CELGENE CORPORATION (NASDAQ:CELG) Files An 8-K Costs Associated with Exit or Disposal Activities
Item 2.05 Costs Associated with Exit or Disposal Activities.

As a result of the Company’s 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”), Celgene concluded on October18, 2017 that it would recognize a fourth quarter 2017 charge to earnings related to the significant impairment of the approximately $1,600 million GED-0301 IPR&D asset, as well as wind-down costs associated with discontinuing the Trials and certain development activities, partially offset by a benefit related to the significant reduction in the approximately $1,400 million of GED-0301 contingent consideration liabilities. At the time of the Initial Form8-K filing, the exact amount of the net pre-tax charge to earnings was not determined, but was estimated to be in the range of $300 million to $500 million.

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. 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 a result of the discontinuance of the Trials discussed above, the Company has determined it will record a net pre-tax charge to earnings of approximately $411 million for the three-month period ending December31, 2017. The net pre-tax charge is comprised of the following:

· 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.

This Item 2.05 contains forward-looking statements, including, but not limited to, statements related to the expected costs associated with discontinuance of the Trials. These forward-looking statements are based on the Company’s current expectations and inherently involve significant risks and uncertainties. The Company’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties. A further description of the risks and uncertainties relating to the business of the Company is contained in the Company’s Annual Report on Form10-K for the year ended December31, 2016, filed with the Securities and Exchange Commission (the “SEC”), and the Company’s subsequent current and periodic reports filed with the SEC. Except as otherwise required by law, the Company undertakes no duty or obligation to update any forward-looking statements contained in this Item 2.05 as a result of new information, future events or changes in its expectations.

Item 2.06 Material Impairments.

The information required by this Item is incorporated by reference from Item 2.05 above.