hedging instrument is recorded in OCI as no amounts are
excluded from the assessment of hedge effectiveness. In addition, the initial value of the excluded
component is recognized in OCI and not in the Consolidated Statements of Income.
In accordance with the transition provisions of ASU 2017-12, the Company is required to eliminate
the separate measurement of ineffectiveness for its cash flow hedging instruments existing as of the
Adoption Date through a cumulative effect adjustment to retained earnings as of the Application
Date. We did not record a cumulative-effect adjustment to eliminate ineffectiveness amounts as
all such amounts were not material to the Company's previously issued Consolidated Financial
Statements. In addition, we did not have any ineffectiveness during fiscal year 2017.
Also in accordance with the transition provisions of ASU 2017-12, we modified the recognition
model for the excluded component from a mark-to-market approach to an amortization approach
for all hedges existing as of the Adoption Date with a cumulative-effect adjustment of $30 million
that reduced Accumulated other comprehensive (loss) income (AOCI) with a corresponding
adjustment that increased Retained earnings as of the Application Date.
Cash, Cash Equivalents and Debt Securities Available-for-Sale: We invest our excess cash
primarily in money market funds, repurchase agreements, time deposits, commercial paper, U.S.
Treasury securities, U.S. government-sponsored agency securities, U.S. government-sponsored
agency mortgage-backed securities (MBS), ultra-short income fund investments, global corporate

debt securities and asset backed securities. All liquid investments with maturities of three months
or less from the date of purchase are classified as cash equivalents and all investments with
maturities of greater than three months from the date of purchase are classified as debt securities
available-for-sale. We determine the appropriate classification of our investments in marketable
debt securities at the time of purchase.
We invest in debt securities that are carried at fair value, held for an unspecified period of
time and are intended for use in meeting our ongoing liquidity needs. Unrealized gains and
losses on debt securities available-for-sale, which are deemed to be temporary, are reported as a
separate component of stockholders' equity, net of tax. The cost of debt securities is adjusted for
amortization of premiums and accretion of discounts to maturity. The amortization, along with
realized gains and losses and other-than-temporary impairment charges related to debt securities,
is included in Interest and investment income, net.
A decline in the market value of any debt security available-for-sale below its carrying value that is
determined to be other-than-temporary would result in a charge to earnings and decrease in the debt
security's carrying value down to its newly established fair value. Factors evaluated to determine
if an investment is other-than-temporarily impaired include significant deterioration in earnings
performance, credit rating, asset quality or business prospects of the issuer; adverse changes in
the general market condition in which the issuer operates; our intent to hold to maturity and an
evaluation as to whether it is more likely than not that we will not have to sell before recovery of
its cost basis; our expected future cash flows from the debt security; and issues that raise concerns
about the issuer's ability to continue as a going concern.
Concentration of Credit Risk: Cash, cash equivalents and debt securities available-for-sale are
financial instruments that potentially subject the Company to concentration of credit risk. We
invest our excess cash primarily in money market funds, repurchase agreements, time deposits,
commercial paper, U.S. Treasury securities, U.S. government-sponsored agency securities, U.S.
government-sponsored agency MBS, ultra-short income fund investments, global corporate debt
securities and asset backed securities (see Note 7). We have established guidelines relative to
diversification and maturities to maintain safety and liquidity. These guidelines are reviewed
We sell our products in the United States primarily through wholesale distributors and specialty
contracted pharmacies. Therefore, wholesale distributors and large pharmacy chains account for
a large portion of our U.S. trade receivables and net product revenues (see Note 20). While
most international sales, primarily in Europe, are made directly to hospitals, clinics and retail
chains, many of which in Europe are government owned and have extended their payment
terms in recent years given the economic pressure these countries are facing, sales in other
international regions are also made to wholesalers and distributors. We continuously monitor
the creditworthiness of our customers, including these governments, and have internal policies
regarding customer credit limits. We estimate an allowance for doubtful accounts primarily based
on historical payment patterns, aging of receivable balances and general economic conditions,
including publicly available information on the credit worthiness of countries themselves and
provinces or areas within such countries where they are the ultimate customers.
We continue to monitor economic conditions, including the volatility associated with international
economies, the sovereign debt situation in certain European countries and associated impacts on
the financial markets and our business. Our current business model in these markets is typically to
sell our hematology and oncology products directly to principally government owned or controlled
hospitals, which in turn directly deliver critical care to patients. Many of our products are used
to treat life-threatening diseases and we believe this business model enables timely delivery
and adequate supply of products. Many of the outstanding receivable balances are related to
government-funded hospitals and we believe the receivable balances are ultimately collectible.
Similarly, we believe that future sales to these customers will continue to be collectible.
Inventory: Inventories are recorded at the lower of cost or net realizable value, with cost
determined on a first-in, first-out basis. We periodically review the composition of inventory in
order to identify excess, obsolete, slow-moving or otherwise non-saleable items. If non-saleable

items are observed and there are no alternate uses for the inventory, we will record a write-down to
net realizable value in the period that the decline in value is first recognized. Included in inventory
are raw materials used in the production of preclinical and clinical products, which are charged to
research and development expense when consumed.
We capitalize inventory costs associated with certain products prior to regulatory approval of
products, or for inventory produced in new production facilities, when management considers it
highly probable that the pre-approval inventories will be saleable. The determination to capitalize
is based on the particular facts and circumstances relating to the expected regulatory approval of
the product or production facility being considered, and accordingly, the time frame within which
the determination is made varies from product to product. The assessment of whether or not the
product is considered highly probable to be saleable is made on a quarterly basis and includes, but
is not limited to, how far a particular product or facility has progressed along the approval process,
any known safety or efficacy concerns, potential labeling restrictions and other impediments. We
could be required to write down previously capitalized costs related to pre-launch inventories upon
a change in such judgment, or due to a denial or delay of approval by regulatory bodies, a delay
in commercialization or other potential factors. As of December 31, 2018, the carrying value of
pre-approval inventory was not material.
Property, Plant and Equipment, Net: Property, plant and equipment, net is stated at cost less
accumulated depreciation. Depreciation of plant and equipment is recorded using the straight-line
method. Building improvements are depreciated over the remaining useful life of the building.
Leasehold improvements are depreciated over the lesser of the economic useful life of the asset or
the remaining term of the lease, including anticipated renewal options. Capitalized software costs
incurred in connection with developing or obtaining software are amortized over their estimated
useful life from the date the systems are ready for their intended use. The estimated useful lives of
Buildings 40 years
Maintenance and repairs are charged to operations as incurred, while expenditures for
improvements which extend the life of an asset are capitalized.
Investments in Other Entities: We hold a portfolio of investments in equity securities and certain
investment funds that are accounted for under either the equity method, as equity investments
with readily determinable fair values, or as equity investments without readily determinable fair
values. Investments in companies or certain investment funds over which we have significant
influence but not a controlling interest are accounted for using the equity method, with our share
of earnings or losses reported in Other income (expense), net in the Consolidated Statements
of Income. Our equity investments with readily determinable fair values are primarily equity
investments in the publicly traded common stock of companies, including common stock of
companies with whom we have entered into collaboration agreements. Prior to ASU 2016-01,
which we adopted on January 1, 2018, unrealized gains and losses on these investments, which
were deemed to be temporary, were reported as a separate component of stockholder's equity, net
of tax. Realized gains and losses as well as other-than-temporary impairment charges related to
these investments were included in Other income (expense), net in the Consolidated Statements
of Income. Following the adoption of ASU 2016-01, these investments are measured at fair
value with changes in fair value recognized in Other income (expense), net in the Consolidated
Statements of Income and are no longer subject to impairment. Also prior to the adoption of
ASU 2016-01, equity investments without readily determinable fair values were recorded at cost
minus other-than-temporary impairment, with other-than-temporary impairment charges included

in Other income (expense), net in the Consolidated Statements of Income. Following the adoption
of ASU 2016-01, these investments are measured at cost adjusted for changes in observable prices
minus impairment or at net asset value (NAV), as a practical expedient, if available, with changes
in measurement recognized in Other income (expense), net in the Consolidated Statements of
Income. Investments in equity investments without readily determinable fair values of companies
that become publicly traded and are not classified as equity method investments are accounted for
as equity investments with readily determinable fair values prospectively from the date of such
companies' initial public offering. Our equity method investments and equity investments without
readily determinable fair values are included in Other non-current assets on the Consolidated
Balance Sheets.
All equity method investments and investments without a readily determinable fair value are
reviewed on a regular basis for possible impairment. If an equity method investment's fair value
is determined to be less than its net carrying value and the decline is determined to be other-
than-temporary, the investment is written down to its fair value. Investments without a readily
determinable fair value that do not qualify for the practical expedient to estimate fair value
using NAV per share are written down to fair value if a qualitative assessment indicates that the
investment is impaired and the fair value of the investment is less than its carrying value. Such
evaluation is judgmental and dependent on specific facts and circumstances. Factors considered in
determining whether an other-than-temporary decline in value or impairment has occurred include:
market value or exit price of the investment based on either market-quoted prices or future rounds
of financing by the investee; length of time that the market value was below its cost basis; financial
condition and business prospects of the investee; our intent and ability to retain the investment for
a sufficient period of time to allow for recovery in market value of the investment; a bona fide offer
to purchase, an offer by the investee to sell, or a completed auction process for the same or similar
security for an amount less than the carrying amount of the investment; issues that raise concerns
about the investee's ability to continue as a going concern; and any other information that we may
be aware of related to the investment.
Other Intangible Assets: Intangible assets with definite useful lives are amortized to their estimated
residual values over their estimated useful lives and reviewed for impairment if certain events or
changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Amortization is initiated for in-process research and development (IPR&D) intangible assets when
their useful lives have been determined. IPR&D intangible assets which are determined to have
had a drop in their fair value are adjusted downward and an expense recognized in Research and
development in the Consolidated Statements of Income. These IPR&D intangible assets are tested
Goodwill: Goodwill represents the excess of purchase price over fair value of net assets acquired
in a business combination accounted for by the acquisition method of accounting and is not
amortized, but is subject to impairment testing. We test our goodwill for impairment at least
annually or when a triggering event occurs that could indicate a potential impairment by assessing
qualitative factors or performing a quantitative analysis in determining whether it is more likely
than not that the fair value of net assets are below their carrying amounts.
Impairment of Long-Lived Assets: Long-lived assets, such as property, plant and equipment and
certain other long-term assets are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the carrying amount
of an asset or asset group to the estimated undiscounted future cash flows expected to be generated
by the asset or asset group. If the carrying amount of the assets exceed their estimated future
undiscounted net cash flows, an impairment charge is recognized for the amount by which the
carrying amount of the assets exceed the fair value of the assets.
Contingent Consideration from Business Combinations: Subsequent to the acquisition date, we

measure contingent consideration arrangements at fair value for each period with changes in
fair value recognized in income as Acquisition related charges (gains) and restructuring, net in
the Consolidated Statements of Income. Changes in contingent consideration obligation values

can result from movements in publicly listed prices of our Contingent Value Rights issued
in connection with our acquisition of Abraxis BioScience, Inc. (Abraxis) (Abraxis CVRs),
adjustments to discount rates, updates in the assumed achievement or timing of milestones or
changes in the probability of certain clinical events and changes in the assumed probability
associated with regulatory approval. In the absence of new information, changes in fair value
reflect only the passage of time as development work towards the achievement of the milestones
Foreign Currency Translation: Operations in non-U.S. entities are recorded in the functional
currency of each entity. For financial reporting purposes, the functional currency of an entity is
determined by a review of the source of an entity's most predominant cash flows. The results of
operations for non-U.S. dollar functional currency entities are translated from functional currencies
into U.S. dollars using the average currency rate during each month, which approximates the
results that would be obtained using actual currency rates on the dates of individual transactions.
Assets and liabilities are translated using currency rates at the end of the period. Adjustments
resulting from translating the financial statements of our foreign entities into the U.S. dollar
are excluded from the determination of net income and are recorded as a component of OCI.
Transaction gains and losses are recorded in Other income (expense), net in the Consolidated
Advertising Costs: Advertising costs are expensed when incurred and are recorded in Selling,
general and administrative in the Consolidated Statements of Income. Advertising costs consist of
direct-to-consumer advertising and were $174 million, $119 million and $95 million for the years
ended December 31, 2018, 2017 and 2016, respectively.
Research and Development Costs: Research and development costs are expensed as incurred.
These include all internal and external costs related to services contracted by us. Upfront and
milestone payments made to third parties in connection with research and development
collaborations are expensed as incurred up to the point of regulatory approval. Milestone payments
made to third parties upon regulatory approval are capitalized and amortized over the remaining
useful life of the related product. Upfront payments are recorded when incurred, and milestone
payments are recorded when the specific milestone has been achieved. Asset acquisition expenses,
including 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, are
recorded as incurred.
Income Taxes: We utilize the asset and liability method of accounting for income taxes. Under
this method, deferred tax assets and liabilities are determined based on the difference between
the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax
rates in effect for years in which the temporary differences are expected to reverse. A valuation
allowance is provided when it is more likely than not that some portion or all of a deferred tax
asset will not be realized. We recognize the benefit of an uncertain tax position that we have taken
or expect to take on income tax returns we file if such tax position is more likely than not to
be sustained. We recognize the tax on Global Intangible Low-Taxed Income (GILTI) as a period
expense in the period the tax is incurred. Under this policy, we have not provided deferred taxes on
temporary differences that upon their reversal will affect the amount of income subject to GILTI in
the period.
Revenue Recognition: Revenue from the sale of products is recognized in a manner that depicts the
transfer of those promised goods to customers in an amount that reflects the consideration to which
we expect to be entitled in exchange for these good or services. To achieve this core principle,
we follow a five-step model that includes identifying the contract with a customer, identifying
the performance obligations in the contract, determining the transaction price, allocating the
transaction price to the performance obligations and recognizing revenue when, or as, we satisfy a
performance obligation. In addition, we recognize revenue from other product sales and royalties
based on licensees' sales of our products or products using our technologies. We do not consider
royalty revenue to be a material source of our consolidated revenue.

We record gross-to-net sales accruals for government rebates, chargebacks, distributor services
fees, other rebates and administrative fees, sales returns and allowances and sales discounts. See
Note 2 for further detail on gross-to-net sales accruals and revenue recognition disclosures.
Share-Based Compensation: We utilize share-based compensation in the form of stock options,

restricted stock units (RSUs) and performance-based restricted stock units (PSUs). Compensation
expense is recognized in the Consolidated Statements of Income based on the estimated fair value
of the awards at grant date. Compensation expense recognized reflects an estimate of the number
of awards expected to vest after taking into consideration an estimate of award forfeitures based on
actual experience and is recognized on a straight-line basis over the requisite service period, which
is generally the vesting period required to obtain full vesting. Management expectations related to
the achievement of performance goals associated with PSU grants is assessed regularly and that
assessment is used to determine whether PSU grants are expected to vest. If performance-based
milestones related to PSU grants are not met or not expected to be met, any compensation expense
recognized to date associated with grants that are not expected to vest will be reversed.
The fair values of stock option grants are estimated as of the date of grant using a Black-Scholes
option valuation model. The fair values of RSU and PSU grants that are not based on market
performance are based on the market value of our common stock on the date of grant. Certain
of our PSU grants are measured based on the achievement of specified performance and market
targets, including non-GAAP (Generally Accepted Accounting Principles) revenue, non-GAAP
earnings per share, and relative total shareholder return. The grant date fair value for the portion of
the PSUs related to non-GAAP revenue and non-GAAP earnings per share is estimated using the
fair market value of our common stock on the grant date. The grant date fair value for the portion
of the PSUs related to relative total shareholder return is estimated using the Monte Carlo valuation
model.
Earnings Per Share: Basic earnings per share is computed by dividing net income by the weighted-
average number of common shares outstanding during the period. Diluted earnings per share is
computed by dividing net income by the weighted-average number of common shares outstanding
during the period, assuming potentially dilutive common shares resulting from option exercises,
RSUs, PSUs, warrants and other incentives had been issued and any proceeds thereof used to
repurchase common stock at the average market price during the period. The assumed proceeds
used to repurchase common stock is the sum of the amount to be paid to us upon exercise of
options and the amount of compensation cost attributed to future services and not yet recognized.
New accounting standards which have been adopted
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards
Update No. 2014-09, "Revenue from Contracts with Customers" (ASU 2014-09) and has
subsequently issued a number of amendments to ASU 2014-09. The new standard, as amended,
provides a single comprehensive model to be used in the accounting for revenue arising from
contracts with customers and supersedes previous revenue recognition guidance, including
industry-specific guidance. The standard’s stated core principle is that an entity should recognize
revenue to depict the transfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for those goods or services.
To achieve this core principle, ASU 2014-09 includes provisions within a five step model that
includes identifying the contract with a customer, identifying the performance obligations in the
contract, determining the transaction price, allocating the transaction price to the performance
obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation.
In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of
revenue and cash flows arising from contracts with customers. See Note 2 for revenue recognition
disclosures.
The new standard was effective for us on January 1, 2018 and we elected to adopt it using
a modified retrospective transition method, which required a cumulative effect adjustment to
opening retained earnings as of January 1, 2018. The implementation of ASU 2014-09 using
the modified retrospective transition method did not have a material quantitative impact on our
consolidated financial statements as the timing of revenue recognition did not significantly change.

We also elected the following practical expedients, which were available to us as a result of
utilizing the modified retrospective transition method:
• We applied the provisions of the standard only to contracts that were not completed as
of January 1, 2018; and
• We did not retrospectively restate contracts for contract modifications executed before
the beginning of the earliest period presented.
In accordance with the transition provisions of ASU 2014-09, we recorded a cumulative effect
adjustment of $4 million to increase Retained earnings (net of a $1 million tax effect). In limited
instances, the new standard permits us to recognize revenue earlier than under the previous
revenue recognition guidance. Historically, we deferred certain revenue where the transaction price
pursuant to the underlying customer arrangement was not fixed or determinable. Under the new
standard, such customer arrangements are accounted for as variable consideration, which results in
revenue being recognized earlier provided we can reliably estimate the ultimate price expected to
be realized from the customer. In addition, ASU 2014-09 requires companies who elect to adopt
the standard using the modified retrospective transition method to disclose within the footnotes the
effects of applying the provisions of the previous standards to current year financial statements.
Revenue and Net income for the year ended December 31, 2018, do not differ materially from
amounts that would have resulted from application of the previous standards.
In January 2016 and February 2018, the FASB issued ASU 2016-01 and Accounting Standards
Update No. 2018-03, "Technical Corrections and Improvements to Financial
Instruments—Overall: Recognition and Measurement of Financial Assets and Financial
Liabilities" (ASU-2018-03), respectively. ASU 2016-01 changes accounting for equity
investments, financial liabilities under the fair value option, and presentation and disclosure
requirements for financial instruments. ASU 2016-01 does not apply to equity investments in
consolidated subsidiaries or those accounted for under the equity method of accounting. In
addition, the FASB clarified guidance related to the valuation allowance assessment when
recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt
securities. Equity investments with readily determinable fair values will be measured at fair value
with changes in fair value recognized in Net income. We have elected to measure all of our equity
investments without readily determinable fair values at cost adjusted for changes in observable
prices minus impairment or at NAV, as a practical expedient, if available. Changes in measurement
of equity investments without readily determinable fair values will be recognized in Net income.
The guidance related to equity investments without readily determinable fair values, in which the
practical expedient has not been elected, will be applied prospectively to equity investments that
exist as of the date of adoption. For equity investments without a readily determinable fair value in
which the NAV per share practical expedient is elected, ASU 2018-03 clarified that the transition
should not be performed prospectively, but rather as a cumulative effect adjustment to opening
Retained earnings as of the beginning of the fiscal year of adoption. Equity investments without
readily determinable fair values are recorded within Other non-current assets on the Consolidated
Balance Sheets. We have not elected the fair value option for financial liabilities with instrument-
specific credit risk. Companies must assess valuation allowances for deferred tax assets related
to available-for-sale debt securities in combination with their other deferred tax assets. ASU
2016-01 was effective for us on January 1, 2018 which required a cumulative effect adjustment
to opening Retained earnings to be recorded for equity investments with readily determinable fair
values and equity investments without readily determinable fair values in which the NAV per
share practical expedient was elected. As of the adoption date, we held publicly traded equity
investments with a fair value of approximately $1.8 billion in a net unrealized gain position of $875
million, and having an associated deferred tax liability of $188 million. We recorded a cumulative
effect adjustment of $687 million to decrease AOCI with a corresponding increase to Retained
earnings for the amount of unrealized gains or losses, net of tax as of the beginning of fiscal
year 2018. In addition, we held an equity investment without a readily determinable fair value
in which we elected the NAV per share practical expedient. As such, on January 1, 2018, we
recorded an additional cumulative effect adjustment of $59 million to increase equity investments
without readily determinable fair values as the NAV was in excess of our cost basis as of the
adoption date with a corresponding increase to Retained earnings of $44 million, net of the tax
effect of $15 million. As a result of the implementation of ASU 2016-01, effective on January 1,

2018 unrealized gains and losses in Equity investments with readily determinable fair values and
equity investments without readily determinable fair values for which observable price changes
for identical or similar (e.g. dividend rights, voting rights, etc.) investments occur are recorded on
the Consolidated Balance Sheets within Other income (expense), net. We recorded a net gain of
$317 million in Other income (expense), net for the year ended December 31, 2018 as a result of
adopting this standard. The implementation of ASU 2016-01 is expected to increase volatility in
our net income as the volatility previously recorded in OCI related to changes in the fair market
value of available-for-sale equity investments will now be reflected in Net income effective with
the adoption date.
In February 2018, the FASB issued Accounting Standards Update No. 2018-02, "Income
Statement-Reporting Comprehensive Income: Reclassification of Certain Tax Effects from
Accumulated Other Comprehensive Income" (ASU 2018-02). The new standard is effective on
January 1, 2019 with early adoption permitted. The guidance permits a reclassification from AOCI
to Retained earnings for stranded tax effects resulting from U.S. tax reform legislation enacted in
December 2017 (2017 Tax Act). We elected to early adopt ASU 2018-02 on January 1, 2018. We
use a specific identification approach to release the income tax effects in AOCI. We have recast our
previously reported Marketable securities available-for-sale on our Consolidated Balance Sheet as
of December 31, 2017 to conform to the current year presentation as outlined earlier in this Note 1.
As a result of adopting this standard, we recorded a cumulative effect adjustment to increase AOCI
by $117 million with a corresponding decrease to Retained earnings. We recorded the impacts of
adopting ASU 2018-02 prior to recording the impacts of adopting ASU 2016-01 and included state
income tax related effects in the amounts reclassified to Retained earnings.
In August 2016, the FASB issued Accounting Standards Update No. 2016-15, "Statement of Cash
Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" (ASU 2016-15).
ASU 2016-15 clarifies how companies present and classify certain cash receipts and cash
payments in the statement of cash flows where diversity in practice exists. ASU 2016-15 was
effective for us in our first quarter of fiscal 2018 and did not result in any changes to the
presentation of our Consolidated Statements of Cash Flows upon adoption.
In October 2016, the FASB issued Accounting Standards Update No. 2016-16, "Intra-Entity
Transfers of Assets Other Than Inventory” (ASU 2016-16). ASU 2016-16 requires the income tax
consequences of intra-entity transfers of assets other than inventory to be recognized as current
period income tax expense or benefit and removes the requirement to defer and amortize the
consolidated tax consequences of intra-entity transfers. The new standard was effective for us on
January 1, 2018. As of the adoption date, we had net prepaid tax assets of $166 million related to
intra-entity transfers of assets other than inventory which was recorded in Other non-current assets.
Using the modified retrospective approach, we recorded a cumulative effect adjustment of $166
million to decrease Retained earnings with a corresponding decrease in prepaid tax assets as of the
beginning of fiscal year 2018.
In January 2017, the FASB issued Accounting Standards Update No. 2017-01, "Business
Combinations" (ASU 2017-01). ASU 2017-01 provides guidance for evaluating whether
transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The
guidance provides a screen to determine when an integrated set of assets and activities (a "set")
does not qualify to be a business. The screen requires that when substantially all of the fair value
of the gross assets acquired (or disposed of) is concentrated in an identifiable asset or a group of
similar identifiable assets, the set is not a business. If the screen is not met, the guidance requires
a set to be considered a business to include, at a minimum, an input and a substantive process that
together significantly contribute to the ability to create outputs and removes the evaluation as to
whether a market participant could replace the missing elements. The new standard was effective
for us on January 1, 2018 and was adopted on a prospective basis. In the first quarter of 2018,
we acquired Impact Biomedicines Inc. (Impact) and Juno Therapeutics Inc. (Juno) which were
accounted for as an asset acquisition and a business combination, respectively. See Note 3 for
further information on the acquisitions of Impact and Juno. We anticipate that the adoption of this
standard will result in more acquisitions being accounted for as asset acquisitions.

The following table presents a summary of cumulative effect adjustments to Retained earnings and
AOCI due to the adoption of new accounting standards on January 1, 2018 as noted above:
Retained
Earnings AOCI
Increase / Increase /
(Decrease) (Decrease)
ASU 2014-09 $ 4 $ —
ASU 2016-01 687 (687)
ASU 2018-03 44 —
ASU 2018-02 (117) 117
ASU 2016-16 (166) —
Net cumulative effect adjustments to Retained earnings and
AOCI on January 1, 2018 due to the adoption of new
accounting standards $ 452 $ (570)
In February 2016, the FASB issued Accounting Standards Update No. 2016-02, "Leases" (ASU
2016-02). ASU 2016-02 provides accounting guidance for both lessee and lessor accounting
models. Among other things, lessees will recognize a right-of-use asset and a lease liability for
leases with a duration of greater than one year. For income statement purposes, ASU 2016-02
will require leases to be classified as either an operating or finance lease. Operating leases will
result in straight-line expense while finance leases will result in a front-loaded expense pattern.
The new standard will be effective for us on January 1, 2019. In July 2018, the FASB issued
Accounting Standards Update No. 2018-11, "Leases" (ASU 2018-11), which offers a transition
option to entities adopting the new lease standard. Under the transition option, entities can elect
to apply the new guidance using a modified retrospective approach at the beginning of the year in
which the new lease standard is adopted, rather than to the earliest comparative period presented
in their financial statements. We will adopt the standard using the modified retrospective method
and intend to elect the available practical expedients on adoption. We anticipate adoption of the
new standard will increase total assets by $280 million - $310 million, with an offsetting increase
to total liabilities of $310 million - $340 million on our consolidated balance sheet and result
in additional lease-related disclosures in the footnotes to our consolidated financial statements.
Adoption of the standard has required changes to our business processes, systems and controls to
comply with the provisions of the standard. We have implemented a system from a third-party
service provider to assist in the adoption of the standard. We are in the process of finalizing our
testing of the system. In addition, we have designed and implemented internal controls that became
operational during the first quarter of 2019 to ensure our readiness.
In June 2016, the FASB issued Accounting Standards Update No. 2016-13, "Financial Instruments
- Credit Losses: Measurement of Credit Losses on Financial Instruments" (ASU 2016-13). ASU
2016-13 requires that expected credit losses relating to financial assets measured on an amortized
cost basis and available-for-sale debt securities be recorded through an allowance for credit losses.
ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt
securities to the amount by which carrying value exceeds fair value and also requires the reversal
of previously recognized credit losses if fair value increases. The new standard will be effective
for us on January 1, 2020. Early adoption will be available on January 1, 2019. We are currently
evaluating the effect that the updated standard will have on our consolidated financial statements
and related disclosures.
In November 2018, the FASB issued Accounting Standards Update No. 2018-18, “Collaboration
Arrangements: Clarifying the Interaction between Topic 808 and Topic 606” (ASU 2018-18).
The issuance of ASU 2014-09 raised questions about the interaction between the guidance on
collaborative arrangements and revenue recognition. ASU 2018-18 addresses this uncertainty by

(1) clarifying that certain transactions between collaborative arrangement participants should be
accounted for as revenue under ASU 2014-09 when the collaboration arrangement participant is
a customer, (2) adding unit of account guidance to assess whether the collaboration arrangement
or a part of the arrangement is with a customer and (3) precluding a company from presenting
transactions with collaboration arrangement participants that are not directly related to sales to
third parties together with revenue from contracts with customers. The new standard will be
effective for us on January 1, 2020 with early adoption permitted. We are currently evaluating
the effect that the updated standard will have on our consolidated financial statements and related
disclosures.

12 Months Ended
Revenue
Dec. 31, 2018
Revenue from Contract with
Customer [Abstract]
Revenue Revenue
Subsequent to January 1, 2018 we account for revenue in accordance with ASU 2014-09, which we
adopted using the modified retrospective method. See Note 1 for further discussion of the adoption,
including the impact on our consolidated financial statements. The majority of our revenue
is derived from product sales. Our primary commercial stage products include REVLIMID®,
POMALYST®/IMNOVID®, OTEZLA®, ABRAXANE® and VIDAZA®. In addition, we recognize
revenue from other product sales and royalties based on licensees’ sales of our products or
products using our technologies. We do not consider royalty revenue to be a material source of our
consolidated revenue. As such, the following disclosure only relates to revenue associated with net
product sales.
Performance Obligations
A performance obligation is a promise in a contract to transfer a distinct good or service to the

customer, and is the unit of account in the current revenue standard. A contract’s transaction price
is allocated to each distinct performance obligation and recognized as revenue when, or as, the
performance obligation is satisfied.
At contract inception, we assess the goods promised in our contracts with customers and identify a
performance obligation for each promise to transfer to the customer a good that is distinct. When
identifying our performance obligations, we consider all goods promised in the contract regardless
of whether explicitly stated in the customer contract or implied by customary business practices.
Generally, our contracts with customers require us to transfer an individual distinct product,
which would represent a single performance obligation. In limited situations, our contracts with
customers will require us to transfer two or more distinct products, which would represent multiple
performance obligations for each distinct product. For contracts with multiple performance
obligations, we allocate the contract’s transaction price to each performance obligation on a
relative standalone selling price basis. In determining our standalone selling prices for our
products, we utilize observable prices for our goods sold separately in similar circumstances and
to customers in the same geographical region or market. Our performance obligations with respect
to our product sales are satisfied at a point in time, which transfer control upon delivery of product
to our customers. We consider control to have transferred upon delivery because the customer
has legal title to the asset, we have transferred physical possession of the asset, the customer has
significant risks and rewards of ownership of the asset, and in most instances we have a present
right to payment at that time. The aggregate dollar value of unfulfilled orders as of December 31,
2018 was not material.
Distribution
REVLIMID® and POMALYST® are distributed in the United States primarily through contracted
pharmacies under the REVLIMID Risk Evaluation and Mitigation Strategy (REMS) and
POMALYST REMS® programs, respectively. These are proprietary risk-management distribution
programs tailored specifically to provide for the safe and appropriate distribution and use of
REVLIMID® and POMALYST®. Internationally, REVLIMID® and IMNOVID® are distributed
under mandatory risk-management distribution programs tailored to meet local authorities’
specifications to provide for the product’s safe and appropriate distribution and use. These
programs may vary by country and, depending upon the country and the design of the risk-
management program, the product may be sold through hospitals or retail pharmacies. OTEZLA®,
ABRAXANE® and VIDAZA® are distributed through the more traditional pharmaceutical
industry supply chain and are not subject to the same risk-management distribution programs as
REVLIMID® and POMALYST®/IMNOVID®.

Significant Payment Terms
Our contracts with our customers state the terms of the sale including the description, quantity,
and price for each product purchased as well as the payment and shipping terms. Our contractual
payment terms vary by jurisdiction. In the United States, our contractual payment terms are
typically due in no more than 30 days. Sales made outside the United States typically have
payment terms that are greater than 60 days, thereby extending collection periods beyond those
in the United States. The period between when we transfer control of the promised goods to a
customer and when we receive payment from such customer is expected to be one year or less.
Any exceptions to this are either not material or we collect interest from the customer for the time
period between the invoice due date and the payment date. As such, we do not adjust the invoice
amount for the effects of a significant financing component as the impact is not material to our
consolidated financial statements.
Contract Balances
When the timing of our delivery of product is different from the timing of payments made by the
customers, we recognize either a contract asset (performance precedes the contractual due date) or
a contract liability (customer payment precedes performance). There were no significant changes
in our contract asset or liability balances during the year ended December 31, 2018 other than from
transactions in the ordinary course of operating activities as described above.
Contract Assets
In limited situations, certain customer contractual payment terms require us to bill in arrears; thus,
we satisfy some or all of our performance obligations before we are contractually entitled to bill
the customer. In these situations, billing occurs subsequent to revenue recognition, which results
in a contract asset. We reflect these contract assets as Other current assets on the Consolidated
Balance Sheet. For example, certain of our contractual arrangements do not permit us to bill until
the product is sold through to the end-customer. As of December 31, 2018, such contract assets
were $36 million.
Contract Liabilities
In other limited situations, certain customer contractual payment terms allow us to bill in advance;
thus, we receive customer cash payment before satisfying some or all of its performance
obligations. In these situations, billing occurs in advance of revenue recognition, which results in
contract liabilities. We reflect these contract liabilities in Deferred revenue on our Consolidated
Balance Sheet. For example, certain of our contractual arrangements provide the customer with
free product after the customer has purchased a contractual minimum amount of product. We
concluded the free product represents a future performance obligation in the form of a contractual
material right. As such, we defer a portion of the transaction price as a contract liability upon each
sale of product until the contractual minimum volume is achieved. As we satisfy our remaining
performance obligations we release a portion of the deferred revenue balance. Revenue recognized
for the year ended December 31, 2018 that was reflected in the deferred revenue balance at the
beginning of the year was $51 million. As of December 31, 2018, such contract liabilities were
$137 million.
Gross-to-Net Sales Adjustments
We record gross-to-net sales accruals for government rebates, chargebacks, distributor service fees,
other rebates and administrative fees, sales returns and allowances, and sales discounts. Provisions
for discounts, early payments, rebates, sales returns, distributor service fees and chargebacks
under terms customary in the industry are provided for in the same period the related sales are
recorded. We record estimated reductions to revenue for volume-based discounts and rebates at
the time of the initial sale based upon the sales terms, historical experience and trend analysis.
We estimate these accruals using an expected value approach based primarily upon our historical

rebate and discount payments made and the provisions included in current customer contracts and
government regulations.
Government Rebates, including Medicaid and Medicare Rebates
Government rebate accruals are based on estimated payments due to governmental agencies for
purchases made by third parties under various governmental programs. In the U.S., we participate
in state government Medicaid programs and other Federal and state government programs, which
require rebates to participating government entities. U.S. Medicaid rebate accruals are generally
based on historical payment data and estimates of future Medicaid beneficiary utilization applied
to the Medicaid unit rebate formula established by the Center for Medicaid and Medicare Services.
The Medicaid rebate percentage was increased and extended to Medicaid Managed Care
Organizations in March 2010. The accrual of the rebates associated with Medicaid Managed Care
Organizations is calculated based on estimated historical patient data related to Medicaid Managed
Care Organizations. We also analyze actual billings received from the states to further support the
accrual rates. Manufacturers of pharmaceutical products are responsible for 50% of the patient’s
cost of branded prescription drugs related to the Medicare Part D Coverage Gap (70% beginning
in 2019). In order to estimate the cost to us of this coverage gap responsibility, we analyze data for
eligible Medicare Part D patients against data for eligible Medicare Part D patients treated with our
products as well as the historical invoices. This expense is recognized throughout the year as costs
are incurred. In certain international markets government-sponsored programs require rebates to be
paid based on program specific rules and, accordingly, the rebate accruals are determined primarily
on estimated eligible sales.
Chargebacks, Distributor Service Fees, Other Rebates and Administrative Fees
Chargeback accruals are based on the differentials between product acquisition prices paid by
wholesalers and lower government contract pricing paid by eligible customers covered under
federally qualified programs. Distributor service fee accruals are based on contractual fees to be
paid to the wholesale distributor for services provided. TRICARE is a health care program of
the U.S. Department of Defense Military Health System that provides civilian health benefits for
military personnel, military retirees and their dependents. TRICARE rebate accruals are included
in chargeback accruals and are based on estimated Department of Defense eligible sales multiplied
by the TRICARE rebate formula.
Rebates or administrative fees are offered to certain wholesale customers, group purchasing
organizations and end-user customers, consistent with pharmaceutical industry practices.
Settlement of rebates and administrative fees may generally occur from one to 15 months from
the date of sale. We record a provision for rebates at the time of sale based on contracted rates
and historical redemption rates. Assumptions used to establish the provision include level of
wholesaler inventories, contract sales volumes and average contract pricing. We regularly review
the information related to these estimates and adjust the provision accordingly.
Returns, Refunds and Warranties
We base our sales returns allowance on estimated on-hand retail/hospital inventories, measured
end-customer demand as reported by third-party sources, actual returns history and other factors,
such as the trend experience for lots where product is still being returned or inventory
centralization and rationalization initiatives conducted by major pharmacy chains, as applicable. If
the historical data we use to calculate these estimates do not properly reflect future returns, then
a change in the allowance would be made in the period in which such a determination is made
and revenues in that period could be materially affected. Under this methodology, we track actual
returns by individual production lots. Returns on closed lots, that is, lots no longer eligible for
return credits, are analyzed to determine historical returns experience. Returns on open lots, that is,
lots still eligible for return credits, are monitored and compared with historical return trend rates.
Any changes from the historical trend rates are considered in determining the current sales return
allowance. We do not provide warranties on our products to our customers unless the product is
defective as manufactured or damaged in transit within a reasonable period of time after receipt of
the product by the customer.

Sales Discounts
Sales discounts are based on payment terms extended to customers, which are generally offered
as an incentive for prompt payment. We record our best estimate of sales discounts to which
customers are likely to be entitled based on both historical information and current trends.
The reconciliation of gross product sales to net product sales by each significant category of gross-
to-net adjustments was as follows:

2018 2017 2016
Total revenues from external customers by our franchises (Hematology / Oncology and
Inflammation & Immunology), product and geography for the years ended December 31, 2018,

2018 2017 2016
REVLIMID®
U.S. $ 6,469 $ 5,426 $ 4,417
Worldwide 9,685 8,187 6,974
® ®
POMALYST /IMNOVID
U.S. 1,391 1,008 778
Worldwide 2,040 1,614 1,311
®
ABRAXANE
U.S. 663 607 634
Worldwide 1,062 992 973
VIDAZA®
U.S. 9 8 12
All Other
U.S. 208 203 236

U.S. 8,740 7,252 6,077
Worldwide 13,657 11,694 10,168

OTEZLA®
U.S. 1,275 1,058 904
Worldwide 1,608 1,279 1,017

U.S. 10,015 8,310 6,981
Worldwide 15,265 12,973 11,185
Total revenue $ 15,281 $ 13,003 $ 11,229

12 Months Ended
Acquisitions and Divestitures
Dec. 31, 2018
Business Combinations
[Abstract]
Acquisitions and Divestitures Acquisitions and Divestitures
Impact Biomedicines, Inc. (Impact): On February 12, 2018, we acquired all of the outstanding
shares of Impact, a privately held biotechnology company which was developing fedratinib, a
highly selective JAK2 kinase inhibitor, for myelofibrosis.
The consideration included an initial payment of approximately $1.1 billion. In addition, the sellers
of Impact are eligible to receive contingent consideration based upon regulatory approvals of up to
$1.4 billion and contingent consideration of up to $4.5 billion based upon the achievement of sales
in any four consecutive calendar quarters between $1.0 billion and $5.0 billion. The acquisition
of Impact was concentrated in one single identifiable asset and thus, for accounting purposes,
we have concluded that the acquired assets do not meet the accounting definition of a business.
The initial payment was allocated primarily to fedratinib, resulting in a $1.1 billion research and
development asset acquisition expense and the balance of approximately $7 million was allocated
to the remaining net assets acquired.
Juno Therapeutics, Inc. (Juno): On March 6, 2018 (Acquisition Date), we acquired all of the
outstanding shares of Juno, resulting in Juno becoming our wholly-owned subsidiary. Juno is
developing CAR (chimeric antigen receptor) T and TCR (T cell receptor) therapeutics with a
broad, novel portfolio evaluating multiple targets and cancer indications. The acquisition added
a novel scientific platform and scalable manufacturing capabilities including JCAR017 and
JCARH125, both directed CAR T therapeutics currently in programs for relapsed and/or refractory
diffuse large B-cell lymphoma and relapsed and/or refractory multiple myeloma, respectively.
Total consideration for the acquisition was approximately $10.4 billion, consisting of $9.1 billion
for common stock outstanding, $966 million for the fair value of our investment in Juno and $367
million for the portion of equity compensation attributable to the pre-combination service period.
In addition, the fair value of the awards attributed to post-combination service period was $666
million, which will be recognized as compensation expense over the requisite service period in
our post-combination financial statements. We recognized $528 million of post-combination share-
based compensation for the year ended December 31, 2018.
The acquisition has been accounted for as a business combination using the acquisition method of
accounting which requires that assets acquired and liabilities assumed be recognized at their fair
values as of the acquisition date and requires the fair value of acquired IPR&D to be classified as
indefinite-lived assets until the successful completion or abandonment of the associated research
and development efforts.
The total consideration for the acquisition of Juno was $10.4 billion, which consisted of the
following:
Total
Consideration

(1) The
Company recognized a gain of $458 million during the first quarter of 2018, as a result of
remeasuring to fair value the equity interest in Juno held by us before the business combination,
which was recorded in Other income (expense), net within the Consolidated Statement of Income.
See Note 1 for further information on the adoption of ASU 2016-01.
(2) All
equity compensation attributable to pre-combination service was paid during the first quarter
of 2018.
The purchase price allocation resulted in the following amounts being allocated to the assets
acquired and liabilities assumed at the Acquisition Date based upon their respective fair values
summarized below. The determination of fair value was finalized in the fourth quarter of
2018. During the second and fourth quarters of 2018, the Company recorded certain measurement
period adjustments that were not material.
Amounts
Recognized as
of the
Acquisition
Date
IPR&D 6,980
Goodwill 3,137
(1) Includes cash and cash equivalents, debt securities available-for-sale, accounts receivable, net
of allowances, other current assets, accounts payable, accrued expenses and other current liabilities
(including accrued litigation). See Note 19 for litigation matters related to Juno.
The fair value assigned to acquired IPR&D was based on the present value of expected after-
tax cash flows attributable to JCAR017, which is in a pivotal phase II trial and JCARH125.
The present value of expected after-tax cash flows attributable to JCAR017 and JCARH125
assigned to IPR&D was determined by estimating the after-tax costs to complete development
of JCAR017 and JCARH125 into commercially viable products, estimating future revenue and
ongoing expenses to produce, support and sell JCAR017 and JCARH125, on an after-tax basis,
and discounting the resulting net cash flows to present value. The revenue and costs projections
used were reduced based on the probability that products at similar stages of development will
become commercially viable products. The rate utilized to discount the net cash flows to their
present value reflects the risk associated with the intangible asset and is benchmarked to the cost of
equity. Acquired IPR&D will be accounted for as indefinite-lived intangible assets until regulatory
approvals for JCAR017 and JCARH125 in a major market or discontinuation of development.
The fair value of the technology platform intangible asset is equal to the present value of the
expected after-tax cash flows attributable to the intangible asset, which was calculated based on the
multi-period excess earnings method of the income approach. The multi-period excess earnings
method of the income approach included estimating probability adjusted annual after-tax net cash
flows through the cycle of development and commercialization of potential products generated by
the technology platform then discounting the resulting probability adjusted net post-tax cash flows
using a discount rate commensurate with the risk of our overall business operations to arrive at the
net present value.

The excess of purchase price over the fair value amounts assigned to identifiable assets acquired
and liabilities assumed represents the goodwill amount resulting from the acquisition. The
goodwill recorded as part of the acquisition is primarily attributable to the broadening of our
product portfolio and research capabilities in the hematology and oncology therapeutic area, the
assembled workforce and the deferred tax consequences of the IPR&D asset recorded for financial
statement purposes. We do not expect any portion of this goodwill to be deductible for tax
purposes. The goodwill attributable to the acquisition has been recorded as a non-current asset in
our Consolidated Balance Sheets and is not amortized, but is subject to review for impairment
annually.
Juno actual results from the Acquisition Date through December 31, 2018, which are included in
the Consolidated Statements of Income are as follows:
Acquisition Date
Through December 31,
Classification in the Consolidated Statements of Income 2018
Other revenue $ 2
Total $ (1,170)
(1) Includes share-based compensation expense related to the post-combination service period of
$320 million and $208 million, which was recorded in Research and development and Selling,
general and administrative, respectively, for the period from the Acquisition Date through
December 31, 2018.
(2) Consists of acquisition related compensation expense, transaction costs and the change in
fair value of contingent consideration and success payment liabilities. In addition, we incurred
incremental acquisition costs related to Juno of $41 million for the year ended December 31, 2018.
Pro Forma Financial Information:
The following table provides unaudited pro forma financial information for the years ended
December 31, 2018 and 2017 as if the acquisition of Juno had occurred on January 1, 2017.
Years Ended December

31,
2018 2017
Total revenue $ 15,291 $ 13,029

The unaudited pro forma financial information was prepared using the acquisition method of
accounting and was based on the historical financial information of Celgene and Juno. The
supplemental pro forma financial information reflects primarily the following pro forma
adjustments:

• Elimination of research related cost sharing transactions between Celgene and Juno;
• The pro forma financial information assumes that the acquisition related transaction
fees and costs, including post combination share-based compensation related to the
acquisition, were removed from the year ended December 31, 2018 and were assumed to
have been incurred during the first quarter of 2017;
• The pro forma financial information assumes that the gain recognized as a result of
remeasuring to fair value the equity interest we held in Juno prior to the business
combination was removed from the year ended December 31, 2018 and was assumed to
have been recognized during the first quarter of 2017;
• Additional interest expense and amortization of debt issuance costs for a portion of the
$4.5 billion of debt that was issued in February 2018 to partially finance the acquisition;
• Additional amortization expense on the acquired technology platform asset; and
• Statutory tax rates were applied, as appropriate, to each pro forma adjustment based on
the jurisdiction in which the adjustment occurred.
The unaudited pro forma results do not reflect any operating efficiencies or potential cost savings
that may result from the combined operations of Celgene and Juno. Accordingly, these unaudited
pro forma results are presented for illustrative purposes and are not intended to represent or be
indicative of the actual results of operations of the combined company that would have been
achieved had the acquisition occurred at the beginning of the periods presented, nor are they
intended to represent or be indicative of future results of operations.
Delinia, Inc. (Delinia): On February 3, 2017, we acquired all of the outstanding shares of Delinia, a
privately held biotechnology company focused on developing novel therapeutics for the treatment
of autoimmune diseases. The transaction expands our Inflammation and Immunology pipeline
primarily through the acquisition of Delinia’s lead program, DEL-106, as well as related second
generation programs. DEL-106 is a novel IL-2 mutein Fc fusion protein designed to preferentially
upregulate regulatory T cells (Tregs), immune cells that are critical to maintaining natural self-
tolerance and immune system homeostasis.
The consideration included an initial payment of $302 million. In addition, the sellers of Delinia
are eligible to receive up to $475 million in contingent development, regulatory and commercial
milestones. The acquisition did not include any significant processes and thus, for accounting
purposes, we have concluded that the acquired assets did not meet the definition of a business.
The initial payment was allocated primarily to the DEL-106 program, resulting in a $300 million
research and development asset acquisition expense and approximately $2 million of net assets
acquired.
Other acquisitions: In addition, during the first quarter of 2017, we acquired all of the outstanding
shares of a privately held biotechnology company for total initial consideration of $26 million. The
sellers are also eligible to receive up to $210 million in contingent development and regulatory
approval milestones. The acquisition did not include any significant processes and thus, for
accounting purposes, we have concluded that the acquired assets did not meet the definition of a
business. The consideration transferred resulted in a $25 million research and development asset
acquisition expense and $1 million of net assets acquired.
Celgene Pharmaceutical (Shanghai) Co. Ltd. (Celgene China): On August 31, 2017, we
completed the sale of our Celgene commercial operations in China to BeiGene, Ltd. (BeiGene).
The transaction resulted in an immaterial loss on disposal that was recorded on our Consolidated
Statement of Income in Other income (expense), net during the third quarter of 2017. In
conjunction with the sale, we contemporaneously entered into both a product supply agreement
and strategic collaboration arrangement with BeiGene. See Note 18 for additional details related
to the collaboration arrangement with BeiGene.

EngMab AG (EngMab): On September 27, 2016, we acquired all of the outstanding shares
of EngMab, a privately held biotechnology company focused on T-cell bi-specific antibodies.
EngMab’s lead molecule, EM901 is a preclinical T-cell bi-specific antibody targeting B-cell
maturation antigen (BCMA). The acquisition also included another early stage program.
The consideration included an initial payment of approximately 607 million Swiss Francs (CHF)
(approximately $625 million at the time of acquisition), contingent development and regulatory
milestones of up to CHF 150 million (approximately $155 million at the time of the acquisition)
and contingent commercial milestones of up to CHF 2.3 billion (approximately $2.3 billion at the
time of the acquisition) based on cumulative sales levels of between $1 billion and $40 billion.
The acquisition of EngMab did not include any significant processes and thus, for accounting
purposes, we have concluded that the acquired assets did not meet the definition of a business. The
initial payment was allocated primarily to the EM901 molecule and another early stage program,
resulting in a $623 million research and development asset acquisition expense and $2 million of
net working capital acquired.
Acetylon Pharmaceuticals, Inc. (Acetylon): On December 16, 2016, we acquired all of the
remaining outstanding equity interests we did not already own (approximately 86%) in Acetylon,
a privately held biotechnology company focused on developing next-generation selective small
molecule histone deacetylase (HDAC) inhibitors, which allow for epigenetic regulation of gene
and protein function. Acetylon’s lead molecule, ACY-241 is a HDAC6 inhibitor in phase I trials
for relapsed and/or refractory multiple myeloma. The acquisition also included another early
stage molecule. Prior to the acquisition, we had an equity interest equal to approximately 14% of
Acetylon’s total capital stock with a carrying value of approximately $30 million.
The consideration transferred included an initial payment of approximately $196 million. In

addition, the sellers of Acetylon are eligible to receive contingent regulatory milestones of up
to $375 million per eligible product, contingent commercial milestones of up to $1.5 billion
based on achieving annual net sales in excess of $1 billion and tiered royalties on annual net
sales of eligible products. The acquisition did not include any significant processes and thus, for
accounting purposes, we have concluded that the acquired assets did not meet the definition of
a business. The initial payment and carrying value of our previous equity interest were allocated
primarily to ACY-241 and another early stage molecule, resulting in a $226 million research and
development asset acquisition expense.
Triphase Research and Development I Corporation (Triphase): On November 17, 2016, we

acquired from Triphase Accelerator, L.P. (Sellers) all of the outstanding shares of Triphase by
exercising the option we acquired on October 22, 2012. Triphase was a privately held,
biotechnology company focusing on the development of marizomib for glioblastoma and relapsed
and/or refractory multiple myeloma.
The consideration transferred was valued at approximately $42 million including the value of
the exercised option of $18 million. In addition, the sellers are eligible to receive contingent
development and regulatory milestones of up to $125 million, contingent commercial milestones
of up to $300 million based on achieving annual net sales equal in excess of $1 billion and
royalties on annual net sales. The acquisition did not include any significant processes and thus, for
accounting purposes, we have concluded that the acquired assets did not meet the definition of a
business. The consideration transferred was allocated primarily to the marizomib asset, resulting in
a $44 million research and development asset acquisition expense and $1 million of net liabilities
acquired.
LifebankUSA: In February 2016, we completed the sale of certain assets of Celgene Cellular
Therapeutics (CCT) comprising CCT's biobanking business known as LifebankUSA, CCT’s
biomaterials portfolio of assets, including Biovance®, and CCT's rights to PSC-100, a placental
stem cell program, to Human Longevity, Inc. (HLI), a genomics and cell therapy-based diagnostic

and therapeutic company based in San Diego, California. We received 3.4 million shares of HLI
Class A common stock with a fair value of approximately $40 million as consideration in the
transaction. The fair value of the shares common stock we received was determined based on
the most recent preferred share offering and reduced for the estimated value of the liquidation
preference not offered to common share-holders. The transaction generated a $38 million gain
that was recorded on our Consolidated Statements of Income in Other income (expense), net.
As of December 31, 2018, our total investment in HLI represents approximately 14% of HLI's
outstanding capital stock.

12 Months Ended
Earnings Per Share
Dec. 31, 2018
Earnings Per Share
[Abstract]
Earnings Per Share Earnings Per Share
(Amounts in millions, except per share)
2018 2017 2016

Net income $ 4,046 $ 2,940 $ 1,999
Basic 716.3 779.2 777.2
Options, RSUs, PSUs, warrants and other 17.5 29.5 26.1
Diluted 733.8 808.7 803.3
Basic $ 5.65 $ 3.77 $ 2.57
Diluted $ 5.51 $ 3.64 $ 2.49
The total number of potential shares of common stock excluded from the diluted earnings per share
computation because their inclusion would have been anti-dilutive was 44.8 million in 2018, 24.5
million in 2017 and 23.8 million in 2016.
Share Repurchase Program: In February and May 2018, our Board of Directors approved
increases of $5.0 billion and $3.0 billion, respectively to our authorized share repurchase program,
bringing the total amount authorized since April 2009 to $28.5 billion of our common stock. As
part of the existing Board authorized share repurchase program, in May 2018, we entered into an
Accelerated Share Repurchase (ASR) agreement with a bank to repurchase an aggregate of $2.0
billion of our common stock. As part of the ASR agreement, we received an initial delivery of
approximately 18.0 million shares in May 2018 and a final delivery of approximately 6.0 million
shares in August 2018. The total number of shares repurchased under the ASR agreement was
approximately 24.0 million shares at a weighted average price of $83.53 per share.
As part of the management of our share repurchase program, we may, from time to time, sell
put options on our common stock with strike prices that we believe represent an attractive price
to purchase our shares. If the trading price of our shares exceeds the strike price of the put
option at the time the option expires, we will have economically reduced the cost of our share
repurchase program by the amount of the premium we received from the sale of the put option.
If the trading price of our stock is below the strike price of the put option at the time the option
expires, we would purchase the shares covered by the option at the strike price of the put option.
During 2018 and 2017, we did not sell any put options on our common stock. During 2016, we
recorded net gains of $8 million from selling put options on our common stock on the Consolidated
Statements of Income in Other income (expense), net. As of December 31, 2018 and 2017, we had
no outstanding put options.
We repurchased 67.8 million shares of common stock under the share repurchase program from all
sources during 2018 at a total cost of $6.0 billion As of December 31, 2018, we had a remaining
share repurchase authorization of approximately $2.8 billion.

Financial Instruments and 12 Months Ended
Fair Value Measurement Dec. 31, 2018
Fair Value Disclosures
[Abstract]
Financial Instruments and Fair Financial Instruments and Fair Value Measurement
Value Measurement The table below presents information about assets and liabilities that are measured at fair value on
a recurring basis as of December 31, 2018 and 2017, and the valuation techniques we utilized to
determine such fair value.
• Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or
liabilities. Our level 1 assets consist of equity investments with readily determinable fair
values. Our level 1 liability relates to our publicly traded Abraxis CVRs. See Note 19 for
a description of the Abraxis CVRs.
• Level 2 inputs utilize observable quoted prices for similar assets and liabilities in active
markets and observable quoted prices for identical or similar assets in markets that are
not very active. From time to time, our level 2 assets consist primarily of U.S. Treasury
securities, U.S. government-sponsored agency securities, U.S. government-sponsored
agency MBS, global corporate debt securities, asset backed securities, ultra short income
fund investments, time deposits and repurchase agreements with original maturities of
greater than three months. We also have derivative instruments including foreign currency
forward contracts, purchased currency options, zero-cost collar currency contracts and
interest rate swap contracts, which may be in an asset or liability position.
• Level 3 inputs utilize unobservable inputs and include valuations of assets or liabilities for
which there is little, if any, market activity. We do not have any level 3 assets. Our level
3 liabilities consist of contingent consideration related to undeveloped product rights and
technology platforms resulting from the acquisitions of Gloucester Pharmaceuticals, Inc.
(Gloucester), Nogra Pharma Limited (Nogra), Avila Therapeutics, Inc. (Avila) and
Quanticel Pharmaceuticals, Inc. (Quanticel). In addition, in connection with our
acquisition of Juno in the first quarter of 2018, we assumed Juno's contingent
consideration and success payment liabilities.
Our contingent consideration obligations are recorded at their estimated fair values and we revalue
these obligations each reporting period until the related contingencies are resolved. The fair value
measurements are estimated using probability-weighted discounted cash flow approaches that
are based on significant unobservable inputs related to product candidates acquired in business
combinations and are reviewed quarterly. These inputs include, as applicable, estimated
probabilities and timing of achieving specified development and regulatory milestones, estimated
annual sales and the discount rate used to calculate the present value of estimated future payments.
Significant changes which increase or decrease the probabilities of achieving the related
development and regulatory events, shorten or lengthen the time required to achieve such events,
or increase or decrease estimated annual sales would result in corresponding increases or decreases
in the fair values of these obligations. The fair value of our contingent consideration as of
December 31, 2018 and December 31, 2017 was calculated using the following significant
unobservable inputs:
Ranges (weighted average) utilized as of:

Inputs December 31, 2018 December 31, 2017
Discount rate 3.6 to 4.8% (4.3%) 2.7% to 12.0% (3.5%)
Projected year of payment for development and regulatory
milestones 2020 to 2029 (2024) 2020 to 2029 (2024)
Projected year of payment for sales-based milestones and
other amounts calculated as a percentage of annual sales N/A 2024 to 2030 (2028)

The maximum remaining potential payments related to the contingent consideration from the
acquisitions of Gloucester, Avila, Quanticel and those assumed in our acquisition of Juno are
estimated to be $120 million, $475 million, $214 million, and $286 million, respectively, and
$1.8 billion plus other amounts calculated as a percentage of annual sales pursuant to the license
agreement with Nogra.
Success payment obligations assumed through our acquisition of Juno are also recorded at their
estimated fair values and are revalued quarterly. Changes in the fair value of contingent
consideration and success payment obligations are recognized in Acquisition related charges
(gains) and restructuring, net in the Consolidated Statements of Income.
Effective January 1, 2018, we adopted ASU 2016-01. Among other provisions, the new standard
required modifications to existing presentation and disclosure requirements on a prospective basis.
Certain disclosures as of December 31, 2017 below conform to the disclosure requirements of
ASU 2016-01. See Note 1 for additional information related to the adoption of ASU 2016-01.
The following tables present the Company's hierarchy for its assets and liabilities measured at fair
value on a recurring basis as of December 31, 2018 and 2017:
Quoted Price
in
Active Markets Significant
for Other Significant
Balance at Identical Observable Unobservable
December 31, Assets Inputs Inputs
2018 (Level 1) (Level 2) (Level 3)
Assets:
Debt securities available-for-sale $ 496 $ — $ 496 $ —
Equity investments with readily
determinable fair values 1,312 1,312 — —
Total assets $ 1,886 $ 1,312 $ 574 $ —
Liabilities:
Zero-cost collar currency
contracts (1) — (1) —
Other acquisition related
contingent consideration and
success payments (163) — — (163)
Quoted Price
in
Active Markets Significant
for Other Significant
December 31, Assets Inputs Inputs
2017 (Level 1) (Level 2) (Level 3)
Assets:
Debt securities available-for-sale $ 3,219 $ — $ 3,219 $ —
Equity investments with readily
determinable fair values 1,810 1,810 — —
Total assets $ 5,029 $ 1,810 $ 3,219 $ —

Liabilities:
contracts (136) — (136) —
contingent consideration (80) — — (80)
As a result of the implementation of ASU 2016-01 and ASU 2018-03, effective on January 1,
2018, we measure equity investments without a readily determinable fair value at cost, less any
impairment, plus or minus changes resulting from observable price changes in orderly transactions
for an identical or similar investment of the same issuer or at NAV, as a practical expedient, if
available. We record upward adjustments and downward adjustments and impairments of equity
investments without readily determinable fair values within Other income (expense), net on
the Consolidated Statements of Income. The following table represents a roll-forward of equity
investments without readily determinable fair values:
Year Ended December

31, 2018
Purchases 105
Upward adjustments 66
Sales (23)
Downward adjustments and impairments (134)
Transfer to readily determinable fair value (41)
For equity investments with and without readily determinable fair values held as of December 31,
2018, we recorded a net unrealized loss of $201 million within Other income (expense), net on the
Consolidated Statements of Income for the year ended December 31, 2018.
There were no security transfers between levels 1, 2 and 3 during the years ended December 31,
2018 and 2017. The following tables represent a roll-forward of the fair value of level 3
instruments:
Year Ended
December 31,
2018
Liabilities:

Year Ended
December 31,
2017
Liabilities:
Discontinuance of Certain GED-0301 Phase III Trials: On October 19, 2017, we announced our
decision to discontinue the GED-0301 phase III REVOLVE (CD-002) trial in Crohn’s disease
(CD) and the SUSTAIN (CD-004) extension trial (the Trials). At that time, we concluded we would
record a significant impairment of our GED-0301 IPR&D asset, incur wind-down costs associated
with discontinuing the Trials and certain development activities, and record a benefit related to
the significant reduction of GED-0301 contingent consideration liabilities. At the date GED-0301
was acquired by Celgene, a phase II trial of GED-0301 in patients with active CD had been
completed and a multi-year clinical program designed to support global registrations of GED-0301
in CD was planned, while other indications were not as advanced. As such, substantially all of
the IPR&D asset and contingent consideration liabilities were attributed to the development and
commercialization of GED-0301 for the treatment of CD. As a result of the discontinuance of
the Trials, the Company recorded a net pre-tax charge to earnings of approximately $411 million
during the fourth quarter of 2017. The net pre-tax charge was comprised of the following:
• An impairment charge relating to the entire GED-0301 IPR&D asset of approximately

$1,620 million;
• Other one-time charges of approximately $188 million that will require cash payments
primarily related to wind-down costs associated with discontinuing the Trials and certain
development activities; and
• A reduction in contingent consideration liabilities of approximately $1,397 million
related to GED-0301.
During 2018, we recorded an adjustment related to the clinical trial and development activity wind-
down costs which resulted in a benefit of $60 million being recorded in Research and development
within the Consolidated Statement of Income. In addition, all of these wind-down costs have been
paid.

Derivative Instruments and 12 Months Ended
Hedging Activities Dec. 31, 2018
Derivative Instruments and
Hedging Activities
Disclosure [Abstract]
Derivative Instruments and Derivative Instruments and Hedging Activities
Hedging Activities
Our revenue and earnings, cash flows and fair values of assets and liabilities can be impacted
by fluctuations in foreign exchange rates and interest rates. We actively manage the impact of
foreign exchange rate and interest rate movements through operational means and through the use
of various financial instruments, including derivative instruments such as foreign currency option
contracts, foreign currency forward contracts, treasury rate lock agreements and interest rate swap
contracts. In instances where these financial instruments are accounted for as cash flow hedges
or fair value hedges we may from time to time terminate the hedging relationship. If a hedging
relationship is terminated we generally either settle the instrument or enter into an offsetting
instrument.
We maintain a foreign exchange exposure management program to mitigate the impact of volatility
in foreign exchange rates on future foreign currency cash flows, translation of foreign earnings and
changes in the fair value of assets and liabilities denominated in foreign currencies.
Through our revenue hedging program, we endeavor to reduce the impact of possible unfavorable
changes in foreign exchange rates on our future U.S. Dollar cash flows that are derived from
foreign currency denominated sales. To achieve this objective, we hedge a portion of our
forecasted foreign currency denominated sales that are expected to occur in the foreseeable future,
typically within the next three years, with a maximum of five years. We manage our anticipated
transaction exposure principally with foreign currency forward contracts, a combination of foreign
currency zero-cost collars, and occasionally purchased foreign currency put options.
Foreign Currency Forward Contracts: We use foreign currency forward contracts to hedge
specific forecasted transactions denominated in foreign currencies, manage exchange rate
volatility in the translation of foreign earnings, and reduce exposures to foreign currency
We manage a portfolio of foreign currency forward contracts to protect against changes in

anticipated foreign currency cash flows resulting from changes in foreign currency exchange rates,
primarily associated with non-functional currency denominated revenues and expenses of foreign
subsidiaries. The foreign currency forward hedging contracts outstanding as of December 31, 2018
and December 31, 2017 had settlement dates within 30 months and 20 months, respectively. The
spot rate components of these foreign currency forward contracts are designated as cash flow
hedges and any unrealized gains or losses are reported in OCI and reclassified to the Consolidated
Statements of Income in the same periods during which the underlying hedged transactions affect
earnings. If a hedging relationship is terminated with respect to a foreign currency forward
contract, accumulated gains or losses associated with the contract remain in OCI until the hedged
forecasted transaction occurs and are reclassified to operations in the same periods during which
the underlying hedged transactions affect earnings. We recognize in earnings the initial value of the
forward point components on a straight-line basis over the life of the derivative instrument within
the same line item in the Consolidated Statements of Income that is used to present the earnings
Foreign currency forward contracts entered into to hedge forecasted revenue and expenses were as
follows as of December 31, 2018 and December 31, 2017:

Notional Amount
British Pound 82 97
Euro 1,381 954
Total $ 2,091 $ 1,695
We consider the impact of our own and the counterparties’ credit risk on the fair value of the
contracts as well as the ability of each party to execute its obligations under the contract on an
ongoing basis. As of December 31, 2018, credit risk did not materially change the fair value of our
foreign currency forward contracts.
We also manage a portfolio of foreign currency contracts to reduce exposures to foreign currency
fluctuations of certain recognized assets and liabilities denominated in foreign currencies and, from
time to time, we enter into foreign currency contracts to manage exposure related to translation
of foreign earnings. These foreign currency forward contracts have not been designated as hedges
and, accordingly, any changes in their fair value are recognized on the Consolidated Statements of
Income in Other income (expense), net in the current period. The aggregate notional amount of the
foreign currency forward non-designated hedging contracts outstanding as of December 31, 2018
and December 31, 2017 were $347 million and $885 million, respectively.
Foreign Currency Option Contracts: From time to time, we may hedge a portion of our future
foreign currency exposure by utilizing a strategy that involves both a purchased local currency
put option and a written local currency call option that are accounted for as hedges of future sales
denominated in that local currency. Specifically, we sell (or write) a local currency call option and
purchase a local currency put option with the same expiration dates and local currency notional
amounts but with different strike prices. The premium collected from the sale of the call option is
equal to the premium paid for the purchased put option, resulting in no net premium being paid.
This combination of transactions is generally referred to as a “zero-cost collar.” The expiration
dates and notional amounts correspond to the amount and timing of forecasted foreign currency
sales. The foreign currency zero-cost collar contracts outstanding as of December 31, 2018 and
December 31, 2017 had settlement dates within 24 months and 36 months, respectively. If the U.S.
Dollar weakens relative to the currency of the hedged anticipated sales, the purchased put option
value reduces to zero and we benefit from the increase in the U.S. Dollar equivalent value of our
anticipated foreign currency cash flows; however, this benefit would be capped at the strike level
of the written call, which forms the upper end of the collar.
Outstanding foreign currency zero-cost collar contracts entered into to hedge forecasted revenue
were as follows as of December 31, 2018 and December 31, 2017:
Notional Amount1
2018 2017
1U.S. Dollar notional amounts are calculated as the hedged local currency amount multiplied by the strike
value of the foreign currency option. The local currency notional amounts of our purchased put and written
call that are designated as hedging activities are equal to each other.
We also have entered into foreign currency purchased put option contracts to hedge forecasted
revenue which were not part of a collar strategy. Such purchased put option contracts had a
notional value of nil and $258 million as of December 31, 2018 and December 31, 2017,

respectively. We de-designated all of our purchased put option contracts prior to December 31,
2018.

Forward Starting Interest Rate Swaps and Treasury Rate Locks: In anticipation of issuing fixed-
rate debt, we may use forward starting interest rate swaps (forward starting swaps) or treasury
rate lock agreements (treasury rate locks) that are designated as cash flow hedges to hedge against
changes in interest rates that could impact expected future issuances of debt. To the extent these
hedges of cash flows related to anticipated debt are effective, any realized or unrealized gains or
losses on the forward starting swaps or treasury rate locks are reported in OCI and are recognized
in income over the life of the anticipated fixed-rate notes. As of December 31, 2018 and December
Interest Rate Swap Contracts: From time to time we hedge the fair value of certain debt obligations
through the use of interest rate swap contracts. The interest rate swap contracts are designated
hedges of the fair value changes in the notes attributable to changes in benchmark interest rates.
Gains or losses resulting from changes in fair value of the underlying debt attributable to the
hedged benchmark interest rate risk are recorded on the Consolidated Statements of Income
within Interest (expense) with an associated offset to the carrying value of the notes recorded
on the Consolidated Balance Sheets. Since the specific terms and notional amount of the swap
are intended to match those of the debt being hedged all changes in fair value of the swap are
recorded on the Consolidated Statements of Income within Interest (expense) with an associated
offset to the derivative asset or liability on the Consolidated Balance Sheets. Consequently, there
is no net impact recorded in income. Any net interest payments made or received on interest rate
swap contracts are recognized as interest expense on the Consolidated Statements of Income. If a
hedging relationship is terminated for an interest rate swap contract, accumulated gains or losses
associated with the contract are measured and recorded as a reduction or increase of current and
future interest expense associated with the previously hedged debt obligations.
The following table summarizes the notional amounts of our outstanding interest rate swap
contracts as of December 31, 2018 and December 31, 2017:
Notional Amount
2018 2017
Interest rate swap contracts entered into as fair value hedges of the
following fixed-rate senior notes:
3.875% senior notes due 2025 $ 200 $ 200
3.450% senior notes due 2027 450 250
Total $ 850 $ 450
We have entered into swap contracts that were designated as hedges of certain of our fixed rate
notes in 2018 and 2017, and also terminated the hedging relationship by settling certain of those
swap contracts during 2018 and 2017. We settled $250 million and $200 million notional amount
of certain swap contracts in 2018 and 2017, respectively. The settlement of swap contracts resulted
in the receipt of net proceeds of $2 million and $3 million during the years ended December 31,
2018 and 2017, respectively, which are accounted for as a reduction of current and future interest
expense associated with these notes. See Note 12 for additional details related to reductions of
current and future interest expense.
The following table summarizes the fair value and presentation in the Consolidated Balance
Sheets for derivative instruments as of December 31, 2018 and 2017:
December 31, 2018

Fair Value
Asset Liability
Instrument Balance Sheet Location Derivatives Derivatives
Derivatives designated as hedging
instruments:
Other non-current 12 15
liabilities
liabilities
Derivatives not designated as hedging
instruments:
Accrued expenses and 2 12
other current liabilities
Total $ 159 $ 92
1Derivative instruments in this category are subject to master netting arrangements and are presented on a
net basis on the Consolidated Balance Sheets in accordance with Accounting Standards Codification
(ASC) 210-20.
December 31, 2017

Fair Value
Balance Sheet Asset Liability
Instrument Location Derivatives Derivatives
Accrued expenses and other 30 79
current liabilities
current liabilities
Total $ 93 $ 278
net basis in the Consolidated Balance Sheets in accordance with ASC 210-20.
As of December 31, 2018 and December 31, 2017, the following amounts were recorded on the
Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges:

Cumulative Amount of Fair
Value Hedging Adjustment
Carrying Amount of the Hedged Included in the Carrying Amount
Liability of the Hedged Liability
Consolidated Balance Sheet
Classification in Which the December 31, December 31, December 31, December 31,
Hedged Item Is Included 2018(1) 2017(1) 2018(2) 2017(2)
Current portion of long-term
debt, net of discount $ 501 $ — $ 2 $ —
(1)The current portion of long-term debt, net of discount includes $501 million of carrying value with
discontinued hedging relationships as of December 31, 2018. The long-term debt, net of discount includes
approximately $3.3 billion and $3.8 billion of carrying value with discontinued hedging relationships as of
December 31, 2018 and December 31, 2017, respectively.
(2)The current portion of long-term debt, net of discount includes $2 million of hedging adjustments on
$107 million and $139 million of hedging adjustment on discontinued hedging relationships on long-term
debt as of December 31, 2018 and December 31, 2017, respectively.
The following tables summarizes the effect of derivative instruments designated as cash-flow
hedging instruments in AOCI for the years ended December 31, 2018 and 2017:
2018
Amount of
Classification Gain/(Loss)
Classification of Recognized in
of Amount of Gain/(Loss) Income on
Amount of Gain/(Loss) Gain/(Loss) Recognized in Derivative
Gain/(Loss) Reclassified Reclassified Income Related Related to
Recognized in from from to Amount Amount
OCI Accumulated Accumulated Excluded from Excluded from
on OCI OCI Effectiveness Effectiveness
Instrument Derivative(1) into Income into Income Testing Testing
Foreign exchange Net product Net product
contracts $ 249 sales $ (2) sales $ (8)
Treasury rate Interest
lock agreements (4) (expense) (5) N/A
1 Net gains of $35 million are expected to be reclassified from AOCI into income in the next
12 months.
2017
Classification of Amount of
Amount of Gain/(Loss) Gain/(Loss) Classification
Gain/(Loss) Reclassified Reclassified of Amount of
Recognized in from from Gain/(Loss) Gain/(Loss)
OCI Accumulated Accumulated Recognized in Recognized in
on OCI OCI Income on Income on
Instrument Derivative(1) into Income into Income Derivative Derivative
contracts $ (419) sales $ 184 sales $ (3)
Forward starting
interest rate Interest
swaps (13) (expense) (1) N/A
(1) For the year ended December 31, 2017, the straight-line amortization of the initial value of the
amount excluded from the assessment of hedge effectiveness for our foreign exchange contracts
recognized in OCI was a loss of $15 million which $18 million related to the cumulative effect

adjustment related to the adoptions of ASU 2017-12. There were no excluded components for our
treasury rate lock and interest rate swap agreements.
The following table summarizes the effect of derivative instruments designated as fair value
hedging instruments on the Consolidated Statements of Income for the years ended December 31,
2018 and 2017:
Amount of Gain
on Derivative
1 The amounts include a benefit of $32 million and $35 million relating to the amortization of
the cumulative amount of fair value hedging adjustments included in the carrying amount of the
hedged liability for discontinued hedging relationships for the years ended December 31, 2018 and
December 31, 2017, respectively.
The following table summarizes the effect of derivative instruments not designated as hedging
instruments on the Consolidated Statements of Income for the years ended December 31, 2018 and
2017:
on Derivative
Instrument on Derivative 2018 2017
The impact of gains and losses on foreign exchange contracts not designated as hedging
instruments related to changes in the fair value of assets and liabilities denominated in foreign
currencies are generally offset by net foreign exchange gains and losses, which are also included
on the Consolidated Statements of Income in Other income (expense), net for all periods presented.
When we enter into foreign exchange contracts not designated as hedging instruments to mitigate
the impact of exchange rate volatility in the translation of foreign earnings, gains and losses will
generally be offset by fluctuations in the U.S. Dollar translated amounts of each Consolidated
Statements of Income account in current and/or future periods.
Classification and Amount of Gain or (Loss)

Recognized in Income on Fair Value and
Cash Flow Hedging Relationships
2018
Other
income
Net product Interest (expense),
sales (expense) net
Total amounts of income and expense line items presented

in the Consolidated Statements of Income in which the
effects of fair value or cash flow hedges are recorded $ 15,265 $ (741) $ 337


Amount of gain or (loss) reclassified from AOCI into
income (2) — —
Amount excluded from effectiveness testing
recognized using a systematic and rational
amortization approach / changes in fair value 20 — —
Reclassification adjustment for excluded component
(loss) gain (28) — —
income — (5) —
income — — —
(1)
The amounts include a benefit of $32 million relating to the amortization of the cumulative amount of fair
value hedging adjustments included in the carrying amount of the hedged liability for discontinued hedging
relationships for the year ended December 31, 2018.

2017
Other
income
sales (expense) net



income 184 — —
income — (5) —
income — (1) —

(1)

Cash, Cash Equivalents, 12 Months Ended
Debt Securities Available-
for-Sale and Equity
Dec. 31, 2018
Investments with Readily
Determinable Fair Values
Cash, Cash Equivalents, and
Short-term Investments
[Abstract]
Cash, Cash Equivalents, Debt Cash, Cash Equivalents, Debt Securities Available-for-Sale and Equity Investments with
Securities Available-for-Sale Readily Determinable Fair Values
and Equity Investments with Time deposits, repurchase agreements, and commercial paper instruments with original maturities
Readily Determinable Fair less than three months and money market funds are included in Cash and cash equivalents. As
Values of December 31, 2018, the carrying value of our time deposits and repurchase agreements was
$276 million and money market funds was $2.9 billion, all of which are included in Cash and
cash equivalents. As of December 31, 2017, the carrying value of our time deposits and repurchase
agreements was $1.2 billion, commercial paper instruments was $35 million, and money market
funds was $4.5 billion, all of which were included in Cash and cash equivalents. The carrying
values approximated fair value as of December 31, 2018 and December 31, 2017.
Effective January 1, 2018, we adopted ASU 2016-01. Among other provisions, the new standard
required modifications to existing presentation and disclosure requirements on a prospective
basis. As such, certain disclosures as of December 31, 2017 below conform to the disclosure
requirements prior to the adoption of ASU 2016-01. See Note 1 for additional information related
to the adoption of ASU 2016-01.
The amortized cost, gross unrealized holding gains, gross unrealized holding losses and estimated
fair value of debt securities available-for-sale by major security type and class of security and
equity investments with readily determinable fair values as of as of December 31, 2018 and 2017
were as follows:

Time deposits(1) and Repurchase
agreements(1) 46 — — 46
(1)

U.S. government-sponsored agency
securities 42 — — 42
Time deposits(1) and Repurchase agreements
(1) 89 — — 89

Equity securities with readily determinable
fair values $ 935 $ 881 $ (6) $ 1,810
(1) Have original maturities of greater than three months.
U.S. Treasury securities include government debt instruments issued by the U.S. Department of
the Treasury. U.S. government-sponsored agency securities include general unsecured obligations
either issued directly by or guaranteed by U.S. government sponsored enterprises. U.S.
government-sponsored agency MBS include mortgage-backed securities issued by the Federal
National Mortgage Association, the Federal Home Loan Mortgage Corporation and the
Government National Mortgage Association. Corporate debt-global includes obligations issued by
investment-grade corporations, including some issues that have been guaranteed by governments
and government agencies. Asset backed securities consist of triple-A rated securities with cash
flows collateralized by credit card receivables and auto loans. Ultra short income fund includes
investments in certificates of deposit, repurchase agreements, commercial paper and corporate
notes. Time deposits and repurchase agreements in the tables above have original maturities greater
than three months. Our repurchase agreements are collateralized by U.S. government securities,
cash, bonds, commercial paper and bank certificates of deposit. As of December 31, 2018, all of
our time deposits and repurchase agreements had original maturities less than one year.
Equity securities with readily determinable fair values, which consist of investments in publicly
traded equity securities, were approximately $1.3 billion as of December 31, 2018.
Duration periods of debt securities available-for-sale as of December 31, 2018 were as follows:
Amortized Fair
Cost Value

12 Months Ended
Inventory
Dec. 31, 2018
Inventory Disclosure
[Abstract]
Inventory Inventory
A summary of inventories by major category as of December 31, 2018 and 2017 follows:
2018 2017
Total $ 458 $ 541
The decrease in total inventory from December 31, 2017 to December 31, 2018 is primarily due to
raw materials charges recorded during 2018.

Property, Plant and 12 Months Ended
Equipment, Net Dec. 31, 2018
Property, Plant and
Equipment, Net [Abstract]
Property, Plant and Property, Plant and Equipment, Net
Equipment, Net
Property, plant and equipment, net as of December 31, 2018 and 2017 consisted of the following:
2018 2017
Land $ 81 $ 77
Buildings 639 525
Total $ 1,367 $ 1,070
The increase in total property, plant, and equipment from December 31, 2017 to December 31,
2018 primarily relates to the Juno acquisition as well as the manufacturing facility in Couvet,
Switzerland and renovations of our two campuses in Summit, New Jersey. See Note 3 for further
information related to the acquisition of Juno.

12 Months Ended
Other Financial Information
Dec. 31, 2018
Other Financial Information Other Financial Information
Other current assets as of December 31, 2018 and 2017 consisted of the following:
2018 2017
Other 127 150
Total $ 501 $ 388
Accrued expenses and other current liabilities as of December 31, 2018 and 2017 consisted of the
following:
2018 2017
Interest 238 173
Other 466 383
Total $ 2,987 $ 2,523
Other non-current liabilities as of December 31, 2018 and 2017 consisted of the following:
2018 2017
Other 91 48
Total $ 477 $ 544

Intangible Assets and 12 Months Ended
Goodwill Dec. 31, 2018
Goodwill and Intangible
Assets Disclosure [Abstract]
Intangible Assets and Intangible Assets and Goodwill
Goodwill
Intangible Assets: Our finite lived intangible assets primarily consist of developed product rights
and technology obtained from the Pharmion Corp. (Pharmion), Gloucester, Abraxis BioScience,
Inc. (Abraxis), Avila, Quanticel, and Juno acquisitions. The remaining weighted-average
amortization period for finite-lived intangible assets not fully amortized is approximately 8.8
years. Our indefinite lived intangible assets consist of acquired IPR&D product rights from the
Receptos, Inc. (Receptos), Gloucester and Juno acquisitions.
Intangible assets outstanding as of December 31, 2018 and 2017 are summarized as follows:
Gross Intangible
Technology 1,743 (552) 1,191
Licenses 66 (35) 31
Other 54 (39) 15
5,269 (2,887) 2,382
Gross Intangible
Licenses 66 (30) 36
Other 43 (34) 9
3,998 (2,413) 1,585
The increase in the gross carrying value of intangible assets during the year ended December 31,
2018 was primarily due to the addition of approximately $7.0 billion of IPR&D and $1.3 billion of
a technology platform asset from the Juno acquisition. The economic useful life of the technology
platform asset is 15 years (see Note 3).
Amortization expense was $474 million, $336 million and $466 million for the years ended
December 31, 2018, 2017 and 2016, respectively. Effective for the second quarter of 2018, we
reduced the remaining estimated useful life of our ABRAXANE® intangible assets, which will
result in full amortization by 2022 in conjunction with the recent settlements of patent-related

proceedings (see Note 19). Assuming no changes in the gross carrying amount of finite-lived
intangible assets, the future annual amortization expense related to finite-lived intangible assets is
expected to be approximately $442 million in 2019, $440 million in 2020, $438 million in 2021,
$179 million in 2022 and $93 million in 2023.
Goodwill: The carrying value of Goodwill increased to approximately $8.0 billion as of

December 31, 2018 compared to $4.9 billion as of December 31, 2017 due to the acquisition of
Juno (see Note 3).

12 Months Ended
Debt
Dec. 31, 2018
Debt Disclosure [Abstract]
Debt Debt
Short-Term Borrowings and Current Portion of Long-Term Debt: We had no outstanding short-
term borrowings as of December 31, 2018 and 2017. The current portion of long-term debt
outstanding as of December 31, 2018 and 2017 includes:
2018 2017
2.250% senior notes due 2019 $ 501 $ —
Long-Term Debt: Our outstanding senior notes with maturity dates in excess of one year after
December 31, 2018 have an aggregate principal amount of $19.850 billion with varying maturity
dates and interest rates. The carrying values of the long-term portion of these senior notes as of
December 31, 2018 and 2017 are summarized below:
2018 2017
2.250% senior notes due 2019 $ — $ 505
2.875% senior notes due 2020 1,497 1,495
3.950% senior notes due 2020 509 514
2.250% senior notes due 2021 498 497
3.250% senior notes due 2022 1,034 1,044
3.550% senior notes due 2022 996 994
2.750% senior notes due 2023 747 746
4.000% senior notes due 2023 730 737
3.625% senior notes due 2024 1,000 1,001
3.875% senior notes due 2025 2,478 2,478
3.450% senior notes due 2027 986 991
3.900% senior notes due 2028 1,490 —
5.700% senior notes due 2040 247 247
5.250% senior notes due 2043 393 393
4.625% senior notes due 2044 987 987
5.000% senior notes due 2045 1,975 1,975
4.350% senior notes due 2047 1,234 1,234
4.550% senior notes due 2048 1,476 —
As of December 31, 2018 and 2017, the fair value of our outstanding Senior Notes was
approximately $19.3 billion and $16.6 billion, respectively, and represented a level 2 measurement
within the fair value measurement hierarchy.
Debt Issuance: In February 2018, we issued $500 million principal amount of 2.875% senior notes
due 2021 (2021 Notes), $1.000 billion principal amount of 3.250% senior notes due 2023 (2023
Notes), $1.500 billion principal amount of 3.900% senior notes due 2028 (2028 Notes) and $1.500
billion principal amount of 4.550% senior notes due 2048 (2048 Notes). The 2021 Notes, 2023
Notes, 2028 Notes and 2048 Notes were issued at 99.954%, 99.758%, 99.656% and 99.400% of

par, respectively, and the discount is being amortized as additional interest expense over the period
from issuance through maturity. Offering costs of approximately $32 million were recorded as a
direct deduction from the carrying amount of the 2021 Notes, 2023 Notes, 2028 Notes and 2048
Notes on our Consolidated Balance Sheets. The offering costs are being amortized as additional
interest expense using the effective interest rate method over the period from issuance through
maturity. Interest on the 2021 Notes is payable semi-annually in arrears on February 19 and August
19 of each year, beginning August 19, 2018 and the principal is due in full at the maturity date.
Interest on the 2023 Notes, 2028 Notes and 2048 Notes is payable semi-annually in arrears on
February 20 and August 20 of each year, beginning August 20, 2018 and the principal is due in full
at the maturity date. The 2021 Notes, 2023 Notes, 2028 Notes and 2048 Notes may be redeemed
at our option, in whole or in part, at any time at a redemption price equaling accrued and unpaid
interest plus the greater of 100% of the principal amount of the Notes to be redeemed or the sum of
the present values of the remaining schedule payments of interest and principal discounted to the
date of redemption on a semi-annual basis plus 10 basis points for the 2021 Notes, 15 basis points
for the 2023 Notes, 20 basis points for the 2028 Notes and 25 basis points for the 2048 Notes. If
we experience a change of control accompanied by a downgrade of the debt to below investment
grade, we will be required to offer to repurchase the 2021 Notes, 2023 Notes, 2028 Notes and
2048 Notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid
interest. We are subject to covenants which limit our ability to pledge properties as security under
borrowing arrangements and limit our ability to perform sale and leaseback transactions involving
our property.
In November 2017, we issued an additional $750 million principal amount of 2.750% senior notes
due 2023 (2023 Notes), $1.000 billion principal amount of 3.450% senior notes due 2027 (2027
Notes) and $1.250 billion principal amount of 4.350% senior notes due 2047 (2047 Notes). The
2023 Notes, 2027 Notes and 2047 Notes were issued at 99.944%, 99.848% and 99.733% of par,
respectively and the discount is being amortized as additional interest expense over the period
from issuance through maturity. Aggregate offering costs of approximately $23 million have been
recorded as a direct deduction from the carrying amount of the 2023 Notes, 2027 Notes and 2047
Notes on our Consolidated Balance Sheets. The offering costs are being amortized as additional
interest expense using the effective interest rate method over the period from issuance through
maturity. Interest on the 2023 Notes is payable semi-annually in arrears on February 15 and August
15 of each year, beginning on February 15, 2018 and the principal is due in full at the maturity
date. Interest on the 2027 Notes and 2047 Notes is payable semi-annually in arrears on May 15
and November 15 of each year, beginning on May 15, 2018 and the principal is due in full at the
maturity date. The 2023 Notes, 2027 Notes and 2047 Notes may be redeemed at our option, in
whole or in part, at any time at a redemption price equaling accrued and unpaid interest plus the
greater of 100% of the principal amount of the notes to be redeemed or the sum of the present
values of the remaining schedule payments of interest and principal discounted to the date of
redemption on a semi-annual basis plus 12.5 basis points for the 2023 Notes, 20 basis points for
the 2027 Notes and 25 basis points for the 2047 Notes. If we experience a change of control, we
will be required to offer to repurchase the 2023 Notes, 2027 Notes and 2047 Notes at a purchase
price equal to 101% of the principal amount plus accrued and unpaid interest. We are subject to
covenants which limit our ability to pledge properties as security under borrowing arrangements
and limit our ability to perform sale and leaseback transactions involving our property.
In August 2017, we issued an additional $500 million principal amount of 2.250% senior notes
due 2021 (2021 Notes). The 2021 Notes were issued at 99.706% of par, and the discount is being
amortized as additional interest expense over the period from issuance through maturity. Offering
costs of approximately $2 million have been recorded as a direct deduction from the carrying
amount of the 2021 Notes on our Consolidated Balance Sheets. The offering costs are being
amortized as additional interest expense using the effective interest rate method over the period
from issuance through maturity. Interest on the 2021 Notes is payable semi-annually in arrears
on February 15 and August 15 of each year, beginning on February 15, 2018 and the principal
on the 2021 Notes is due in full at the maturity date. The 2021 Notes may be redeemed at our
option, in whole or in part, at any time at a redemption price equaling accrued and unpaid interest
plus the greater of 100% of the principal amount of the 2021 Notes to be redeemed or the sum
of the present values of the remaining schedule payments of interest and principal discounted to
the date of redemption on a semi-annual basis plus 15 basis points. If we experience a change of

control accompanied by a downgrade of the debt to below investment grade, we will be required
to offer to repurchase the 2021 Notes at a purchase price equal to 101% of the principal amount
plus accrued and unpaid interest. We are subject to covenants which limit our ability to pledge
properties as security under borrowing arrangements and limit our ability to perform sale and
leaseback transactions involving our property.
Debt Redemption: On November 9, 2017, we announced the redemption of all of the outstanding
$1.000 billion aggregate principal amount of 2.125% senior notes and $400 million aggregate
principal amount of 2.300% senior notes, each maturing in August 2018. On December 11, 2017,
we paid cash of approximately $1.4 billion, including accrued interest of $10 million, to complete
the redemption resulting in a loss on extinguishment of debt of $4 million, which was recorded in
Other income (expense), net in the Consolidated Statements of Income during the fourth quarter
of 2017. The charge is comprised of the make-whole-premium and write-off of unamortized
premium, discount and debt issuance costs related to the redeemed notes.
Debt Repayment: In August 2017, we repaid the 1.900% senior notes with a principal amount of
$500 million upon maturity.
From time to time, we have used treasury rate locks and forward starting interest rate swap
contracts to hedge against changes in interest rates in anticipation of issuing fixed-rate notes. As
of December 31, 2018 and 2017, a balance of $31 million in losses for both periods remained in
AOCI related to the settlement of these derivative instruments and will be recognized as interest
expense over the life of the notes.
As of December 31, 2018 and 2017, we were party to pay-floating, receive-fixed interest rate
swap contracts designated as fair value hedges of fixed-rate notes as described in Note 6. Our
swap contracts outstanding as of December 31, 2018 effectively convert the hedged portion of
our fixed-rate notes to floating rates. From time to time, we terminate the hedging relationship
on certain of our swap contracts by settling the contracts or by entering into offsetting contracts.
Any net proceeds received or paid in these settlements are accounted for as a reduction or
increase of current and future interest expense associated with the previously hedged notes. As of
December 31, 2018 and 2017, we had balances of $109 million and $139 million, respectively,
of unamortized gains recorded as a component of our debt as a result of past swap contract
settlements, including $2 million and $3 million related to the settlement of swap contracts during
2018 and 2017, respectively. See Note 6 for additional details related to interest rate swap contract
activity.
Commercial Paper: As of both December 31, 2018 and 2017, we had available capacity to issue
up to $2.0 billion of Commercial Paper and there were no borrowings under the Program.
Senior Unsecured Credit Facility: We maintain a senior unsecured revolving credit facility (Credit
Facility) that provides revolving credit in the aggregate amount of $2.0 billion. During the second
quarter of 2018, we amended our Credit Facility to extend the expiration date to April 25,
2023. Amounts may be borrowed in U.S. dollars for general corporate purposes. The Credit
Facility currently serves as backup liquidity for our Commercial Paper borrowings. As of both
December 31, 2018 and 2017, there were no outstanding borrowings against the Credit Facility.
The Credit Facility contains affirmative and negative covenants, including certain customary
financial covenants. We were in compliance with all financial covenants as of December 31, 2018.

12 Months Ended
Stockholders' Equity
Dec. 31, 2018
Stockholders' Equity Note
[Abstract]
Stockholders' Equity Stockholders' Equity
Preferred Stock: Our Board of Directors is authorized to issue, at any time, without further
stockholder approval, up to 5.0 million shares of preferred stock, and to determine the price, rights,
privileges and preferences of such shares.
Common Stock: As of December 31, 2018, we were authorized to issue up to 1.150 billion shares
of common stock of which shares of common stock issued totaled 981.5 million.
Treasury Stock: During the period of April 2009 through December 2018, our Board of Directors
has approved repurchases of up to an aggregate $28.5 billion of our common stock, including
increases of $5.0 billion and $3.0 billion in February and May 2018, respectively. We repurchased
$6.0 billion, $3.9 billion and $2.2 billion of treasury stock under the program in 2018, 2017
and 2016, respectively, excluding transaction fees. As of December 31, 2018, an aggregate 272.7
million common shares were repurchased under the program at an average price of $94.22 per
common share and total cost of $25.7 billion.
Other: When employee awards of RSUs vest and are settled net in order to fulfill minimum
statutory tax withholding requirements, the shares withheld are reflected as treasury stock.
A summary of changes in common stock issued and treasury stock is presented below (in millions
of shares):
Common Stock
Common Stock in Treasury

Accumulated Other 12 Months Ended
Comprehensive Income Dec. 31, 2018
Equity [Abstract]
Accumulated Other Accumulated Other Comprehensive Income
Comprehensive Income
During the third quarter of 2017, we adopted ASU 2017-12 on a modified retrospective basis. As
a result of applying the new guidance during the nine-month period ended September 30, 2017, we
recorded a cumulative effect adjustment of $30 million to decrease AOCI as of the beginning of
fiscal year 2017.
The components of other comprehensive income (loss) consist of changes in pension liability,
changes in net unrealized gains (losses) on debt securities available-for-sale and equity investments
with readily determinable fair values in 2017 and debt securities available-for-sale in 2018, change
in net unrealized gains (losses) related to cash flow hedges, the amortization of the excluded
component related to cash flow hedges and changes in foreign currency translation adjustments.
The accumulated balances related to each component of other comprehensive income (loss), net of
tax, are summarized as follows:
Net
Unrealized
Gains Net Amortization
(Losses) On Unrealized of Excluded
Available- Gains Component
for-Sale (Losses) Related to Foreign Accumulated
Pension Marketable Related to Cash Flow Currency Other
Liability Securities Cash Flow Hedges Translation Comprehensive
Adjustment (1) Hedges (See Note 1) Adjustments Income (Loss)
Balances as of
December 31,
2016 $ (38) $ 144 $ 415 $ — $ (102) $ 419
Cumulative
effect
adjustment for
the adoption of
ASU 2017-12
(See Note 1) — — (12) (18) — (30)
Other
comprehensive
income (loss)
before
reclassifications,
net of tax 16 395 (428) (15) 70 38
Reclassified
losses (gains)
from
accumulated
other
comprehensive
income (loss),
net of tax — 23 (181) 18 — (140)
Net current-
period other
comprehensive
income (loss),
net of tax 16 418 (609) 3 70 (102)

Balances as of
December 31,
2017 $ (22) $ 562 $ (206) $ (15) $ (32) $ 287
Cumulative
effect
adjustment for
the adoption of
ASU 2016-01
and ASU
2018-02 (See
Note 1) — (566) (4) — — (570)
Other
comprehensive
(loss) income
before
reclassifications,
net of tax (6) (7) 246 (20) (28) 185
Reclassified
losses from
accumulated
other
comprehensive
income (loss),
net of tax — 14 6 28 — 48
Net current-
period other
comprehensive
(loss) income,
net of tax (6) 7 252 8 (28) 233
Balances as of
December 31,
2018 $ (28) $ 3 $ 42 $ (7) $ (60) $ (50)
(1)Balances as of December 31, 2017 are prior to the adoption of ASU 2016-01 and, as such,
include equity securities with readily determinable fair values. Upon adoption of ASU 2016-01, we
recorded a cumulative effect adjustment for our net unrealized gains related to our equity securities
with readily determinable fair values as of January 1, 2018. Therefore, the unrealized gains (losses)
position as of December 31, 2018 solely relate to debt securities available-for-sale. See Note 1 for
further information related to the adoption of ASU 2016-01.

Other Comprehensive Income (Loss)
Accumulated Other Affected Line Item in the Years Ended December 31,
Comprehensive Income Consolidated Statements of
(Loss) Components Income 2018 2017 2016
Foreign exchange Net product sales
contracts $ (2) $ 184 $ 307
Treasury rate lock Interest (expense) (5) (5)
agreements (5)
Interest rate swap Interest (expense) —
agreements (1) (2)
Foreign exchange
contracts Net product sales (8) (3) —
Gains (losses) on available-for-sale debt securities /
marketable securities (1):

Realized gain (loss) on
sales of marketable Interest and investment
securities income, net (18) (37) (358)
Total reclassification, net
of tax $ (28) $ 155 $ 71
(1)(Losses) gains reclassified out of Accumulated other comprehensive (loss) income prior to
December 31, 2017 are prior to the adoption of ASU 2016-01 and, as such, include equity
securities with readily determinable fair values. Upon adoption of ASU 2016-01, we recorded a
cumulative effect adjustment for our net unrealized gains related to our equity securities with readily
determinable fair values as of January 1, 2018. Therefore, unrealized gains (losses) for the twelve-
month period ended December 31, 2018 solely relate to debt securities available-for-sale. See Note
1 for further information related to the adoption of ASU 2016-01.

12 Months Ended
Share-Based Compensation
Dec. 31, 2018
Disclosure of Compensation
Related Costs, Share-based
Payments [Abstract]
Share-Based Compensation Share-Based Compensation
We have stockholder-approved stock incentive plans, the Celgene Corporation 2017 Stock
Incentive Plan and the 2014 Equity Incentive Plan (formerly known as the Juno Therapeutics, Inc.
2014 Equity Incentive Plan) (collectively, the Plans) that provide for the granting of options, RSUs,
PSUs and other share-based and performance-based awards to our employees, officers and non-
employee directors. The Management Compensation and Development Committee of the Board
of Directors (Compensation Committee) may determine the type, amount and terms, including
vesting, of any awards made under the Plans.
On June 14, 2017, our stockholders approved an amendment of the Plan, which included the
following key modifications: adoption of an aggregate share reserve of approximately 275.3
million shares of Common Stock, which includes 10.0 million new shares of Common Stock;
increase the maximum individual payment under performance-based cash awards for 3 years
performance periods to $15 million; provide that stock options and stock appreciation rights
granted under the Plan may receive or retain dividends or dividend equivalents unless the
underlying common stock subject to such award vests or are no longer subject to forfeiture
restrictions; provide that, in the event of a change in control, allow for accelerated vesting or
lapse of restrictions; provide that, if any performance-based award is subject to vesting after
an involuntary termination of employment within the two-year period following a change in
control, any vesting of such award shall be determined based on the higher of (A) Committee’s
determination and certification of the extent to which the applicable performance goals have been
achieved, and (B) the deemed achievement of all relevant performance goals at the “target” level
prorated based on service during the performance period prior to the change in control. The term
of the Plan is through April 18, 2027.
With respect to options granted under the Plan, the exercise price may not be less than the market
closing price of the common stock on the date of grant. In general, options granted under the Plan
vest over periods ranging from immediate vesting to four-year vesting and expire ten years from
the date of grant, subject to earlier expiration in case of termination of employment unless the
participant meets the retirement provision under which the option would have a maximum of three
additional years to vest. The vesting period for options granted under the Plan is subject to certain
acceleration provisions if a change in control, as defined in the Plan, occurs. Plan participants may
elect to exercise options at any time during the option term. However, any shares so purchased
which have not vested as of the date of exercise shall be subject to forfeiture, which will lapse in
accordance with the established vesting time period.
We issue PSUs to certain executive officers that are payable in shares of our common stock at
the end of a three-year performance measurement period. The number of shares to be issued
at the end of the measurement period will vary, based on performance, from 0% to 200% of
the target number of PSUs granted, depending on the achievement of specified performance and
market targets for non-GAAP revenue (37.5% weighting), non-GAAP earnings per share (37.5%
weighting) and relative total shareholder return (25% weighting). All shares delivered upon PSU
vesting are restricted from trading for one year and one day from the vesting date.
The grant date fair value for the portion of the PSUs related to non-GAAP revenue and non-GAAP
earnings per share was estimated using the fair market value of our common stock on the grant
date. The grant date fair value for the portion of the PSUs related to relative total shareholder return
was estimated using the Monte Carlo valuation model.

Shares of common stock available for future share-based grants under all plans were 27.7 million
at December 31, 2018.
The following table summarizes the components of share-based compensation expense in the
Consolidated Statements of Income for the years ended December 31, 2018, 2017 and 2016:
2018 2017 2016

The tax benefit related to share-based compensation expense above excludes excess tax benefits of
$22 million, $290 million, and $189 million from share-based compensation awards that vested or
were exercised during the years ended December 31, 2018, 2017 and 2016, respectively.
Included in share-based compensation expense for the years ended December 31, 2018, 2017 and
2016 was compensation expense related to non-qualified stock options of $421 million, $347
million and $357 million, respectively. Share-based compensation expense for the year ended
December 31, 2018 also includes $193 million of cash paid for accelerated vesting of equity
awards related to the acquisition of Juno. These awards are a component of the $666 million fair
value of equity compensation attributable to the post-combination service period. See Note 3 for
additional information related to the acquisition of Juno. Net proceeds received from share-based
compensation arrangements for the years ended December 31, 2018, 2017 and 2016 were $144
million, $685 million and $359 million, respectively. Prior to the adoption of ASU 2016-09, we did
not recognize a deferred tax asset for excess tax benefits that had not been realized and had applied
the tax law method as our accounting policy regarding the ordering of tax benefits to determine
whether an excess tax benefit has been realized.
Stock Options: As of December 31, 2018, there was $530 million of total unrecognized
compensation cost related to stock options granted under the plans. That cost will be recognized
over an expected remaining weighted-average period of 2.1 years.
The weighted-average grant date fair value of the stock options granted during the years ended
December 31, 2018, 2017 and 2016 was $28.93 per share, $32.42 per share and $32.49 per share,
respectively. We estimated the fair value of options granted using a Black-Scholes option pricing
model with the following assumptions:
2018 2017 2016

2.51% - 1.70% - 1.03% -
Risk-free interest rate 2.96% 2.22% 2.08%
The risk-free interest rate is based on the U.S. Treasury zero-coupon curve. Expected volatility
of stock option awards is estimated based on the implied volatility of our publicly traded options
with settlement dates of six months. The use of implied volatility was based upon the availability
of actively traded options on our common stock and the assessment that implied volatility is
more representative of future stock price trends than historical volatility. The expected term of an
employee share option is the period of time for which the option is expected to be outstanding.

We made a determination of expected term by analyzing employees' historical exercise experience
from its history of grants and exercises in our option database and management estimates.
Forfeiture rates are estimated based on historical data.
The following table summarizes all stock option activity for the year ended December 31, 2018:
Weighted
Average
Weighted Remaining Aggregate
Options Average Exercise Contractual Intrinsic Value
Outstanding as of
December 31, 2017 67.8 $ 82.53 6.1 $ 1,823
Changes during the
Year:
Conversion of Juno
awards 3.7 34.01
Granted 10.3 89.26
Expired (1.2) 106.27
Outstanding as of
December 31, 2018 71.1 $ 83.57 5.6 $ 539
Vested as of
December 31, 2018 or
expected to vest in the
future 69.9 $ 83.28 5.6 $ 539
Vested as of
December 31, 2018 46.1 $ 74.43 4.3 $ 500
The total fair value of shares vested during the years ended December 31, 2018, 2017 and 2016
was $490 million, $346 million and $335 million, respectively. The total intrinsic value of stock
options exercised during the years ended December 31, 2018, 2017 and 2016 was $297 million,
$1.2 billion and $747 million, respectively. We primarily utilize newly issued shares to satisfy the
exercise of stock options.
Restricted Stock Units: We issue RSUs, under our equity program in order to provide an effective
incentive award with a strong retention component. Equity awards may, at the option of employee
participants, be divided between stock options and RSUs. The employee may choose between
alternate Company defined mixes of stock options and RSUs, with the number of options to be
granted reduced by four for every one RSU to be granted.
Information regarding the Company's RSUs for the year ended December 31, 2018 is as follows
(shares in millions):
Weighted Average
Grant Date Fair
Nonvested RSUs Share Equivalent Value
Granted 5.7 79.38
Vested (3.2) 104.09

As of December 31, 2018, there was $607 million of total unrecognized compensation cost related
to non-vested RSU awards. That cost is expected to be recognized over a weighted-average period
of 1.8 years. The Company primarily utilizes newly issued shares to satisfy the vesting of RSUs.
Performance-Based Restricted Stock Units: We grant performance-based restricted stock units that
vest contingent upon the achievement of pre-determined performance-based milestones that are
either related to product development or the achievement of specified performance and market
targets, including non-GAAP revenue, non-GAAP earnings per share and relative total shareholder
return. The following table summarizes the Company's performance-based restricted stock unit
activity for the year ended December 31, 2018 (shares in thousands):
Weighted Average
Grant Date Fair
Nonvested Performance-Based RSUs Share Equivalent Value
Granted 163 86.14
Vested (315) 101.80
As of December 31, 2018, there was $30 million of total unrecognized compensation cost related
to non-vested awards of performance-based RSUs that is expected to be recognized over a
weighted-average period of 1.1 years.

12 Months Ended
Employee Benefit Plans
Dec. 31, 2018
Retirement Benefits
[Abstract]
Employee Benefit Plans Employee Benefit Plans
We sponsor an employee savings and retirement plan, which qualifies under Section 401(k) of
the Internal Revenue Code, as amended (the Code) for our U.S. employees. Our contributions
to the U.S. savings plan are discretionary and have historically been made in the form of our
common stock (see Note 13). Such contributions are based on specified percentages of employee
contributions up to 6% of eligible compensation or a maximum permitted by law. Total expense
for contributions to the U.S. savings plans were $33 million, $34 million and $40 million in 2018,
2017 and 2016, respectively.
We also sponsor defined contribution plans in certain foreign locations. Participation in these plans
is subject to the local laws that are in effect for each country and may include statutorily imposed
minimum contributions. We also maintain defined benefit plans in certain foreign locations for
which the obligations and the net periodic pension costs were determined not to be material as of
and for the year ended December 31, 2018.
In 2000, our Board of Directors approved a deferred compensation plan. The plan was frozen
effective as of December 31, 2004, and no additional contributions or deferrals can be made to that
plan. Accrued benefits under the frozen plan will continue to be governed by the terms under the
tax laws in effect prior to the enactment of American Jobs Creation Act of 2004, Section 409A
(Section 409A).
In February 2005, our Board of Directors adopted the Celgene Corporation 2005 Deferred
Compensation Plan, effective as of January 1, 2005, and amended the plan in February 2008.
This plan operates as our ongoing deferred compensation plan and is intended to comply with
Section 409A. Eligible participants, which include certain top-level executives as specified by the
plan, can elect to defer up to an amended 90% of the participant's base salary, 100% of cash
bonuses and equity compensation allowed under Section 409A. Company contributions to the
deferred compensation plan represent a match to certain participants' deferrals up to a specified
percentage, which currently ranges from 10% to 20%, depending on the employee's position as
specified in the plan, of the participant's base salary. Expenses related to our contributions to the
deferred compensation plans in 2018, 2017 and 2016, were not material. The Company's matches
are fully vested upon contribution. All other Company contributions to the plan do not vest
until the specified requirements are met. As of December 31, 2018 and 2017, we had a deferred
compensation liability included in other non-current liabilities in the Consolidated Balance Sheets
of approximately $152 million and $156 million, respectively, which included the participant's
elected deferral of salaries and bonuses, the Company's matching contribution and earnings on
deferred amounts as of that date. The plan provides various alternatives for the measurement of
earnings on the amounts participants defer under the plan. The measurement alternatives are based
on returns of a variety of funds that offer plan participants the option to spread their risk across a
diverse group of investments.
We have established a Long-Term Incentive Plan, or LTIP, designed to provide key officers and
executives with performance-based incentive opportunities contingent upon achievement of pre-
established corporate performance objectives covering a three-year period. As of December 31,
2018, we had recorded liabilities for three separate three-year performance cycles running
concurrently and ending December 31, 2018, 2019 and 2020. Performance measures for each of
the performance cycles are based on the following components: 37.5% on non-GAAP earnings per
share (as defined in the LTIP); 37.5% on total non-GAAP revenue (as defined in the LTIP); and
25% on relative total shareholder return, which is a measurement of our stock price performance
during the applicable three-year period compared with a group of other companies in the
biopharmaceutical industry.

Threshold, target and maximum cash payout levels are calculated as a percentage between 0% to
200% of each participant’s base salary at the time the LTIP was approved by the Compensation
Committee. Such awards are payable in cash or common stock or a mixture of cash and common
stock, which will be determined by the Compensation Committee at the time of award delivery.
Share-based payout levels are calculated using the cash-based threshold, target and maximum
levels, divided by the average closing price of Celgene stock for the 30 trading days prior to
the commencement of each performance cycle. Therefore, final share-based award values are
reflective of the stock price at the end of the measurement period. The Compensation Committee
may determine that payments made in common stock are restricted from trading for a period
of time. The estimated payout value for the three-year performance cycle ended December 31,
2018 is $8 million, which is included in Accrued expenses and other current liabilities as of
December 31, 2018, and the maximum potential cash-based payout, assuming maximum
objectives are achieved for performance cycles ending in 2019, 2020 and 2021 are $10 million,
$10 million and $14 million, respectively. We accrue the long-term incentive liability over each
three-year cycle. Prior to the end of a three-year cycle, the accrual is based on an estimate of our
level of achievement during the cycle. Upon a change in control, participants will be entitled to an
immediate payment equal to their target award or, if higher, an award based on actual performance
through the date of the change in control. For the years ended December 31, 2018, 2017 and 2016,
we recognized expense related to the LTIP of $4 million, $5 million and $13 million, respectively.
In December 2018, we adopted an executive severance plan, pursuant to which our executive
officers are entitled to severance benefits on an involuntary termination without cause or a
resignation for good reason (each, a “qualifying termination”), subject to the executive signing a
release agreement. Under the plan, if the executive experiences a qualifying termination, he or
she is entitled to (1) a cash payment equal to 1.5 times (or 2 times for our CEO) the sum of base
salary and target annual bonus, (2) COBRA benefit continuation coverage for up to 18 months
(or 24 months for our CEO) at active employee rates, and (3) 18 months’ outplacement services.
However, if the qualifying termination occurs on or within 2 years after a change in control of
Celgene, or in certain circumstances otherwise in connection with such change in control, the
executive is entitled to (1) a cash payment equal to 2.5 times (or 3 times for our CEO) the sum of
base salary and target annual bonus, (2) COBRA benefit continuation coverage for up to 30 months
(or 36 months for our CEO) at active employee rates, (3) 18 months’ outplacement services, (4) a
pro-rated annual bonus for year of termination, and (5) full vesting of outstanding equity awards.
In January 2019, we adopted an additional severance plan that covers all full-time and part-time
US employees who are not already covered by another change in control severance plan. Pursuant
to this plan, eligible employees are entitled to receive severance benefits if he or she experiences
a qualifying termination on or within 2 years after a change in control of Celgene, or in certain
circumstances otherwise in connection with such change in control, subject to the employee
signing a release. Severance benefits are generally equal to a specified percentage of base salary
and target bonus and benefit continuation coverage under COBRA at active employee rates for the
applicable severance period. The severance amounts are determined based on an employee’s grade
level and tenure. Our executive officers are not eligible to participate under this plan.

12 Months Ended
Income Taxes
Dec. 31, 2018
Income Tax Disclosure
[Abstract]
Income Taxes Income Taxes
We adopted ASU 2016-01, ASU 2016-16 and ASU 2018-02, effective January 1, 2018. See Note
1 for additional information related to the adoption of these accounting standard updates.
U.S. tax reform legislation (2017 Tax Act) was enacted on December 22, 2017, which reduced the
U.S. statutory tax rate from 35% to 21% beginning in 2018. The 2017 Tax Act requires companies
to pay a one-time toll charge on earnings of certain foreign subsidiaries that were previously tax
deferred and introduces a new U.S. tax on certain off-shore earnings referred to as GILTI beginning
in 2018.
We applied the guidance issued by the Securities and Exchange Commission (SEC) in Staff
Accounting Bulletin (SAB) 118 when accounting for the enactment-date effects of the 2017 Tax
Act. The guidance provides for a measurement period up to one year in which provisional amounts
may be adjusted as income tax expense or benefit in the period the adjustment is determined. At
December 31, 2017 and throughout 2018, we recorded provisional amounts for certain enactment-
date effects of the 2017 Tax Act by applying the guidance of SAB 118 because we had not yet
completed our enactment-date accounting of these effects. After further analysis of the 2017 Tax
Act and guidance released by U.S. federal and state tax authorities, we recorded a tax benefit of
$43 million in our 2018 income tax provision to adjust the amounts recorded as of December 31,
2017. As of December 22, 2018, we have now completed our accounting for all of the enactment-
date income tax effects of the 2017 Tax Act.
The FASB allows companies to adopt an accounting policy to either recognize deferred taxes for
GILTI or treat such as a tax cost in the year incurred. We have elected to recognize the tax on
GILTI as a period expense in the period the tax is incurred. Under this policy, we have not provided
deferred taxes on temporary differences that upon their reversal will affect the amount of income
subject to GILTI in the period.
Income (loss) before income taxes is as follows:
2018 2017 2016

U.S. $ (600) $ 445 $ 735
Non-U.S. 5,432 3,869 1,637
For the years ended December 31, 2018, 2017 and 2016, U.S. income before income taxes reflects
charges related to share-based compensation, upfront collaboration payments, asset impairments,
acquisitions and interest expense which in the aggregate, increased from 2016 to 2018. The
decrease in U.S. income before income taxes in 2018 as compared to 2017 included research and
other expenses related to Juno and Impact. Many of these charges are not deductible for U.S.
income tax purposes. Non-U.S. income before income taxes reflects the results of our commercial,
research and manufacturing operations outside the U.S.
The provision (benefit) for taxes on income is as follows:
2018 2017 2016

United States:
Federal $ 571 $ 2,545 $ 569

International:
Amounts are reflected in the preceding tables based on the location of the taxing authorities.
Deferred taxes arise because of different treatment between financial statement accounting and
tax accounting, known as temporary differences. We record the tax effect on these temporary
differences as deferred tax assets (generally items that can be used as a tax deduction or credit in
future periods) or deferred tax liabilities (generally items for which we received a tax deduction but
have not yet recorded in the Consolidated Statements of Income and the tax effects of acquisition
related temporary differences). We evaluate the likelihood of the realization of deferred tax assets
and record a valuation allowance if it is more likely than not that all or a portion of the asset will
not be realized. We consider many factors when assessing the likelihood of future realization of
deferred tax assets, including our recent cumulative earnings experience by taxing jurisdiction,
expectations of future taxable income, the carryforward periods available to us for tax reporting
purposes, tax planning strategies and other relevant factors. Significant judgment is required in
making this assessment. As of December 31, 2018 and 2017, it was more likely than not that we
would realize our deferred tax assets, net of valuation allowances. The $82 million net decrease
in the valuation allowance from 2017 to 2018 relates primarily to certain foreign net operating
loss (NOL) carryforwards. As a result of the 2017 Tax Act, we recorded an income tax benefit of
$621 million primarily related to the remeasurement of our deferred tax liabilities and assets as of
December 31, 2017.
We no longer consider our earnings from operations conducted outside the U.S. to be permanently
reinvested offshore. As a result of the 2017 Tax Act’s favorable U.S. tax treatment of repatriated
foreign earnings as well as our capital contribution reserves outside the U.S., we expect to have
access to our offshore earnings with minimal to no additional U.S. or foreign tax costs. Further,
as we have no plans to dispose of any of our international subsidiaries, we consider any residual
basis differences in the stock of those subsidiaries that exceeds the basis differences related to
earnings, to be permanently reinvested. It is not practicable to compute the deferred tax liability
that would be recorded if the excess basis differences in international subsidiaries that are not
related to earnings were to reverse upon a disposition of our international subsidiaries.
As of December 31, 2018 and 2017 the tax effects of temporary differences that give rise to
deferred tax assets and liabilities were as follows:
2018 2017
Unrealized (gains) on securities — (146) — (193)
Subtotal 1,466 (4,000) 1,226 (2,253)

As of December 31, 2018 and 2017, deferred tax assets and liabilities were classified on our
Consolidated Balance Sheets as follows:
2018 2017
Reconciliation of the U.S. statutory income tax rate to the Company's effective tax rate is as
follows:
Percentages 2018 2017 2016

Tax rate differences on foreign operations (11.2)% (28.8)% (21.1)%
Acquisition and collaboration related differences 6.0 % 2.1 % (0.7)%
Stock compensation excess tax benefits (0.5)% (6.7)% —%
2017 Tax Act (0.9)% 29.4 % —%
Other 0.3 % (0.7)% 1.6 %
Our reconciliation of the U.S. statutory income tax rate to our effective tax rate includes tax rate
differences on our foreign operations which are subject to income taxes at different rates than
the U.S. and in 2018 we were subject to U.S. tax on GILTI which is subject to an effective
federal statutory tax rate of 10.5% less any foreign tax credits. The tax rate differences from
foreign operations were lower in 2018 as compared to 2017 and 2016 primarily due to the
reduction in the U.S. federal tax rate from 35% to 21% and the provision for U.S. tax on GILTI.
The provision for U.S. tax on GILTI reduced our tax rate differences on foreign operations in
2018 by approximately 9.3 percentage points. The benefit related to our tax rate differences on
foreign operations primarily results from our commercial operations in Switzerland, which include
significant research and development and manufacturing for worldwide markets. We operate under
an income tax agreement in Switzerland that provides an exemption from most Swiss income taxes
on our operations in Switzerland through 2024. The difference between the maximum statutory
Swiss income tax rate of approximately 15.6% and our Swiss income tax rate under the tax
agreement resulted in a reduction in our 2018, 2017 and 2016 effective tax rates of 23.6, 14.8 and
20.5 percentage points, respectively.
The impact of acquisition and collaboration related differences on our effective tax rate was
higher in 2018 compared to 2017 and 2016 primarily due to nondeductible research expenses
incurred in our acquisition of Impact in 2018 and a non-recurring tax benefit related to a loss on
our investment in Avila in 2016. The increase in tax benefits from stock compensation in 2018
and 2017 compared to 2016 is related to excess tax benefits from employee stock compensation
upon adoption of ASU 2016-09 in 2017. The reconciliation also includes the effect of changes
in uncertain tax positions, which include the effect of settlements, expirations of statutes of
limitations, and other changes in prior year tax positions.

As of December 31, 2018, we had U.S. federal NOL carryforwards of approximately $620 million
and state NOL carryforwards of approximately $1.3 billion that will expire in the years 2019
through 2038. We also have U.S. federal and state research and experimentation credit
carryforwards of approximately $72 million that will expire in the years 2020 through 2038.
Deferred tax assets for certain of our U.S. federal and state carryforwards and all of our foreign
carryforwards are subject to a full valuation allowance. Prior to the adoption of ASU 2016-09,
excess tax benefits related to share-based compensation deductions incurred after December 31,
2005 were required to be recognized in the period in which the tax deduction was realized through
a reduction of income taxes payable. As a result, we had not recorded deferred tax assets for
these share-based compensation deductions included in our NOL carryforwards and research and
experimentation credit carryforwards. ASU 2016-09 was effective for us on January 1, 2017.
Among other provisions, the new standard requires that excess tax benefits and tax deficiencies
that arise upon vesting or exercise of share-based payments be recognized as income tax benefits
and expenses in the income tax provision. Previously, such amounts were recorded to additional
paid-in-capital. This aspect of the new guidance was required to be adopted prospectively, and
accordingly, the income tax provision for 2018 and 2017 includes $22 million and $290 million,
respectively, of excess tax benefits arising from share-based compensation awards that vested
or were exercised during the period. In addition, at January 1, 2017, the Company recorded a
cumulative-effect adjustment to Retained earnings, with a corresponding increase to net deferred
tax assets, in the amount of $17 million related to previously unrecognized excess tax benefits. We
realized excess tax benefits related to share-based compensation in 2016 for income tax purposes
as an increase to additional paid-in capital in the amount of approximately $185 million.
Prior to the adoption of ASU 2016-01, the income tax effects of unrealized gains or losses on
certain equity investments were required to be recorded to AOCI. We recorded deferred income tax
expense in 2017 of $227 million and deferred income tax benefits in 2016 of $61 million primarily
related to net unrealized gains/losses on securities, as a component of AOCI.
During the third quarter of 2017, we completed an updated analysis of our current and prior
year estimates of our U.S. research and development and orphan drug tax credits. The analysis
resulted in additional net income tax benefits of approximately $65 million including $55 million
related to prior year estimated tax credits, which were recorded on our Consolidated Statements of
Income within Income tax provision. The effect of the change in estimate increased net income by
approximately $65 million. On a per share basis, this increased both of the Company’s basic and
diluted income per share by $0.08.
In 2015, we acquired all of the outstanding common stock of Receptos. The acquisition was
accounted for using the acquisition method of accounting, and we recorded a deferred tax liability
of $2.5 billion related to the acquisition. Upon integration of the acquired assets into our offshore
research, manufacturing, and commercial operations, the deferred tax liability was reclassified to a
non-current tax liability which represented an estimate of income tax that may have been incurred
in the future upon successful development of the acquired IPR&D into a commercially viable
product. Upon enactment of the 2017 Tax Act, the non-current tax liability was reclassified to a
deferred tax liability and remeasured for the enacted change in tax rates that are expected to apply
when the temporary difference reverses.
Our tax returns are under routine examination in many taxing jurisdictions. The scope of these
examinations includes, but is not limited to, the review of our taxable presence in a jurisdiction, our
deduction of certain items, our claims for research and development tax credits, our compliance
with transfer pricing rules and regulations and the inclusion or exclusion of amounts from our
tax returns as filed. Our U.S. federal income tax returns have been audited by the Internal
Revenue Service (IRS) through the year ended December 31, 2008. Tax returns for the years ended
December 31, 2009, 2010, and 2011 are currently under examination by the IRS. We are also
subject to audits by various state and foreign taxing authorities, including, but not limited to, most
U.S. states and major European and Asian countries where we have operations.
We regularly reevaluate our tax positions and the associated interest and penalties, if applicable,
resulting from audits of federal, state and foreign income tax filings, as well as changes in tax
law (including regulations, administrative pronouncements, judicial precedents, etc.) that would

reduce the technical merits of the position to below more likely than not. We believe that our
accruals for tax liabilities are adequate for all open years. Many factors are considered in making
these evaluations, including past history, recent interpretations of tax law and the specifics of
each matter. Because tax regulations are subject to interpretation and tax litigation is inherently
uncertain, these evaluations can involve a series of complex judgments about future events and can
rely heavily on estimates and assumptions. We apply a variety of methodologies in making these
estimates and assumptions, which include studies performed by independent economists, advice
from industry and subject matter experts, evaluation of public actions taken by the IRS and other
taxing authorities, as well as our industry experience. These evaluations are based on estimates
and assumptions that have been deemed reasonable by management. However, if management's
estimates are not representative of actual outcomes, our results of operations could be materially
impacted.
Unrecognized tax benefits, generally represented by liabilities on the consolidated balance sheet
and all subject to tax examinations, arise when the estimated benefit recorded in the financial
statements differs from the amounts taken or expected to be taken in a tax return because
of the uncertainties described above. A reconciliation of the beginning and ending amount of
unrecognized tax benefits is as follows:
2018 2017
Settlements — —
These unrecognized tax benefits relate primarily to issues common among multinational
corporations. If recognized, unrecognized tax benefits of approximately $1.1 billion would have a
net impact on the effective tax rate. We account for interest and penalties related to uncertain tax
positions as part of our provision for income taxes. Accrued interest as of December 31, 2018 and
2017 is approximately $90 million and $60 million, respectively.
We have recorded changes in the liability for unrecognized tax benefits related to income tax
audits, new information, and expirations of statutes of limitations in various taxing jurisdictions.
The liability for unrecognized tax benefits is expected to increase in the next twelve months
relating to operations occurring in that period. Any settlements of examinations with taxing
authorities or expirations of statutes of limitations would likely result in a decrease in our liability
for unrecognized tax benefits and a corresponding increase in taxes paid or payable and/or a
decrease in income tax expense. It is reasonably possible that the amount of the liability for
unrecognized tax benefits could change by a significant amount during the next twelve-month
period as a result of settlements or expirations of statutes of limitations. Finalizing examinations
with the relevant taxing authorities can include formal administrative and legal proceedings and, as
a result, it is difficult to estimate the timing and range of possible change related to the Company’s
unrecognized tax benefits. An estimate of the range of the possible change cannot be made until
issues are further developed or examinations close. Our estimates of tax benefits and potential
tax benefits may not be representative of actual outcomes, and variation from such estimates
could materially affect our financial statements in the period of settlement or when the statutes of
limitations expire.

12 Months Ended
Collaboration Agreements
Dec. 31, 2018
Collaboration Agreements Collaboration Agreements
We enter into collaborative arrangements for the research and development, license, manufacture and/or
commercialization of products and/or product candidates. In addition, we also acquire product candidates
and research and development technology rights and establish research and development collaborations with
third parties to enhance our strategic position within our industry by strengthening and diversifying our
research and development capabilities, product pipeline and marketed product base. These arrangements
may include non-refundable, upfront payments, payments by us for options to acquire rights to products
and product candidates and other rights, as well as contingent obligations by us for potential development,
regulatory and commercial performance milestone payments, cost sharing arrangements, royalty payments,
profit sharing and equity investments (including equity investments in the event of an initial public offering
of equity by our partners). The activities under these collaboration agreements are performed with no
guarantee of either technological or commercial success. Although we do not consider any individual
alliance to be material, certain of the more notable alliances are described below. Summarized financial
information for each of our alliances is presented in tabular format after the alliance description:
Acceleron Pharma (Acceleron):
We have worldwide strategic collaboration agreements with Acceleron for the joint development and
commercialization of sotatercept (ACE-011) and luspatercept (ACE-536). In June and July 2018, Celgene
and Acceleron announced that luspatercept achieved all primary and key secondary endpoints in the phase III
MEDALISTTM and BELIEVETM trials in patients with low-to-intermediate risk myelodysplastic syndromes
(MDS) and transfusion-dependent beta-thalassemia, respectively.
On January 1, 2013, we became responsible for the payment of all development costs related to sotatercept
and luspatercept and have recognized development expenses as research and development expense as they
were incurred.
With respect to the sotatercept program, Acceleron is eligible to receive up to $367 million in development,
regulatory approval and sales-based milestones and up to an additional $348 million for each of three
specific discovery stage programs. We also agreed to co-promote the developed products in North America.
Acceleron will receive tiered royalties on worldwide net sales upon the commercialization of a development
compound.
With respect to the luspatercept program, we have an exclusive, worldwide, royalty-bearing license to
luspatercept and future Acceleron products for the treatment of anemia. We also agreed to co-promote the
products in the United States, Canada and Mexico. Acceleron is eligible to receive development, regulatory
approval and sales-based milestones of up to $218 million for luspatercept and up to an additional $171
million for the first discovery stage program, $149 million for the second discovery stage program and $125
million for each additional discovery stage program thereafter. Acceleron will receive tiered royalties on
worldwide net sales upon the commercialization of a development compound.
The sotatercept and luspatercept agreements may be terminated by us, at our sole discretion, at any time or
by either party, among other things, upon a material breach by the other party.
In September 2017, we amended and restated the collaboration agreement with Acceleron for the joint
development and commercialization of sotatercept. Under the amended and restated collaboration
agreement, Acceleron has the right to fund and conduct all research and development activities for
sotatercept in the pulmonary hypertension field. Should sotatercept be approved for an indication in the
pulmonary hypertension field, Acceleron will be responsible for global commercialization and Celgene will
be eligible to receive royalties on global net sales in that field. The original collaboration deal terms will
remain in place with respect to development and commercialization outside of the pulmonary hypertension
field.

Equity
Extension/ Amortization Investments
Termination of Prepaid Made Intangible Equity Percentage of
Upfront of Research and During Asset Investment Outstanding
2018 $ — $ — $ — $ — $ — $ — $ 268 13.3%
2017 — — — — 28 — 261 13.6%
2016 — 15 — — 32
2015
and
prior 70 45 — — 93
Agios Pharmaceuticals, Inc. (Agios):
During 2010, we entered into a discovery and development collaboration and license agreement with Agios
(2010 Collaboration Agreement) that focused on cancer metabolism targets and the discovery, development
and commercialization of associated therapeutics.
With respect to each product that we choose to license, Agios could receive up to approximately $120
million upon achievement of certain milestones and other payments plus royalties on worldwide sales, and
Agios may also participate in the development and commercialization of certain products in the United
States.
In June 2014, we exercised our option to license AG-221 (enasidenib), now IDHIFA®, from Agios on
an exclusive worldwide basis, with Agios retaining the right to conduct a portion of commercialization
activities for enasidenib in the United States. Enasidenib is currently in a phase III study in patients
that present an isocitrate dehydrogenase-2 (IDH2) mutation in relapsed refractory acute myeloid leukemia
(rrAML). A New Drug Application (NDA) was submitted to the U.S. Food and Drug Administration (FDA)
in the fourth quarter of 2016 based on phase I/II data generated in the rrAML population. IDHIFA® was
approved in August 2017 for the treatment of adult patients with relapsed or refractory acute myeloid
leukemia with an isocitrate dehydrogenase (IDH2) detected by and FDA-approved companion diagnostic.
In January 2015, we exercised our option to an exclusive license from Agios to AG-120, an orally available,
selective inhibitor of the mutated isocitrate dehydrogenase-1 (IDH1) protein for the treatment of patients
with cancers that harbor an IDH1 mutation, outside the United States, with Agios retaining the right to
conduct development and commercialization within the United States. In May 2016, we agreed to return to
Agios the AG-120 lead development candidate. As a result, Agios obtained global rights to AG-120 and the
IDH1 program. Neither Agios nor Celgene have any continuing financial obligation, including royalties or
milestone payments, to the other concerning AG-120 or the IDH1 program.
In April 2015, we and Agios entered into a new joint worldwide development and profit share collaboration
for AG-881. AG-881 is a small molecule that has shown in preclinical studies to fully penetrate the
blood brain barrier and inhibit IDH1 and IDH2 mutant cancer cells. Under the terms of the AG-881
collaboration, Agios is eligible to receive contingent payments of up to $70 million based on the attainment
of specified regulatory goals. We and Agios will jointly collaborate on the worldwide development program
for AG-881, sharing development costs equally. The two companies will share profits equally, with Celgene
recording commercial sales worldwide. Agios will lead commercialization in the U.S. with both companies
sharing equally in field-based commercial activities, and we will lead commercialization ex-U.S. with Agios
providing one third of field-based commercial activities in the major European Union (EU) markets.
In May 2016, we and one of our subsidiaries entered into a new global collaboration agreement with Agios
(2016 Collaboration Agreement), focused on the research and development of immunotherapies against
certain metabolic targets that exert their antitumor efficacy primarily via the immune system. In addition
to new programs identified under the 2016 Collaboration Agreement, we and Agios have also agreed
that all future development and commercialization of two programs that were conducted under the 2010
Collaboration Agreement will now be governed by the 2016 Collaboration Agreement.
During the term of the 2016 Collaboration Agreement, Agios plans to conduct research programs focused
on discovering compounds that are active against metabolic targets in the immuno-oncology (I/O) field. The

initial four-year term will expire in May 2020. We may extend the term for up to two additional one-year
terms or in specified cases, up to four additional years.
Under the 2016 Collaboration Agreement, Agios has granted us exclusive options to obtain development
and commercialization rights for each program that we have designated for further development. We may
exercise each such option beginning on the designation of a development candidate for such program (or
on the designation of such program as a continuation program) and ending on the earlier of the end of a
specified period after Agios has furnished us with specified information for such program, or January 1,
2030. Programs that have applications in the inflammation or autoimmune (I&I) field that may result from
the 2016 Collaboration Agreement will also be subject to the exclusive options described above.
In September 2018, we terminated our joint worldwide development and profit share collaboration with
Agios for AG-881 entered into during 2015. Our 2016 collaboration agreement with Agios remains in effect,
which focuses on the research and development of immunotherapies against certain metabolic targets that
exert their antitumor efficacy primarily via the immune system. We have retained our equity interest in Agios
and exclusive license to IDHIFA® (enasidenib).

Equity
2018 $ — $ 15 $ — $ — $ 57 $ — $ 310 11.5%
2017 8 — — — 31 — 335 12.0%
2016 200 25 — 1 —
2015
and
prior 130 — 60 — 89
BeiGene, Ltd. (BeiGene):
On July 5, 2017, we entered into a strategic collaboration to develop and commercialize BeiGene’s
investigational anti-programmed cell death protein-1 (PD-1) inhibitor, BGB-A317, for patients with solid
tumor cancers in the United States, Europe, Japan and the rest of the world outside of Asia. BeiGene
will retain exclusive rights for the development and commercialization of BGB-A317 for hematological
malignancies globally and for solid tumors in Asia (with the exception of Japan). BeiGene acquired our
commercial operations in China and gained an exclusive license to commercialize our approved therapies
in China - ABRAXANE®, REVLIMID® and VIDAZA®. See Note 3 for additional details related to the
divestiture of Celgene China. In addition, BeiGene was granted licensing rights in China to CC-122,
under the same terms and conditions as our approved commercial products. CC-122 is a next generation
CELMoD® agent currently in development by us for relapsed / refractory multiple myeloma, lymphoma and
hepatocellular carcinoma. This transaction closed on August 31, 2017.
The license arrangement will expire in its entirety on the later of (a) expiration of the last valid claim that
covers the composition of matter or method of use of the last licensed product, (b) expiration of regulatory
exclusivity for the last licensed product or (c) twelve years after the first commercial sale of the last licensed
product.
The license agreement may be terminated by us, at our sole discretion, or by either party, among other things
upon material breach by the other party. The supply arrangement has an initial term of ten years, which can
be extended upon the mutual agreement of both parties.


Equity
Extension/ Amortization Investments Percentage
Termination of Prepaid Made Intangible Equity of
2018 $ — $ — $ — $ — $ — $ — $ 353 4.2%
2017 268 — — — 174 — 246 5.5%
bluebird bio, Inc. (bluebird):
In June 2015, we amended and restated the March 2013 collaboration agreement with bluebird. The
amended and restated collaboration focuses on the discovery, development and commercialization of novel
disease-altering gene therapy product candidates targeting BCMA. BCMA is a cell surface protein that is
expressed in normal plasma cells and in most multiple myeloma cells, but is absent from other normal
tissues. The collaboration applies gene therapy technology to modify a patient’s own T cells, known as
CAR T cells, to target and destroy cancer cells that express BCMA. Under the amended and restated
agreement, Celgene had an option to license any anti-BCMA products resulting from the collaboration after
the completion of a phase I clinical study by bluebird.
Under the amended and restated collaboration agreement bluebird developed the lead anti-BCMA product
candidate (bb2121) through a phase I clinical study and will develop next-generation anti-BCMA product
candidates. The payment was recorded as prepaid research and development on the balance sheet and was
being recognized as expense as development work is performed. Upon exercising our option to license a
product and achievement of certain milestones, we may be obligated to pay up to $230 million per licensed
product in aggregate potential option fees and clinical and regulatory milestone payments. bluebird also has
the option to participate in the development and commercialization of any licensed products resulting from
the collaboration through a 50/50 co-development and profit share in the United States in exchange for a
reduction of milestone payments. Royalties would also be paid to bluebird in regions where there is no profit
share, including in the United States, if bluebird declines to exercise their co-development and profit sharing
rights. In February 2016, we exercised our option to license bb2121. In March 2018, bluebird exercised
their co-development and profit sharing rights and we entered into a 50/50 co-development and profit share
agreement in the United States for bb2121. Bluebird will receive milestones and royalties on ex-US net sales
upon the commercialization of bb2121. In September 2017, we exercised our option to license bb21217 and
entered into a license agreement for this product candidate. Bluebird has the option to enter into a 50/50 co-
development and profit share in the United States for bb21217.
After the eighteen month anniversaries of the agreements' effective dates, we have the ability to terminate
the bb2121 50/50 co-development and profit share and the bb21217 license at our discretion upon 180
days written notice to bluebird. If a product was optioned under the amended and restated agreement, the
parties entered into a pre-negotiated license agreement and, potentially, a co-development agreement (if
bluebird exercised its option to participate in the development and commercialization in the United States).
The license agreement, if not terminated sooner, would expire upon the expiration of all applicable royalty
terms under the agreement with respect to the particular product, and the co-development agreement, if not
terminated sooner, would expire when the product is no longer being developed or commercialized in the
United States. Upon the expiration of a particular license agreement, we will have a fully paid-up, royalty-
free license to use bluebird intellectual property to manufacture, market, use and sell such licensed product.
As of December 31, 2018, we have entered into two such license agreements with bluebird for bb2121 and
bb21217, and bluebird has exercised its option to participate in the development and commercialization in
the United States for bb2121.

Equity
2018 $ — $ — $ — $ 3 $ — $ — $ 95 1.9%
2017 15 — — 8 37 4 171 1.9%

2016 10 — — 8 50
2015
and
prior 75 — — 5 —
FORMA Therapeutics Holdings LLC (FORMA):
In April 2013, we entered into a collaboration agreement with FORMA to discover, develop and
commercialize product candidates to regulate protein homeostasis targets. Protein homeostasis, which is
important in oncology, neurodegenerative and other disorders, involves a tightly regulated network of
pathways controlling the biogenesis, folding, transport and degradation of proteins.
The collaboration enables us to evaluate selected targets and lead assets in protein homeostasis pathways
during the pre-clinical phase. Based on such evaluation, we have the right to obtain exclusive licenses with
respect to the development and commercialization of multiple product candidates outside of the United
States, in exchange for research and early development payments of up to approximately $200 million
to FORMA. Under the terms of the collaboration agreement, FORMA is incentivized to advance the full
complement of product candidates through phase I, while Celgene is responsible for all further global
clinical development for each licensed candidate. FORMA is eligible to receive up to an additional $315
million in potential payments based upon development, regulatory and sales objectives for the first ex-
U.S. license. FORMA is also eligible to receive potential payments for successive licenses, which escalate
for productivity, increasing up to a maximum of an additional $430 million per program. In addition,
FORMA will receive royalties on ex-U.S. sales and additional payments if multiple product candidates reach
defined cumulative sales objectives. The collaboration agreement includes provisions for Celgene to obtain
rights with respect to development and commercialization of product candidates inside the United States in
exchange for additional payments.
Under the collaboration, the parties perform initial research and development for a term of four years. If,
during such research term, a product candidate meets certain criteria, then the parties enter into a pre-
negotiated license agreement and the collaboration continues until all license agreements have expired and
all applicable royalty terms under the collaboration with respect to the particular products have expired.
Each license agreement, if not terminated sooner, expires upon the expiration of all applicable royalty terms
under such agreement. Upon the expiration of each license agreement, we will have an exclusive, fully-paid,
royalty-free license to use the applicable FORMA intellectual property to manufacture, market, use and sell
the product developed under such agreement outside of the United States.
On March 21, 2014, we entered into a second collaboration arrangement with FORMA (March 2014
Collaboration), pursuant to which FORMA granted us an option to license the rights to select current and
future FORMA product candidates during a term of three and one-half years. In addition, with respect
to each licensed product candidate, we have the obligation to pay designated amounts when certain
development, regulatory and sales milestone events occur, with such amounts being variable and contingent
on various factors. With respect to each licensed product candidate, we will assume responsibility for all
global development activities and costs after completion of phase I clinical trials. FORMA will retain U.S.
rights to all such licensed assets, including responsibility for manufacturing and commercialization.
During July 2017, we entered into the first of the two additional collaborations. FORMA granted us an
option to license the worldwide rights (except the U.S.) to select current and future product candidates for
the next two years and three months (or through October 1, 2019). In addition, with respect to each licensed
product candidate, we have the same rights and obligations as under the March 2014 Collaboration.
If we had exercised our option to enter into an additional collaboration pursuant to the March 2014
Collaboration, we would have received an exclusive option to acquire FORMA, including the U.S. rights to
all licensed product candidates, and worldwide rights to other wholly-owned assets within FORMA at that
time.
On December 28, 2018, we and FORMA mutually terminated our 2013 and 2014 collaboration
arrangements resulting in the termination of all research and development programs conducted under the two
collaborations including all license agreements entered into under the two collaborations (the Termination
Date). Celgene concurrently entered into a worldwide license agreement for FT-1101 (a program which
Celgene held EU license rights to prior to the Termination Date) and a worldwide license agreement for
an undisclosed target (an early stage program which Celgene did not have right to prior to the Termination

Date). Under the arrangement, Celgene will pay FORMA a total of $78 million in cash, of which $66 million
relates to termination and expanded rights to the existing FT-1101 program and $12 million related to an
upfront fee for the early stage undisclosed target. FORMA is eligible to receive up to an additional $305
million in potential payments and royalties based upon development, regulatory and sales objectives for the
FT-1101 program and for the undisclosed target.

Equity
2018 $ 12 $ — $ 66 $ — $ — $ — n/a n/a
2017 246 25 — — — — n/a n/a
2016 71 — — — —
2015
and
prior 337 — — — —
Jounce Therapeutics, Inc. (Jounce):
In July 2016, we entered into a collaboration agreement with Jounce for the development and
commercialization of immunotherapies for cancer, including Jounce’s lead product candidate, JTX-2011,
targeting ICOS (the Inducible T cell CO-Stimulator), up to four early stage programs to be selected from a
defined pool of B cell, T regulatory cell and tumor-associated macrophage targets emerging from Jounce’s
research platform, and a Jounce checkpoint immuno-oncology program. Under the terms of the collaboration
agreement Jounce is eligible to receive regulatory, development and net sales milestone payments.
We have the right to opt into the collaboration programs at defined stages of development. Following opt-in,
the parties will share U.S. profits and losses on the collaboration programs as follows: (a) Jounce will retain
a 60% U.S. profit share of JTX-2011, with 40% allocated to us; (b) Jounce will retain a 25% U.S. profit share
on the first additional program, with 75% allocated to us; and (c) the parties will equally share U.S. profits
on up to three additional programs. Also, following opt-in to each of the foregoing programs, we will receive
exclusive ex-U.S. commercialization rights with respect to such program, Jounce will be eligible to receive
tiered royalties on sales outside the United States, and development costs will be shared by the parties in
a manner that is commensurate with their respective product rights under such program. The parties will
equally share global profits from the checkpoint program.
The collaboration agreement has an initial term of four years, which may be extended up to three additional
years. If the parties enter into any pre-negotiated license or co-commercialization agreement during the
initial term, the collaboration agreement will continue until all such license and co-commercialization
agreements have expired. The collaboration agreement may be terminated at our discretion upon 120 days
prior written notice to Jounce and by either party upon material breach of the other party, subject to cure
periods.

Equity
2018 $ — $ — $ — $ — $ — $ — $ 12 10.7%
2017 — — — — 10 — 44 10.7%
2016 238 — — — 24

Lycera Corp. (Lycera):
In June 2018, our collaboration and option agreement with Lycera expired. As a result, we do not have an
exclusive right to acquire Lycera. We have retained our equity interest in Lycera, an exclusive license for
Lycera’s portfolio of novel ex-vivo RORγ agonist compounds and an exclusive license for Lycera’s RORγ
antagonist compounds. Collaboration related Research and development expense and intangible asset and
equity investment balances related to Lycera are included in Other Collaboration Arrangements below.
Prothena Corporation plc (Prothena):
On March 20, 2018, we entered into a collaboration agreement with Prothena to develop new therapies for
a broad range of neurodegenerative diseases. The collaboration is focused on three proteins implicated in
the pathogenesis of several neurodegenerative diseases, including tau, TDP-43 and an undisclosed target. In
addition, we purchased approximately 1.2 million of Prothena's ordinary shares. We made a total payment of
$150 million, which was accounted for as a $40 million equity investment with a readily determinable fair
value and $110 million as upfront collaboration consideration that was expensed immediately as research
and development.
For each of the programs, we have an exclusive right to license clinical candidates in the U.S. at the
investigational new drug (IND) filing and if exercised, would also have a right to expand the license to
global rights at the completion of Phase 1. Following the exercise of global rights, we will be responsible for
funding all further global clinical development and commercialization. Prothena may receive future potential
exercise payments and regulatory and commercial milestones for each licensed program. Prothena will also
receive additional royalties on net sales of any resulting marketed products.
The collaboration agreement has an initial term of six years, which may be extended up to two additional
years. The collaboration agreement may be terminated at our discretion upon 60 days prior written notice to
Prothena and by either party upon material breach of the other party, subject to cure periods.

Equity
2018 $ 110 $ — $ — $ — $ 40 $ — $ 12 2.9%
Other Collaboration Arrangements in 2018:
In addition to the collaboration arrangements described above, we entered into collaboration arrangements
during 2018 that include the potential for future milestone payments of up to $825 million related to the
attainment of specified developmental, regulatory and sales milestones over a period of several years. Our
obligation to fund these efforts is contingent upon our continued involvement in the programs and/or the
lack of any adverse events which could cause the discontinuance of the programs.
Summarized financial information related to our other collaboration arrangements is presented below:

Equity
2018 $ 402 $ 10 $ 7 $ 7 $ 26 $ 13 $ 230 n/a
2017 229 10 20 4 43 8 749 n/a
2016 297 36 9 17 64

1 Year-end balance is presented for current year and prior years.

Commitments and 12 Months Ended
Contingencies Dec. 31, 2018
Commitments and
Contingencies Disclosure
[Abstract]
Commitments and Commitments and Contingencies
Contingencies Contingent Value Rights: In connection with the acquisition of Abraxis in 2010, Abraxis CVRs
were issued under a Contingent Value Rights Agreement, or Abraxis CVR Agreement, entered into
between Celgene and American Stock Transfer & Trust Company, LLC, as trustee. The Abraxis
CVRs are registered for trading on the NASDAQ Global Market under the symbol "CELGZ." The
fair value of the liability of the Company related to payments under the Abraxis CVR Agreement
are subject to fluctuation based on trading prices for the publicly traded Abraxis CVRs. Subsequent
to the Abraxis acquisition date, we measured the contingent consideration represented by the
Abraxis CVRs at fair value with changes in fair value recognized in operating earnings. The
fair value of our liability related to the Abraxis CVRs was $19 million and $42 million as of
December 31, 2018 and 2017, respectively, which was recorded in Other non-current liabilities on
our Consolidated Balance Sheets.
For each full one-year period ending December 31 during the term of the Abraxis CVR
Agreement, which we refer to as a net sales measuring period, each holder of an Abraxis CVR is
entitled to receive a pro rata portion, based on the number of Abraxis CVRs then outstanding, of
net sales related payments, calculated as follows:
• 2.5% of the net sales of ABRAXANE® and the Abraxis pipeline products that exceed
$1.0 billion but are less than or equal to $2.0 billion for such period, plus
• an additional amount equal to 5% of the net sales of ABRAXANE® and the Abraxis
pipeline products that exceed $2.0 billion but are less than or equal to $3.0 billion for such
period, plus
• an additional amount equal to 10% of the net sales of ABRAXANE® and the Abraxis
pipeline products that exceed $3.0 billion for such period.
No payments will be due under the Abraxis CVR Agreement with respect to net sales of
ABRAXANE® and the Abraxis pipeline products after December 31, 2025, which we refer to
as the net sales payment termination date, unless net sales for the net sales measuring period
ending on December 31, 2025 are equal to or greater than $1.0 billion, in which case the net
sales payment termination date will be extended until the last day of the first net sales measuring
period subsequent to December 31, 2025 during which net sales of ABRAXANE® and the Abraxis
pipeline products are less than $1.0 billion or, if earlier, December 31, 2030.
In addition to the above, each holder of an Abraxis CVR was entitled to receive a pro rata portion
of two potential contingent milestone payments. The first contingent milestone payment was not
achieved, as the October 2012 FDA approval of ABRAXANE® for use in the treatment of NSCLC
did not result in the use of a marketing label that included a progression-free survival claim. The
second contingent milestone payment was achieved upon the FDA approval of ABRAXANE® for
use in the treatment of pancreatic cancer permitting us to market with a label that included an
overall survival claim. This approval resulted in a subsequent payment of $300 million to Abraxis
CVR holders in October 2013.
Leases: We lease offices and research facilities under various operating lease agreements in the
United States and international markets as well as automobiles and certain equipment in these same
markets. As of December 31, 2018, the non-cancelable lease terms for the operating leases expire
at various dates between 2019 and 2029 and include renewal options. In general, the Company is
also required to reimburse the lessors for real estate taxes, insurance, utilities, maintenance and
other operating costs associated with the leases.

Future minimum lease payments under non-cancelable operating leases as of December 31, 2018
are:
Operating
Leases
2019 $ 92
2020 89
2021 70
2022 59
2023 45
Thereafter 68
Total rental expense under operating leases was approximately $113 million in 2018, $69 million
in 2017 and $70 million in 2016.
Lines of Credit: We maintain lines of credit with several banks to support our hedging programs
and to facilitate the issuance of bank letters of credit and guarantees on behalf of our subsidiaries.
Lines of credit supporting our hedging programs as of December 31, 2018 allowed us to enter
into derivative contracts with settlement dates through 2028. As of December 31, 2018, we have
entered into derivative contracts with net notional amounts totaling $7.4 billion. Lines of credit
facilitating the issuance of bank letters of credit and guarantees as of December 31, 2018 allowed
us to have letters of credit and guarantees issued on behalf of our subsidiaries totaling $168 million.
Other Commitments: Our obligations related to product supply contracts totaled $495 million at
December 31, 2018. The non-cancelable contract terms for product supply expire at various dates
between 2019 and 2027 and include renewal options. In addition, we have committed to invest an
aggregate $32 million in investment funds, which are callable at any time.
2017 Tax Act: Under the 2017 Tax Act, a company’s post-1986 previously untaxed foreign
Earnings & Profits was mandatorily deemed to be repatriated and taxed, which is also referred to as
the toll charge. We have elected to pay the toll charge in installments over eight years, or through
2025. However, the toll charge liability is not discounted on our financial statements. As such, we
have recorded approximately $1.2 billion as a non-current income tax liability, included in Income
taxes payable on the Consolidated Balance Sheet as of December 31, 2018.
Collaboration Arrangements: We have entered into certain research and development

collaboration agreements, as identified in Note 18 above, with third parties that include the
funding of certain development, manufacturing and commercialization efforts with the potential
for future milestone and royalty payments upon the achievement of pre-established developmental,
regulatory and/or commercial targets. Our obligation to fund these efforts is contingent upon
continued involvement in the programs and/or the lack of any adverse events which could cause
the discontinuance of the programs. Due to the nature of these arrangements, the future potential
payments are inherently uncertain, and accordingly no amounts have been recorded for the
potential future achievement of these targets in our accompanying Consolidated Balance Sheets as
of December 31, 2018 and 2017.
Contingencies: We believe we maintain insurance coverage adequate for our current needs. Our
operations are subject to environmental laws and regulations, which impose limitations on the
discharge of pollutants into the air and water and establish standards for the treatment, storage and
disposal of solid and hazardous wastes. We review the effects of such laws and regulations on our
operations and modify our operations as appropriate. We believe we are in substantial compliance
with all applicable environmental laws and regulations.
We have ongoing customs, duties and value-added tax (VAT) examinations in various countries
that have yet to be settled. Based on our knowledge of the claims and facts and circumstances

to date, none of these matters, individually or in the aggregate, are deemed to be material to our
financial condition.
Legal Proceedings:
Like many companies in our industry, we have, from time to time, received inquiries and
subpoenas and other types of information requests from government authorities and others and we
have been subject to claims and other actions related to our business activities. While the ultimate
outcome of investigations, inquiries, information requests and legal proceedings is difficult to
predict, adverse resolutions or settlements of those matters may result in, among other things,
modification of our business practices, product recalls, costs and significant payments, which may
have a material adverse effect on our results of operations, cash flows or financial condition.
Pending patent proceedings include challenges to the scope, validity and/or enforceability of our
patents relating to certain of our products, uses of products or processes. Further, as certain of
our products mature or they near the end of their regulatory exclusivity periods, it is more likely
that we will receive challenges to our patents, and in some jurisdictions we have received such
challenges. We are also subject, from time to time, to claims of third parties that we infringe
their patents covering products or processes. Although we believe we have substantial defenses to
these challenges and claims, there can be no assurance as to the outcome of these matters and an
adverse decision in these proceedings could result in one or more of the following: (i) a loss of
patent protection, which could lead to a significant reduction of sales that could materially affect
our future results of operations, cash flows or financial condition; (ii) our inability to continue to
engage in certain activities; and (iii) significant liabilities, including payment of damages, royalties
and/or license fees to any such third party.
We record accruals for loss contingencies to the extent that we conclude it is probable that a
liability has been incurred and the amount of the related loss can be reasonably estimated. We
evaluate, on a quarterly basis, developments in legal proceedings and other matters that could
cause an increase or decrease in the amount of the liability that has been accrued previously.
Among the principal matters pending are the following:
Patent-Related Proceedings:
REVLIMID®: In 2012, our European patent EP 1 667 682 (the ’682 patent) relating to certain
polymorphic forms of lenalidomide expiring in 2024 was opposed in a proceeding before the
European Patent Office (EPO) by Generics (UK) Ltd. and Teva Pharmaceutical Industries Ltd. On
July 21, 2015, the EPO determined that the ’682 patent was not valid. We appealed the EPO ruling
to the EPO Board of Appeal, thereby staying any revocation of the patent until the appeal is finally
adjudicated. No appeal hearing date has been set.
We believe that our patent portfolio for lenalidomide in Europe, including the composition of
matter patent, which expires in 2022, is strong. In the event that we do not prevail on the appeal
relating to the ’682 patent, we still expect that we will have protection in the EU for lenalidomide
until at least 2022.
In June 2017, Accord Healthcare Ltd. (Accord) commenced lawsuits against us in the United
Kingdom (UK) seeking to revoke our UK patents protecting REVLIMID®. In June 2018, we
entered into a settlement agreement with Accord resolving the lawsuits.
We received a Notice of Allegation dated June 13, 2017 from Dr. Reddy’s Laboratories Ltd. (DRL)
notifying us of the filing of DRL’s Abbreviated New Drug Submission (ANDS) with Canada’s
Minister of Health, with respect to Canadian Letters Patent Nos. 2,261,762; 2,476,983; 2,477,301;
2,537,092; 2,687,924; 2,687,927; 2,688,694; 2,688,695; 2,688,708; 2,688,709; 2,741,412 and
2,741,575. DRL is seeking to manufacture and market a generic version of 5 mg, 10 mg, 15 mg, 20
mg, and 25 mg REVLIMID® (lenalidomide) capsules in Canada. We commenced a proceeding in
the Federal Court of Canada on July 27, 2017, seeking an order prohibiting the Minister of Health
from granting marketing approval to DRL until expiry of these patents.

We received a further Notice of Allegation dated September 20, 2017 from DRL relating to
the same submission, but also referencing 2.5 mg REVLIMID® (lenalidomide) capsules. DRL’s
Notice of Allegation contains invalidity allegations relating to Canadian Letters Patent Nos.
2,537,092; 2,687,924; 2,687,927; 2,688,694; 2,688,695; 2,688,708; 2,688,709; 2,741,412 and
2,741,575. We commenced a proceeding in the Federal Court of Canada on November 2, 2017,
seeking an order prohibiting the Minister of Health from granting marketing approval to DRL until
expiry of these patents. The hearings for these proceedings are scheduled for September 23-24,
2019 and September 30-October 3, 2019, respectively.
We received two Notices of Allegation on July 3, 2018 and July 6, 2018 from Natco Pharma
(Canada) Inc. (Natco Canada) notifying us of the filing of Natco Canada’s two separate ANDSs
with Canada’s Minister of Health, with respect to Canadian Letters Patent Nos. 2,476,983;
2,477,301; 2,537,092; 2,687,924; 2,687,927; 2,688,694; 2,688,695; 2,688,708; 2,688,709;
2,741,412 and 2,741,575. Natco Canada is seeking to manufacture and market a generic version of
2.5 mg, 5 mg, 7.5 mg, 10 mg, 15 mg, 20 mg, and 25 mg REVLIMID® (lenalidomide) capsules in
Canada. We commenced infringement actions in the Federal Court of Canada on August 16, 2018,
asserting all the patents, and seeking a declaration of infringement and a permanent injunction. The
trial is anticipated to start on March 30, 2020.
We received four Notices of Allegation on October 4, 2018 from Apotex Inc. (Apotex) notifying
us of the filing of Apotex’s ANDS with Canada’s Minister of Health, with respect to Canadian
Letters Patent Nos. 2,476,983; 2,477,301; 2,537,092; 2,687,924; 2,687,927; 2,688,694; 2,688,695;
2,688,708; 2,688,709; 2,741,412 and 2,741,575. Apotex is seeking to manufacture and market a
generic version of 2.5 mg, 5 mg, 10 mg, 15 mg, 20 mg, and 25 mg REVLIMID® (lenalidomide)
capsules in Canada. We commenced infringement actions in the Federal Court of Canada on
November 15, 2018, asserting all the patents, and seeking a declaration of infringement and a
permanent injunction. The trial is anticipated to start on May 4, 2020.
We received a Notice Letter dated September 9, 2016 from DRL notifying us of its Abbreviated
New Drug Application (ANDA) which contains Paragraph IV certifications against U.S. Patent
Nos. 7,465,800; 7,855,217; 7,968,569; 8,530,498; 8,648,095; 9,101,621 and 9,101,622 that are
listed in the U.S. Food and Drug Administration (FDA) list of Approved Drug Products with
Therapeutic Equivalence Evaluations, commonly referred to as the Orange Book (Orange Book),
for REVLIMID®. DRL is seeking to manufacture and market a generic version of 2.5 mg, 5 mg,
10 mg, 15 mg, 20 mg, and 25 mg REVLIMID® (lenalidomide) capsules in the United States. In
response to the Notice Letter, we timely filed an infringement action against DRL in the U.S.
District Court for the District of New Jersey on October 20, 2016. As a result of the filing of our
action, the FDA cannot grant final approval of DRL’s ANDA until at least the earlier of (i) a final
decision that each of the patents is invalid, unenforceable, and/or not infringed, and (ii) March
12, 2019. On November 18, 2016, DRL filed an answer and counterclaims asserting that each of
the patents is invalid and/or not infringed. On December 27, 2016, we filed our answer to DRL’s
counterclaims. Fact discovery is closed. Expert discovery is ongoing. The court has not yet entered
a schedule for trial.
We received an additional Notice Letter from DRL dated June 8, 2017 notifying us of additional
Paragraph IV certifications against U.S. Patent Nos. 7,189,740; 8,404,717 and 9,056,120 that are
listed in the Orange Book for REVLIMID®. In response to that Notice Letter, we timely filed
an infringement action against DRL in the U.S. District Court for the District of New Jersey on
July 20, 2017. As a result of the filing of our action, the FDA cannot grant final approval of
DRL’s ANDA until at least the earlier of (i) a final decision that each of the patents is invalid,
unenforceable, and/or not infringed, and (ii) December 9, 2019. On October 18, 2017, DRL filed
an amended answer and counterclaims asserting that each of the patents is invalid and/or not
infringed. We filed our answer to DRL’s counterclaims on November 15, 2017. Fact discovery is
set to close on May 31, 2019. The court has not yet entered a schedule for expert discovery or trial.
We received another Notice Letter from DRL dated February 26, 2018 notifying us of additional
Paragraph IV certifications against U.S. Patent Nos. 6,315,720; 6,561,977; 6,755,784; 8,315,886
and 8,626,531 that are listed in the Orange Book for REVLIMID®. In response to the Notice Letter,

we timely filed an infringement action against DRL in the U.S. District Court for the District of
New Jersey on April 12, 2018. As a result of the filing of our action, the FDA cannot grant final
approval of DRL’s ANDA until at least the earlier of (i) a final decision that each of the patents
is invalid, unenforceable, and/or not infringed, and (ii) August 27, 2020. DRL filed an amended
answer and counterclaims on May 31, 2018 asserting that each of the patents is invalid and/or not
infringed. We filed our answer to DRL’s counterclaims on June 28, 2018. The case is stayed until
July 1, 2019, subject to renewal by agreement of the parties and the court’s approval of same. The
court has not yet entered a schedule for expert discovery or trial.
We received a Notice Letter dated February 27, 2017 from Zydus Pharmaceuticals (USA) Inc.
(Zydus) notifying us of Zydus’s ANDA, which contains Paragraph IV certifications against U.S.
Patent Nos. 7,465,800; 7,855,217; 7,968,569; 8,530,498; 8,648,095; 9,101,621 and 9,101,622 that
are listed in the Orange Book for REVLIMID®. Zydus is seeking to manufacture and market a
capsules in the United States. In response to the Notice Letter, we timely filed an infringement
action against Zydus in the U.S. District Court for the District of New Jersey on April 12, 2017. As
a result of the filing of our action, the FDA cannot grant final approval of Zydus’s ANDA until at
least the earlier of (i) a final decision that each of the patents is invalid, unenforceable, and/or not
infringed, and (ii) August 28, 2019. On August 7, 2017, Zydus filed an answer and counterclaims
asserting that each of the patents is invalid and/or not infringed. On September 11, 2017, we filed
our answer to Zydus’s counterclaims. Fact discovery is set to close on May 31, 2019. The court
has yet to enter a schedule for expert discovery and trial.
On April 27, 2018, we filed another infringement action against Zydus in the U.S. District Court
for the District of New Jersey. The patents-in-suit are U.S. Patent Nos. 7,977,357; 8,193,219 and
8,431,598, which are patents that are not listed in the Orange Book. Zydus filed its answer on July
9, 2018 asserting that each of the patents is invalid and/or not infringed. Fact discovery is set to
close on May 31, 2019. The court has yet to enter a schedule for expert discovery and trial.
We received a Notice Letter dated June 30, 2017 from Cipla Ltd., India (Cipla) notifying us of
Cipla’s ANDA which contains Paragraph IV certifications against U.S. Patent Nos. 7,465,800;
7,855,217; 7,968,569; 8,530,498; 8,648,095; 9,101,621 and 9,101,622 that are listed in the Orange
Book for REVLIMID®. Cipla is seeking to manufacture and market a generic version of 5 mg,
10 mg, 15 mg, 20 mg, and 25 mg REVLIMID® (lenalidomide) capsules in the United States. In
response to the Notice Letter, on August 15, 2017, we timely filed an infringement action against
Cipla in the U.S. District Court for the District of New Jersey. As a result of the filing of our action,
the FDA cannot grant final approval of Cipla’s ANDA until at least the earlier of (i) a final decision
that each of the patents is invalid, unenforceable, and/or not infringed, and (ii) January 5, 2020.
On October 13, 2017, Cipla filed an answer and counterclaims asserting that each of the patents is
invalid and/or not infringed. We filed our answer to Cipla’s counterclaims on November 17, 2017.
Fact discovery is set to close on May 31, 2019. The court has yet to enter a schedule for expert
On May 8, 2018, we filed another infringement action against Cipla in the U.S. District Court
8,431,598, which are patents that are not listed in the Orange Book. Cipla filed its answer and
counterclaims on July 16, 2018 asserting that each of the patents is invalid and/or not infringed.
We filed our answer to Cipla’s counterclaims on August 20, 2018. Fact discovery is set to close on
May 31, 2019. The court has yet to enter a schedule for expert discovery and trial.
We received a Notice Letter dated July 24, 2017 from Lotus Pharmaceutical Co., Inc. (Lotus)
notifying us of Lotus’s ANDA which contains Paragraph IV certifications against U.S. Patent
Nos. 5,635,517; 6,315,720; 6,561,977; 6,755,784; 7,189,740; 7,465,800; 7,855,217; 7,968,569;
8,315,886; 8,404,717; 8,530,498; 8,626,531; 8,648,095; 9,056,120; 9,101,621 and 9,101,622 that
are listed in the Orange Book for REVLIMID®. Lotus is seeking to manufacture and market a
action against Lotus in the U.S. District Court for the District of New Jersey on September 6, 2017.
As a result of the filing of our action, the FDA cannot grant final approval of Lotus’s ANDA until

at least the earlier of (i) a final decision that each of the patents is invalid, unenforceable, and/or not
infringed, and (ii) January 25, 2020. On October 5, 2017, Lotus filed an answer and counterclaims
asserting that each of the patents is invalid and/or not infringed. We filed our answer to Lotus’s
counterclaims on November 9, 2017. Fact discovery is set to close on May 31, 2019. The court has
yet to enter a schedule for expert discovery and trial.
On July 10, 2018, we filed another infringement action against Lotus in the U.S. District Court
8,431,598, which are patents that are not listed in the Orange Book. Lotus filed its answer and
counterclaims on July 18, 2018 asserting that each of the patents is invalid and/or not infringed.
We filed our answer to Lotus’s counterclaims on August 22, 2018. Fact discovery is set to close on
May 31, 2019. The court has yet to enter a schedule for expert discovery and trial.
We received a Notice Letter dated November 28, 2017 from Apotex Inc. (Apotex) notifying us of
Apotex’s ANDA, which contains Paragraph IV certifications against U.S. Patent Nos. 6,315,720;
6,561,977; 6,755,784; 7,465,800; 7,468,363; 7,855,217; 8,315,886; 8,626,531 and 8,741,929 that
are listed in the Orange Book for REVLIMID®. Apotex is seeking to manufacture and market a
action against Apotex in the U.S. District Court for the District of New Jersey on January 11, 2018.
As a result of the filing of our action, the FDA cannot grant final approval of Apotex’s ANDA until
at least the earlier of (i) a final decision that each of the patents is invalid, unenforceable, and/or not
infringed, and (ii) May 29, 2020. On April 2, 2018, Apotex responded to the complaint by filing
a motion to dismiss the case for failure to join a necessary party. We filed our response on May
21, 2018. Apotex filed its reply brief on June 11, 2018. On August 15, 2018, the parties submitted
a proposed stipulation resolving the motion to dismiss. The court ordered the stipulation and the
motion was terminated as moot. Apotex filed its answer on August 30, 2018. Fact discovery is set
to close on January 17, 2020. The court has yet to enter a schedule for expert discovery and trial.
We received a Notice Letter dated May 30, 2018 from Sun Pharmaceutical Industries Limited
(Sun) notifying us of Sun’s ANDA, which contains Paragraph IV certifications against U.S. Patent
Nos. 7,465,800; 7,855,217 and 7,968,569 that are listed in the Orange Book for REVLIMID®. Sun
is seeking to manufacture and market a generic version of 2.5 mg, 5 mg, 10 mg, 15 mg, 20 mg,
and 25 mg REVLIMID® (lenalidomide) capsules in the United States. In response to the Notice
Letter, we timely filed an infringement action against Sun in the U.S. District Court for the District
of New Jersey on July 13, 2018. As a result of the filing of our action, the FDA cannot grant final
approval of Sun’s ANDA until at least the earlier of (i) a final decision that each of the patents is
invalid, unenforceable, and/or not infringed, or (ii) November 30, 2020. On August 14, 2018, Sun
filed an answer and counterclaims asserting that each of the patents is invalid and/or not infringed.
We filed our answer to Sun’s counterclaims on September 18, 2018. Fact discovery is set to close
on January 17, 2020. The court has yet to enter a schedule for expert discovery and trial.
We received a Notice Letter dated November 9, 2018 from Hetero USA Inc. (Hetero) notifying us
of Hetero’s ANDA, which contains Paragraph IV certifications against U.S. Patent Nos. 7,465,800;
7,855,217; 7,468,363; and 8,741,929 that are listed in the Orange Book for REVLIMID®. Hetero
is seeking to manufacture and market a generic version of 2.5 mg, 5 mg, 10 mg, 15 mg, 20 mg, and
25 mg REVLIMID® (lenalidomide) capsules in the United States. In response to the Notice Letter,
we timely filed an infringement action against Hetero in the U.S. District Court for the District of
New Jersey on December 20, 2018. As a result of the filing of our action, the FDA cannot grant
final approval of Hetero’s ANDA until at least the earlier of (i) a final decision that each of the
patents is invalid, unenforceable, and/or not infringed, or (ii) May 12, 2021. Hetero has not yet
responded to the complaint.
POMALYST®: We received a Notice Letter dated March 30, 2017 from Teva Pharmaceuticals
USA, Inc. (Teva) (the Teva Notice Letter) notifying us of Teva’s ANDA submitted to the FDA,
which contains Paragraph IV certifications against U.S. Patent Nos. 6,316,471; 8,198,262;
8,673,939; 8,735,428 and 8,828,427 that are listed in the Orange Book for POMALYST®. Teva is
seeking to manufacture and market a generic version of 1 mg, 2 mg, 3 mg, and 4 mg POMALYST®
(pomalidomide) capsules in the United States. We later received similar Notice Letters (together

with the Teva Notice Letter, the Pomalidomide Notice Letters) from other generic drug
manufacturers—Apotex; Hetero USA, Inc. (Hetero); Aurobindo Pharma Ltd. (Aurobindo); Mylan
Pharmaceuticals Inc. (Mylan); and Breckenridge Pharmaceutical, Inc. (Breckenridge)—relating to
these and other POMALYST® patents listed in the Orange Book. In May 2018, we received a
similar Notice Letter from Synthon Pharmaceuticals Inc. (the Synthon Notice Letter).
In response to the Pomalidomide Notice Letters, we timely filed infringement actions in the U.S.
District Court for the District of New Jersey against Teva on May 4, 2017 and against Apotex,
Hetero, Aurobindo, Mylan, and Breckenridge on May 11, 2017. As a result of the filing of our
actions, the FDA cannot grant final approval of these ANDAs until at least the earlier of (i) a final
decision that each of the patents is invalid, unenforceable, and/or not infringed, and (ii) August 8,
2020.
On July 13, 2017, Apotex and Hetero each filed answers and counterclaims asserting that each
of the patents is invalid and/or not infringed, and further seeking declaratory judgments of
noninfringement and invalidity for additional patents listed in the Orange Book for POMALYST®,
namely U.S. Patent Nos. 6,315,720; 6,561,977; 6,755,784; 8,315,886 and 8,626,531. On August
17, 2017, we filed replies to Apotex’s and Hetero’s counterclaims, as well as counter-
counterclaims against Apotex and Hetero asserting infringement of U.S. Patent Nos. 6,315,720;
6,561,977; 6,755,784; 8,315,886 and 8,626,531. Apotex and Hetero filed replies to our counter-
counterclaims on September 6 and September 8, 2017, respectively.
On July 31, 2017, Breckenridge filed an answer and counterclaims asserting that each of the
patents is invalid and/or not infringed. We filed our answer to Breckenridge’s counterclaims on
September 5, 2017. On December 6, 2017, Breckenridge filed an amended pleading to include
counterclaims seeking declaratory judgments of noninfringement and invalidity for additional
patents listed in the Orange Book for POMALYST®, namely U.S. Patent Nos. 6,315,720;
6,561,977; 6,755,784; 8,315,886 and 8,626,531. We replied to Breckenridge’s amended
counterclaims and asserted counter-counterclaims on January 3, 2018. Breckenridge filed its
answer to our counter-counterclaims on January 24, 2018.
On August 7, 2017, Teva filed an answer and counterclaims asserting that each of the patents is
invalid and/or not infringed. On September 11, 2017, we filed our answer to Teva’s counterclaims.
On August 9, 2017, Mylan filed a motion to dismiss the complaint, and on March 2, 2018, the court
denied Mylan’s motion to dismiss without prejudice and granted our request for venue-related
discovery.
On September 15, 2017, Aurobindo filed an answer and counterclaims asserting that each of
the patents is invalid and/or not infringed, and further seeking declaratory judgments of
noninfringement and invalidity for additional patents listed in the Orange Book for POMALYST®,
namely U.S. Patent Nos. 6,315,720; 6,561,977; 6,755,784; 8,315,886 and 8,626,531. We filed
our answer to Aurobindo’s counterclaims and counter-counterclaims concerning U.S. Patent Nos.
6,315,720; 6,561,977; 6,755,784; 8,315,886 and 8,626,531 on October 20, 2017. Aurobindo filed
its answer to our counter-counterclaims on November 24, 2017.
In response to the Synthon Notice Letter, we timely filed an infringement action against Synthon
in the U.S. District Court for the District of New Jersey on June 19, 2018. As a result of the filing
of our actions, the FDA cannot grant final approval of Synthon’s ANDA until at least the earlier
of (i) a final decision that each of the patents is invalid, unenforceable, and/or not infringed, and
(ii) November 7, 2020. On July 16, 2018, Synthon filed an answer and counterclaims asserting
that each of the patents asserted in the complaint is invalid and/or not infringed. On August 20,
2018, we filed our answer to Synthon’s counterclaims. We received a notice letter dated October
5, 2018 from Synthon notifying us of an additional Paragraph IV certification against U.S. Patent
No. 9,993,467 that is listed in the Orange Book for POMALYST®. In response to the Notice Letter,
we timely filed an amended complaint against Synthon on November 20, 2018. On December 4,
2018, Synthon filed an answer and counterclaims asserting that each of the patents in the amended
complaint is invalid and/or not infringed. On January 2, 2019, we filed our answer to Synthon’s

counterclaims. Fact discovery is scheduled to close on January 10, 2020 and expert discovery is
scheduled to close on August 7, 2020. Trial has not been scheduled.
We received a Notice Letter dated August 7, 2018 from Hetero notifying us of an additional
Paragraph IV certification against U.S. Patent No. 9,993,467 that is listed in the Orange Book for
POMALYST®. In response to the Notice Letter, we timely filed an infringement action against
Hetero in the U.S. District Court for the District of New Jersey on September 20, 2018 (“the
Hetero ’467 Action”). On November 30, 2018, Hetero filed its Answer, Affirmative Defenses, and
Counterclaims. We filed our answer to Hetero’s counterclaims on January 4, 2019.
We received a Notice Letter dated August 13, 2018 from Teva notifying us of an additional
Teva in the U.S. District Court for the District of New Jersey on September 27, 2018 (“the
Teva ’467 Action”). On November 14, 2018, Teva filed its Answer, Affirmative Defenses, and
Counterclaims. We filed our answer to Teva’s counterclaims on December 18, 2018.
We received a Notice Letter dated August 22, 2018 from Breckenridge notifying us of an
additional Paragraph IV certification against U.S. Patent No. 9,993,467 that is listed in the Orange
Book for POMALYST®. In response to the Notice Letter, we timely filed an infringement action
against Breckenridge in the U.S. District Court for the District of New Jersey on October 5,
2018 (“the Breckenridge ’467 Action”). On November 7, 2018, Breckenridge filed its Answer,
Affirmative Defenses, and Counterclaims. We filed our answer to Breckenridge’s counterclaims
on December 12, 2018.
We received a Notice Letter dated September 28, 2018 from Mylan notifying us of an additional
Mylan in the U.S. District Court for the District of New Jersey on November 9, 2018 (“the Mylan
’467 Action”). On January 22, 2019, Mylan filed its Answer.
We received a Notice Letter dated October 9, 2018 from Apotex notifying us of an additional
Apotex in the U.S. District Court for the District of New Jersey on November 21, 2018 (“the
Apotex ’467 Action”). On December 12, 2018, Apotex filed its Answer, Affirmative Defenses,
and Counterclaims. We filed our answer to Apotex’s counterclaims on January 16, 2019.
We received a Notice Letter dated November 30, 2018 from Aurobindo notifying us of an
additional Paragraph IV certification against U.S. Patent No. 9,993,467 that is listed in the Orange
Book for POMALYST®. In response to the Notice Letter, we timely filed an infringement action
against Aurobindo in the U.S. District Court for the District of New Jersey on January 4, 2019
(“the Aurobindo ’467 Action”). On January 18, 2019, Aurobindo filed its Answer, Affirmative
Defenses, and Counterclaims. We filed our answer to Aurobindo's counterclaims on February 22,
2019.
On January 31, 2019, the above-referenced POMALYST® actions filed in May 2017 against (i)
Teva and (ii) Apotex, Hetero, Aurobindo, Mylan, and Breckenridge were consolidated with the
Hetero ’467 Action, the Teva ’467 Action, the Breckenridge ’467 Action, the Mylan ’467 Action,
the Apotex ’467 Action, and the Aurobindo ’467 Action. In the consolidated case, fact discovery
is set to close on July 12, 2019, and expert discovery is set to close on January 17, 2020. The court
has yet to enter a schedule for trial.
On February 14, 2019, we filed additional infringement actions in the U.S. District Court for the
District of New Jersey against each of Apotex, Aurobindo, Breckenridge, Hetero, and Mylan.
The patents-in-suit are 10,093,647, 10,093,648, and 10,093,649, which patents are not listed in the
Orange Book. As of February 22, 2019, none of these defendants had responded to the Complaint.

ABRAXANE®: We received a Notice Letter dated February 23, 2016 from Actavis LLC (Actavis)
notifying us of Actavis’s ANDA which contains Paragraph IV certifications against U.S. Patent
Nos. 7,820,788; 7,923,536; 8,138,229 and 8,853,260 that are listed in the Orange Book for
ABRAXANE®. We then received a Notice Letter dated October 25, 2016 from Cipla notifying us
of Cipla’s ANDA, which contains Paragraph IV certifications against the same four patents for
ABRAXANE®. Actavis and Cipla are each seeking to manufacture and market a generic version
of ABRAXANE® 100 mg/vial.
On April 6, 2016, we filed an infringement action against Actavis in the U.S. District Court
for the District of New Jersey. We entered into a settlement with Actavis, effective January 23,
2018, to terminate that patent litigation and Inter Partes Review (IPR) challenges between the
parties relating to certain patents for ABRAXANE®. As part of the settlement, the parties filed a
Consent Judgment with the U.S. District Court for the District of New Jersey, which was entered
on January 26, 2018, enjoining Actavis from marketing generic paclitaxel protein-bound particles
for injectable suspension before expiration of the patents-in-suit, except as provided for in the
settlement. In the settlement, we agreed to provide Actavis with a license to our patents required to
manufacture and sell a generic paclitaxel protein-bound particles for injectable suspension product
in the United States beginning on March 31, 2022.
On December 7, 2016, we filed an infringement action against Cipla in the U.S. District Court
for the District of New Jersey. As a result of the filing of our action, the FDA cannot grant final
approval of Cipla’s ANDA until at least the earlier of (i) a final decision that each of the patents
is invalid, unenforceable, and/or not infringed, and (ii) April 25, 2019. On January 20, 2017, Cipla
filed an answer and counterclaims asserting that each of the patents is invalid and/or not infringed.
Our answer was filed on February 24, 2017. In September 2018, we entered into a settlement
with Cipla to terminate this patent litigation. As part of the settlement, the parties filed a Consent
Judgment with the U.S. District Court for the District of New Jersey, which was entered on October
9, 2018, enjoining Cipla from marketing generic paclitaxel protein-bound particles for injectable
suspension before expiration of the patents-in-suit, except as provided for in the settlement. In the
settlement, we agreed to provide Cipla with a license to our patents required to manufacture and
sell a generic paclitaxel protein-bound particles for injectable suspension product in the United
States beginning on September 27, 2022.
On January 13, 2017, the UK High Court of Justice handed down a ruling after a hearing held
on December 20, 2016 in which we argued that the UK Intellectual Property Office improperly
rejected our request for a Supplemental Protection Certificate (SPC) to the ABRAXANE® patent
UK No. 0 961 612 (the ’612 patent). In that ruling, the High Court referred the matter to the Court
of Justice for the EU (CJEU). A hearing was held at the CJEU on June 21, 2018. On December
13, 2018, we received the opinion of the Advocate General that urged the Court to reject Celgene’s
request for an SPC. This opinion is not binding on the CJEU. We expect a decision from the CJEU
in early 2019. If the CJEU were to find in our favor, the ruling would need to be implemented in
other jurisdictions in which the proceedings are pending, potentially resulting in the grant of SPCs
not only in the UK, but also in other jurisdictions that have previously rejected our initial request
including Germany and Ireland. The ’612 patent expired in Europe in September 2017. However,
if granted, the SPCs will expire in 2022. Data exclusivity in Europe expired in January 2019.
We received a Notice of Allegation (NOA) dated March 22, 2018 from Panacea Biotec Ltd.
(Panacea) notifying us of the filing of Panacea’s ANDS with Canada’s Minister of Health,
with respect to Canadian Letters Patent No. 2,509,365 (the ’365 patent). Panacea is seeking
to manufacture and market a generic version of 100 mg/vial ABRAXANE® (paclitaxel powder
for injectable suspension, nanoparticle, albumin-bound (nab®) paclitaxel) in Canada. On May
4, 2018, our subsidiaries, Abraxis BioScience, LLC and Celgene Inc. commenced an action for
patent infringement in the Federal Court of Canada seeking, among other relief, a declaration of
infringement in relation to the ’365 patent.
In June 2018, we settled certain patent disputes with Apotex involving ABRAXANE® that were
triggered by Apotex filing an ANDA in the United States, IPR patent challenges before the U.S.
Patent Office (see below), and the aforementioned NOA filed by Apotex’s marketing partner,
Panacea. In addition to dismissing the patent proceedings, in the settlement we agreed to provide

Apotex with a license to our patents required to manufacture and sell a generic paclitaxel protein-
bound particles for injectable suspension product in the United States beginning on September 27,
2022, and in certain countries outside of the United States, including Canada, beginning on a later
date.
We received a Notice Letter dated November 5, 2018 from HBT Labs, Inc. (HBT) notifying
us of HBT’s 505(b)(2) NDA which contains Paragraph IV certifications against U.S. Patent
Nos. 7,758,891; 7,820,788; 7,923,536; 8,034,375; 8,138,229; 8,268,348; 8,314,156; 8,853,260;
9,101,543; 9,393,318; 9,511,046 and 9,597,409 that are listed in the Orange Book for
ABRAXANE®. HBT is seeking to manufacture and market Paclitaxel Protein-Bound Particles
for Injectable Suspension (Albumin-Bound), 100 mg/vial in the United States. In response to the
Notice letter, we timely filed infringement actions against HBT in the U.S. District Court for the
District of New Jersey on December 17, 2018, and in the U.S. District Court for the District of
Delaware on December 19, 2018. As a result of these filings, the FDA cannot grant final approval
of HBT’s 505(b)(2) NDA until at least the earlier of (i) a final decision that each of the patents
is invalid, unenforceable, and/or not infringed, or (ii) May 6, 2021. On February 5, 2019, we
filed a notice of voluntary dismissal without prejudice in the United States District Court for the
District of New Jersey. The court ordered the notice of voluntary dismissal on February 7, 2019.
On February 11, 2019, HBT filed a motion to dismiss and transfer in the United States District
Court for the District of Delaware.
OTEZLA®: We received Notice Letters from each of the following company groups (individual
or joint) between May 14, 2018 and June 1, 2018: Alkem Laboratories Ltd. (Alkem); Amneal
Pharmaceuticals LLC (Amneal); Annora Pharma Private Ltd. (Annora) and Hetero USA Inc.
(Hetero); Aurobindo Pharma Ltd. and Aurobindo Pharma U.S.A. Inc. (Aurobindo); Cipla Ltd.
(Cipla); Dr. Reddy’s Laboratories, Ltd. and Dr. Reddy’s Laboratories, Inc. (DRL); Emcure
Pharmaceuticals Ltd. (Emcure) and Heritage Pharmaceuticals Inc. (Heritage); Glenmark
Pharmaceuticals Ltd. (Glenmark); Macleods Pharmaceuticals Ltd. (Macleods); Mankind Pharma
Ltd. (Mankind); MSN Laboratories Private Ltd. (MSN); Pharmascience Inc. (Pharmascience);
Prinston Pharmaceutical Inc. (Prinston); Sandoz Inc. (Sandoz); Shilpa Medicare Ltd. (Shilpa);
Teva Pharmaceuticals USA, Inc. (Teva) and Actavis LLC (Actavis); Torrent Pharmaceuticals
Ltd. (Torrent); Unichem Laboratories, Ltd. (Unichem); and Zydus Pharmaceuticals (USA) Inc.
(Zydus) notifying us of their ANDAs, which contain Paragraph IV certifications against one or
more of the following patents: U.S. Patent Nos. 6,962,940; 7,208,516; 7,427,638; 7,659,302;
7,893,101; 8,455,536; 8,802,717; 9,018,243 and 9,872,854, which are listed in the Orange Book
for OTEZLA®. Each of the companies is seeking to market a generic version of OTEZLA®. In
response to the Notice Letters, we timely filed infringement actions in the U.S. District Court for
the District of New Jersey. As a result of the filing of our actions, the FDA cannot grant final
approval of any of these companies’ ANDAs until at least the earlier of (i) a final decision that
each of the asserted patents is invalid, unenforceable, and/or not infringed, and (ii) September 21,
2021.
Between August 8, 2018 and August 30, 2018, we filed amended complaints against Alkem,
Amneal, Aurobindo, Cipla, DRL, Glenmark, Pharmascience, Sandoz, Teva and Actavis, Unichem,
and Zydus additionally asserting U.S. Patent No. 9,724,330, which was recently listed in the
Orange Book for OTEZLA®.
Between October 15, 2018 and November 27, 2018, we filed amended complaints against Alkem,
Amneal, Annora and Hetero, Aurobindo, Cipla, DRL, Emcure and Heritage, Glenmark, Macleods,
Mankind, MSN, Pharmascience, Prinston, Sandoz, Teva and Actavis, Torrent, Unichem, and
Zydus additionally asserting U.S. Patent No. 10,092,541, which was recently listed in the Orange
Book for OTEZLA®.
Each defendant has filed an Answer disputing infringement and/or validity of the patents asserted
against it. Along with their Answers, each of Alkem, Annora and Hetero, Cipla, DRL, Emcure
and Heritage, Glenmark, Macleods, Mankind, Pharmascience, Sandoz, Shilpa, Teva and Actavis,
Torrent, and Unichem filed declaratory judgment counterclaims asserting that some or all of the
patents are not infringed and/or are invalid. The court has consolidated all OTEZLA® litigations

for discovery and case management purposes, and entered a schedule for fact discovery. The court
has not yet entered a schedule for expert discovery or trial in any of the OTEZLA® litigations.
THALOMID®: We received a Notice Letter dated July 19, 2018 from West-Ward Pharmaceuticals
International Limited (West-Ward) notifying us of West-Ward’s ANDA which contains Paragraph
IV certifications against U.S. Patent Nos. 6,315,720; 6,561,977; 6,755,784; 6,869,399; 7,141,018;
7,230,012; 7,959,566; 8,315,886 and 8,626,531 that are listed in the Orange Book for
THALOMID®. West-Ward is seeking to manufacture and market a generic version of 50 mg, 100
mg, 150 mg, and 200 mg THALOMID® (thalidomide) capsules in the United States. In response
to the Notice letter, we timely filed an infringement action against West-Ward in the U.S. District
Court for the District of New Jersey on August 31, 2018. As a result of the filing of our action,
the FDA cannot grant final approval of West-Ward’s ANDA until at least the earlier of (i) a final
decision that each of the patents is invalid, unenforceable, and/or not infringed, and (ii) January
20, 2021. On February 11, 2019, West-Ward filed its answer and counterclaims, asserting that each
of the patents is invalid and/or not infringed.
Juno patent-related proceedings:
KITE: On October 18, 2017, the day on which the FDA approved Kite Pharma, Inc.’s (Kite)
Yescarta™ KTE-C19 product, Juno filed a complaint against Kite in the U.S. District Court for the
Central District of California. The complaint alleged that Yescarta™ infringes claims 1-3, 5, 7-9,
and 11 of U.S. Patent No. 7,446,190 (the ’190 Patent). Kite answered the complaint on November
28, 2017, and filed counterclaims of non-infringement and invalidity against Juno. Juno filed a
motion to dismiss Kite’s counterclaims and to strike certain affirmative defenses on December 19,
2017.
On March 8, 2018, the court granted Juno’s motion to dismiss and strike, and ordered Kite to
file an amended answer and counterclaims. On the same day, the court denied Kite’s motion
to stay. On March 29, 2018, Kite filed an amended answer and counterclaims, asserting that
the ’190 Patent is invalid and/or not infringed. On April 9, 2018, we filed an answer to Kite’s
counterclaims. The court held a claim construction hearing on September 18, 2018, and issued
a claim construction order on October 9, 2018. On November 12, 2018, Kite filed a motion to
dismiss Plaintiffs Memorial Sloan Kettering Cancer Center and Juno Therapeutics based on an
alleged lack of standing. Plaintiffs filed their opposition on November 26, 2018, and Kite filed
its reply on December 3, 2018. The Court did not hold a hearing and has taken the motion under
submission. Kite filed a motion for summary judgment of non-infringement on January 22, 2019.
We filed our opposition to Kite’s summary judgment motion on February 19, 2019. Kite’s reply is
due on March 11, 2019, and the hearing is scheduled for April 1, 2019. Fact and expert discovery
are set to close on March 29, 2019, and June 14, 2019, respectively, and trial is scheduled to begin
on December 3, 2019.
CITY OF HOPE: On August 22, 2017, City of Hope (COH) filed a lawsuit against Juno in the U.S.
District Court for the Central District of California alleging that prior to our acquisition of Juno,
Juno breached an exclusive license agreement (ELA) between Juno and COH by sublicensing
COH intellectual property to us without COH’s consent and by failing to pay COH related
sublicensing revenues. COH sought damages and a judicial declaration that the ELA has
terminated. In July 2018, Juno and COH entered into a confidential settlement agreement
dismissing the lawsuit and reinstating the ELA. The settlement amount was not materially different
than the amount we had previously accrued for this matter.
Proceedings involving the U.S. Patent and Trademark Office (USPTO):
REMS IPRs: Under the America Invents Act (AIA), any person may seek to challenge an issued
patent by petitioning the USPTO to institute a post grant review. On April 23, 2015, we were
informed that the Coalition for Affordable Drugs VI LLC filed petitions for IPR challenging
the validity of our U.S. Patent Nos. 6,045,501 (the ’501 patent) and 6,315,720 (the ’720 patent)
covering certain aspects of our REMS program. On October 27, 2015, the USPTO Patent Trial
and Appeal Board (PTAB) instituted IPR proceedings relating to these patents. An oral hearing
was held on July 21, 2016. The PTAB’s decisions, rendered on October 26, 2016, held that the

’501 and ’720 patents are invalid, primarily due to obviousness in view of certain publications. On
November 25, 2016, we requested a rehearing with respect to certain claims of these patents. On
September 8, 2017, the PTAB denied our rehearing request for the ’501 patent, but granted our
rehearing request pertaining to a certain claim of the ’720 patent.
We timely appealed to the U.S. Court of Appeals for the Federal Circuit the PTAB’s determinations
regarding certain claims of the ’720 patent and the ’501 patent on November 6, 2017 and on
November 9, 2017, respectively. On February 26, 2018, the USPTO intervened in our appeal.
Our opening briefs were filed on May 31, 2018. The USPTO filed its briefs on August 30, 2018.
Our reply briefs were filed by October 29, 2018. The court has not yet scheduled oral argument.
The ’501 and ’720 patents remain valid and enforceable pending appeal. We retain other patents
covering certain aspects of our REMS program, as well as patents that cover our products that use
our REMS system.
ABRAXANE® IPR: On April 4, 2017, Actavis filed petitions for IPRs challenging the validity of
our U.S. Patent Nos. 8,138,229 (the ’229 patent); 7,923,536 (the ’536 patent); 7,820,788 (the ’788
patent) and 8,853,260 (the ’260 patent) covering certain aspects of our ABRAXANE® product. On
October 10, 2017, the PTAB instituted IPR proceedings on the ’229, ’536, and ’788 patents and on
October 11, 2017 denied institution of the IPR on the ’260 patent. On January 29, 2018, the parties
submitted a joint motion to terminate all three IPRs in connection with the settlement entered into
with Actavis mentioned above. On May 8, 2018, the PTAB granted the parties’ joint motion to
terminate.
On November 9, 2017, Apotex and Cipla each filed petitions for IPRs challenging the validity of
the ’229, ’536, and ’788 patents. On May 8, 2018, the PTAB denied institution of all IPRs.
REVLIMID® IPRs: On February 23, 2018, Apotex filed a petition for IPR challenging the validity
of our U.S. Patent No. 8,741,929. On September 27, 2018, the PTAB denied institution of the IPR.
On October 29, 2018, Apotex filed a Request for Rehearing.
On August 3, 2018, DRL filed petitions for IPR challenging the validity of our U.S. Patent Nos.
9,056,120; 8,404,717 and 7,189,740. Our preliminary responses were filed by November 14, 2018,
November 30, 2018, and December 11, 2018, respectively. On February 11, 2019, the PTAB
denied institution of all three IPRs.
On September 12, 2018, Lotus filed a petition for IPR challenging the validity of our U.S. Patent
No. 7,968,569. Our preliminary response was filed by December 18, 2018.
JUNO IPR: On August 13, 2015, Kite filed a petition for IPR challenging the validity of U.S.
Patent No. 7,446,190 (the ’190 Patent), exclusively licensed from Memorial Sloan Kettering
Cancer Center. On February 11, 2016, the PTAB instituted the IPR proceedings. A hearing was
held before the PTAB on October 20, 2016. On December 16, 2016, the PTAB issued a final
written decision upholding all claims of the ’190 Patent. On February 16, 2017, Kite filed a notice
of appeal of the PTAB’s final written decision to the U.S. Court of Appeals for the Federal Circuit.
On June 6, 2018, the Federal Circuit affirmed the decision of the Patent Trial and Appeal Board,
upholding all claims of the ’190 Patent.
Other Proceedings:
MYLAN: On April 3, 2014, Mylan filed a lawsuit against us in the U.S. District Court for the
District of New Jersey alleging that we violated various federal and state antitrust and unfair
competition laws by allegedly refusing to sell samples of our THALOMID® and REVLIMID®
brand drugs so that Mylan may conduct the bioequivalence testing necessary to submit ANDAs
to the FDA for approval to market generic versions of these products. Mylan is seeking injunctive
relief, damages and a declaratory judgment. We filed a motion to dismiss Mylan’s complaint on
May 25, 2014. Mylan filed its opposition to our motion to dismiss on June 16, 2014. The Federal
Trade Commission filed an amicus curiae brief in opposition to our motion to dismiss on June 17,
2014.

On December 22, 2014, the court granted our motion to dismiss (i) Mylan’s claims based on
Section 1 of the Sherman Act (without prejudice), and (ii) Mylan’s related claims arising under
the New Jersey Antitrust Act. The court denied our motion to dismiss the remaining claims which
primarily relate to Section 2 of the Sherman Act. On January 6, 2015, we filed a motion to certify
for interlocutory appeal the order denying our motion to dismiss with respect to the claims relating
to Section 2 of the Sherman Act, which appeal was denied by the U.S. Court of Appeals for the
Third Circuit on March 5, 2015. On January 20, 2015, we filed an answer to Mylan’s complaint.
Fact discovery closed in June 2016 and expert discovery closed in November 2016. On December
16, 2016, we moved for summary judgment, seeking a ruling that judgment be granted in our favor
on all claims. The motion for summary judgment was argued on December 13, 2017. Supplemental
briefing on the motion for summary judgment was filed on February 1, 2018. On October 3, 2018,
the Court granted in part and denied in part our motion for summary judgment. Trial has been set
to begin in May 2019.
THALOMID®AND REVLIMID®ANTITRUST LITIGATION: On November 7, 2014, the

International Union of Bricklayers and Allied Craft Workers Local 1 Health Fund (IUB) filed a
putative class action lawsuit against us in the U.S. District Court for the District of New Jersey
alleging that we violated various antitrust, consumer protection, and unfair competition laws by
(a) allegedly securing an exclusive supply contract with Seratec S.A.R.L. so that Barr Laboratories
allegedly could not secure its own supply of thalidomide active pharmaceutical ingredient, (b)
allegedly refusing to sell samples of our THALOMID® and REVLIMID® brand drugs to various
generic manufacturers for the alleged purpose of bioequivalence testing necessary for ANDAs
to be submitted to the FDA for approval to market generic versions of these products, and (c)
allegedly bringing unjustified patent infringement lawsuits in order to allegedly delay approval
for proposed generic versions of THALOMID® and REVLIMID®. IUB, on behalf of itself and a
putative class of third-party payers, is seeking injunctive relief and damages.
In February 2015, we filed a motion to dismiss IUB’s complaint, and upon the filing of a similar
putative class action making similar allegations by the City of Providence (Providence), the parties
agreed that the decision in the motion to dismiss IUB’s complaint would apply to the identical
claims in Providence’s complaint. In October 2015, the court denied our motion to dismiss on all
grounds.
We filed our answers to the IUB and Providence complaints in January 2016. On June 14, 2017, a
new complaint was filed by the same counsel representing the plaintiffs in the IUB case, making
similar allegations and adding three new plaintiffs - International Union of Operating Engineers
Stationary Engineers Local 39 Health and Welfare Trust Fund (Local 39), The Detectives’
Endowment Association, Inc. (DEA) and David Mitchell. Plaintiffs added allegations that our
settlements of patent infringement lawsuits against certain generic manufacturers have had
anticompetitive effects. Counsel identified the new complaint as related to the IUB and Providence
cases and, on August 1, 2017, filed a consolidated amended complaint on behalf of IUB,
Providence, Local 39, DEA, and Mitchell. On September 28, 2017, the same counsel filed
another complaint, which it identified as related to the consolidated case, and which made similar
allegations on behalf of an additional asserted class representative, New England Carpenters
Health Benefits Fund (NEC). The NEC action has been consolidated with the original action
involving IUB, Providence, DEA, Local 39, and Mitchell into a master action for all purposes.
On October 2, 2017, the plaintiffs filed a motion for certification of two damages classes under
the laws of thirteen states and the District of Columbia and a nationwide injunction class. On
February 26, 2018, we filed our opposition to the plaintiffs’ motion and a motion for judgment
on the pleadings dismissing all state law claims where the plaintiffs no longer seek to represent a
class. The plaintiffs filed their opposition to our motion for judgment on the pleadings on April
2, 2018, and we filed our reply on April 13, 2018. The plaintiffs filed their reply in support of
their class certification motion on May 18, 2018. Fact discovery in these cases closed on May 17,
2018 and expert discovery closed on December 11, 2018. On October 30, 2018, the Court denied
Plaintiffs’ Motion for Class Certification. On December 14, 2018, the plaintiffs filed a new motion
for class certification. Our opposition to Plaintiff’s new motion for class certification was filed on
January 25, 2019 and the plaintiffs’ reply in support of their new motion for class certification was
filed on February 15, 2019. No trial date has been set.

USAO MASSACHUSETTS SUBPOENA: In December 2015, we received a subpoena from the
U.S. Attorney’s Office for the District of Massachusetts, and in November 2016, we received a
second subpoena related to the same inquiry. The materials requested primarily relate to patient
assistance programs, including our support of 501(c)(3) organizations that provide financial
assistance to eligible patients. We are cooperating with these requests.
CANADIAN COMPETITION BUREAU ORDER: In August 2017, we received an order issued

by the Federal Court in Ottawa, Ontario, Canada at the request of the Canadian Competition
Bureau, requiring that we provide certain materials and information relating to our risk
management program and requests by generic manufacturers to purchase our products in Canada.
On December 18, 2018, the Canadian Competition Bureau informed Celgene that it is
discontinuing its inquiry of Celgene.
JUNO SECURITIES CLASS ACTION: In July 2016, two putative securities class action
complaints (the Veljanoski Complaint and the Wan Complaint) were filed against Juno and its
chief executive officer, Hans E. Bishop, in the U.S. District Court for the Western District of
Washington. On September 7, 2016, an additional putative securities class action complaint (the
Paradisco Complaint and, together with the Veljanoski Complaint and the Wan Complaint, the
Complaints) was filed against Juno, Mr. Bishop, and its chief financial officer, Steve Harr, in
the U.S. District Court for the Western District of Washington. The Complaints generally allege
material misrepresentations and omissions in public statements regarding patient deaths in Juno’s
Phase II clinical trial of JCAR015 as well as, violations by all named defendants of Sections 10(b)
and 20(a) of the Securities Exchange Act. On October 7, 2016, the Complaints were consolidated
into a single action. On December 12, 2016, the court-appointed lead plaintiff and a named
plaintiff filed a Consolidated Amended Complaint (Consolidated Complaint), which includes
claims against Juno, Mr. Bishop, Dr. Harr, and Juno’s chief medical officer, Dr. Mark J. Gilbert
(the Defendants). The Consolidated Complaint includes allegations similar to those in the previous
Complaints, as well as additional allegations regarding purported material misrepresentations and
omissions in public statements after July 7, 2016 regarding the safety of JCAR015. The parties
mediated on May 9, 2018, following which the parties agreed to a settlement in principle of the
class action. On November 16, 2018, the court approved the parties’ settlement. The settlement
amount was not materially different than the amount we had previously accrued for this matter.
CELGENE SECURITIES CLASS ACTION: On March 29, 2018, the City of Warren General
Employees’ Retirement System filed a putative class action against us and certain of our officers
in the U.S. District Court for the District of New Jersey. The complaint alleges that the defendants
violated federal securities laws by making misstatements and/or omissions concerning (1) trials of
GED-0301, (2) 2020 outlook and projected sales of OTEZLA®, and (3) the new drug application
for Ozanimod. On May 3, 2018, a similar putative class action lawsuit against us and certain
of our officers was filed by Charles H. Witchcoff in the U.S. District Court for the District of
New Jersey. The complaint alleges that defendants violated federal securities laws by making
material misstatements and/or omissions concerning (1) trials of GED-0301, (2) 2020 outlook and
projected sales of OTEZLA®, and (3) the new drug application for Ozanimod. On September 27,
2018, the court consolidated the two actions and appointed a lead plaintiff, lead counsel, and co-
liaison counsel for the putative class. On October 9, 2018, the court entered a scheduling order
which requires lead plaintiff to file an amended complaint by December 10, 2018; defendants to
file their motion to dismiss the amended complaint by February 8, 2019; lead plaintiff to file its
opposition to the motion to dismiss by April 9, 2019; and defendants to file their reply by May 9,
2019. On December 10, 2018, the lead plaintiff filed its amended complaint. On February 8, 2019,
defendants filed a motion to dismiss plaintiff’s amended complaint in full.
SARATOGA DERIVATIVE ACTION: On July 12, 2018, Saratoga Advantage Trust Health and
Biotechnology Portfolio filed a shareholder derivative complaint against certain members of our
board of directors in the U.S. District Court for the District of New Jersey. The complaint alleges
that (i) certain defendants made misrepresentations and omissions of material fact concerning,
among other things, trials of GED-0301, sales of OTEZLA®, 2017 and 2020 fiscal guidance,
and the new drug application for Ozanimod and (ii) all defendants failed to adequately supervise
Celgene with regard to trials of GED-0301, sales of OTEZLA®, 2017 and 2020 fiscal guidance,

the new drug application for Ozanimod, and the promotion and marketing of REVLIMID®. The
plaintiff has agreed to stay the defendants’ obligation to answer or otherwise respond to the
allegations in the complaint in deference to the Celgene Securities Class Actions and subject to
thirty days’ notice by either plaintiff or defendants of an intent to proceed. On August 1, 2018, the
Court entered an order staying the proceedings until the disposition of the first motion to dismiss in
the Celgene Securities Class Action. The order also administratively terminated the proceedings.
GEROLD DERIVATIVE ACTION: On October 11, 2018, Sam Baran Gerold filed a shareholder
derivative complaint against certain members of our board of directors in the Superior Court of
New Jersey. The complaint alleges that (i) defendants breached certain fiduciary duties related
to, among other things, GED-0301, OTEZLA®, and the new drug application for Ozanimod
and (ii) because of that breach, the defendants caused Celgene to waste its corporate assets and
the defendants were unjustly enriched. On October 29, 2018, defendants removed this matter to
the U.S. District Court for the District of New Jersey. On January 9, 2019 the court entered a
stipulation and order staying the matter until the disposition of the motion to dismiss in the Celgene
Securities Class Action or at any party’s election on 15 days’ notice to all other parties.
FISHER DERIVATIVE ACTION: On October 19, 2018, Susan Fisher filed a stockholder
derivative complaint against certain of our present and former directors or executives in the U.S.
District Court of Delaware. The complaint alleged that defendants (i) violated Section 14(a) of
the Securities Exchange Act by participating in the issuance of materially misleading proxies
and (ii) failed to exercise proper oversight of Celgene, and that, because of that failure, the
defendants caused Celgene to waste its corporate assets and the defendants were unjustly enriched.
On November 13, 2018, with defendants’ consent, the plaintiff dismissed her complaint without
prejudice.
HUMANA, INC (HUMANA): On May 16, 2018, Humana filed a lawsuit against us in the Pike
County Circuit Court of the Commonwealth of Kentucky. Humana’s complaint alleges we engage
in unlawful off-label marketing in connection with sales of THALOMID® and REVLIMID®
and asserts claims against us for fraud, breach of contract, negligent misrepresentation, unjust
enrichment, and violations of New Jersey’s Racketeer Influenced and Corrupt Organizations Act.
The complaint seeks, among other things, treble and punitive damages, injunctive relief and
attorneys’ fees and costs. On June 13, 2018, we removed Humana’s lawsuit to the U.S. District
Court for the Eastern District of Kentucky and, on July 11, 2018, filed a motion to dismiss
Humana’s complaint in full. On July 12, 2018, Humana moved to remand the case to state court.
The court has not set a hearing date for the motions. The Court has stayed the action pending a
ruling on Humana’s motion to remand.
Proceedings Related to the Bristol-Myers Squibb’s Proposed Acquisition of Celgene:
Between February 4, 2019 and February 20, 2019, six putative class actions and three individual
actions were filed against Celgene, the directors of Celgene, and in four cases, Bristol-Myers
Squibb Company and/or Burgundy Merger Sub, Inc. Three complaints, Bernstein v. Celgene
Corporation, et al., 2:19-cv-04804; Lowinger v. Celgene Corporation, et al., 2:19-cv-04752; and
Wang v. Celgene Corporation, et al., 2:19-cv-04865, were filed in the U.S. District Court for
the District of New Jersey. Three complaints, Gerold v. Celgene Corporation, et al.,
1:19-cv-00233-UNA; Sbriglio v. Celgene Corporation, et al., 1:19-cv-00277-UNA; and Grayson
v. Celgene Corporation, et al., No. 1:19-cv-00332, were filed in the U.S. District Court for the
District of Delaware. Two complaints, Rogers v. Celgene Corporation, et al., 1:19-cv-01275; and
Woods v. Celgene Corporation, et al., No. 1:19-cv-01597, were filed in the U.S. District Court
for the Southern District of New York. One complaint, Ciavarella v. Alles, No. 2019-0133-AGB,
was filed in the Court of Chancery of the State of Delaware. The federal complaints generally
allege that defendants prepared and filed a false or misleading registration statement regarding the
proposed merger in violation of Section 14(a) and Section 20(a) of the Exchange Act, and Rule
14a-9 promulgated under the Exchange Act. Specifically, the federal complaints allege that the
registration statement misstated or omitted material information regarding the parties’ financial
projections and the analyses performed by the parties’ financial advisors. Some of the federal
complaints also allege that the registration statement misstated or omitted material information
regarding potential conflicts of interest faced by Celgene directors and executives. The federal

complaints further allege that the Celgene Board of Directors and/or Bristol-Myers Squibb are
liable for these violations as “controlling persons” of Celgene under Section 20(a) of the Exchange
Act. The federal complaints seek, among other relief, injunctive relief to prevent consummation
of the merger until the alleged disclosure violations are cured, damages in the event the merger
is consummated, and an award of attorney’s fees. The Ciavarella complaint alleges that Celgene’s
directors breached their fiduciary duties by failing to maximize the value of Celgene and that
Bristol-Myers Squibb aided and abetted those breaches. It seeks, among other things, injunctive
relief to prevent consummation of the merger, damages in the event the merger is consummated,
and an award of attorney’s fees.
In addition, a complaint, Landers, et al. v. Caforio, et al., No. 2019-0125-AGB, was filed in the
Court of Chancery of the State of Delaware. Landers is styled as a putative class action on behalf
of Bristol-Myers Squibb stockholders and names members of the Bristol-Myers Squibb board of
directors as defendants, alleging that they breached their fiduciary duties by failing to disclose
material information about the merger.
Additional lawsuits arising out of or relating to the definitive merger agreement, the registration
statement and/or the proposed acquisition of us by Bristol-Myers Squibb may be filed in the
future. Celgene believes that the lawsuits are without merit and intends to defend vigorously
against them and any other lawsuits challenging the merger. However, there can be no assurance
that defendants will be successful in the outcome of the pending lawsuits or in any potential
future lawsuits. One of the conditions to completion of the proposed acquisition is the absence of
any applicable injunction or other order being in effect that prohibits completion of the proposed
acquisition. Accordingly, if a plaintiff is successful in obtaining an injunction, then such order
may prevent the proposed acquisition from being completed, or from being completed within the
expected timeframe.

Geographic and Product 12 Months Ended
Information Dec. 31, 2018
Segment Reporting
[Abstract]
Geographic and Product Geographic and Product Information
Information
Operations by Geographic Area: Revenues primarily consisted of sales of our primary
commercial stage products including REVLIMID®, POMALYST®/IMNOVID®, OTEZLA®,
ABRAXANE® and VIDAZA®. In addition, we earn revenue from other product sales and licensing
arrangements.
Revenues 2018 2017 2016

United States $ 10,023 $ 8,324 $ 7,010
Europe 3,771 3,327 3,046
All other 1,487 1,352 1,173
Total revenues $ 15,281 $ 13,003 $ 11,229

Europe 331 296
All other 8 6
Revenues by Product: Total revenues from external customers by product for the years ended
December 31, 2018, 2017 and 2016 were as follows:
2018 2017 2016

REVLIMID® $ 9,685 $ 8,187 $ 6,974
OTEZLA® 1,608 1,279 1,017
ABRAXANE® 1,062 992 973
IDHIFA® 72 20 —
VIDAZA® 594 628 608
THALOMID® 114 132 152
ISTODAX® 63 76 80
Other 4 9 4
Total revenue $ 15,281 $ 13,003 $ 11,229
Major Customers: We sell our products primarily through wholesale distributors and specialty
pharmacies in the United States, which account for a large portion of our total revenues.
International sales are primarily made directly to hospitals, clinics and retail chains, many of which
are government owned. During the three-year period of 2018, 2017 and 2016, customers that
accounted for more than 10% of our total revenue in at least one of those years are summarized
below. The percentage of amounts due from these customers compared to total net accounts
receivable is also summarized below as of December 31, 2018 and 2017.

Percent of Total Revenue Percent of Net Accounts Receivable
Customer 2018 2017 2016 2018 2017
McKesson Corp. 12.1% 12.0% 10.3% 10.4% 9.6%
CVS Health Corp. 11.5% 12.5% 12.0% 9.2% 9.7%
AmerisourceBergen
Corp. 11.4% 10.0% 8.5% 14.4% 9.7%

Quarterly Results of 12 Months Ended
Operations (Unaudited) Dec. 31, 2018
Quarterly Financial Data
[Abstract]
Quarterly Results of Quarterly Results of Operations (Unaudited)
Operations (Unaudited) 2018 1Q 2Q 3Q 4Q Year
Total revenue $ 3,538 $ 3,814 $ 3,892 $ 4,037 $ 15,281
Gross profit(1) 3,396 3,682 3,733 3,867 14,678
Net income(3) 846 1,045 1,082 1,073 4,046
Basic $ 1.13 $ 1.46 $ 1.54 $ 1.53 $ 5.65
Diluted $ 1.10 $ 1.43 $ 1.50 $ 1.50 $ 5.51
Basic 748.3 716.1 702.0 699.5 716.3
Diluted 768.3 732.6 719.7 713.9 733.8
2017 1Q 2Q 3Q 4Q Year
Total revenue $ 2,962 $ 3,271 $ 3,287 $ 3,483 $ 13,003
Gross profit(1) 2,839 3,148 3,165 3,360 12,512
Net income (loss) 932 1,101 988 (81) 2,940
Net income (loss) per
share:(4)
Basic $ 1.20 $ 1.41 $ 1.26 $ (0.10) $ 3.77
Diluted $ 1.15 $ 1.36 $ 1.21 $ (0.10) $ 3.64
Basic 779.0 780.4 784.1 773.5 779.2
Diluted 811.2 811.7 815.2 773.5 808.7
1 Gross profit is computed by subtracting cost of goods sold (excluding amortization of
acquired intangible assets) from net product sales.
2 The Income tax provision in the fourth quarter of 2017 includes income tax expense
of approximately $1.3 billion as a result of the 2017 Tax Act, which was enacted on
December 22, 2017. See Note 17 for additional details related to the 2017 Tax Act.
In addition, the Income tax provision for 2018 and 2017 includes $22 million and
$290 million, respectively, of excess tax benefits arising from share-based compensation
awards that vested or were exercised during 2018 and 2017, respectively, as a result of
3 ASU 2016-01, was effective for us on January 1, 2018. ASU 2016-01 requires changes
in the fair value of equity investments with readily determinable fair values and changes
in observable prices of equity investments without readily determinable fair values to be
recorded in net income. As such, a net gain of $959 million was recorded in the first
quarter of 2018 which was offset by net charges of $6 million, $123 million, and $513
million which were recorded in the second, third and fourth quarters, respectively. See
Note 1 of Notes to Consolidated Financial Statements contained elsewhere in this report
for additional information.
4 The sum of the quarters may not equal the full year due to rounding. In addition, quarterly
and full year basic and diluted earnings per share are calculated separately.

12 Months Ended
Subsequent Event
Dec. 31, 2018
Subsequent Events
[Abstract]
Subsequent Event Subsequent Events
On January 2, 2019, Bristol-Myers Squibb and Celgene entered into a definitive merger agreement
under which Bristol-Myers Squibb will acquire Celgene in a cash and stock transaction with an
equity value of approximately $74 billion, based on the closing price of Bristol-Myers Squibb
stock of $52.43 on January 2, 2019. Under the terms of the agreement, Celgene shareholders will
receive 1.0 Bristol-Myers Squibb share and $50.00 in cash for each share of Celgene. Celgene
shareholders will also receive one tradeable Bristol-Myers Squibb CVR for each share of Celgene,
which will entitle the holder to receive a payment for the achievement of future regulatory
milestones. The Boards of Directors of both companies have approved the merger agreement.
The definitive merger agreement includes restrictions on the conduct of our business prior to the
completion of the merger or termination of the merger agreement, generally requiring us to conduct
our business in the ordinary course consistent with past practice. Without limiting the generality of
the foregoing, we are subject to a variety of specified restrictions. Unless we obtain Bristol-Myers
Squibb’s prior written consent (which consent may not be unreasonably withheld, conditioned or
delayed) and except (i) as required or expressly contemplated by the merger agreement, (ii) as
required by applicable law or (iii) as set forth in the confidential disclosure schedule delivered by
Celgene to Bristol-Myers Squibb, we may not, among other things, incur additional indebtedness,
issue additional shares of our common stock outside of our equity incentive plans, repurchase our
common stock, pay dividends, acquire assets, securities or property (subject to certain exceptions,
including without limitation, acquisitions up to a specified individual amount and an aggregate
limitation), dispose of businesses or assets, enter into material contracts or make certain additional
capital expenditures.
Based on the closing price of Bristol-Myers Squibb stock of $52.43 on January 2, 2019, the cash
and stock consideration to be received by Celgene shareholders at closing is valued at $102.43 per
Celgene share and one Bristol-Myers Squibb CVR. The Bristol-Myers Squibb CVR will entitle its
holder to receive a one-time potential payment of $9.00 in cash upon FDA approval of all three of
ozanimod (by December 31, 2020), liso-cel (JCAR017) (by December 31, 2020) and bb2121 (by
March 31, 2021), in each case for a specified indication. When completed, Bristol-Myers Squibb
shareholders are expected to own approximately 69% of the company, and Celgene shareholders
are expected to own approximately 31%.
The transaction is not subject to a financing condition. The cash portion will be funded through
a combination of cash on hand and debt financing. Bristol-Myers Squibb has obtained fully
committed debt financing from Morgan Stanley Senior Funding, Inc. and MUFG Bank, Ltd.
The transaction is subject to approval by Bristol-Myers Squibb and Celgene shareholders and the
satisfaction of customary closing conditions and regulatory approvals. Bristol-Myers Squibb and
Celgene expect to complete the transaction in the third quarter of 2019.
If the merger agreement is terminated under specified circumstances, Celgene may be required
to pay Bristol-Myers Squibb a termination fee of $2.2 billion, and if the merger agreement
is terminated under certain other circumstances, Bristol-Myers Squibb may be required to pay
Celgene a termination fee of $2.2 billion.

Schedule II - Valuation and 12 Months Ended
Qualifying Accounts Dec. 31, 2018
SEC Schedule, 12-09, Valuation and
Qualifying Accounts [Abstract]
Schedule II - Valuation and Qualifying Schedule II – Valuation and Qualifying Accounts
Accounts
(In Millions)
Balance at Charged to
Year ended Beginning Expense or Balance at
December 31, of Year Sales Deductions End of Year
2018:
Allowance for
doubtful accounts $ 16 $ 2 $ 2 $ 16
Allowance for
customer discounts 20 243 1 241 22
Subtotal 36 245 243 38
Allowance for sales
returns 15 45 1 13 47
Total $ 51 $ 290 $ 256 $ 85
2017:
Allowance for
doubtful accounts $ 15 $ (1) $ (2) $ 16
Allowance for
Subtotal 31 192 187 36
Allowance for sales
returns 18 8 1 11 15
Total $ 49 $ 200 $ 198 $ 51
2016:
Allowance for
doubtful accounts $ 18 $ 1 $ 4 $ 15
Allowance for
Subtotal 30 155 154 31
Allowance for sales
returns 17 11 1 10 18
Total $ 47 $ 166 $ 164 $ 49
1 Amounts are a reduction from gross sales.

Policies (Policies)
Accounting Policies
[Abstract]
Financial Instruments Financial Instruments: Certain financial instruments reflected in the Consolidated Balance Sheets,
(e.g., cash, cash equivalents, accounts receivable, certain other assets, accounts payable, short-term
borrowings and certain other liabilities) are recorded at cost, which approximates fair value due to
their short-term nature. The fair values of financial instruments other than debt securities available-
for-sale and equity investments with readily determinable fair values are determined through a
combination of management estimates and information obtained from third parties using the latest
market data. The fair value of debt securities available-for-sale and equity investments with readily
determinable fair values is determined utilizing the valuation techniques appropriate to the type of
security. See Note 5.
Hedges Derivative Instruments and Hedges: All derivative instruments are recognized on the Consolidated
Balance Sheets at their fair value. Changes in the fair value of derivative instruments are recorded
each period in current earnings or Other comprehensive income (loss) (OCI), depending on
whether a derivative instrument is designated as part of a hedging transaction and, if it is, the
type of hedging transaction. For a derivative to qualify as a hedge at inception and throughout
the hedged period, we formally document the nature and relationships between the hedging
instruments and hedged item. We assess, both at inception and on an on-going basis, whether
derivative instruments are highly effective in offsetting the changes in the fair value or cash
flows of hedged items. If we determine that a forecasted transaction is no longer probable
of occurring, we discontinue hedge accounting and any related unrealized gain or loss on the
derivative instrument is recognized in Other income (expense), net in our Consolidated Statements
of Income. We use derivative instruments, including those not designated as part of a hedging
transaction, to manage our exposure to movements in foreign exchange, our stock price and
interest rates. The use of these derivative instruments modifies the exposure of these risks with the
intent to reduce our risk or cost.
Prior to Accounting Standards Update No. 2017-12, "Targeted Improvements to Accounting for
Hedging Activities" (ASU 2017-12), which we adopted on August 31, 2017 (Adoption Date), with
an application date of January 1, 2017 (Application Date), we were required to separately measure
and reflect the amount by which the hedging instrument did not offset the changes in the fair
value or cash flows of hedged items, which was referred to as the ineffective amount. We assessed
hedge effectiveness on a quarterly basis and recorded the gain or loss related to the ineffective
portion of derivative instruments, if any, in Other income (expense), net in the Consolidated
Statements of Income. Pursuant to the provisions of ASU 2017-12, we are no longer required to
separately measure and recognize hedge ineffectiveness. Upon adoption of ASU 2017-12, we no
longer recognize hedge ineffectiveness in our Consolidated Statements of Income, but we instead
• cash flow hedges included in the assessment of hedge effectiveness in OCI. The amounts
recorded in OCI will subsequently be reclassified to earnings in the same line item in
the Consolidated Statements of Income as impacted by the hedged item when the hedged
item affects earnings; and
• fair value hedges included in the assessment of hedge effectiveness in the same line item
in the Consolidated Statements of Income that is used to present the earnings effect of the
hedged item.
Prior to the adoption of ASU 2017-12, we excluded option premiums and forward points (excluded
components) from our assessment of hedge effectiveness for our foreign exchange cash flow
hedges. We recognized all changes in fair value of the excluded components in Other income

(expense), net in the Consolidated Statements of Income. The amendments in ASU 2017-12
continue to allow those components to be excluded from the assessment of hedge effectiveness,
which we have elected to continue to apply. Pursuant to the provisions of ASU 2017-12, we no
longer recognize changes in the fair value of the excluded components in Other income (expense),
net, but we instead recognize the initial value of the excluded component on a straight-line basis
over the life of the derivative instrument, within the same line item in the Consolidated Statements
of Income that is used to present the earnings effect of the hedged item.
Cash, Cash Equivalents and Cash, Cash Equivalents and Debt Securities Available-for-Sale: We invest our excess cash
Marketable Securities primarily in money market funds, repurchase agreements, time deposits, commercial paper, U.S.
Treasury securities, U.S. government-sponsored agency securities, U.S. government-sponsored
Available for Sale agency mortgage-backed securities (MBS), ultra-short income fund investments, global corporate
debt securities and asset backed securities. All liquid investments with maturities of three months
or less from the date of purchase are classified as cash equivalents and all investments with
maturities of greater than three months from the date of purchase are classified as debt securities
available-for-sale. We determine the appropriate classification of our investments in marketable
debt securities at the time of purchase.
We invest in debt securities that are carried at fair value, held for an unspecified period of
time and are intended for use in meeting our ongoing liquidity needs. Unrealized gains and
losses on debt securities available-for-sale, which are deemed to be temporary, are reported as a
separate component of stockholders' equity, net of tax. The cost of debt securities is adjusted for
amortization of premiums and accretion of discounts to maturity. The amortization, along with
realized gains and losses and other-than-temporary impairment charges related to debt securities,
is included in Interest and investment income, net.
A decline in the market value of any debt security available-for-sale below its carrying value that is
determined to be other-than-temporary would result in a charge to earnings and decrease in the debt
security's carrying value down to its newly established fair value. Factors evaluated to determine
if an investment is other-than-temporarily impaired include significant deterioration in earnings
performance, credit rating, asset quality or business prospects of the issuer; adverse changes in
the general market condition in which the issuer operates; our intent to hold to maturity and an
evaluation as to whether it is more likely than not that we will not have to sell before recovery of
its cost basis; our expected future cash flows from the debt security; and issues that raise concerns
about the issuer's ability to continue as a going concern.
Concentration of Credit Risk Concentration of Credit Risk: Cash, cash equivalents and debt securities available-for-sale are
financial instruments that potentially subject the Company to concentration of credit risk. We
invest our excess cash primarily in money market funds, repurchase agreements, time deposits,
commercial paper, U.S. Treasury securities, U.S. government-sponsored agency securities, U.S.
government-sponsored agency MBS, ultra-short income fund investments, global corporate debt
securities and asset backed securities (see Note 7). We have established guidelines relative to
diversification and maturities to maintain safety and liquidity. These guidelines are reviewed
We sell our products in the United States primarily through wholesale distributors and specialty
contracted pharmacies. Therefore, wholesale distributors and large pharmacy chains account for
a large portion of our U.S. trade receivables and net product revenues (see Note 20). While
most international sales, primarily in Europe, are made directly to hospitals, clinics and retail
chains, many of which in Europe are government owned and have extended their payment
terms in recent years given the economic pressure these countries are facing, sales in other
international regions are also made to wholesalers and distributors. We continuously monitor
the creditworthiness of our customers, including these governments, and have internal policies
regarding customer credit limits. We estimate an allowance for doubtful accounts primarily based
on historical payment patterns, aging of receivable balances and general economic conditions,
including publicly available information on the credit worthiness of countries themselves and
provinces or areas within such countries where they are the ultimate customers.
We continue to monitor economic conditions, including the volatility associated with international
economies, the sovereign debt situation in certain European countries and associated impacts on

the financial markets and our business. Our current business model in these markets is typically to
sell our hematology and oncology products directly to principally government owned or controlled
hospitals, which in turn directly deliver critical care to patients. Many of our products are used
to treat life-threatening diseases and we believe this business model enables timely delivery
and adequate supply of products. Many of the outstanding receivable balances are related to
government-funded hospitals and we believe the receivable balances are ultimately collectible.
Similarly, we believe that future sales to these customers will continue to be collectible.
Inventory Inventory: Inventories are recorded at the lower of cost or net realizable value, with cost
determined on a first-in, first-out basis. We periodically review the composition of inventory in
order to identify excess, obsolete, slow-moving or otherwise non-saleable items. If non-saleable
items are observed and there are no alternate uses for the inventory, we will record a write-down to
net realizable value in the period that the decline in value is first recognized. Included in inventory
are raw materials used in the production of preclinical and clinical products, which are charged to
research and development expense when consumed.
We capitalize inventory costs associated with certain products prior to regulatory approval of
products, or for inventory produced in new production facilities, when management considers it
highly probable that the pre-approval inventories will be saleable. The determination to capitalize
is based on the particular facts and circumstances relating to the expected regulatory approval of
the product or production facility being considered, and accordingly, the time frame within which
the determination is made varies from product to product. The assessment of whether or not the
product is considered highly probable to be saleable is made on a quarterly basis and includes, but
is not limited to, how far a particular product or facility has progressed along the approval process,
any known safety or efficacy concerns, potential labeling restrictions and other impediments. We
could be required to write down previously capitalized costs related to pre-launch inventories upon
a change in such judgment, or due to a denial or delay of approval by regulatory bodies, a delay in
commercialization or other potential factors.
Property, Plant and Equipment Property, Plant and Equipment, Net: Property, plant and equipment, net is stated at cost less
accumulated depreciation. Depreciation of plant and equipment is recorded using the straight-line
method. Building improvements are depreciated over the remaining useful life of the building.
Leasehold improvements are depreciated over the lesser of the economic useful life of the asset or
the remaining term of the lease, including anticipated renewal options. Capitalized software costs
incurred in connection with developing or obtaining software are amortized over their estimated
useful life from the date the systems are ready for their intended use. The estimated useful lives of
Buildings 40 years
Maintenance and repairs are charged to operations as incurred, while expenditures for
improvements which extend the life of an asset are capitalized.
Investments in Other Entities Investments in Other Entities: We hold a portfolio of investments in equity securities and certain
investment funds that are accounted for under either the equity method, as equity investments
with readily determinable fair values, or as equity investments without readily determinable fair
values. Investments in companies or certain investment funds over which we have significant
influence but not a controlling interest are accounted for using the equity method, with our share
of earnings or losses reported in Other income (expense), net in the Consolidated Statements
of Income. Our equity investments with readily determinable fair values are primarily equity
investments in the publicly traded common stock of companies, including common stock of
companies with whom we have entered into collaboration agreements. Prior to ASU 2016-01,
which we adopted on January 1, 2018, unrealized gains and losses on these investments, which
were deemed to be temporary, were reported as a separate component of stockholder's equity, net

of tax. Realized gains and losses as well as other-than-temporary impairment charges related to
these investments were included in Other income (expense), net in the Consolidated Statements
of Income. Following the adoption of ASU 2016-01, these investments are measured at fair
value with changes in fair value recognized in Other income (expense), net in the Consolidated
Statements of Income and are no longer subject to impairment. Also prior to the adoption of
ASU 2016-01, equity investments without readily determinable fair values were recorded at cost
minus other-than-temporary impairment, with other-than-temporary impairment charges included
in Other income (expense), net in the Consolidated Statements of Income. Following the adoption
of ASU 2016-01, these investments are measured at cost adjusted for changes in observable prices
minus impairment or at net asset value (NAV), as a practical expedient, if available, with changes
in measurement recognized in Other income (expense), net in the Consolidated Statements of
Income. Investments in equity investments without readily determinable fair values of companies
that become publicly traded and are not classified as equity method investments are accounted for
as equity investments with readily determinable fair values prospectively from the date of such
companies' initial public offering. Our equity method investments and equity investments without
readily determinable fair values are included in Other non-current assets on the Consolidated
Balance Sheets.
All equity method investments and investments without a readily determinable fair value are
reviewed on a regular basis for possible impairment. If an equity method investment's fair value
is determined to be less than its net carrying value and the decline is determined to be other-
than-temporary, the investment is written down to its fair value. Investments without a readily
determinable fair value that do not qualify for the practical expedient to estimate fair value
using NAV per share are written down to fair value if a qualitative assessment indicates that the
investment is impaired and the fair value of the investment is less than its carrying value. Such
evaluation is judgmental and dependent on specific facts and circumstances. Factors considered in
determining whether an other-than-temporary decline in value or impairment has occurred include:
market value or exit price of the investment based on either market-quoted prices or future rounds
of financing by the investee; length of time that the market value was below its cost basis; financial
condition and business prospects of the investee; our intent and ability to retain the investment for
a sufficient period of time to allow for recovery in market value of the investment; a bona fide offer
to purchase, an offer by the investee to sell, or a completed auction process for the same or similar
security for an amount less than the carrying amount of the investment; issues that raise concerns
about the investee's ability to continue as a going concern; and any other information that we may
be aware of related to the investment
Other Intangible Assets Other Intangible Assets: Intangible assets with definite useful lives are amortized to their estimated
residual values over their estimated useful lives and reviewed for impairment if certain events or
changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Amortization is initiated for in-process research and development (IPR&D) intangible assets when
their useful lives have been determined. IPR&D intangible assets which are determined to have
had a drop in their fair value are adjusted downward and an expense recognized in Research and
development in the Consolidated Statements of Income. These IPR&D intangible assets are tested
Goodwill Goodwill: Goodwill represents the excess of purchase price over fair value of net assets acquired
in a business combination accounted for by the acquisition method of accounting and is not
amortized, but is subject to impairment testing. We test our goodwill for impairment at least
annually or when a triggering event occurs that could indicate a potential impairment by assessing
qualitative factors or performing a quantitative analysis in determining whether it is more likely
than not that the fair value of net assets are below their carrying amounts.
Impairment of Long-Lived Impairment of Long-Lived Assets: Long-lived assets, such as property, plant and equipment and
Assets certain other long-term assets are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the carrying amount
of an asset or asset group to the estimated undiscounted future cash flows expected to be generated
by the asset or asset group. If the carrying amount of the assets exceed their estimated future
undiscounted net cash flows, an impairment charge is recognized for the amount by which the
carrying amount of the assets exceed the fair value of the assets.

Contingent Consideration from Contingent Consideration from Business Combinations: Subsequent to the acquisition date, we
Business Combinations measure contingent consideration arrangements at fair value for each period with changes in
fair value recognized in income as Acquisition related charges (gains) and restructuring, net in
the Consolidated Statements of Income. Changes in contingent consideration obligation values
can result from movements in publicly listed prices of our Contingent Value Rights issued
in connection with our acquisition of Abraxis BioScience, Inc. (Abraxis) (Abraxis CVRs),
adjustments to discount rates, updates in the assumed achievement or timing of milestones or
changes in the probability of certain clinical events and changes in the assumed probability
associated with regulatory approval. In the absence of new information, changes in fair value
reflect only the passage of time as development work towards the achievement of the milestones
Foreign Currency Translation Foreign Currency Translation: Operations in non-U.S. entities are recorded in the functional
currency of each entity. For financial reporting purposes, the functional currency of an entity is
determined by a review of the source of an entity's most predominant cash flows. The results of
operations for non-U.S. dollar functional currency entities are translated from functional currencies
into U.S. dollars using the average currency rate during each month, which approximates the
results that would be obtained using actual currency rates on the dates of individual transactions.
Assets and liabilities are translated using currency rates at the end of the period. Adjustments
resulting from translating the financial statements of our foreign entities into the U.S. dollar
are excluded from the determination of net income and are recorded as a component of OCI.
Transaction gains and losses are recorded in Other income (expense), net in the Consolidated
Advertising Costs Advertising Costs: Advertising costs are expensed when incurred and are recorded in Selling,
general and administrative in the Consolidated Statements of Income.
Research and Development Research and Development Costs: Research and development costs are expensed as incurred.
Costs These include all internal and external costs related to services contracted by us. Upfront and
milestone payments made to third parties in connection with research and development
collaborations are expensed as incurred up to the point of regulatory approval. Milestone payments
made to third parties upon regulatory approval are capitalized and amortized over the remaining
useful life of the related product. Upfront payments are recorded when incurred, and milestone
payments are recorded when the specific milestone has been achieved. Asset acquisition expenses,
including 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, are
recorded as incurred.
Income Taxes Income Taxes: We utilize the asset and liability method of accounting for income taxes. Under
this method, deferred tax assets and liabilities are determined based on the difference between
the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax
rates in effect for years in which the temporary differences are expected to reverse. A valuation
allowance is provided when it is more likely than not that some portion or all of a deferred tax
asset will not be realized. We recognize the benefit of an uncertain tax position that we have taken
or expect to take on income tax returns we file if such tax position is more likely than not to be
sustained.
Revenue Recognition Revenue Recognition: Revenue from the sale of products is recognized in a manner that depicts the
transfer of those promised goods to customers in an amount that reflects the consideration to which
we expect to be entitled in exchange for these good or services. To achieve this core principle,
we follow a five-step model that includes identifying the contract with a customer, identifying
the performance obligations in the contract, determining the transaction price, allocating the
transaction price to the performance obligations and recognizing revenue when, or as, we satisfy a
performance obligation. In addition, we recognize revenue from other product sales and royalties
based on licensees' sales of our products or products using our technologies. We do not consider
royalty revenue to be a material source of our consolidated revenue.
We record gross-to-net sales accruals for government rebates, chargebacks, distributor services
fees, other rebates and administrative fees, sales returns and allowances and sales discounts. See
Note 2 for further detail on gross-to-net sales accruals and revenue recognition disclosures.
Share-Based Compensation Share-Based Compensation: We utilize share-based compensation in the form of stock options,
restricted stock units (RSUs) and performance-based restricted stock units (PSUs). Compensation
expense is recognized in the Consolidated Statements of Income based on the estimated fair value

of the awards at grant date. Compensation expense recognized reflects an estimate of the number
of awards expected to vest after taking into consideration an estimate of award forfeitures based on
actual experience and is recognized on a straight-line basis over the requisite service period, which
is generally the vesting period required to obtain full vesting. Management expectations related to
the achievement of performance goals associated with PSU grants is assessed regularly and that
assessment is used to determine whether PSU grants are expected to vest. If performance-based
milestones related to PSU grants are not met or not expected to be met, any compensation expense
recognized to date associated with grants that are not expected to vest will be reversed.
The fair values of stock option grants are estimated as of the date of grant using a Black-Scholes
option valuation model. The fair values of RSU and PSU grants that are not based on market
performance are based on the market value of our common stock on the date of grant. Certain
of our PSU grants are measured based on the achievement of specified performance and market
targets, including non-GAAP (Generally Accepted Accounting Principles) revenue, non-GAAP
earnings per share, and relative total shareholder return. The grant date fair value for the portion of
the PSUs related to non-GAAP revenue and non-GAAP earnings per share is estimated using the
fair market value of our common stock on the grant date. The grant date fair value for the portion
of the PSUs related to relative total shareholder return is estimated using the Monte Carlo valuation
model.
Earnings Per Share Earnings Per Share: Basic earnings per share is computed by dividing net income by the weighted-
average number of common shares outstanding during the period. Diluted earnings per share is
computed by dividing net income by the weighted-average number of common shares outstanding
during the period, assuming potentially dilutive common shares resulting from option exercises,
RSUs, PSUs, warrants and other incentives had been issued and any proceeds thereof used to
repurchase common stock at the average market price during the period. The assumed proceeds
used to repurchase common stock is the sum of the amount to be paid to us upon exercise of
options and the amount of compensation cost attributed to future services and not yet recognized.
New Accounting Standards
Adopted and Not Yet Adopted New accounting standards which have been adopted
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards
Update No. 2014-09, "Revenue from Contracts with Customers" (ASU 2014-09) and has
subsequently issued a number of amendments to ASU 2014-09. The new standard, as amended,
provides a single comprehensive model to be used in the accounting for revenue arising from
contracts with customers and supersedes previous revenue recognition guidance, including
industry-specific guidance. The standard’s stated core principle is that an entity should recognize
revenue to depict the transfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for those goods or services.
To achieve this core principle, ASU 2014-09 includes provisions within a five step model that
includes identifying the contract with a customer, identifying the performance obligations in the
contract, determining the transaction price, allocating the transaction price to the performance
obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation.
In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of
revenue and cash flows arising from contracts with customers. See Note 2 for revenue recognition
disclosures.
The new standard was effective for us on January 1, 2018 and we elected to adopt it using
a modified retrospective transition method, which required a cumulative effect adjustment to
opening retained earnings as of January 1, 2018. The implementation of ASU 2014-09 using
the modified retrospective transition method did not have a material quantitative impact on our
consolidated financial statements as the timing of revenue recognition did not significantly change.
We also elected the following practical expedients, which were available to us as a result of
utilizing the modified retrospective transition method:
• We applied the provisions of the standard only to contracts that were not completed as
of January 1, 2018; and
• We did not retrospectively restate contracts for contract modifications executed before
the beginning of the earliest period presented.

In accordance with the transition provisions of ASU 2014-09, we recorded a cumulative effect
adjustment of $4 million to increase Retained earnings (net of a $1 million tax effect). In limited
instances, the new standard permits us to recognize revenue earlier than under the previous
revenue recognition guidance. Historically, we deferred certain revenue where the transaction price
pursuant to the underlying customer arrangement was not fixed or determinable. Under the new
standard, such customer arrangements are accounted for as variable consideration, which results in
revenue being recognized earlier provided we can reliably estimate the ultimate price expected to
be realized from the customer. In addition, ASU 2014-09 requires companies who elect to adopt
the standard using the modified retrospective transition method to disclose within the footnotes the
effects of applying the provisions of the previous standards to current year financial statements.
Revenue and Net income for the year ended December 31, 2018, do not differ materially from
amounts that would have resulted from application of the previous standards.
In January 2016 and February 2018, the FASB issued ASU 2016-01 and Accounting Standards
Update No. 2018-03, "Technical Corrections and Improvements to Financial
Instruments—Overall: Recognition and Measurement of Financial Assets and Financial
Liabilities" (ASU-2018-03), respectively. ASU 2016-01 changes accounting for equity
investments, financial liabilities under the fair value option, and presentation and disclosure
requirements for financial instruments. ASU 2016-01 does not apply to equity investments in
consolidated subsidiaries or those accounted for under the equity method of accounting. In
addition, the FASB clarified guidance related to the valuation allowance assessment when
recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt
securities. Equity investments with readily determinable fair values will be measured at fair value
with changes in fair value recognized in Net income. We have elected to measure all of our equity
investments without readily determinable fair values at cost adjusted for changes in observable
prices minus impairment or at NAV, as a practical expedient, if available. Changes in measurement
of equity investments without readily determinable fair values will be recognized in Net income.
The guidance related to equity investments without readily determinable fair values, in which the
practical expedient has not been elected, will be applied prospectively to equity investments that
exist as of the date of adoption. For equity investments without a readily determinable fair value in
which the NAV per share practical expedient is elected, ASU 2018-03 clarified that the transition
should not be performed prospectively, but rather as a cumulative effect adjustment to opening
Retained earnings as of the beginning of the fiscal year of adoption. Equity investments without
readily determinable fair values are recorded within Other non-current assets on the Consolidated
Balance Sheets. We have not elected the fair value option for financial liabilities with instrument-
specific credit risk. Companies must assess valuation allowances for deferred tax assets related
to available-for-sale debt securities in combination with their other deferred tax assets. ASU
2016-01 was effective for us on January 1, 2018 which required a cumulative effect adjustment
to opening Retained earnings to be recorded for equity investments with readily determinable fair
values and equity investments without readily determinable fair values in which the NAV per
share practical expedient was elected. As of the adoption date, we held publicly traded equity
investments with a fair value of approximately $1.8 billion in a net unrealized gain position of $875
million, and having an associated deferred tax liability of $188 million. We recorded a cumulative
effect adjustment of $687 million to decrease AOCI with a corresponding increase to Retained
earnings for the amount of unrealized gains or losses, net of tax as of the beginning of fiscal
year 2018. In addition, we held an equity investment without a readily determinable fair value
in which we elected the NAV per share practical expedient. As such, on January 1, 2018, we
recorded an additional cumulative effect adjustment of $59 million to increase equity investments
without readily determinable fair values as the NAV was in excess of our cost basis as of the
adoption date with a corresponding increase to Retained earnings of $44 million, net of the tax
effect of $15 million. As a result of the implementation of ASU 2016-01, effective on January 1,
2018 unrealized gains and losses in Equity investments with readily determinable fair values and
equity investments without readily determinable fair values for which observable price changes
for identical or similar (e.g. dividend rights, voting rights, etc.) investments occur are recorded on
the Consolidated Balance Sheets within Other income (expense), net. We recorded a net gain of
$317 million in Other income (expense), net for the year ended December 31, 2018 as a result of
adopting this standard. The implementation of ASU 2016-01 is expected to increase volatility in
our net income as the volatility previously recorded in OCI related to changes in the fair market

value of available-for-sale equity investments will now be reflected in Net income effective with
the adoption date.
In February 2018, the FASB issued Accounting Standards Update No. 2018-02, "Income
Statement-Reporting Comprehensive Income: Reclassification of Certain Tax Effects from
Accumulated Other Comprehensive Income" (ASU 2018-02). The new standard is effective on
January 1, 2019 with early adoption permitted. The guidance permits a reclassification from AOCI
to Retained earnings for stranded tax effects resulting from U.S. tax reform legislation enacted in
December 2017 (2017 Tax Act). We elected to early adopt ASU 2018-02 on January 1, 2018. We
use a specific identification approach to release the income tax effects in AOCI. We have recast our
previously reported Marketable securities available-for-sale on our Consolidated Balance Sheet as
of December 31, 2017 to conform to the current year presentation as outlined earlier in this Note 1.
As a result of adopting this standard, we recorded a cumulative effect adjustment to increase AOCI
by $117 million with a corresponding decrease to Retained earnings. We recorded the impacts of
adopting ASU 2018-02 prior to recording the impacts of adopting ASU 2016-01 and included state
income tax related effects in the amounts reclassified to Retained earnings.
In August 2016, the FASB issued Accounting Standards Update No. 2016-15, "Statement of Cash
Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" (ASU 2016-15).
ASU 2016-15 clarifies how companies present and classify certain cash receipts and cash
payments in the statement of cash flows where diversity in practice exists. ASU 2016-15 was
effective for us in our first quarter of fiscal 2018 and did not result in any changes to the
presentation of our Consolidated Statements of Cash Flows upon adoption.
In October 2016, the FASB issued Accounting Standards Update No. 2016-16, "Intra-Entity
Transfers of Assets Other Than Inventory” (ASU 2016-16). ASU 2016-16 requires the income tax
consequences of intra-entity transfers of assets other than inventory to be recognized as current
period income tax expense or benefit and removes the requirement to defer and amortize the
consolidated tax consequences of intra-entity transfers. The new standard was effective for us on
January 1, 2018. As of the adoption date, we had net prepaid tax assets of $166 million related to
intra-entity transfers of assets other than inventory which was recorded in Other non-current assets.
Using the modified retrospective approach, we recorded a cumulative effect adjustment of $166
million to decrease Retained earnings with a corresponding decrease in prepaid tax assets as of the
beginning of fiscal year 2018.
In January 2017, the FASB issued Accounting Standards Update No. 2017-01, "Business
Combinations" (ASU 2017-01). ASU 2017-01 provides guidance for evaluating whether
transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The
guidance provides a screen to determine when an integrated set of assets and activities (a "set")
does not qualify to be a business. The screen requires that when substantially all of the fair value
of the gross assets acquired (or disposed of) is concentrated in an identifiable asset or a group of
similar identifiable assets, the set is not a business. If the screen is not met, the guidance requires
a set to be considered a business to include, at a minimum, an input and a substantive process that
together significantly contribute to the ability to create outputs and removes the evaluation as to
whether a market participant could replace the missing elements. The new standard was effective
for us on January 1, 2018 and was adopted on a prospective basis. In the first quarter of 2018,
we acquired Impact Biomedicines Inc. (Impact) and Juno Therapeutics Inc. (Juno) which were
accounted for as an asset acquisition and a business combination, respectively. See Note 3 for
further information on the acquisitions of Impact and Juno. We anticipate that the adoption of this
standard will result in more acquisitions being accounted for as asset acquisitions.
The following table presents a summary of cumulative effect adjustments to Retained earnings and
AOCI due to the adoption of new accounting standards on January 1, 2018 as noted above:
Retained
Earnings AOCI

ASU 2014-09 $ 4 $ —
ASU 2016-01 687 (687)
ASU 2018-03 44 —
ASU 2018-02 (117) 117
ASU 2016-16 (166) —
Net cumulative effect adjustments to Retained earnings and
AOCI on January 1, 2018 due to the adoption of new
accounting standards $ 452 $ (570)
In February 2016, the FASB issued Accounting Standards Update No. 2016-02, "Leases" (ASU
2016-02). ASU 2016-02 provides accounting guidance for both lessee and lessor accounting
models. Among other things, lessees will recognize a right-of-use asset and a lease liability for
leases with a duration of greater than one year. For income statement purposes, ASU 2016-02
will require leases to be classified as either an operating or finance lease. Operating leases will
result in straight-line expense while finance leases will result in a front-loaded expense pattern.
The new standard will be effective for us on January 1, 2019. In July 2018, the FASB issued
Accounting Standards Update No. 2018-11, "Leases" (ASU 2018-11), which offers a transition
option to entities adopting the new lease standard. Under the transition option, entities can elect
to apply the new guidance using a modified retrospective approach at the beginning of the year in
which the new lease standard is adopted, rather than to the earliest comparative period presented
in their financial statements. We will adopt the standard using the modified retrospective method
and intend to elect the available practical expedients on adoption. We anticipate adoption of the
new standard will increase total assets by $280 million - $310 million, with an offsetting increase
to total liabilities of $310 million - $340 million on our consolidated balance sheet and result
in additional lease-related disclosures in the footnotes to our consolidated financial statements.
Adoption of the standard has required changes to our business processes, systems and controls to
comply with the provisions of the standard. We have implemented a system from a third-party
service provider to assist in the adoption of the standard. We are in the process of finalizing our
testing of the system. In addition, we have designed and implemented internal controls that became
operational during the first quarter of 2019 to ensure our readiness.
In June 2016, the FASB issued Accounting Standards Update No. 2016-13, "Financial Instruments
- Credit Losses: Measurement of Credit Losses on Financial Instruments" (ASU 2016-13). ASU
2016-13 requires that expected credit losses relating to financial assets measured on an amortized
cost basis and available-for-sale debt securities be recorded through an allowance for credit losses.
ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt
securities to the amount by which carrying value exceeds fair value and also requires the reversal
of previously recognized credit losses if fair value increases. The new standard will be effective
for us on January 1, 2020. Early adoption will be available on January 1, 2019. We are currently
evaluating the effect that the updated standard will have on our consolidated financial statements
and related disclosures.
In November 2018, the FASB issued Accounting Standards Update No. 2018-18, “Collaboration
Arrangements: Clarifying the Interaction between Topic 808 and Topic 606” (ASU 2018-18).
The issuance of ASU 2014-09 raised questions about the interaction between the guidance on
collaborative arrangements and revenue recognition. ASU 2018-18 addresses this uncertainty by
(1) clarifying that certain transactions between collaborative arrangement participants should be
accounted for as revenue under ASU 2014-09 when the collaboration arrangement participant is
a customer, (2) adding unit of account guidance to assess whether the collaboration arrangement
or a part of the arrangement is with a customer and (3) precluding a company from presenting
transactions with collaboration arrangement participants that are not directly related to sales to
third parties together with revenue from contracts with customers. The new standard will be
effective for us on January 1, 2020 with early adoption permitted. We are currently evaluating

the effect that the updated standard will have on our consolidated financial statements and related
disclosures.

Policies (Tables)
Accounting Policies [Abstract]
Schedule of New Accounting
Year Ended Year Ended
Pronouncements and Changes in December 31, 2017 December 31, 2016
Accounting Principles
As As As As
Reported Revised Reported Revised
Purchases of marketable securities
available for sale $ (8,478) N/A $ (1,281) N/A
Purchases of debt securities available-
for-sale N/A $ (8,163) N/A $ (1,106)
Purchases of equity investment
securities N/A (410) N/A (307)
Proceeds from sales of marketable
securities available-for-sale 5,968 N/A 633 N/A
Proceeds from sales of investment
securities 20 N/A 15 N/A
Proceeds from sales of debt securities
available-for-sale N/A 5,872 N/A 633
Proceeds from sales of equity investment
securities N/A 116 N/A 15
December 31, 2017

values N/A 1,810
The following table presents a summary of cumulative effect adjustments to Retained
earnings and AOCI due to the adoption of new accounting standards on January 1, 2018
as noted above:
Retained
Earnings AOCI
ASU 2014-09 $ 4 $ —
ASU 2016-01 687 (687)
ASU 2018-03 44 —
ASU 2018-02 (117) 117
ASU 2016-16 (166) —
Net cumulative effect adjustments to Retained
earnings and AOCI on January 1, 2018 due to the
adoption of new accounting standards $ 452 $ (570)
Schedule of estimated useful lives of The estimated useful lives of capitalized assets are as follows:
capitalized assets Buildings 40 years


12 Months Ended
Revenue (Tables)
Dec. 31, 2018
Revenue from Contract with
Customer [Abstract]
Reconciliation of Gross The reconciliation of gross product sales to net product sales by each significant category of gross-
Product to Net Product Sales to-net adjustments was as follows:
2018 2017 2016
Disaggregation of Revenue Total revenues from external customers by our franchises (Hematology / Oncology and
Inflammation & Immunology), product and geography for the years ended December 31, 2018,

2018 2017 2016
REVLIMID®
U.S. $ 6,469 $ 5,426 $ 4,417
Worldwide 9,685 8,187 6,974
® ®
POMALYST /IMNOVID
U.S. 1,391 1,008 778
Worldwide 2,040 1,614 1,311
®
ABRAXANE
U.S. 663 607 634
Worldwide 1,062 992 973
®
VIDAZA
U.S. 9 8 12
All Other
U.S. 208 203 236
U.S. 8,740 7,252 6,077

Worldwide 13,657 11,694 10,168

OTEZLA®
U.S. 1,275 1,058 904
Worldwide 1,608 1,279 1,017

U.S. 10,015 8,310 6,981
Worldwide 15,265 12,973 11,185
Total revenue $ 15,281 $ 13,003 $ 11,229

Total revenues from external customers by product for the years ended December 31, 2018, 2017
and 2016 were as follows:
2018 2017 2016

REVLIMID® $ 9,685 $ 8,187 $ 6,974
OTEZLA® 1,608 1,279 1,017
ABRAXANE® 1,062 992 973
IDHIFA® 72 20 —
VIDAZA® 594 628 608
THALOMID® 114 132 152
ISTODAX® 63 76 80
Other 4 9 4
Total revenue $ 15,281 $ 13,003 $ 11,229

Acquisitions and Divestitures 12 Months Ended
(Tables) Dec. 31, 2018
Business Combinations
[Abstract]
Schedule of Business The total consideration for the acquisition of Juno was $10.4 billion, which consisted of the
Acquisitions, by Acquisition following:
Total
Consideration
(1) The
Company recognized a gain of $458 million during the first quarter of 2018, as a result of
remeasuring to fair value the equity interest in Juno held by us before the business combination,
which was recorded in Other income (expense), net within the Consolidated Statement of Income.
See Note 1 for further information on the adoption of ASU 2016-01.
(2) All
equity compensation attributable to pre-combination service was paid during the first quarter
of 2018.
Schedule of Recognized The purchase price allocation resulted in the following amounts being allocated to the assets
Identified Assets Acquired and acquired and liabilities assumed at the Acquisition Date based upon their respective fair values
summarized below. The determination of fair value was finalized in the fourth quarter of
Liabilities Assumed 2018. During the second and fourth quarters of 2018, the Company recorded certain measurement
period adjustments that were not material.
Amounts
Recognized as
of the
Acquisition
Date
IPR&D 6,980
Goodwill 3,137
(1) Includes cash and cash equivalents, debt securities available-for-sale, accounts receivable, net
of allowances, other current assets, accounts payable, accrued expenses and other current liabilities
(including accrued litigation). See Note 19 for litigation matters related to Juno.
Schedule of Included Business Juno actual results from the Acquisition Date through December 31, 2018, which are included in
Acquisition Expenses the Consolidated Statements of Income are as follows:
Acquisition Date
Through December 31,
Classification in the Consolidated Statements of Income 2018

Other revenue $ 2
Total $ (1,170)
(1) Includes share-based compensation expense related to the post-combination service period of
$320 million and $208 million, which was recorded in Research and development and Selling,
general and administrative, respectively, for the period from the Acquisition Date through
December 31, 2018.
(2) Consists of acquisition related compensation expense, transaction costs and the change in
fair value of contingent consideration and success payment liabilities. In addition, we incurred
incremental acquisition costs related to Juno of $41 million for the year ended December 31, 2018.
Business Acquisition, Pro The following table provides unaudited pro forma financial information for the years ended
Forma Information December 31, 2018 and 2017 as if the acquisition of Juno had occurred on January 1, 2017.
Years Ended December

31,
2018 2017
Total revenue $ 15,291 $ 13,029


12 Months Ended
Earnings Per Share (Tables)
Dec. 31, 2018
Earnings Per Share [Abstract]
Schedule of earnings per share (Amounts in millions, except per share)
2018 2017 2016
Net income $ 4,046 $ 2,940 $ 1,999
Basic 716.3 779.2 777.2
Options, RSUs, PSUs, warrants
and other 17.5 29.5 26.1
Diluted 733.8 808.7 803.3
Basic $ 5.65 $ 3.77 $ 2.57
Diluted $ 5.51 $ 3.64 $ 2.49

Fair Value Measurement
Dec. 31, 2018
(Tables)
Fair Value Disclosures [Abstract]
Schedule of Significant Unobservable The fair value of our contingent consideration as of December 31, 2018 and
Inputs Calculation December 31, 2017 was calculated using the following significant unobservable inputs:
Ranges (weighted average) utilized as

of:
December 31, December 31,
Inputs 2018 2017
2.7% to 12.0%
Discount rate 3.6 to 4.8% (4.3%) (3.5%)
Projected year of payment for development and 2020 to 2029 2020 to 2029
regulatory milestones (2024) (2024)
Projected year of payment for sales-based
milestones and other amounts calculated as a 2024 to 2030
percentage of annual sales N/A (2028)
Assets and liabilities measured at fair The following tables present the Company's hierarchy for its assets and liabilities
value on recurring basis measured at fair value on a recurring basis as of December 31, 2018 and 2017:
Quoted Price
in
Active Significant
Markets for Other Significant
December Assets Inputs Inputs
Assets:
Debt securities available-
for-sale $ 496 $ — $ 496 $ —
Equity investments with
readily determinable fair
values 1,312 1,312 — —
Total assets $ 1,886 $ 1,312 $ 574 $ —
Liabilities:
contracts (1) — (1) —
contingent consideration
and success payments (163) — — (163)
Quoted Price
in
Active Significant
Markets for Other Significant
December Assets Inputs Inputs

Assets:
Debt securities available-
for-sale $ 3,219 $ — $ 3,219 $ —
Equity investments with
readily determinable fair
values 1,810 1,810 — —
Total assets $ 5,029 $ 1,810 $ 3,219 $ —
Liabilities:
contracts (136) — (136) —
contingent consideration (80) — — (80)
Roll-forward of fair value of Level 3 There were no security transfers between levels 1, 2 and 3 during the years ended
instruments (significant unobservable December 31, 2018 and 2017. The following tables represent a roll-forward of the fair
value of level 3 instruments:
inputs), liabilities
Year Ended
December 31,
2018
Liabilities:
Settlements, including transfers to Accrued expenses and other current
liabilities 72
Year Ended
December 31,
2017
Liabilities:
Settlements, including transfers to Accrued expenses and other current
liabilities 62

Hedging Activities (Tables) Dec. 31, 2018
Hedging Activities
Disclosure [Abstract]
Schedule of notional amount The following table summarizes the notional amounts of our outstanding interest rate swap
of foreign currency forward contracts as of December 31, 2018 and December 31, 2017:
contracts
Notional Amount
2018 2017
Interest rate swap contracts entered into as fair value hedges of the
following fixed-rate senior notes:
3.875% senior notes due 2025 $ 200 $ 200
3.450% senior notes due 2027 450 250
Total $ 850 $ 450
Foreign currency forward contracts entered into to hedge forecasted revenue and expenses were as
follows as of December 31, 2018 and December 31, 2017:
Notional Amount
British Pound 82 97
Euro 1,381 954
Total $ 2,091 $ 1,695
Foreign currency option Outstanding foreign currency zero-cost collar contracts entered into to hedge forecasted revenue
contracts entered into to hedge were as follows as of December 31, 2018 and December 31, 2017:
forecasted revenue and Notional Amount1
expenses 2018 2017
1U.S. Dollar notional amounts are calculated as the hedged local currency amount multiplied by the strike
value of the foreign currency option. The local currency notional amounts of our purchased put and written
call that are designated as hedging activities are equal to each other.
Schedule of fair value and The following table summarizes the fair value and presentation in the Consolidated Balance
balance sheet location of Sheets for derivative instruments as of December 31, 2018 and 2017:
derivative instruments
December 31, 2018
Fair Value
Asset Liability
Instrument Balance Sheet Location Derivatives Derivatives
Derivatives designated as hedging
instruments:

liabilities
liabilities
Derivatives not designated as hedging
instruments:
Accrued expenses and 2 12
Total $ 159 $ 92
net basis on the Consolidated Balance Sheets in accordance with Accounting Standards Codification
(ASC) 210-20.
December 31, 2017

Fair Value
Balance Sheet Asset Liability
Instrument Location Derivatives Derivatives
current liabilities
current liabilities
Total $ 93 $ 278
net basis in the Consolidated Balance Sheets in accordance with ASC 210-20.

2018
Other
income
sales (expense) net



income (2) — —
income — (5) —
income — — —
(1)

2017
Other
income
sales (expense) net



income 184 — —

income — (5) —
income — (1) —
(1)
Cumulative basis adjustments As of December 31, 2018 and December 31, 2017, the following amounts were recorded on the
for fair value hedges Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges:
Cumulative Amount of Fair

Value Hedging Adjustment
Carrying Amount of the Hedged Included in the Carrying Amount
Liability of the Hedged Liability
Consolidated Balance Sheet
Classification in Which the December 31, December 31, December 31, December 31,
Hedged Item Is Included 2018(1) 2017(1) 2018(2) 2017(2)
Current portion of long-term
debt, net of discount $ 501 $ — $ 2 $ —
(1)The current portion of long-term debt, net of discount includes $501 million of carrying value with
approximately $3.3 billion and $3.8 billion of carrying value with discontinued hedging relationships as of
December 31, 2018 and December 31, 2017, respectively.
(2)The current portion of long-term debt, net of discount includes $2 million of hedging adjustments on
$107 million and $139 million of hedging adjustment on discontinued hedging relationships on long-term
debt as of December 31, 2018 and December 31, 2017, respectively
Schedule of effect of The following tables summarizes the effect of derivative instruments designated as cash-flow
derivative instruments hedging instruments in AOCI for the years ended December 31, 2018 and 2017:
designated as hedging
2018
instruments on Consolidated
Amount of
Statements of Income
Classification Gain/(Loss)
Classification of Recognized in
of Amount of Gain/(Loss) Income on
Amount of Gain/(Loss) Gain/(Loss) Recognized in Derivative
Gain/(Loss) Reclassified Reclassified Income Related Related to
Recognized in from from to Amount Amount
OCI Accumulated Accumulated Excluded from Excluded from
on OCI OCI Effectiveness Effectiveness
Instrument Derivative(1) into Income into Income Testing Testing
contracts $ 249 sales $ (2) sales $ (8)
1 Net gains of $35 million are expected to be reclassified from AOCI into income in the next
12 months.
2017

Classification of Amount of
Amount of Gain/(Loss) Gain/(Loss) Classification
Gain/(Loss) Reclassified Reclassified of Amount of
Recognized in from from Gain/(Loss) Gain/(Loss)
OCI Accumulated Accumulated Recognized in Recognized in
on OCI OCI Income on Income on
Instrument Derivative(1) into Income into Income Derivative Derivative
contracts $ (419) sales $ 184 sales $ (3)
Forward starting
interest rate Interest
swaps (13) (expense) (1) N/A
(1) For the year ended December 31, 2017, the straight-line amortization of the initial value of the
amount excluded from the assessment of hedge effectiveness for our foreign exchange contracts
recognized in OCI was a loss of $15 million which $18 million related to the cumulative effect
adjustment related to the adoptions of ASU 2017-12. There were no excluded components for our
treasury rate lock and interest rate swap agreements.
The following table summarizes the effect of derivative instruments designated as fair value
hedging instruments on the Consolidated Statements of Income for the years ended December 31,
2018 and 2017:
Amount of Gain
on Derivative
1 The amounts include a benefit of $32 million and $35 million relating to the amortization of
the cumulative amount of fair value hedging adjustments included in the carrying amount of the
hedged liability for discontinued hedging relationships for the years ended December 31, 2018 and
December 31, 2017, respectively.
Schedule of effect of The following table summarizes the effect of derivative instruments not designated as hedging
derivative instruments not instruments on the Consolidated Statements of Income for the years ended December 31, 2018 and
2017:
designated as hedging
instruments on Consolidated Classification of Gain/(Loss)
Statements of Income Recognized in Income
on Derivative
Instrument on Derivative 2018 2017

Cash, Cash Equivalents, 12 Months Ended
for-Sale and Equity
Investments with Readily Dec. 31, 2018
(Tables)
Cash, Cash Equivalents, and
Short-term Investments
[Abstract]
Schedule of available-for-sale The amortized cost, gross unrealized holding gains, gross unrealized holding losses and estimated
securities by major security fair value of debt securities available-for-sale by major security type and class of security and
equity investments with readily determinable fair values as of as of December 31, 2018 and 2017
type and class were as follows:

Time deposits(1) and Repurchase
agreements(1) 46 — — 46
(1)

U.S. government-sponsored agency
securities 42 — — 42
Time deposits(1) and Repurchase agreements
(1) 89 — — 89
Equity securities with readily determinable

fair values $ 935 $ 881 $ (6) $ 1,810
(1) Have original maturities of greater than three months.

Schedule of duration periods uration periods of debt securities available-for-sale as of December 31, 2018 were as follows:
of available-for-sale debt Amortized Fair
securities Cost Value

12 Months Ended
Inventory (Tables)
Dec. 31, 2018
Inventory Disclosure [Abstract]
Summary of inventories by major A summary of inventories by major category as of December 31, 2018 and 2017
category follows:
2018 2017
Total $ 458 $ 541

Property, Plant and 12 Months Ended
Equipment, Net (Tables) Dec. 31, 2018
Property, Plant and Equipment, Net
[Abstract]
Schedule of property, plant and equipment Property, plant and equipment, net as of December 31, 2018 and 2017 consisted of
the following:
2018 2017
Land $ 81 $ 77
Buildings 639 525
Total $ 1,367 $ 1,070

Other Financial Information 12 Months Ended
Schedule of other current assets Other current assets as of December 31, 2018 and 2017 consisted of the following:
2018 2017
Other 127 150
Total $ 501 $ 388
Schedule of accrued expenses Accrued expenses and other current liabilities as of December 31, 2018 and 2017 consisted of
the following:
2018 2017
Interest 238 173
Other 466 383
Total $ 2,987 $ 2,523
Schedule of other non-current Other non-current liabilities as of December 31, 2018 and 2017 consisted of the following:
liabilities 2018 2017
Other 91 48
Total $ 477 $ 544

Intangible Assets and 12 Months Ended
Goodwill (Tables) Dec. 31, 2018
Goodwill and Intangible Assets Disclosure
[Abstract]
Schedule of finite-lived intangible assets Intangible assets outstanding as of December 31, 2018 and 2017 are
summarized as follows:
Gross Intangible
Technology 1,743 (552) 1,191
Licenses 66 (35) 31
Other 54 (39) 15
5,269 (2,887) 2,382
Gross Intangible
Licenses 66 (30) 36
Other 43 (34) 9
3,998 (2,413) 1,585
Schedule of indefinite-lived intangible assets Intangible assets outstanding as of December 31, 2018 and 2017 are
summarized as follows:
Gross Intangible
Technology 1,743 (552) 1,191
Licenses 66 (35) 31
Other 54 (39) 15
5,269 (2,887) 2,382

Gross Intangible
Licenses 66 (30) 36
Other 43 (34) 9
3,998 (2,413) 1,585

12 Months Ended
Debt (Tables)
Dec. 31, 2018
Debt Disclosure [Abstract]
Schedule of Short-term Debt We had no outstanding short-term borrowings as of December 31, 2018 and 2017. The current
portion of long-term debt outstanding as of December 31, 2018 and 2017 includes:
2018 2017
2.250% senior notes due 2019 $ 501 $ —
Carrying values of the senior The carrying values of the long-term portion of these senior notes as of December 31, 2018 and
notes 2017 are summarized below:
2018 2017
2.250% senior notes due 2019 $ — $ 505
2.875% senior notes due 2020 1,497 1,495
3.950% senior notes due 2020 509 514
2.250% senior notes due 2021 498 497
3.250% senior notes due 2022 1,034 1,044
3.550% senior notes due 2022 996 994
2.750% senior notes due 2023 747 746
4.000% senior notes due 2023 730 737
3.625% senior notes due 2024 1,000 1,001
3.875% senior notes due 2025 2,478 2,478
3.450% senior notes due 2027 986 991
3.900% senior notes due 2028 1,490 —
5.700% senior notes due 2040 247 247
5.250% senior notes due 2043 393 393
4.625% senior notes due 2044 987 987
5.000% senior notes due 2045 1,975 1,975
4.350% senior notes due 2047 1,234 1,234
4.550% senior notes due 2048 1,476 —

Stockholders' Equity 12 Months Ended
Stockholders' Equity Note [Abstract]
Summary of changes in common stock issued A summary of changes in common stock issued and treasury stock is presented
and treasury stock below (in millions of shares):
Common
Common Stock
Stock in Treasury
stock units 14.0 (1.0)

Dec. 31, 2018
(Tables)
Equity [Abstract]
Summary of other The accumulated balances related to each component of other comprehensive income (loss), net of
comprehensive income (loss) tax, are summarized as follows:
Net
Unrealized
Gains Net Amortization
(Losses) On Unrealized of Excluded
Available- Gains Component
for-Sale (Losses) Related to Foreign Accumulated
Pension Marketable Related to Cash Flow Currency Other
Liability Securities Cash Flow Hedges Translation Comprehensive
Adjustment (1) Hedges (See Note 1) Adjustments Income (Loss)
Balances as of
December 31,
2016 $ (38) $ 144 $ 415 $ — $ (102) $ 419
Cumulative
effect
adjustment for
the adoption of
ASU 2017-12
(See Note 1) — — (12) (18) — (30)
Other
comprehensive
income (loss)
before
reclassifications,
net of tax 16 395 (428) (15) 70 38
Reclassified
losses (gains)
from
accumulated
other
comprehensive
income (loss),
net of tax — 23 (181) 18 — (140)
Net current-
period other
comprehensive
income (loss),
net of tax 16 418 (609) 3 70 (102)
Balances as of
December 31,
2017 $ (22) $ 562 $ (206) $ (15) $ (32) $ 287
Cumulative
effect
adjustment for
the adoption of
ASU 2016-01
and ASU
2018-02 (See
Note 1) — (566) (4) — — (570)
Other
comprehensive
(loss) income
before (6) (7) 246 (20) (28) 185

reclassifications,
net of tax
Reclassified
losses from
accumulated
other
comprehensive
income (loss),
net of tax — 14 6 28 — 48
Net current-
period other
comprehensive
(loss) income,
net of tax (6) 7 252 8 (28) 233
Balances as of
December 31,
2018 $ (28) $ 3 $ 42 $ (7) $ (60) $ (50)
(1)Balances as of December 31, 2017 are prior to the adoption of ASU 2016-01 and, as such,
include equity securities with readily determinable fair values. Upon adoption of ASU 2016-01, we
recorded a cumulative effect adjustment for our net unrealized gains related to our equity securities
with readily determinable fair values as of January 1, 2018. Therefore, the unrealized gains (losses)
position as of December 31, 2018 solely relate to debt securities available-for-sale. See Note 1 for
further information related to the adoption of ASU 2016-01.
Reclassification out of
Accumulated Other Other Comprehensive Income (Loss)
Comprehensive Income Accumulated Other Affected Line Item in the Years Ended December 31,
Comprehensive Income Consolidated Statements of
(Loss) Components Income 2018 2017 2016
Foreign exchange Net product sales
contracts $ (2) $ 184 $ 307
Treasury rate lock Interest (expense) (5) (5)
agreements (5)
Interest rate swap Interest (expense) —
agreements (1) (2)
Foreign exchange
contracts Net product sales (8) (3) —
Gains (losses) on available-for-sale debt securities /
Realized gain (loss) on
sales of marketable Interest and investment
securities income, net (18) (37) (358)
Total reclassification, net
of tax $ (28) $ 155 $ 71
(1)(Losses) gains reclassified out of Accumulated other comprehensive (loss) income prior to
December 31, 2017 are prior to the adoption of ASU 2016-01 and, as such, include equity
securities with readily determinable fair values. Upon adoption of ASU 2016-01, we recorded a
cumulative effect adjustment for our net unrealized gains related to our equity securities with readily
determinable fair values as of January 1, 2018. Therefore, unrealized gains (losses) for the twelve-

month period ended December 31, 2018 solely relate to debt securities available-for-sale. See Note
1 for further information related to the adoption of ASU 2016-01.

Share-Based Compensation 12 Months Ended
Disclosure of Compensation Related
Costs, Share-based Payments
[Abstract]
Components of share-based The following table summarizes the components of share-based compensation expense
compensation expense in the Consolidated Statements of Income for the years ended December 31, 2018, 2017
and 2016:
2018 2017 2016

Tax benefit related to share-based compensation
expense 151 180 167
Schedule of assumptions used in the We estimated the fair value of options granted using a Black-Scholes option pricing
estimation of fair value of options model with the following assumptions:
granted 2018 2017 2016
2.51% - 1.70% - 1.03% -
Schedule of stock option activity The following table summarizes all stock option activity for the year ended December 31,
2018:
Weighted
Weighted Average
Average Remaining Aggregate
Options Exercise Contractual Intrinsic Value
Outstanding as of
December 31, 2017 67.8 $ 82.53 6.1 $ 1,823
Changes during the
Year:
Conversion of Juno
awards 3.7 34.01
Granted 10.3 89.26
Expired (1.2) 106.27
Outstanding as of
December 31, 2018 71.1 $ 83.57 5.6 $ 539
Vested as of
December 31, 2018 or
expected to vest in the
future 69.9 $ 83.28 5.6 $ 539
Vested as of
December 31, 2018 46.1 $ 74.43 4.3 $ 500

Schedule of restricted stock units Information regarding the Company's RSUs for the year ended December 31, 2018 is as
follows (shares in millions):
Weighted
Share Average Grant
Nonvested RSUs Equivalent Date Fair Value
Granted 5.7 79.38
Vested (3.2) 104.09
Schedule of performance-based The following table summarizes the Company's performance-based restricted stock unit
restricted stock units activity for the year ended December 31, 2018 (shares in thousands):
Weighted
Share Average Grant
Nonvested Performance-Based RSUs Equivalent Date Fair Value
Granted 163 86.14
Vested (315) 101.80

12 Months Ended
Income Taxes (Tables)
Dec. 31, 2018
Income Tax Disclosure [Abstract]
Schedule of income (loss) before income taxes Income (loss) before income taxes is as follows:
2018 2017 2016

U.S. $ (600) $ 445 $ 735
Non-U.S. 5,432 3,869 1,637
Schedule of provision (benefit) for taxes on income The provision (benefit) for taxes on income is as follows:
2018 2017 2016
United States:
Federal $ 571 $ 2,545 $ 569
International:
Schedule of tax effects of temporary differences that As of December 31, 2018 and 2017 the tax effects of temporary
give rise to deferred tax assets and liabilities differences that give rise to deferred tax assets and liabilities were as
follows:
2018 2017
Unrealized (gains) on
securities — (146) — (193)
Subtotal 1,466 (4,000) 1,226 (2,253)
Schedule of deferred tax assets and liabilities As of December 31, 2018 and 2017, deferred tax assets and liabilities
classified on the company's balance sheet were classified on our Consolidated Balance Sheets as follows:
2018 2017

Reconciliation of U.S. statutory income tax rate to Reconciliation of the U.S. statutory income tax rate to the Company's
company's effective tax rate for continuing effective tax rate is as follows:
operations Percentages 2018 2017 2016
Tax rate differences on foreign
operations (11.2)% (28.8)% (21.1)%
Acquisition and collaboration related
differences 6.0 % 2.1 % (0.7)%
Stock compensation excess tax
benefits (0.5)% (6.7)% —%
2017 Tax Act (0.9)% 29.4 % —%
Other 0.3 % (0.7)% 1.6 %
Reconciliation of beginning and ending amount of A reconciliation of the beginning and ending amount of unrecognized
unrecognized tax benefits tax benefits is as follows:
2018 2017
Settlements — —

Collaboration Agreements 12 Months Ended
Schedule of Collaboration Summarized financial information related to our other collaboration arrangements is presented below:
Agreements Years Ended December 31, As of December 31,1
Equity
2018 $ 402 $ 10 $ 7 $ 7 $ 26 $ 13 $ 230 n/a
2017 229 10 20 4 43 8 749 n/a
2016 297 36 9 17 64
1Year-end balance is presented for current year and prior years.

Equity
2018 $ 12 $ — $ 66 $ — $ — $ — n/a n/a
2017 246 25 — — — — n/a n/a
2016 71 — — — —
2015
and
prior 337 — — — —

Equity
2018 $ 110 $ — $ — $ — $ 40 $ — $ 12 2.9%

Equity
2018 $ — $ — $ — $ — $ — $ — $ 353 4.2%
2017 268 — — — 174 — 246 5.5%
1Year-end balance and percentage of outstanding equity are presented for the current and prior years.

Equity
2018 $ — $ — $ — $ — $ — $ — $ 268 13.3%
2017 — — — — 28 — 261 13.6%
2016 — 15 — — 32
2015
and
prior 70 45 — — 93

Equity
2018 $ — $ — $ — $ 3 $ — $ — $ 95 1.9%
2017 15 — — 8 37 4 171 1.9%
2016 10 — — 8 50
2015
and
prior 75 — — 5 —

Equity
2018 $ — $ — $ — $ — $ — $ — $ 12 10.7%
2017 — — — — 10 — 44 10.7%
2016 238 — — — 24

Equity
2018 $ — $ 15 $ — $ — $ 57 $ — $ 310 11.5%
2017 8 — — — 31 — 335 12.0%
2016 200 25 — 1 —
2015
and
prior 130 — 60 — 89

Contingencies (Tables) Dec. 31, 2018
Commitments and Contingencies Disclosure
[Abstract]
Schedule of future minimum lease payments under Future minimum lease payments under non-cancelable operating
non-cancelable operating leases leases as of December 31, 2018 are:
Operating
Leases
2019 $ 92
2020 89
2021 70
2022 59
2023 45
Thereafter 68

Information (Tables) Dec. 31, 2018
Segment Reporting [Abstract]
Schedule of revenues and long-lived
Revenues 2018 2017 2016
assets by geographic area
United States $ 10,023 $ 8,324 $ 7,010
Europe 3,771 3,327 3,046
All other 1,487 1,352 1,173
Total revenues $ 15,281 $ 13,003 $ 11,229

Europe 331 296
All other 8 6

Schedule of total revenues from Total revenues from external customers by our franchises (Hematology / Oncology and
external customers by product Inflammation & Immunology), product and geography for the years ended December 31,
2018, 2017 and 2016 were as follows:

2018 2017 2016
REVLIMID®
U.S. $ 6,469 $ 5,426 $ 4,417
Worldwide 9,685 8,187 6,974
® ®
POMALYST /IMNOVID
U.S. 1,391 1,008 778
Worldwide 2,040 1,614 1,311
®
ABRAXANE
U.S. 663 607 634
Worldwide 1,062 992 973
®
VIDAZA
U.S. 9 8 12
All Other
U.S. 208 203 236
U.S. 8,740 7,252 6,077
Worldwide 13,657 11,694 10,168

OTEZLA®
U.S. 1,275 1,058 904
Worldwide 1,608 1,279 1,017

U.S. 10,015 8,310 6,981
Worldwide 15,265 12,973 11,185
Total revenue $ 15,281 $ 13,003 $ 11,229

Total revenues from external customers by product for the years ended December 31,
2018, 2017 and 2016 were as follows:
2018 2017 2016

REVLIMID® $ 9,685 $ 8,187 $ 6,974
OTEZLA® 1,608 1,279 1,017
ABRAXANE® 1,062 992 973
IDHIFA® 72 20 —
VIDAZA® 594 628 608
THALOMID® 114 132 152
ISTODAX® 63 76 80
Other 4 9 4
Total revenue $ 15,281 $ 13,003 $ 11,229
Schedule of customer concentration The percentage of amounts due from these customers compared to total net accounts
risk based on total revenues and net receivable is also summarized below as of December 31, 2018 and 2017.
accounts receivable Percent of Total Revenue Percent of Net Accounts Receivable
Customer 2018 2017 2016 2018 2017
McKesson Corp. 12.1% 12.0% 10.3% 10.4% 9.6%
CVS Health Corp. 11.5% 12.5% 12.0% 9.2% 9.7%
AmerisourceBergen
Corp. 11.4% 10.0% 8.5% 14.4% 9.7%

Quarterly Results of 12 Months Ended
Operations (Unaudited)
Dec. 31, 2018
(Tables)
Quarterly Financial Data
[Abstract]
Schedule of quarterly results
2018 1Q 2Q 3Q 4Q Year
of operations
Total revenue $ 3,538 $ 3,814 $ 3,892 $ 4,037 $ 15,281
Gross profit(1) 3,396 3,682 3,733 3,867 14,678
Net income(3) 846 1,045 1,082 1,073 4,046
Basic $ 1.13 $ 1.46 $ 1.54 $ 1.53 $ 5.65
Diluted $ 1.10 $ 1.43 $ 1.50 $ 1.50 $ 5.51
Basic 748.3 716.1 702.0 699.5 716.3
Diluted 768.3 732.6 719.7 713.9 733.8
2017 1Q 2Q 3Q 4Q Year
Total revenue $ 2,962 $ 3,271 $ 3,287 $ 3,483 $ 13,003
Gross profit(1) 2,839 3,148 3,165 3,360 12,512
Net income (loss) 932 1,101 988 (81) 2,940
Net income (loss) per
share:(4)
Basic $ 1.20 $ 1.41 $ 1.26 $ (0.10) $ 3.77
Diluted $ 1.15 $ 1.36 $ 1.21 $ (0.10) $ 3.64
Basic 779.0 780.4 784.1 773.5 779.2
Diluted 811.2 811.7 815.2 773.5 808.7
1 Gross profit is computed by subtracting cost of goods sold (excluding amortization of
acquired intangible assets) from net product sales.
2 The Income tax provision in the fourth quarter of 2017 includes income tax expense
of approximately $1.3 billion as a result of the 2017 Tax Act, which was enacted on
December 22, 2017. See Note 17 for additional details related to the 2017 Tax Act.
In addition, the Income tax provision for 2018 and 2017 includes $22 million and
$290 million, respectively, of excess tax benefits arising from share-based compensation
awards that vested or were exercised during 2018 and 2017, respectively, as a result of
3 ASU 2016-01, was effective for us on January 1, 2018. ASU 2016-01 requires changes
in the fair value of equity investments with readily determinable fair values and changes
in observable prices of equity investments without readily determinable fair values to be
recorded in net income. As such, a net gain of $959 million was recorded in the first
quarter of 2018 which was offset by net charges of $6 million, $123 million, and $513
million which were recorded in the second, third and fourth quarters, respectively. See
Note 1 of Notes to Consolidated Financial Statements contained elsewhere in this report
for additional information.
4 The sum of the quarters may not equal the full year due to rounding. In addition, quarterly
and full year basic and diluted earnings per share are calculated separately.

of Significant Accounting
Dec. 31, Dec. 31, Dec. 31,
Policies (Narrative) (Details)
2018 2017 2016
- USD ($)
$ in Millions
Organization, Consolidation and Presentation of Financial Statements
[Abstract]
Maximum equity ownership percentage, investments 50.00%
Advertising expense $ 174 $ 119 $ 95

Nature of Business, Basis of
of Significant Accounting Jan. 01, Jan. 01,
Policies (ASU 2017-12) 2018 2017
(Details) - USD ($)
$ in Millions
New Accounting Pronouncement, Early Adoption [Line Items]
Cumulative effect adjustment $ (570) $ (30)
Retained Earnings
Cumulative effect adjustment 452
Retained Earnings | Accounting Standards Update 2017-12
Accumulated Other Comprehensive Income (Loss)
Cumulative effect adjustment (570)
Accumulated Other Comprehensive Income (Loss) | Accounting Standards Update
2017-12
Cumulative effect adjustment $ (30)

Policies (Equity Investments, Dec. 31, Dec. 31, Dec. 31,
ASU 2016-01) (Details) - 2018 2017 2016
USD ($)
$ in Millions
New Accounting Pronouncements or Change in Accounting Principle
[Line Items]
Marketable securities available-for-sale $ 496 $ 3,219
Purchases of equity investment securities (249) (410) $ (307)
Proceeds from sales of equity investment securities $ 96 116 15
As Reported
New Accounting Pronouncements or Change in Accounting Principle
[Line Items]
Marketable securities available-for-sale 5,029
Purchases of marketable securities available for sale (8,478) (1,281)
Purchases of equity investment securities (95) (132)
Proceeds from sales of marketable securities available-for-sale 5,968 633
Proceeds from sales of investment securities $ 20 $ 15

Policies (Useful Life of Dec. 31, 2018
Property and Equipment)
(Details)
Buildings
Property, Plant and Equipment:
Estimated useful lives of capitalized assets 40 years
Building and operating equipment
Manufacturing machinery and equipment
Other machinery and equipment
Furniture and fixtures
Computer equipment and software | Minimum
Computer equipment and software | Maximum

Jan. 01, Jan. 01,
Policies (Cumulative Effect
2018 2017
Adjustments) (Details) - USD
($)
$ in Millions
New Accounting Pronouncements or Change in Accounting Principle [Line
Items]
Retained Earnings
Items]
Retained Earnings | ASU 2014-09
Items]
Items]
Items]
Items]
Items]
AOCI Increase / (Decrease)
Items]
AOCI Increase / (Decrease) | ASU 2014-09
Items]
Items]

Items]
Items]
Items]
Cumulative effect adjustment $0

Nature of Business, Basis of 3 Months
12 Months Ended
Presentation and Summary Ended
Policies (New Accounting
Jan. 01, Sep. 30, Dec. 31, Dec. 31, Dec. 31, Jan. 01,
Standards Which Have Been
2018 2018 2018 2017 2016 2017
Adopted) (Details) - USD ($)
$ in Millions
New Accounting Pronouncements or Change in
Accounting Principle [Line Items]
1,800
values
Marketable securities unrealized gain 875
Deferred tax liability 188 $ 2,729 $ 1,304
Other income (expense), net $ 337 $ 24 $ (324)
ASU 2014-09
Tax effect of new accounting principle 1
ASU 2014-09 | Net product sales
ASU 2016-16
Deferred tax asset, intra-entity transfer, asset other than
166
inventory
AOCI Including Portion Attributable to Noncontrolling
Interest | ASU 2016-01
AOCI Including Portion Attributable to Noncontrolling
Interest | ASU 2018-02
Retained Earnings

Investment Without Determinable Fair Values |
Investments | ASU 2016-01
Other income (expense), net $ 201
Investments | Retained Earnings | ASU 2016-01
Tax effect of new accounting principle $ 15

Policies (New Accounting
Standards Which Have Not Jan. 01, 2019
Yet Been Adopted) (Details) - USD ($)
Subsequent Event -
Accounting Standards
Update No. 2018-11
$ in Millions
Minimum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease, right-of-use asset $ 280
Operating lease, liability 310
Maximum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease, right-of-use asset 310
Operating lease, liability $ 340

Revenue (Narrative) 12 Months Ended
(Details) Dec. 31, 2018
$ in Millions USD ($)
Revenue from Contract with Customer [Abstract]
Contract with customer asset $ 36
Contract with customer liability revenue recognized 51
Contract with customer, liability $ 137

Revenue (Gross Product 3 Months Ended 12 Months Ended
Sales to Net Product Sales
Dec. Sep. Jun. Mar. Dec. Sep. Jun. Mar. Dec. Dec. Dec.
Reconciliation) (Details) -
31, 30, 30, 31, 31, 30, 30, 31, 31, 31, 31,
USD ($)
2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 2016
$ in Millions
Disaggregation of Revenue
[Line Items]
Total revenue $ $ $ $ $ $ $ $ $ $ $
4,037 3,892 3,814 3,538 3,483 3,287 3,271 2,962 15,281 13,003 11,229
Gross to Net Sales
(3,005) (2,165) (1,602)
Adjustments
Government Rebates
[Line Items]
Gross to Net Sales
(1,076) (890) (688)
Adjustments
Chargebacks and Distributor
Services Fees
[Line Items]
Gross to Net Sales
(1,641) (1,074) (750)
Adjustments
Sales Discounts
[Line Items]
Gross to Net Sales
(243) (193) (153)
Adjustments
Sales Returns and Allowances
[Line Items]
Gross to Net Sales
(45) (8) (11)
Adjustments
Gross Product Sales
[Line Items]
Total revenue 18,270 15,138 12,787
Net product sales
[Line Items]
Total revenue $ $ $
15,265 12,973 11,185

3 Months Ended 12 Months Ended
Revenue (Details) - USD ($) Dec. Sep. Jun. Mar. Dec. Sep. Jun. Mar. Dec. Dec. Dec.
$ in Millions 31, 30, 30, 31, 31, 30, 30, 31, 31, 31, 31,
2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 2016
Disaggregation of Revenue [Line
Items]
Total revenue $ $ $ $ $ $ $ $ $ $ $
4,037 3,892 3,814 3,538 3,483 3,287 3,271 2,962 15,281 13,003 11,229
United States
Items]
Total revenue 10,023 8,324 7,010
Items]
Total revenue 13,657 11,694 10,168
Hematology / Oncology: | United
States
Items]
Total revenue 8,740 7,252 6,077
Hematology / Oncology: |
International
Items]
Total revenue 4,917 4,442 4,091
REVLIMID
Items]
Total revenue 9,685 8,187 6,974
REVLIMID | United States
Items]
Total revenue 6,469 5,426 4,417
REVLIMID | International
Items]
Total revenue 3,216 2,761 2,557
Hematology / Oncology: | Pomalyst/
Imnovid
Items]

Total revenue 2,040 1,614 1,311
Imnovid | United States
Items]
Total revenue 1,391 1,008 778
Imnovid | International
Items]
Total revenue 649 606 533
Hematology / Oncology: | Abraxane
Items]
Total revenue 1,062 992 973
| United States
Items]
| International
Items]
Hematology / Oncology: | Vidaza
Items]
Hematology / Oncology: | Vidaza |
United States
Items]
Hematology / Oncology: | Vidaza |
International
Items]
Hematology / Oncology: | All Other
Hematology and Oncology
Items]

Hematology and Oncology | United
States
Items]
Hematology and Oncology |
International
Items]
Inflammation & Immunology: |
Otezla
Items]
Total revenue 1,608 1,279 1,017
Otezla | United States
Items]
Total revenue 1,275 1,058 904
Otezla | International
Items]
Net product sales
Items]
Total revenue 15,265 12,973 11,185
Net product sales | United States
Items]
Total revenue 10,015 8,310 6,981
Net product sales | International
Items]
Total revenue 5,250 4,663 4,204
Other revenue
Items]

(Impact Biomedicines)
Feb. 12, 2018
(Details) - Impact
USD ($)
Biomedicines Inc
$ in Millions
Business Acquisition [Line Items]
Payments to acquire assets $ 1,100
Contingent milestones eligibility 1,400
Potential milestone payments 4,500
Net assets acquired 7
Minimum
Total revenue 1,000
Maximum
Total revenue $ 5,000

Acquisitions and Divestitures 12 Months
(Juno Therapeutics - Ended
Narrative) (Details) - Juno -
Mar. 06,
USD ($) Dec. 31, 2018
2018
$ in Millions
Consideration transferred $ 10,434
Cash paid for outstanding common stock 9,101
Celgene investment in Juno, fair value 966
Equity compensation attributable to the pre-combination service period $ 367
Cash for the portion of equity compensation attributable to the post-combination
$ 666
service period
Post combination share-based compensation $ 528

(Juno) (Details) - USD ($) Ended
$ / shares in Units, $ in Mar. 06, Mar. 31, Dec. 31, Dec. 31,
Millions 2018 2018 2018 2017
Business Combination, Recognized Identifiable Assets Acquired
and Liabilities Assumed, Net [Abstract]
Goodwill $ 8,003 $ 4,866
Juno
Business Combination, Consideration Transferred
Cash paid for outstanding common stock $ 9,101
Celgene investment in Juno at $87.00 per share 966
Cash for equity compensation attributable to pre-combination service 367
Gain recognized based on fair market value of equity interest $ 458
Investment owned, price per share (usd per share) $ 87.00
Business Combination, Recognized Identifiable Assets Acquired
and Liabilities Assumed, Net [Abstract]
Working capital $ 452
IPR&D 6,980
Property, plant and equipment 144
Goodwill 3,137

12 Months Ended
(Juno - Income Statement Ended
Location) (Details) - USD ($) Dec. 31, Dec. 31, Dec. 31,
Dec. 31, 2018
$ in Millions 2018 2017 2016
Allocated compensation expense $ 1,114 $ 644 $ 606
Allocated compensation expense 575 268 253
Selling, general and administrative
Allocated compensation expense 503 $ 347 $ 320
Juno
Other revenue $2
Other (expense) income, net 10
Income tax provision (benefit), net (260)
Total (1,170)
Allocated compensation expense 193
Acquisition related charges (gains) and restructuring, net $ 41
Juno | Research and development
Business combination, expenses and losses recognized
967
separately
Post combination allocated expenses 320
Juno | Selling, general and administrative
312
separately
Post combination allocated expenses 208
Juno | Amortization of acquired intangible assets
70
separately
Juno | Acquisition related charges and restructuring, net
$ 98
separately

(Juno- Pro Forma) (Details) -
Juno - USD ($)
Dec. 31, 2018 Dec. 31, 2017 Feb. 28, 2018
$ / shares in Units, $ in
Millions
Total revenue $ 15,291 $ 13,029
Net income $ 4,058 $ 2,151
Net income per common share: basic (in dollars per share) $ 5.67 $ 2.76
Net income per common share: diluted (in dollars per share) $ 5.53 $ 2.66
Debt issuance costs $ 4,500

(Delania) (Details) - USD ($)
Feb. 03, 2017 Sep. 30, 2017
$ in Millions
Delinia
Total consideration $ 302
Total fair value of consideration 2
Delinia | Research and development
Total consideration 300
Privately Held Biotech
Total consideration $ 26
Total fair value of consideration 1
Privately Held Biotech | Research and development
Acquisition cost expensed $ 25
Development Regulatory and Commercial Milestones | Delinia
Potential milestone payments 475
Development and Regulatory Milestones | Privately Held Biotech
Potential milestone payments $ 210

(EngMab AG) (Details) -
CHF (SFr) USD ($)
Sep. 27, 2016 - EngMab AG
SFr in Millions
Total consideration SFr 607 $ 625,000,000
Working capital 2,000,000
Total consideration 623,000,000
Development and Regulatory Milestones
Potential milestone payments 150 155,000,000
Commerical Milestones
Potential milestone payments SFr 2,300 2,300,000,000
Minimum
Cumulative sales levels for milestones 1,000,000,000
Maximum
Cumulative sales levels for milestones $ 40,000,000,000.0

(Acetylon) (Details) - Dec. 16, 2016 Dec. 15, 2016
Acetylon - USD ($)
Remaining equity acquired 86.00%
Percentage of equity investment ownership 14.00%
Equity investment $ 30,000,000
Total consideration $ 196,000,000
Research and development expense 226,000,000
Minimum
Net annual sales goals 1,000,000,000.0
Regulatory milestone | Maximum
Contingent milestones eligibility 375,000,000
Commercial milestone | Maximum
Contingent milestones eligibility $ 1,500,000,000.0

Nov. 17, 2016
(Triphase) (Details) -
USD ($)
Triphase
Total consideration $ 42,000,000
Option premium paid 18,000,000
Research and development expense 44,000,000
Net liabilities acquired 1,000,000
Maximum | Regulatory milestone
Maximum | Commercial milestone
Minimum
Net annual sales goals $ 1,000,000,000.0

(LifebankUSA) (Details) -
USD ($)
Feb. 29, 2016 Dec. 31, 2018
shares in Millions, $ in
Millions
HLI
Percentage of equity investment ownership 14.00%
LifebankUSA | Other Income (Expense)
Gain on sale of CCT's biobanking business $ 38
LifebankUSA | HLI
Investment owned, balance, shares 3.4
Investment owned, at fair value $ 40

8 Months
3 Months Ended 12 Months Ended
Earnings Per Share (Details) Ended
- USD ($) Mar. 31, Dec. 31, Sep. 30, Mar. 31, Aug. 31,
Dec. 31, 2018 Sep. 30, 2018 Jun. 30, 2018 Jun. 30, 2017 Dec. 31, 2018 Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016 May 31, 2018 Feb. 28, 2018
2018 2017 2017 2017 2018
Earnings Per Share
[Abstract]
Net income $ $ $ $ $ $ $ $ $
$ 1,073,000,000 $ 4,046,000,000
1,082,000,000 1,045,000,000 846,000,000 (81,000,000) 988,000,000 1,101,000,000 932,000,000 2,940,000,000 1,999,000,000
Basic (in shares) 699,500,000 702,000,000 716,100,000 748,300,000 773,500,000 784,100,000 780,400,000 779,000,000 716,300,000 779,200,000 777,200,000
Options, restricted stock units,
17,500,000 29,500,000 26,100,000
warrants and other (in shares)
Diluted (in shares) 713,900,000 719,700,000 732,600,000 768,300,000 773,500,000 815,200,000 811,700,000 811,200,000 733,800,000 808,700,000 803,300,000
Net income per share
attributable to Celgene:
Basic (in dollars per share) $ 1.53 $ 1.54 $ 1.46 $ 1.13 $ (0.10) $ 1.26 $ 1.41 $ 1.20 $ 5.65 $ 3.77 $ 2.57
Diluted (in dollars per share) $ 1.50 $ 1.50 $ 1.43 $ 1.10 $ (0.10) $ 1.21 $ 1.36 $ 1.15 $ 5.51 $ 3.64 $ 2.49
Anti-dilutive securities
Antidilutive securities
excluded from computation of 44,800,000 24,500,000 23,800,000
earnings per share (in shares)
Additional shares authorized $ $
3,000,000,000 5,000,000,000
Approved common share $ $ $
repurchase amount 28,500,000,000.0 28,500,000,000.0 28,500,000,000.0
Repurchase agreement value $
2,000,000,000
Accelerated shares
6,000,000 18,000,000
repurchased (in shares)
Accelerated shares
24,000,000
repurchased
Accelerated shares acquired
$ 83.53 $ 83.53 $ 83.53
(usd per share)
Put option premium net gains
$ 8,000,000
(losses)
Put options outstanding 0 0 0 0 0
Common stock repurchased
under the program during the 67,800,000.0
period (in shares)
Shares purchased under share $ $
$ 6,020,000,000
repurchase program 3,911,000,000 2,160,000,000
Remaining open-ended
$ 2,800,000,000 $ 2,800,000,000 $ 2,800,000,000
repurchase authorization

Financial Instruments and
(Assumption Calculations)
(Details) - Debt - Income
Dec. 31, 2018 Dec. 31, 2017
Approach Valuation
Technique - Significant
Unobservable Inputs (Level
3)
Discount rate | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt instrument, measurement input 0.036 0.027
Discount rate | Maximum
Discount rate | Weighted Average
Probability of payment | Minimum
Probability of payment | Maximum
Probability of payment | Weighted Average

Financial Instruments and 3 Months
12 Months Ended
Fair Value Measurement Ended
(Narrative) (Details) - USD
Dec. 31, Dec. 31, Dec. 31,
($) Dec. 31, 2017
2018 2017 2016
$ in Millions
Research and development $ 5,673 $ 5,915 $ 4,470
Gloucester Pharmaceuticals, Inc.
Estimated maximum potential payments related to contingent
120
consideration
Avila Therapeutics, Inc.
475
consideration
Quanticel
214
consideration
Juno
286
consideration
Nogra Pharma Limited
1,800
consideration
GED 0301
Income before tax $ 411
Impairment of intangible assets 1,620
Wind down cost 188
Contingent consideration adjustment, increase (decrease) $ 1,397
Clinical Trial and Development Activity Wind-down Costs
Research and development $ 60

Financial Instruments and
Dec. 31, Jan. 01, Dec. 31,
(Assets and Liabilities)
2018 2018 2017
(Details) - USD ($)
$ in Millions
Assets:
Debt securities available-for-sale $ 496 $ 3,219
Equity investments with readily determinable fair values $ 1,800
Recurring basis
Assets:
Forward currency contracts 78
Liabilities:
Contingent value rights (19) (42)
Forward currency contracts (42)
Interest rate swaps (10) (7)
Zero-cost collar currency contracts (1) (136)
Other acquisition related contingent consideration (in 2018 includes
(163) (80)
success payments)
Total liabilities (193) (307)
Recurring basis | Quoted Price in Active Markets for Identical Assets
(Level 1)
Assets:
Debt securities available-for-sale 0 0
Liabilities:
Contingent value rights (19) (42)
Interest rate swaps 0 0
Zero-cost collar currency contracts 0 0
0 0
success payments)
Recurring basis | Significant Other Observable Inputs (Level 2)
Assets:
Equity investments with readily determinable fair values 0 0
Total assets 574 3,219
Liabilities:

Contingent value rights 0 0
Forward currency contracts (42)
Interest rate swaps (10) (7)
Zero-cost collar currency contracts (1) (136)
0 0
success payments)
Recurring basis | Significant Unobservable Inputs (Level 3)
Assets:
Debt securities available-for-sale 0 0
Equity investments with readily determinable fair values 0 0
Total assets 0 0
Liabilities:
Contingent value rights 0 0
Interest rate swaps 0 0
Zero-cost collar currency contracts 0 0
(163) (80)
success payments)
Total liabilities $ (163) $ (80)

Financial Instruments and 12 Months
Fair Value Measurement Ended
(Schedule of Remeasurement
of Equity Investments) Dec. 31, 2018
(Details) - Investments USD ($)
$ in Millions
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation
[Line Items]
Purchases 105
Purchases 66
Sales 23
Downward adjustments and impairments 134
Transfer to readily determinable fair value 41

(Level 3 Liabilities) (Details)
Dec. 31, 2018 Dec. 31, 2017
- USD ($)
$ in Millions
Liabilities:
Balance at beginning of period $ (80) $ (1,490)
Amounts acquired or issued, including measurement period adjustments (116)
Net change in fair value (39) 1,348
Settlements 72 62
Balance at end of period $ (163) $ (80)

Hedging Activities (Foreign
Currency Forward
Dec. 31, Dec. 31,
Contracts) (Details) - USD
2018 2017
($)
$ in Millions
Derivative [Line Items]
Notional amount $ 7,400
Designated as hedging instruments | Foreign currency forward contracts
Period to settlement dates of derivatives is within this period 30 months 20 months
Notional amount $ 2,091 $ 1,695
Not designated as hedging instruments | Foreign currency forward contracts
Notional amount 347 885
Australian Dollar | Designated as hedging instruments | Foreign currency forward
contracts
British Pound | Designated as hedging instruments | Foreign currency forward
contracts
Canadian Dollar | Designated as hedging instruments | Foreign currency forward
contracts
Euro | Designated as hedging instruments | Foreign currency forward contracts
Notional amount 1,381 954
Japanese Yen | Designated as hedging instruments | Foreign currency forward
contracts
Notional amount $ 424 $ 356
Minimum | Foreign currency forward contracts
Maturity period 3 years
Maximum | Foreign currency forward contracts
Maturity period 5 years

Hedging Activities (Foreign
Currency Option Contracts) Dec. 31, 2018 Dec. 31, 2017
(Details) - USD ($)
Notional amount $
7,400,000,000
Designated as hedging instruments | Foreign exchange option contracts
Period to settlement dates of derivatives is within this period 24 months 36 months
Purchased Put | Foreign exchange option contracts
Notional amount $0 $ 258,000,000
Purchased Put | Designated as hedging instruments | Foreign exchange option
contracts
Notional amount 1,933,000,000 3,319,000,000
Written Call | Designated as hedging instruments | Foreign exchange option
contracts
Notional amount $ $
2,216,000,000 3,739,000,000

Hedging Activities (Interest
Rate Swap Contracts) Dec. 31, Dec. 31, Feb. 28, Nov. 30,
(Details) - USD ($) 2018 2017 2018 2017
$ in Millions
Notional amount $ 7,400
Interest rate swap agreements
Notional amount 850 $ 450
Terminated swaps 250 200
Proceeds from settlement of interest rate swap contracts $2 3
3.875% senior notes due 2025
Interest rate 3.875%
Interest rate 3.45%
Interest rate 3.90% 3.90%
Senior Notes | 3.875% senior notes due 2025 | Interest rate
swap agreements
Notional amount $ 200 200
swap agreements
Notional amount $ 450 250
Interest rate 3.45%
swap agreements
Notional amount $ 200 $0

Hedging Activities (Fair
Value and Presentation in Dec. 31, Dec. 31,
the Balance Sheet) (Details) - 2018 2017
USD ($)
$ in Millions
Fair value of derivative instruments
Asset Derivatives $ 159 $ 93
Liability Derivatives 92 278
Designated as hedging instruments | Foreign exchange contracts | Other current assets
Asset Derivatives 63 5
Designated as hedging instruments | Foreign exchange contracts | Accrued expenses and
Asset Derivatives 30
Liability Derivatives 79
Designated as hedging instruments | Foreign exchange contracts | Other non-current assets
Designated as hedging instruments | Foreign exchange contracts | Other non-current
liabilities
Designated as hedging instruments | Interest rate swap agreements | Other current assets
Designated as hedging instruments | Interest rate swap agreements | Other non-current
assets
Asset Derivatives 1
Liability Derivatives 0
Designated as hedging instruments | Interest rate swap agreements | Other non-current
liabilities
Not designated as hedging instruments | Foreign exchange contracts | Other current assets

Not designated as hedging instruments | Foreign exchange contracts | Accrued expenses
and other current liabilities
Not designated as hedging instruments | Interest rate swap agreements | Other current
assets
Not designated as hedging instruments | Interest rate swap agreements | Other non-current
assets
Liability Derivatives $4 $3

Hedging Activities
(Cumulative Basis Dec. Dec.
Adjustments For Fair Value 31, 31,
Hedges) (Details) (Details) - 2018 2017
USD ($)
$ in Millions
Long-term debt, net of discount $ $
19,769 15,838
Accounting Standards Update 2017-12 | Carrying Amount of the Hedged Liability
Current portion of long-term debt, net of discount 501 0
Accounting Standards Update 2017-12 | Cumulative Amount of Fair Value Hedging Adjustment
Included in the Carrying Amount of the Hedged Liability
Current portion of long-term debt, net of discount 2 0
Long-term debt, net of discount 90 128
Hedging Adjustment Discontinued Hedging Relationship ASU 2017-12 | Carrying Amount of the
Hedged Liability
Current portion of long-term debt, net of discount 501
Hedging Adjustment Discontinued Hedging Relationship ASU 2017-12 | Cumulative Amount of
Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability
Current portion of long-term debt, net of discount 2
Long-term debt, net of discount $ 107 $ 139

Hedging Activities (Schedule
Dec. Dec. Dec.
of Impacts on Income)
31, 31, 31,
(Details) - USD ($)
2018 2017 2016
$ in Millions
Derivative instruments gain loss
Amount of gain/(loss) recognized in OCI on derivative $ 245 $ (434) $ 145
Designated as hedging instruments
Gains (losses) expected to be reclassified from accumulated OCI into operations in the
(35)
next 12 months
Reclassification adjustment for excluded component (loss) gain (15)
Designated as hedging instruments | Cash flow hedges | Foreign exchange contracts
Amount of gain/(loss) recognized in OCI on derivative 249 (419)
Designated as hedging instruments | Cash flow hedges | Foreign exchange contracts |
Net product sales
Amount of gain or (loss) reclassified from AOCI into income (2) 184
Amount of gain/(loss) recognized in income on derivative (8) (3)
Amount excluded from effectiveness testing recognized using a systematic and
(8) (3)
rational amortization approach / changes in fair value
Designated as hedging instruments | Cash flow hedges | Treasury rate lock agreements
Amount of gain/(loss) recognized in OCI on derivative (4) (2)
Designated as hedging instruments | Cash flow hedges | Treasury rate lock agreements
| Interest (expense)
Amount of gain or (loss) reclassified from AOCI into income (5) (5)
Designated as hedging instruments | Cash flow hedges | Forward starting interest rate
swaps
Amount of gain/(loss) recognized in OCI on derivative (13)
Designated as hedging instruments | Cash flow hedges | Forward starting interest rate
swaps | Interest (expense)
Amount of gain or (loss) reclassified from AOCI into income (1)
Designated as hedging instruments | Fair value hedges | Interest rate swap agreements |
Interest (expense)
Amount of gain/(loss) recognized in income on derivative 29 35
29 35
Not designated as hedging instruments | Foreign exchange contracts | Net product sales

Derivative instruments not designated as hedging instruments
Amount of gain/(loss) recognized in income on derivative 16 (52)
Accounting Standards Update 2017-12 | Designated as hedging instruments
Reclassification adjustment for excluded component (loss) gain (18)
Accounting Standards Update 2017-12 | Designated as hedging instruments | Fair
value hedges | Interest rate swap agreements | Interest (expense)
Amount of gain/(loss) recognized in income on derivative 32 35
$ 32 $ 35

Derivative Instruments and 3 Months Ended 12 Months Ended
Hedging Activities (Location
and Amount of Gain or
(Loss) Recognized in Income Dec. Sep. Jun. Mar. Dec. Sep. Jun. Mar. Dec. Dec. Dec.
on Fair Value and Cash Flow 31, 30, 30, 31, 31, 30, 30, 31, 31, 31, 31,
Hedging Relationships) 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 2016
(Details) - USD ($)
$ in Millions
Total revenue $ $ $ $ $ $ $ $ $ $ $
4,037 3,892 3,814 3,538 3,483 3,287 3,271 2,962 15,281 13,003 11,229
Net product sales | Interest rate swap
agreements
Amount of gain or (loss) reclassified from
0 0
AOCI into income
Net product sales | Treasury rate lock
agreements
0 0
AOCI into income
Interest (expense) | Interest rate swap
agreements
0 (1)
AOCI into income
Interest (expense) | Treasury rate lock
agreements
(5) (5)
AOCI into income
Other income (expense), net | Interest rate
swap agreements
0 0
AOCI into income
Other income (expense), net | Treasury rate
lock agreements
0 0
AOCI into income

Effects of Fair Value and Cash Flow
Hedging | Net product sales | Interest rate
swap agreements
Gain (loss) on fair value hedging
0 0
relationships
Hedging | Interest (expense) | Interest rate
swap agreements
6 2
relationships
Hedging | Other income (expense), net |
Interest rate swap agreements
0 0
relationships
Cash flow hedges | Net product sales |
Foreign exchange contracts
(2) 184
AOCI into income
20 15
amortization approach / changes in fair
value
Reclassification adjustment for excluded
(28) (18)
component (loss) gain
Cash flow hedges | Interest (expense) |
Foreign exchange contracts
0 0
AOCI into income
0 0
value
0 0
Cash flow hedges | Other income (expense),
net | Foreign exchange contracts
0 0
AOCI into income

0 0
value
0 0
(15)
Designated as hedging instruments | Effects
of Fair Value and Cash Flow Hedging | Net
product sales | Interest rate swap
agreements
0 0
relationships
of Fair Value and Cash Flow Hedging |
Interest (expense) | Interest rate swap
agreements
29 35
relationships
of Fair Value and Cash Flow Hedging |
Other income (expense), net | Interest rate
swap agreements
0 0
relationships
Designated as hedging instruments | Fair
value hedges | Interest (expense) | Interest
rate swap agreements
29 35
value
Accounting Standards Update 2017-12 |
(18)
Accounting Standards Update 2017-12 |
Designated as hedging instruments | Fair

value hedges | Interest (expense) | Interest
rate swap agreements
32 35
value
Net product sales
Total revenue $ $ $
15,265 12,973 11,185

Cash, Cash Equivalents,
for-Sale and Equity
Dec. 31, 2018 Dec. 31, 2017
($)
$ in Millions
Cash and Cash Equivalents [Abstract]
Time deposits and repurchase agreements $ 276 $ 1,200
Commercial paper 35
Money market funds 2,900 4,500
Equity investments with readily determinable fair values $ 1,312 $ 1,810

for-Sale and Equity
Dec. 31, 2018 Dec. 31, 2017
(Amortized Cost, Gross
Unrealized Gain/Loss, and
Estimated Fair Value)
(Details) - USD ($)
$ in Millions
Cash and cash equivalents
Money market funds $ 2,900 $ 4,500
Available-for-sale securities by major security type and class of security
Amortized Cost 496 3,228
Gross Unrealized Gain 0 0
Gross Unrealized Loss 0 (9)
Estimated Fair Value 496 3,219
Ultra short income fund
Amortized Cost 450 352
Gross Unrealized Loss 0 0
Estimated Fair Value 450 352
Time deposits and Repurchase agreements
Amortized Cost 46 89
Gross Unrealized Loss 0 0
Estimated Fair Value $ 46 89
U.S. Treasury securities
Amortized Cost 445
Gross Unrealized Gain 0
Gross Unrealized Loss (3)
Estimated Fair Value 442
U.S. government-sponsored agency securities
Amortized Cost 42
Gross Unrealized Loss 0
U.S. government-sponsored agency MBS
Amortized Cost 17

Gross Unrealized Loss 0
Corporate debt - global
Amortized Cost 2,080
Estimated Fair Value 2,075
Asset backed securities
Amortized Cost 203
Equity securities with readily determinable fair values
Amortized Cost 935
Estimated Fair Value $ 1,810

for-Sale and Equity
Dec. 31, 2018
USD ($)
(Debt Securities, Amortized
Cost and Fair Value)
(Details)
$ in Millions
Amortized Cost
Duration of one year or less $ 496
Fair Value
Duration of one year or less $ 496

Inventory (Details) - USD ($)
Dec. 31, 2018 Dec. 31, 2017
$ in Millions
Inventory Disclosure [Abstract]
Total $ 458 $ 541

Property, Plant and
Equipment, Net (Details) -
Dec. 31, 2018 Dec. 31, 2017
USD ($)
$ in Millions
Subtotal $ 2,360 $ 1,903
Total 1,367 1,070
Land
Subtotal 81 77
Buildings
Subtotal 639 525
Building and operating equipment
Subtotal 170 54
Leasehold improvements
Subtotal 236 153
Machinery and equipment
Subtotal 426 310
Furniture and fixtures
Subtotal 79 64
Computer equipment and software
Subtotal 563 496
Construction in progress
Subtotal $ 166 $ 224

(Schedule of Other Current
Dec. 31, 2018 Dec. 31, 2017
Assets) (Details) - USD ($)
$ in Millions
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Other 127 150
Total $ 501 $ 388

(Details) - USD ($) Dec. 31, 2018 Dec. 31, 2017
$ in Millions
Accrued expenses
Interest 238 173
Milestones payable 0 62
Success payment liability 70 0
Short-term contingent consideration and success payments 60 0
Other 466 383
Total 2,987 2,523
Other non-current liabilities
Contingent consideration (see Note 5) 103 80
Other 91 48
Total $ 477 $ 544

Intangible Assets and 9 Months
12 Months Ended
Goodwill (Intangible Assets) Ended
(Details) - USD ($) Dec. 31, Dec. 31, Dec. 31, Mar. 06,
Sep. 30, 2018
$ in Millions 2018 2017 2016 2018
Intangible Assets By Category
Useful life 8 years 9
months 18 days
Gross Carrying Value $ 5,269 $ 3,998
Accumulated Amortization (2,887) (2,413)
Intangible Assets, Net 2,382 1,585
Total intangible assets
Gross Carrying Value 19,100 10,849
Amortization 474 336 $ 466
Finite-Lived Intangible Assets, Net, Amortization
Expense, Fiscal Year Maturity [Abstract]
Estimated amortization expense, 2019 442
Acquired developed product rights
Gross Carrying Value 3,406 3,406
Technology
Gross Carrying Value 1,743 483
Accumulated Amortization (552) (410)
Intangible Assets, Net 1,191 73
Licenses
Gross Carrying Value 66 66
Intangible Assets, Net 31 36

Other
Gross Carrying Value 54 43
Intangible Assets, Net 15 9
Acquired IPR&D product rights
Gross Carrying Value $ 13,831 $ 6,851
Juno
Finite-Lived Intangible Assets, Net, Amortization
Expense, Fiscal Year Maturity [Abstract]
Goodwill $ 3,137
Juno | Technology
Useful life 15 years
Gross Carrying Value $ 1,300
Juno | Acquired in Process Research and Development
Product Rights
Gross Carrying Value $ 7,000

Intangible Assets and
Goodwill (Goodwill)
Dec. 31, 2018 Dec. 31, 2017
(Details) - USD ($)
$ in Millions
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill $ 8,003 $ 4,866

Debt (Short-Term
Borrowings and Current
Dec. 31, 2018 Dec. 31, 2017
Portion of Long-Term Debt)
(Details) - USD ($)
Short-term Debt [Line Items]
Short-term debt $0 $0
Short-term Debt [Line Items]
Long term debt, current maturities $ 501,000,000 $ 0
Interest rate 2.25%

Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016 May 31, 2018 Feb. 28, 2018
($)
Stockholders' Equity Note
[Abstract]
Preferred stock, shares authorized 5,000,000.0 5,000,000.0
Common stock, shares authorized 1,150,000,000 1,150,000,000
Common stock, shares issued 981,500,000 971,700,000
Aggregate value of common shares
$
authorized to be purchased under
28,500,000,000.0
share repurchase program
Shares authorized increase (in
3,000,000,000 5,000,000,000
shares)
Amount of stock repurchased under $ $
$ 6,000,000,000
share repurchase program 3,900,000,000 2,200,000,000
Stock repurchase program,
272,700,000
aggregate shares repurchased
Average price of shares repurchased
under share repurchase program (in $ 94.22
dollars per share)
Cost of shares repurchased under
$ 25,700,000,000
share repurchase program

3 Months
1 Months Ended
Debt (Narrative) (Details) - Ended
USD ($) Aug. 31, Sep. 30, Oct. 31,
Dec. 11, 2017 Feb. 28, 2018 Nov. 30, 2017 Dec. 31, 2017 Dec. 31, 2018 Nov. 09, 2017 Apr. 30, 2016
2017 2018 2017
Debt Instrument [Line
Items]
Long-term debt $ $
15,838,000,000 19,769,000,000
Debt, fair value 16,600,000,000 19,300,000,000
Short-term debt 0 0
Repayments of debt $
1,400,000,000
Accrued interest $ 10,000,000
Loss on extinguishment of
4,000,000
debt
Commercial paper, remaining
2,000,000,000 2,000,000,000
borrowing capacity
Commercial Paper
Items]
Short-term debt 0 0
Revolving Credit Facility
Items]
Maximum borrowing capacity $
2,000,000,000.000
Outstanding uncommitted
0 0
facility
Derivative
Items]
Accumulated OCI, loss
31,000,000
position
Gain as a Result of Past Swap
Contract Settlements
Items]
Deferred (gain) loss on
discontinuation of fair value (139,000,000) (109,000,000)
hedge
Gain Related to Settlement of
Swap Contracts During
Current Fiscal Year
Items]
Deferred (gain) loss on
discontinuation of fair value (3,000,000) (2,000,000)
hedge
Items]
Interest rate 1.90%
Repayments of debt $
500,000,000
Items]
Long-term debt $ 500,000,000 0 $ 498,000,000
Offering price as percent of
99.954%
par
Basis spread rate 10.00%
Items]
Long-term debt $
0 $ 994,000,000
1,000,000,000
99.758%
par

Items]
Long-term debt $ $
0
1,500,000,000 1,490,000,000
99.656%
par
Items]
Long-term debt $ $
0
1,500,000,000 1,476,000,000
99.40%
par
2021 2023 2028 2048 Notes
Items]
Debt issuance cost $
32,000,000
Debt instrument, redemption
100.00%
price, percentage
Downgrade of debt rate 101.00%
Items]
Long-term debt $ 750,000,000 746,000,000 $ 747,000,000
99.944%
par
Items]
Long-term debt $
1,000,000,000
Interest rate 3.45%
99.848%
par
Items]
Long-term debt $
1,250,000,000
Interest rate 4.35%
99.733%
par
2023 2027 2047 Senior Notes
Items]
Debt issuance cost $ 23,000,000
100.00%
price, percentage
Items]
Long-term debt $
$ 497,000,000 $ 498,000,000
500,000,000
99.706%
par
Debt issuance cost $ 2,000,000

100.00%
price, percentage
Items]
Long-term debt $
1,000,000,000
Items]
Long-term debt $ 400,000,000
Interest rate 2.30%
Senior Notes
Items]
Long-term debt $
19,850,000,000

(Summary of Common and
Treasury Stock) (Details) - Dec. 31, Dec. 31, Dec. 31,
shares 2018 2017 2016
shares in Millions
Changes in common stock issued and treasury stock
Balance at the beginning of the period (in shares) 971.7
Balance at the end of the period (in shares) 981.5 971.7
Common Stock
Balance at the beginning of the period (in shares) 971.7 954.1 940.1
Exercise of stock options and conversion of restricted stock units (in
9.8 17.6 14.0
shares)
Issuance of common stock for employee benefit plans (in shares) 0.0 0.0 0.0
Shares repurchased under share repurchase program (in shares) 0.0 0.0 0.0
Balance at the end of the period (in shares) 981.5 971.7 954.1
Treasury Stock
Balance at the beginning of the period (in shares) 212.4 175.5 153.5
Exercise of stock options and conversion of restricted stock units (in
1.3 0.6 1.0
shares)
Issuance of common stock for employee benefit plans (in shares) (0.3) (0.4) (0.4)
Shares repurchased under share repurchase program (in shares) 67.9 36.7 21.4
Balance at the end of the period (in shares) 281.3 212.4 175.5

Debt (Long-Term Debt)
(Details) - USD ($) Dec. 31, 2018 Feb. 28, 2018 Dec. 31, 2017 Nov. 30, 2017 Aug. 31, 2017
$ in Millions
Debt Instrument [Line Items]
Long-term debt $ 19,769 $ 15,838
Long-term debt $0 505
Interest rate 2.25%
Long-term debt $ 1,497 1,495
Long-term debt $ 509 514
Interest rate 3.95%
Long-term debt $ 498 497 $ 500
Long-term debt $ 498 $ 500 0
Interest rate 3.25%
Interest rate 3.55%
Long-term debt $ 747 746 $ 750
Long-term debt $ 994 $ 1,000 0

Interest rate 4.00%
Interest rate 3.45%
Long-term debt $ 1,490 $ 1,500 0
Interest rate 5.70%
Interest rate 5.25%
Interest rate 5.00%
Interest rate 4.35%
Long-term debt $ 1,476 $ 1,500 $0

(Summary of Components) Dec. 31, Dec. 31, Dec. 31, Jan. 01, Jan. 01,
(Details) - USD ($) 2018 2017 2016 2018 2017
$ in Millions
Summary of accumulated other comprehensive income
(loss), net of tax
Beginning balance $ 287 $ 419
Cumulative effect adjustment for the adoption of ASU 2017-12
$ (570) $ (30)
(See Note 1)
Other comprehensive income (loss) before reclassifications,
185 38
net of tax
Reclassified losses (gains) from accumulated other
48 (140)
comprehensive income (loss), net of tax
Total other comprehensive income (loss) 233 (102) $ (349)
Ending balance (50) 287 419
Accumulated Other Comprehensive Income (Loss)
(loss), net of tax
(570)
(See Note 1)
Pension Liability Adjustment
(loss), net of tax
Beginning balance (22) (38)
0 0
(See Note 1)
(6) 16
net of tax
0 0
Total other comprehensive income (loss) (6) 16
Ending balance (28) (22) (38)
Net Unrealized Gains (Losses) On Available-for-Sale
Marketable Securities (1)
(loss), net of tax
Beginning balance 562 144
(566) 0
(See Note 1)
(7) 395
net of tax
14 23
Total other comprehensive income (loss) 7 418

Ending balance 3 562 144
Net Unrealized Gains (Losses) Related to Cash Flow Hedges
(loss), net of tax
Beginning balance (206) 415
(4) (12)
(See Note 1)
246 (428)
net of tax
6 (181)
Total other comprehensive income (loss) 252 (609)
Ending balance 42 (206) 415
Amortization of Excluded Component Related to Cash Flow
Hedges (See Note 1)
(loss), net of tax
Beginning balance (15) 0
0 (18)
(See Note 1)
(20) (15)
net of tax
28 18
Total other comprehensive income (loss) 8 3
Ending balance (7) (15) 0
Foreign Currency Translation Adjustments
(loss), net of tax
Beginning balance (32) (102)
$0 0
(See Note 1)
(28) 70
net of tax
0 0
Total other comprehensive income (loss) (28) 70
Ending balance $ (60) $ (32) $ (102)
Accounting Standards Update 2017-12 | Accumulated Other
Comprehensive Income (Loss)
(loss), net of tax
$ 30
(See Note 1)

Accumulated Other 3 Months Ended 12 Months Ended
(Reclassification Out AOCI)
31, 30, 30, 31, 31, 30, 30, 31, 31, 31, 31,
(Details) - USD ($)
2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 2016
$ in Millions
Reclassification Adjustment out of
Accumulated Other Comprehensive
Income [Line Items]
Net product sales $ $ $ $ $ $ $ $ $ $ $
4,037 3,892 3,814 3,538 3,483 3,287 3,271 2,962 15,281 13,003 11,229
Income tax provision (44) (296) (262) (184) (1,212) (3) (77) (82) (786) (1,374) (373)
Total reclassification, net of tax $ $ $ $
$ 846 $ (81) $ 988 $ 932 4,046 2,940 1,999
1,073 1,082 1,045 1,101
Reclassification out of accumulated other
comprehensive income
Income [Line Items]
Total reclassification, net of tax (28) 155 71
comprehensive income | Gains (losses)
related to cash-flow hedges:
Income [Line Items]
related to cash-flow hedges: | Foreign
exchange contracts
Income [Line Items]
Net product sales (2) 184 307
Amortization of excluded component
(8) (3) 0
(losses)
related to cash-flow hedges: | Treasury
rate lock agreements
Income [Line Items]

related to cash-flow hedges: | Interest rate
swap agreements
Income [Line Items]
Interest (expense) 0 (1) (2)
comprehensive income | Gains (losses) on
available-for-sale debt securities /
Income [Line Items]
Interest and investment income, net $
$ (18) $ (37)
(358)

Share-Based Compensation 12 Months
(Discussion of Compensation Ended
Plans) (Details) - USD ($) Jun. 14,
Dec. 31, 2018
$ in Millions 2017
Number of common shares in the share reserve 275,300,000 27,700,000
Additional shares authorized, post-split shares of common stock 10,000,000
Options
Award vesting period, maximum (in years) 4 years
Award expiration period (in years) 10 years
Additional award vesting period, retirement provision, maximum 3 years
PSU
Performance measurement period for PSUs 3 years 3 years
Compensation cost increase $ 15
Award vesting period, maximum (in years) 2 years
Specified performance and market targets for revenue, weighting 37.50%
Specified performance and market targets for earnings per share, weighting 37.50%
Specified performance and market targets for relative total shareholder return,
25.00%
weighting
Restricted trading period 1 year 1 day
PSU | Minimum
Performance based percentage target for PSUs granted 0.00%
PSU | Maximum
Performance based percentage target for PSUs granted 200.00%

(Components of
Compensation Expense) Dec. 31, Dec. 31, Dec. 31,
(Details) - USD ($) 2018 2017 2016
$ in Millions
Stock-Based Compensation
Total share-based compensation expense $ 1,114 $ 644 $ 606
Reduction in net income 963 464 439
Non-qualified stock options
Total share-based compensation expense 421 347 357
Cost of goods sold
Selling, general and administrative
Accounting Standards Update 2016-09, Excess Tax Benefit Component
Excess tax benefit from share-based compensation arrangements 22 $ 290 $ 189
Juno
Total share-based compensation expense 193
Cash for the portion of equity compensation attributable to the post-
$ 666
combination service period

(Stock Options -
Assumptions) (Details) -
Dec. 31, Dec. 31,
Options - USD ($) Dec. 31, 2018
2017 2016
Millions
Unrecognized compensation cost $ 530
Weighted-average period over which unrecognized compensation cost is 2 years 1 month
expected to be recognized 6 days
Weighted-average grant date fair value of the stock options issued (in
$ 28.93 $ 32.42 $ 32.49
dollars per share)
Assumptions used in the estimation of fair value of options granted
Weighted average expected volatility 30.00% 27.00% 32.00%
Expected dividend yield 0.00% 0.00% 0.00%
Period of settlement of publicly traded options 6 months
Minimum
Expected volatility 29.00% 24.00% 29.00%
Expected term (years) 5 years 11 5 years 15
5 years 18 days
days days
Maximum
Expected volatility 32.00% 30.00% 35.00%
Expected term (years) 5 years 1 month 5 years 22 5 years 22
6 days days days

(Plan Activities) (Details) -
USD ($)
Dec. 31, 2018 Dec. 31, 2017
$ / shares in Units, shares in
Thousands, $ in Millions
Options (in Millions)
Outstanding, beginning balnce (in shares) 67,800
Conversion of Juno awards (in shares) 3,700
Granted (in shares) 10,300
Exercised (in shares) (6,400)
Forfeited (in shares) (3,100)
Expired (in shares) (1,200)
Outstanding, ending balance (in shares) 71,100 67,800
Vested or expected to vest in the future (in shares) 69,900
Vested (in shares) 46,100
Weighted Average Exercise Price Per Option
Outstanding, beginning balance (in dollars per share) $ 82.53
Conversion of Juno awards (in dollars per share) 34.01
Granted (in dollars per share) 89.26
Exercised (in dollars per share) 38.95
Forfeited (in dollars per share) 103.83
Expired (in dollars per share) 106.27
Outstanding, ending balance (in dollars per share) 83.57 $ 82.53
Vested or expected to vest in the future (in dollars per share) 83.28
Vested (in dollars per share) $ 74.43
Weighted Average Remaining Contractual Term (Years)
Outstanding, weighted average remaining (in years) 5 years 7 months 6 days 6 years 1 month 6 days
Vested or expected to vest in the future (in years) 5 years 7 months 6 days
Vested (in years) 4 years 3 months 18 days
Aggregate Intrinsic Value (in Millions)
Outstanding $ 539 $ 1,823
Vested or expected to vest in the future 539
Vested $ 500
Nonvested RSUs
Share Equivalent
Nonvested, beginning balance (in shares) 7,700
Conversion of Juno awards (in shares) 2,500
Granted (in shares) 5,700
Exercised (in shares) (3,200)
Forfeited (in shares) (1,000)
Nonvested, ending balance (in shares) 11,700 7,700
Weighted Average Grant Date Fair Value
Nonvested, beginning balance (in dollars per share) $ 109.55

Vested (in dollars per share) 104.09
Nonvested, ending balance (in dollars per share) $ 91.78 $ 109.55
Nonvested Performance-Based RSUs
Share Equivalent
Nonvested, beginning balance (in shares) 558
Conversion of Juno awards (in shares) 336
Granted (in shares) 163
Exercised (in shares) (315)
Forfeited (in shares) (82)
Nonvested, ending balance (in shares) 660 558
Weighted Average Grant Date Fair Value
Nonvested, beginning balance (in dollars per share) $ 116.27
Vested (in dollars per share) 101.80
Nonvested, ending balance (in dollars per share) $ 106.98 $ 116.27

(Additional Information) Dec. 31, Dec. 31,
Dec. 31, 2018
(Details) 2017 2016
USD ($)
$ in Millions USD ($) USD ($)
Options
Total fair value of shares vested $ 490 $ 346 $ 335
Total intrinsic value of stock options exercised during the period $ 297 $ 1,200 $ 747
Ratio of stock options to RSU's in calculating the number of RSU's
4
for employees
Expected weighted-average period in years of compensation cost to 2 years 1 month 6
be recognized days
Nonvested RSUs
Expected weighted-average period in years of compensation cost to 1 year 9 months 18
be recognized days
Nonvested Performance-Based RSUs
Expected weighted-average period in years of compensation cost to 1 year 1 month 6
be recognized days

Employee Benefit Plans 12 Months Ended
(401K Plan) (Details) - USD
Dec. 31, Dec. 31, Dec. 31,
($)
2018 2017 2016
$ in Millions
Retirement Benefits [Abstract]
Defined contribution plan, employer contribution limit percentage of
6.00%
compensation
Defined contribution plan, cost recognized $ 33 $ 34 $ 40

Employee Benefit Plans
(Deferred Compensation Dec. 31, Dec. 31, Dec. 31,
Plan) (Details) - USD ($) 2018 2017 2015
$ in Millions
Deferred Compensation Arrangement with Individual, Postretirement
Benefits [Line Items]
Deferred compensation liability, non-current $ 243 $ 240
Deferred Compensation, Excluding Share-based Payments and Retirement
Benefits
Percentage of cash bonuses which the eligible participants can elect to defer 100.00%
Deferred compensation liability, non-current $ 152 $ 156
Benefits | Minimum
Employer match as a percentage of participant's base salary 10.00%
Benefits | Maximum
Percentage of base salary which the eligible participants can elect to defer 90.00%
Employer match as a percentage of participant's base salary 20.00%

Employee Benefit Plans 12 Months Ended
(Long-Term Incentive Plan) Dec. 31, 2018 Dec. 31, Dec. 31,
(Details) USD ($) 2017 2016
$ in Millions performance_cycle USD ($) USD ($)
Long-Term Incentive Plan
Deferred Compensation Arrangement with Individual,
Postretirement Benefits [Line Items]
Performance period 3 years
Number of separate three-year performance cycles | performance_cycle 3
Consecutive trading days 30 days
Estimated payout for the plan, current $8
Plan related expense $4 $5 $ 13
Long-Term Incentive Plan | Minimum
Payouts as percentage of the participant's salary 0.00%
Long-Term Incentive Plan | Maximum
Payouts as percentage of the participant's salary 200.00%
2019 Long-Term Incentive Plan
Percentage of non-GAAP net income as component of performance
37.50%
measures of the plans
Percentage of total non-GAAP revenue as component of performance
37.50%
Percentage of relative shareholder return as component of performance
25.00%
2019 Long-Term Incentive Plan | Maximum
Potential payout, assuming maximum objectives are achieved $ 10
37.50%
37.50%
25.00%

37.50%
37.50%
25.00%

Income Taxes (Narrative) 12 Months Ended
(Details) - USD ($)
Dec. 31, 2018 Dec. 31, 2017
$ in Millions
Income Tax Disclosure [Abstract]
Income tax provisional amount adjustment $ 43
Valuation allowance decrease $ 82
Remeasurement period adjustment (benefit) expense $ (621)

Income Taxes (Income 12 Months Ended
Before Tax Provision)
(Details) - USD ($) Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016
$ in Millions
Income before income taxes:
U.S. $ (600) $ 445 $ 735
Non-U.S. 5,432 3,869 1,637

Income Taxes (Components 3 Months Ended 12 Months Ended
of Tax Provision (Benefit)) Dec. Sep. Jun. Mar. Dec. Sep. Jun. Mar. Dec. Dec. Dec.
(Details) - USD ($) 31, 30, 30, 31, 31, 30, 30, 31, 31, 31, 31,
$ in Millions 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 2016
Federal $
$ 571 $ 569
2,545
International:
Total international tax
117 108 104
provision
Total provision $ $
$ 44 $ 296 $ 262 $ 184 $3 $ 77 $ 82 $ 786 $ 373
1,212 1,374

Income Taxes (Deferred Tax
Assets and Liabilities)
Dec. 31, 2018 Jan. 01, 2018 Dec. 31, 2017
(Details) - USD ($)
$ in Millions
Assets
NOL carryforwards $ 242 $ 249
Tax credit carryforwards 44 11
Share-based compensation 380 317
Other assets and liabilities 59 38
Intangible assets 425 333
Accrued and other expenses 316 278
Valuation allowance (195) (277)
Total deferred taxes 1,271 949
Liabilities
Other assets and liabilities (59) (52)
Intangible assets (3,795) (2,008)
Unrealized (gains) on securities (146) (193)
Subtotal (4,000) (2,253)
Net deferred tax (liability) $ (2,729) $ (188) $ (1,304)

Income Taxes (Deferred Tax
Dec. 31, Jan. 01, Dec. 31,
Assets) (Details) - USD ($)
2018 2018 2017
$ in Millions
Deferred tax assets and liabilities classified on the company's balance
sheet:
Net deferred tax (liability) $ (2,729) $ (188) $ (1,304)

Income Taxes (Effective Tax 12 Months Ended
Rate Reconciliation) Dec. 31, Dec. 31, Dec. 31,
(Details) 2018 2017 2016
Percentages
U.S. statutory rate 21.00% 35.00% 35.00%
Tax rate differences on foreign operations (11.20%) (28.80%) (21.10%)
State taxes, net of federal benefit 1.40% 0.60% 0.80%
Change in valuation allowance 0.30% 0.80% 0.50%
Acquisition and collaboration related differences 6.00% 2.10% (0.70%)
Changes in uncertain tax positions (0.10%) 0.10% (0.40%)
Stock compensation excess tax benefits (0.50%) (6.70%) 0.00%
2017 Tax Act (0.90%) 29.40% 0.00%
Other 0.30% (0.70%) 1.60%
Effective income tax rate 16.30% 31.80% 15.70%
Operating Loss Carryforwards [Line Items]
Effective rate, foreign operations 10.50%
Effective rate, foreign operations decrease 9.30%
Swiss Federal Tax Administration FTA
Operating Loss Carryforwards [Line Items]
Maximum statutory Swiss income tax rate (as a percent) 15.60% 15.60%
Reduction in effective tax rates due to difference between maximum statutory Swiss
income tax rate and the company's Swiss income tax rate under the tax holiday (as a 23.60% 14.80% 20.50%
percent)

Income Taxes (NOL and Tax 3 Months Ended 12 Months Ended
Credit Carryforwards)
Dec. Sep. Jun. Mar. Dec. Sep. Jun. Mar. Dec. Dec. Dec. Jan. Jan. Dec.
(Details) - USD ($)
31, 30, 30, 31, 31, 30, 30, 31, 31, 31, 31, 01, 01, 31,
2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 2016 2018 2017 2015
Millions
Operating Loss
Carryforwards [Line Items]
Effective income tax rate
reconciliation, share-based
$ 22 $ 290
compensation, excess tax
benefit, amount
Cumulative effect adjustment $ $
(570) (30)
Net income $ $ $ $ $ $ $ $ $
4,046 2,940
1,073 1,082 1,045 846 (81) 988 1,101 932 1,999
185
Deferred income tax expense
32 (1,330) (344)
(benefit)
Deferred tax liabilities, net $
1,304 2,729 1,304 188
2,729
State
Operating Loss
NOL carryforwards 620 620
Research
Operating Loss
Credit carryforwards 72 72
State NOL Expiring 2016
through 2035 | State
Operating Loss
NOL carryforwards 1,300 1,300
Accounting Standards Update
2016-09
Operating Loss
(17)
(17)
Retained Earnings
Operating Loss

Net income $
2,940 1,999
4,046
Retained Earnings |
2016-09
Operating Loss
Cumulative effect adjustment $ 17
Additional Paid-in Capital
Operating Loss
185
Accumulated Other
Comprehensive Income (Loss)
Operating Loss
Cumulative effect adjustment $
(570)
Deferred income tax expense
$ 227 $ 61
(benefit)
Research And Development
and Tax Credits
Operating Loss
Net income $ 65
Basic and diluted earnings per $
share (usd per share) 0.08
Tax Credits - Prior Year
Operating Loss
Net income $ 55
Receptos
Operating Loss
2,500

Income Taxes (Unrecognized 12 Months Ended
Tax Benefits) (Details) - USD
Dec. 31, Dec. 31,
($)
2018 2017
$ in Millions
Unrecognized tax benefits:
Decreases related to prior year tax positions (30) 0
Settlements 0 0
Balance as of end of year 1,203 896
Unrecognized tax benefits that, if recognized, would have a net impact on the effective
1,100
tax rate
Accrued interest related to uncertain tax positions $ 90 $ 60

9
1 Months Ended Months 12 Months Ended
Ended
Mar.
(Details) Jun. Apr. Dec. Dec. Dec.
20, May 31, Apr. 30, Dec. 31, 2018
shares in Millions, $ in Jul. 31, 30, 30, Sep. 31, 31, 31,
2018 Jul. 31, 2017 2016 2015 USD ($) Dec. 28, 2018
Millions 2016 2015 2013 30, 2017 2016 2015
USD collaborative_arrangement agreement USD ($) discovery_stage_program collaborative_arrangement
program USD USD 2016 USD USD USD
($) subsidiary company extension
($) ($) ($) ($) ($)
shares
Program 2 | Celgene
Collaborative Arrangements
and Non-collaborative
Arrangement Transactions
[Line Items]
Profit share percentage 75.00%
Acceleron Pharma Inc
[Line Items]
Upfront fees $0 $ 0 $ 0 $ 70
Acceleron Pharma Inc |
ACE-011 program
[Line Items]
Upfront and milestone
367
payments received
ACE-011 - discovery stage
programs
[Line Items]
$ 348
payments received
Number of programs |
3
discovery_stage_program
ACE-536 program
[Line Items]
$ 218
payments received
ACE-536 first discovery stage
program
[Line Items]
171
payments received
ACE-536 second discovery
stage program
[Line Items]
149
payments received
ACE-536 each additional
discovery stage program
[Line Items]
125
payments received
Agios Pharmaceuticals Inc

[Line Items]
Potential milestone payments $ 120
Number of subsidiaries
entered into new collaboration 1
agreement | subsidiary
Number of programs governed
by another agreement | 2
agreement
Initial term of agreement 4 years
Contract extensions | extension 2
Additional agreement term 1 year
Additional years for contract
4 years
extension
Upfront fees $0 8 200 130
Agios Pharmaceuticals Inc |
AG-881
[Line Items]
Contingent milestone
$ 70
payments to be made
Number of companies in
agreement sharing profits | 2
company
bluebird
[Line Items]
Contingent milestone $
payments to be made 230
Codevelopment and profit
50.00%
share
Upfront fees 0 15 10 75
bluebird | Celgene
[Line Items]
Codevelopment and profit
50.00%
share
FORMA Therapeutics
Holdings, LLC
[Line Items]
Upfront fees $
12 246 71
337
Number of agreements entered
into | 2
collaborative_arrangement
Collaborations terminated |
2
collaborative_arrangement
Payments to terminate
78
collaboration agreement
Potential fees receivable 305
FORMA Therapeutics
Holdings, LLC | Research and
development payments
[Line Items]
Upfront fees $
200
FORMA Therapeutics
Holdings, LLC | Regulatory
approval
[Line Items]
Potential milestone payments $
315
Research and development, 4
period years

FORMA Therapeutics
Holdings, LLC | Termination
and Expanded Rights
[Line Items]
66
FORMA Therapeutics
Holdings, LLC | Early Stage
Undisclosed Target
[Line Items]
12
FORMA Therapeutics
Holdings, LLC | License
payments
[Line Items]
Potential milestone payments $
430
Jounce
[Line Items]
Upfront fees 0 0 238
Number of early stage
4
programs | program
Number of programs profit
3
will be shared on | program
Prothena
[Line Items]
Initial term of agreement 6
years
Additional years for contract 2
extension years
Upfront fees $ 150 110
0
Ordinary shares purchased (in
1.2
shares) | shares
Prothena | Research and
development payments
[Line Items]
Upfront fees $ 110
Prothena | Equity Investment,
Readily Determinable Fair
Value
[Line Items]
Upfront fees $ 40
Other Collaboration
Arrangements
[Line Items]
Upfront fees $ $
402
229 297
Other Collaboration
Arrangements | Maximum

[Line Items]
Contingent milestone
$ 825
payments to be made
Jounce
[Line Items]
Initial term of agreement 4 years
Additional agreement term 3 years
Jounce | Program 2
[Line Items]
JTX201 | Program 1 | Celgene
[Line Items]
JTX201 | Jounce | Program 1
[Line Items]

Collaboration Agreements 12 Months Ended
(Schedule of Collaboration
Agreements) (Details) - USD Mar. 20, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
($) 2018 2018 2017 2016 2015
$ in Millions
Collaborative Arrangements and Non-collaborative
Arrangement Transactions [Line Items]
Intangible Asset Balance $ 16,213 $ 8,436
Acceleron
Upfront Fees 0 0 $0 $ 70
Milestones 0 0 15 45
Extension/ Termination of Agreements 0 0 0 0
Amortization of Prepaid Research and Development 0 0 0 0
Equity Investments Made During Period 0 28 32 93
Intangible Asset Balance 0 0
Equity Investment Balance $ 268 $ 261
Percentage of Outstanding Equity 13.30% 13.60%
Agios Pharmaceuticals Inc
Upfront Fees $0 $8 200 130
Milestones 15 0 25 0
BeiGene
Upfront Fees $0 $ 268
Milestones 0 0
Extension/ Termination of Agreements 0 0
Amortization of Prepaid Research and Development 0 0
Equity Investments Made During Period 0 174
bluebird

Upfront Fees $0 $ 15 10 75
Milestones 0 0 0 0
FORMA
Upfront Fees $ 12 $ 246 71 337
Milestones 0 25 0 0
Equity Investments Made During Period 0 0 0 $0
Jounce
Upfront Fees 0 0 238
Milestones 0 0 0
Extension/ Termination of Agreements 0 0 0
Amortization of Prepaid Research and Development 0 0 0
Equity Investments Made During Period 0 10 24
Prothena
Upfront Fees $ 150 $ 110
Milestones 0
Amortization of Prepaid Research and Development 0
Equity Investments Made During Period 40
Intangible Asset Balance 0
Equity Investment Balance $ 12
Percentage of Outstanding Equity 2.90%
Other Collaboration Arrangements
Upfront Fees $ 402 $ 229 $ 297
Milestones 10 10 36
Extension/ Termination of Agreements 7 20 9
Amortization of Prepaid Research and Development 7 4 17
Equity Investments Made During Period 26 43 $ 64

12 Months
Ended
Commitments and
Dec. 31, 2018 Dec. 31, Oct. 31,
Contingencies (Details)
USD ($) 2017 2013
payment USD ($) USD ($)
Product Liability Contingency [Line Items]
Number of potential milestone payments | payment 2
CVR milestone payment $
300,000,000
Abraxane
Nonfinancial liabilities $
$ 19,000,000
42,000,000
Net sales measurement period 1 year
Abraxane | Milestone One
Royalty rate 2.50%
Abraxane | Milestone One | Minimum
Revenue milestones $
1,000,000,000.000
Abraxane | Milestone One | Maximum
2,000,000,000.000
Abraxane | Milestone Two
Royalty rate 5.00%
Abraxane | Milestone Two | Minimum
2,000,000,000.000
Abraxane | Milestone Two | Maximum
3,000,000,000.000
Abraxane | Milestone Three
Royalty rate 10.00%
Abraxane | Milestone Three | Minimum
3,000,000,000.000

Abraxane | Termination date of December 31, 2025 if sales less than
$1.0 billion | Minimum
Revenue milestones 1,000,000,000.000
Abraxane | Termination date of December 31, 2030 or earlier if sales
less than $1.0 billion | Minimum
1,000,000,000.000

Contingencies (Future
Minimum Lease Payments)
Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016
(Details) - USD ($)
$ in Millions
Operating Leases
2019 $ 92
2020 89
2021 70
2022 59
2023 45
Thereafter 68
Total minimum lease payments 423
Total rental expense under operating leases 113 $ 69 $ 70
Lines of Credit:
Derivative contract notional amount 7,400
Letters of credit and guarantees issued on behalf of subsidiaries 168
Other Commitments:
Product supply contract obligation 495
Commited investment 32
Deferred tax liabilities, noncurrent $ 1,200

Commitments and
Jun. 14, 2017
Contingencies (Legal
plaintiff
Proceedings) (Details)
Commitments and Contingencies Disclosure [Abstract]
Number of plaintiffs 3

Geographic and Product 3 Months Ended 12 Months Ended
Information (Revenue and
Long-Lived Assets) (Details)
31, 30, 30, 31, 31, 30, 30, 31, 31, 31, 31,
- USD ($)
2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 2016
$ in Millions
[Line Items]
Total revenue $ $ $ $ $ $ $ $ $ $ $
4,037 3,892 3,814 3,538 3,483 3,287 3,271 2,962 15,281 13,003 11,229
Total long-lived assets 1,367 1,070 1,367 1,070
United States
[Line Items]
Total revenue 10,023 8,324 7,010
Total long-lived assets 1,028 768 1,028 768
Europe
[Line Items]
Total revenue 3,771 3,327 3,046
Total long-lived assets 331 296 331 296
All other
[Line Items]
Total revenue $
1,487 1,352
1,173
Total long-lived assets $8 $6 $8 $6

Geographic and Product 3 Months Ended 12 Months Ended
Information (Revenue by Dec. Sep. Jun. Mar. Dec. Sep. Jun. Mar. Dec. Dec. Dec.
Product) (Details) - USD ($) 31, 30, 30, 31, 31, 30, 30, 31, 31, 31, 31,
$ in Millions 2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 2016
[Line Items]
Total revenue $ $ $ $ $ $ $ $ $ $ $
4,037 3,892 3,814 3,538 3,483 3,287 3,271 2,962 15,281 13,003 11,229
REVLIMID
[Line Items]
Total revenue 9,685 8,187 6,974
Pomalyst/Imnovid
[Line Items]
Total revenue 2,040 1,614 1,311
Otezla
[Line Items]
Total revenue 1,608 1,279 1,017
Abraxane
[Line Items]
Total revenue 1,062 992 973
IDHIFA
[Line Items]
Vidaza
[Line Items]
azacitidine for injection
[Line Items]
THALOMID
[Line Items]
ISTODAX
[Line Items]
Other
[Line Items]
Total revenue 4 9 4
Net product sales
[Line Items]
Total revenue 15,265 12,973 11,185
Other revenue
[Line Items]

Information (Major
Customers) (Details) -
Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016
Customers' concentration
risk
CVS Health Corp. | Percent of Total Revenue
Major Customers
Percentage of concentration risk 12.10% 12.00% 10.30%
CVS Health Corp. | Percent of Net Accounts Receivable
Major Customers
Percentage of concentration risk 10.40% 9.60%
McKesson Corp. | Percent of Total Revenue
Major Customers
McKesson Corp. | Percent of Net Accounts Receivable
Major Customers
AmerisourceBergen Corp. | Percent of Total Revenue
Major Customers
AmerisourceBergen Corp. | Percent of Net Accounts Receivable
Major Customers

Quarterly Results of 3 Months Ended 12 Months Ended
Operations (Unaudited)
(Details) - USD ($)
31, 30, 30, 31, 31, 30, 30, 31, 31, 31, 31,
$ / shares in Units, shares in
2018 2018 2018 2018 2017 2017 2017 2017 2018 2017 2016
Millions, $ in Millions
Business Acquisition [Line
Items]
Total revenue $ $ $ $ $ $ $ $ $ $ $
4,037 3,892 3,814 3,538 3,483 3,287
3,271 2,962 15,281 13,003 11,229
Gross profit 3,867 3,733 3,682 3,396 3,360 3,165
3,148 2,839 14,678 12,512
Income tax provision 44 296 262 184 1,212 77 3 82 786 1,374 373
Net income (loss) $ $ $ $ $ $ $
$ 846 $ (81) $ 988 $ 932
1,073 1,082 1,045 1,101 4,046 2,940 1,999
Net income (loss) per share
Basic (in dollars per share) $
$ 1.53 $ 1.54 $ 1.46 $ 1.13 $ 1.26 $ 1.41 $ 1.20 $ 5.65 $ 3.77 $ 2.57
(0.10)
Diluted (in dollars per share) $
$ 1.50 $ 1.50 $ 1.43 $ 1.10 $ 1.21 $ 1.36 $ 1.15 $ 5.51 $ 3.64 $ 2.49
(0.10)
Basic (in shares) 699.5 702.0 716.1 748.3 773.5 784.1 780.4 779.0 716.3 779.2 777.2
Diluted (in shares) 713.9 719.7 732.6 768.3 773.5 815.2 811.7 811.2 733.8 808.7 803.3
Income tax provision $
1,300
Debt and equity securities, gain $ $
$ (6) $ 959
(loss) (513) (123)
2016-09, Excess Tax Benefit
Component
Excess tax benefit from share-
$ 22 $ 290 $ 189
based compensation arrangements

Jan. 03, 2019
Subsequent Event (Details) -
USD ($)
Subsequent Event Jan. 02, 2019
right
$ / shares in Units, $ in $ / shares
$ / shares
Billions
shares
Subsequent Event [Line Items]
Cash and stock transaction equity value | $ $ 74.0
Conversion ratio of shares | shares 1.0
Cash compensation per share converted (usd per share) $ 50.00
Sale price per share (usd per share) $ 102.43
Contingent value rights | right 1
Contingent payment (usd per share) $ 9.00
Potential contract termination fee | $ $ 2.2
Bristol-Myers Squibb Company
Share price (usd per share) $ 52.43
Ownership after merger 69.00%
Celgene
Ownership after merger 31.00%

Schedule II - Valuation and 12 Months Ended
Qualifying Accounts
Dec. 31, Dec. 31, Dec. 31,
(Details) - USD ($)
2018 2017 2016
$ in Millions
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves
[Roll Forward]
Balance at Beginning of Year $ 51 $ 49 $ 47
Charged to Expense or Sales 290 200 166
Deductions 256 198 164
Balance at End of Year 85 51 49
Allowance for doubtful accounts
[Roll Forward]
Balance at Beginning of Year 16 15 18
Charged to Expense or Sales 2 (1) 1
Deductions 2 (2) 4
Allowance for customer discounts
[Roll Forward]
Subtotal
[Roll Forward]
Allowance for sales returns
[Roll Forward]
Deductions 13 11 10
Balance at End of Year $ 47 $ 15 $ 18


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SECURITIES AND EXCHANGE COMMISSION

Filing Date: 2019-02-26 | Period of Report: 2018-12-31

(HTML Version on secdatabase.com)

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o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

Title of each class Name of each exchange on which registered

Securities registered pursuant to Section 12(g) of the Act: None

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Documents Incorporated by Reference

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ANNUAL REPORT ON FORM 10-K

Item No. Page

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Disease Geographic Approvals

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Disease Geographic Approvals

Disease Geographic Approvals

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Disease Geographic Approvals

Disease Geographic Approvals

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PRECLINICAL AND CLINICAL-STAGE PIPELINE

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Phase I Clinical Trials

Phase II Clinical Trials

Phase III Clinical Trials

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Myelodysplastic Syndromes (MDS)

DNMT inhibitor: VIDAZA®

Acute Myeloid Leukemia (AML)

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HDAC inhibitor: ISTODAX®

Chronic Lymphocytic Leukemia (CLL)

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PATENTS AND PROPRIETARY TECHNOLOGY

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VIDAZA® in the United States by a competitor in September 2013.

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SALES AND COMMERCIALIZATION

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ITEM 1A. RISK FACTORS

Risks Related to our Business

Our operating results may be subject to significant fluctuations.