As filed with the Securities and Exchange Commission on February 4, 2008

Registration No. 333-148777

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Amendment No. 1

to

Form S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

CELGENE CORPORATION

(Exact name of registrant as specified in its charter)

 

 

86 Morris Avenue

Summit, New Jersey 07901

(908) 673-9000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

Sol J. Barer

Chief Executive Officer

Celgene Corporation

86 Morris Avenue

Summit, New Jersey 07901

(908) 673-9000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

With copies to:

 

 

Approximate date of commencement of proposed offering:   As soon as practicable after this registration statement is declared effective and the effective time of the proposed merger of Pharmion Corporation with Cobalt Acquisition LLC, as described in the Agreement and Plan of Merger, dated as of November 18, 2007, among Celgene Corporation, Cobalt Acquisition LLC and Pharmion Corporation, attached as Annex A to the proxy statement/prospectus forming a part of this registration statement, has occurred.

 

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, please check the following box.  o

 

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

SUBJECT TO COMPLETION, DATED FEBRUARY 4, 2008

 

PROXY STATEMENT/PROSPECTUS

A MERGER IS PROPOSED — YOUR VOTE IS VERY IMPORTANT

 

February 5, 2008

 

Dear Fellow Stockholder:

 

We are pleased to inform you that Pharmion Corporation has agreed, subject to stockholder approval and upon the terms and subject to the conditions set forth in the merger agreement, to be acquired by Celgene Corporation pursuant to a merger in which Pharmion will be merged with a wholly-owned subsidiary of Celgene.

 

You are cordially invited to attend a special meeting of Pharmion stockholders at 8:30 a.m., local time, on March 6, 2008 at the Omni Interlocken Resort, 500 Interlocken Boulevard, Broomfield, Colorado, to consider and vote upon the merger. Only stockholders who hold shares of Pharmion common stock at the close of business on February 4, 2008 will be entitled to vote. You may vote your shares at the special meeting only if you are present in person or represented by proxy.

 

If the planned merger takes place, each outstanding share of Pharmion common stock will be converted into the right to receive (i) that number of shares of Celgene common stock equal to the quotient determined by dividing $47.00 by the volume weighted average price per share of Celgene common stock (rounded to the nearest cent) on The Nasdaq Stock Market for the 15 consecutive trading days ending on (and including) the third trading day immediately prior to the effective time of the merger, which we refer to as the measurement price; provided, however, that if the measurement price is less than $56.15, each share of Pharmion common stock will be converted into the right to receive 0.8370 shares of Celgene common stock and if the measurement price is greater than $72.93, each share of Pharmion common stock will be converted into the right to receive 0.6445 shares of Celgene common stock and (ii) $25.00 in cash, without interest. Pharmion stockholders will not receive any fractional shares of Celgene common stock in the merger. Instead, any stockholder who would otherwise be entitled to a fractional share of Celgene common stock will be entitled to receive an amount in cash (rounded down to the nearest whole cent), without interest, equal to the product of such fraction multiplied by the measurement price.

 

THE BOARD OF DIRECTORS OF PHARMION HAS DETERMINED THAT THE MERGER AGREEMENT AND THE MERGER ARE FAIR TO, ADVISABLE FOR, AND IN THE BEST INTERESTS OF, PHARMION AND ITS STOCKHOLDERS AND HAS APPROVED SUCH ITEMS AND RECOMMENDS THAT HOLDERS OF PHARMION COMMON STOCK VOTE TO APPROVE AND ADOPT THE MERGER AGREEMENT AND APPROVE THE MERGER.

 

You are also being asked to approve the possible adjournment of the special meeting if there are not sufficient votes at the time of the special meeting to approve and adopt the merger agreement and approve the merger or if there are insufficient shares of Pharmion common stock present in person or represented by proxy at the special meeting to constitute a quorum necessary to conduct the business of the special meeting.

 

In light of the importance of the merger proposal, we urge you to attend the special meeting. Whether or not you plan to attend in person, after carefully reading and considering the accompanying materials, please take the time to vote by completing and mailing the enclosed proxy card to us. You may also submit a proxy for your shares on the Internet or by telephone. Your vote is very important, regardless of the number of shares you own. Whether or not you expect to attend the special meeting, please submit the enclosed proxy card as soon as possible to ensure that your shares are represented at the special meeting. Returning your proxy card will not prevent you from attending the special meeting and voting in person should you choose to do so. If your shares are held in “street name” by your broker, you should instruct your broker to vote your shares, following the directions your broker provides. Please note that a failure to vote your shares is the equivalent of a vote against the merger.

 

The enclosed proxy statement/prospectus provides you with important information about the proposed merger. Please give this information your careful attention. In particular, you should read and consider carefully the discussion in the section entitled “Risk Factors” beginning on page 24 of the proxy statement/prospectus.

 

Sincerely,

 

PATRICK J. MAHAFFY
President and Chief Executive Officer

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORS HAVE APPROVED OR DISAPPROVED THE TRANSACTION DESCRIBED HEREIN OR THE CELGENE COMMON STOCK TO BE ISSUED PURSUANT TO THE MERGER OR DETERMINED WHETHER THIS PROXY STATEMENT/PROSPECTUS IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

Celgene common stock is listed on The Nasdaq Global Select Market under the symbol “CELG.” On February 1, 2008, the most recent practicable date prior to the date of this proxy statement/prospectus, the last reported sale price per share of Celgene common stock on The Nasdaq Global Select Market was $59.70. This proxy statement/prospectus is dated February 5, 2008, and is first being mailed to stockholders of Pharmion on or about February 6, 2008.

 

 

PHARMION CORPORATION
2525 28th Street, Suite 200
Boulder, Colorado 80301
(720) 564-9100

 

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To Be Held On March 6, 2008

 

 

 

 

 

 

 

 

 

 

 

By order of the Board of Directors of Pharmion Corporation

 

STEVEN N. DUPONT

Executive Vice President and General Counsel

 

February 5, 2008

at Boulder, Colorado

 

After careful consideration, the board of directors of Pharmion has determined that the merger and the terms of the merger agreement are fair to, advisable for, and in the best interests of Pharmion and you, the Pharmion stockholders. The board of directors of Pharmion unanimously recommends that you vote “FOR” Proposal No. 1, the proposed merger, and “FOR” Proposal No. 2, the adjournment of the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the approval and adoption of the merger agreement and approval of the merger at the time of the special meeting or if there are insufficient shares of Pharmion common stock represented to constitute a quorum necessary to conduct the business of the special meeting.

 

TABLE OF CONTENTS

 

 

We incorporate by reference important business and financial information about Pharmion and Celgene into this proxy statement/prospectus that is not included in or delivered with this proxy statement/prospectus. You may obtain the information incorporated by reference into this proxy statement/prospectus without charge by following the instructions in the section entitled “Where You Can Find More Information” on page 100. To obtain timely delivery of such information, you must request such information no later than five business days before March 6, 2008.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This proxy statement/prospectus contains or incorporates by reference forward-looking statements and information that are based on the current beliefs and expectations of the respective managements of Celgene and Pharmion as well as assumptions made by, and information currently available to, Celgene and its subsidiaries or Pharmion and its subsidiaries, as the case may be.

 

Examples of forward-looking statements include statements regarding Celgene’s or Pharmion’s future financial results, operating results, product successes, business strategies, projected costs, future products, competitive positions, and plans and objectives of management for future operations. When used in or incorporated by reference into this proxy statement/prospectus, the words “anticipate,” “believe,” “plan,” “estimate,” “expect” and “intend” and other similar expressions, as they relate to Celgene or Pharmion or their respective managements or stockholders, are intended to identify forward-looking statements.

 

These forward-looking statements reflect the current views of Celgene and Pharmion with respect to future events and are subject to a number of known and unknown risks, delays, uncertainties and other important factors not under Celgene’s or Pharmion’s control, including: those set forth under the heading “Risk Factors;” the risks described in Celgene’s filings with the Securities and Exchange Commission, which we refer to as the SEC, including Celgene’s Annual Report on Form 10-K for the year ended December 31, 2006 and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2007, June 30, 2007 and September 30, 2007; the risks described in Pharmion’s filings with the SEC, including Pharmion’s Annual Report on Form 10-K for the year ended December 31, 2006 and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2007, June 30, 2007 and September 30, 2007; and the following important factors and assumptions, that could affect the future results of Celgene following the merger, or the future results of Pharmion and Celgene if the merger does not occur, and could cause actual results to differ materially from the results, performance or other expectations implied or expressed in any forward-looking statements:

 

 

The most important factors that could prevent Pharmion and Celgene from achieving their stated goals include Pharmion’s or Celgene’s failure to:

 

 

 

 

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this proxy statement/prospectus. Neither Celgene nor Pharmion undertakes any obligation publicly to update or revise these forward-looking statements to reflect events or circumstances after the date of this proxy statement/prospectus or to reflect the occurrence of unanticipated events.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUMMARY

	•	the approval and adoption of the merger agreement and approval of the merger by Pharmion stockholders;
	•	the expiration or early termination of the waiting period applicable to the consummation of the merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which we refer to as the HSR Act, which expiration occurred on January 2, 2008, and the receipt of any required approval or expiration of applicable waiting period under the antitrust laws of any applicable foreign jurisdictions the failure of which to be obtained or to have expired, individually or in the aggregate, would have a material adverse effect on Celgene;
	•	the absence of any statute, law, rule, ordinance, regulation, code, order, judgment, injunction, writ, decree or any other order of any court or other governmental authority of competent jurisdiction permanently enjoining or otherwise prohibiting the consummation of the merger or the transactions contemplated by the merger agreement;
	•	the registration statement on Form S-4, of which this proxy statement/prospectus forms a part, having been declared effective by the SEC under the Securities Act, and not being subject to a stop order;
	•	all consents, approvals and authorizations of governmental entities arising as a result of the enactment or promulgation of, or a change in, any law occurring after the date of the merger agreement required to consummate the merger (the failure of which to obtain would have a material adverse effect on the combined company) having been obtained; and
	•	the shares of Celgene common stock to be issued pursuant to the merger and the shares of Celgene common stock to be reserved for issuance upon the exercise of options to purchase common stock of Pharmion having been approved for listing on The Nasdaq Global Select Market.

	•	Pharmion’s representations and warranties being true and correct (except where the failure to be true and correct would not have a material adverse effect on Pharmion);
	•	Pharmion having complied in all material respects with its covenants contained in the merger agreement;
	•	the absence of a material adverse change in the business or condition of Pharmion;
	•	Celgene having received an opinion of its outside legal counsel that the merger will be treated as a “reorganization” within the meaning of Section 368(a) of the Code; provided, however, that if the merger is restructured as a reverse merger, as described under “THE MERGER — Form of the Merger” on page 57, in which Merger Sub will be merged with and into Pharmion with Pharmion surviving the merger as a wholly-owned subsidiary of Celgene, Celgene will be deemed to have waived this condition; and
	•	holders of no more than 25% of the number of shares of Pharmion common stock outstanding immediately prior to the effective time having exercised their appraisal rights in the merger in accordance with the DGCL.

	•	Celgene’s and Merger Sub’s representations and warranties being true and correct (except where the failure to be true and correct would not have a material adverse effect on Celgene);
	•	Celgene having complied in all material respects with its covenants in the merger agreement;
	•	the absence of a material adverse change in the business or condition of Celgene; and

	•	Pharmion having received an opinion of its outside legal counsel that the merger will be treated as a “reorganization” within the meaning of Section 368(a) of the Code; provided, however, that if the merger is restructured as a reverse merger, as described under “THE MERGER — Form of the Merger” on page 57, in which Merger Sub will be merged with and into Pharmion with Pharmion surviving the merger as a wholly-owned subsidiary of Celgene, Pharmion will be deemed to have waived this condition.

	•	by mutual written consent of Celgene and of Pharmion;
	•	by either Celgene or Pharmion, if the effective time of the merger does not occur before September 30, 2008, which is referred to as the outside date, unless the primary cause of the failure of the effective time of the merger to occur is the failure of the party seeking to terminate the merger agreement to perform any of its obligations under the merger agreement;
	•	by either Celgene or Pharmion, if any court or governmental entity has enacted any law, or issued any injunction or other order that permanently enjoins or otherwise prohibits the consummation of the merger; or
	•	by either Celgene or Pharmion, if the stockholders of Pharmion do not approve the merger at the stockholder meeting.

	•	Celgene breaches a representation, warranty, covenant or agreement such that the conditions to the obligation of Pharmion to effect the merger, as described above, will not be satisfied and the breach has not been or cannot be cured within 30 days following notice of such breach or facts exist which render impossible one or more of the mutual closing conditions or one or more of the conditions to the obligation of Pharmion to effect the merger by the outside date (however, Pharmion does not have the right to terminate the merger agreement under this provision if it is then in material breach of any of its representations, warranties, covenants or agreements contained in the merger agreement); or
	•	the board of directors of Pharmion determines that a third party proposal relating to a merger, reorganization, recapitalization, tender offer, business combination or other similar transaction involving Pharmion or any proposal to acquire securities representing 30% or more of the equity securities of Pharmion or any of its subsidiaries or to acquire 30% or more of the consolidated assets or revenues of Pharmion and its subsidiaries, which we refer to in this proxy statement/prospectus as an acquisition proposal, constitutes a superior proposal; however, prior to such termination Pharmion must negotiate with Celgene in good faith for three business days to make such modifications to the merger agreement so that the third party proposal would no longer be a superior proposal and Pharmion must pay the required termination fee to Celgene.

	•	Pharmion breaches a representation, warranty, covenant or agreement such that the conditions to the obligation of Celgene to effect the merger, as described above, will not be satisfied and the breach has not been or cannot be cured within 30 days following notice of such breach or facts exist which render impossible one or more of the mutual closing conditions or one or more of the conditions to the obligation of Celgene to effect the merger by the outside date (however, Celgene does not have the right to terminate the merger agreement under this provision if it is then in material breach of any of its representations, warranties, covenants or agreements contained in the merger agreement);
	•	prior to the special meeting of Pharmion stockholders, the board of directors of Pharmion, in the case of a superior proposal, withholds, withdraws, qualifies or modifies its approval or recommendation of the merger agreement or the merger, or approves, adopts, recommends or otherwise declares advisable any such superior proposal not solicited in breach of the merger agreement, fails to transmit to Pharmion stockholders a recommended rejection of any tender offer or exchange offer for 30% or more of the outstanding shares of

		Pharmion common stock by a person who is not an affiliate of Celgene, or if Pharmion fails, within five days of a request by Celgene, to reconfirm its recommendation in favor of the merger agreement and merger (or the board of directors of Pharmion resolves, or publicly announces its intention, to do any of the foregoing);

	•	the board of directors of Pharmion approves, resolves to recommend, or publicly recommends, or Pharmion enters into a binding acquisition agreement with respect to, any acquisition proposal; or
	•	Pharmion breaches its obligations under the merger agreement not to solicit third-party acquisition proposals as described under “Covenants and Agreements — No Solicitation” (or the board of directors of Pharmion resolves, or publicly announces its intention, to do so).

 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF CELGENE

		Nine Months Ended
		September 30,								Year Ended December 31,
		2007(1)				2006(1)				2006(1)				2005				2004				2003				2002
		(Unaudited)
		(In thousands, except per share amounts)
Consolidated Statements of Operations Data:
Total revenue		$	991,230			$	623,919			$	898,873			$	536,941			$	377,502			$	271,475			$	135,746
Costs and operating expenses			703,605				508,941				724,182				453,357				334,774				274,124				250,367
Operating income (loss)			287,625				114,978				174,691				83,584				42,728				(2,649	)			(114,621	)
Interest and investment income, net			79,447				22,102				40,352				24,557				28,340				21,760				22,976
Equity in losses of affiliated companies			3,338				5,202				8,233				6,923				—				4,392				—
Interest expense			7,913				7,086				9,417				9,497				9,551				5,667				27
Other income (expense), net			(3,345	)			4,193				5,502				(7,509	)			1,654				16,609				82
Income (loss) before tax			352,476				128,985				202,895				84,212				63,171				25,661				(91,590	)
Income tax provision (benefit)			201,364				82,916				133,914				20,556				10,415				718				(98	)
Income (loss) from continuing operations			151,112				46,069				68,981				63,656				52,756				24,943				(91,492	)
Discontinued operations: Gain on sale of chiral assets			—				—				—				—				—				750				1,000
Net income (loss)		$	151,112			$	46,069			$	68,981			$	63,656			$	52,756			$	25,693			$	(90,492	)
Income (loss) from continuing operations per common share(2):
Basic		$	0.40			$	0.13			$	0.20			$	0.19			$	0.16			$	0.08			$	(0.30	)
Diluted		$	0.36			$	0.12			$	0.18			$	0.18			$	0.15			$	0.07			$	(0.30	)
Weighted average shares(2):
Basic			380,841				347,687				352,217				335,512				327,738				323,548				309,348
Diluted			431,208				403,092				407,181				390,585				345,710				341,592				309,348

(1)		These periods reflect Celgene’s adoption of the provisions of Statement of Financial Accounting Standards No. 123R, “Share-Based Payment,” effective January 1, 2006.
(2)		Amounts have been adjusted for the two-for-one stock splits effected in February 2006 and October 2004.

		Nine Months Ended
		September 30,								Year Ended December 31,
		2007				2006				2006				2005				2004				2003				2002
		(Unaudited)
		(In thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents and marketable securities		$	2,529,705			$	872,474			$	1,982,220			$	724,260			$	748,537			$	666,967			$	261,182
Total assets			3,373,185				1,526,819				2,735,791				1,258,313				1,107,293				813,026				336,795
Convertible notes(3)			399,731				399,962				399,889				399,984				400,000				400,000				—
Other non-current liabilities			59,811				22,915				56,995				27,850				14,442				8,366				4,913
Retained earnings (deficit)			49,339				(124,684	)			(101,773	)			(170,754	)			(234,410	)			(287,166	)			(312,859	)
Stockholders’ equity			2,479,326				838,278				1,976,177				635,775				477,444				331,744				286,206

(3)		The convertible notes mature in June 2008.

 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF PHARMION

		Nine Months Ended September 30,								Years Ended December 31,
		2007				2006				2006				2005				2004				2003(1)(2)				2002
		(Unaudited)
		(In thousands, except per share amounts)
Consolidated Statements of Operations Data:
Net sales		$	195,834			$	178,596			$	238,646			$	221,244			$	130,171			$	25,539			$	4,735
Operating expenses:
Cost of sales, inclusive of royalties, exclusive of product rights amortization shown separately below			53,341				48,514				65,157				59,800				43,635				11,462				1,575
Research and development			71,992				50,194				70,145				42,944				28,392				24,616				15,049
Acquired in-process research			8,000				24,480				78,763				21,243				—				—				—
Selling, general and administrative			93,174				72,963				104,943				83,323				66,848				36,109				23,437
Product rights amortization			7,407				7,344				9,802				9,345				3,395				1,972				375
Total operating expenses			233,914				203,495				328,810				216,655				142,270				74,159				40,436
Income (loss) from operations			(38,080	)			(24,899	)			(90,164	)			4,589				(12,099	)			(48,620	)			(35,701	)
Other income (expense), net			6,448				5,286				6,926				6,474				2,415				(154	)			1,109
Income (loss) before taxes			(31,632	)			(19,613	)			(83,238	)			11,063				(9,684	)			(48,774	)			(34,592	)
Income tax expense			4,752				7,188				7,774				8,794				7,853				1,285				105
Net income (loss)			(36,384	)			(26,801	)			(91,012	)			2,269				(17,537	)			(50,059	)			(34,697	)
Accretion to redemption value of redeemable convertible preferred stock			—				—				—				—				—				(10,091	)			(8,576	)
Net income (loss) attributable to common stockholders		$	(36,384	)		$	(26,801	)		$	(91,012	)		$	2,269			$	(17,537	)		$	(60,150	)		$	(43,273	)
Net income (loss) attributable to common stockholders per common share:
Basic		$	(1.05	)		$	(0.84	)		$	(2.84	)		$	0.07			$	(0.63	)		$	(14.70	)		$	(57.58	)
Diluted		$	(1.05	)		$	(0.84	)		$	(2.84	)		$	0.07			$	(0.63	)		$	(14.70	)		$	(57.58	)
Shares used in computing net income (loss) attributable to common stockholders per common share:
Basic			34,506				31,993				32,016				31,837				27,933				4,093				752
Diluted			34,506				31,993				32,016				32,876				27,933				4,093				752
Pro forma net loss attributable to common stockholders per common share, assuming conversion of preferred stock, basic and diluted (unaudited)			N/A				N/A				N/A				N/A				N/A			$	(2.66	)		$	(2.47	)
Shares used in computing pro forma net loss attributable to common stockholders per common share, assuming conversion of preferred stock basic and diluted, unaudited			N/A				N/A				N/A				N/A				N/A				18,791				14,073

		Nine Months Ended
		September 30,								Year Ended December 31,
		2007				2006				2006				2005				2004				2003(1)(2)				2002
		(Unaudited)
		(In thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents and short-term investments		$	257,632			$	187,777			$	136,213			$	243,406			$	245,543			$	88,542			$	62,604
Working capital			262,455				209,466				152,997				226,621				233,366				86,539				60,891
Total assets			451,510				376,701				326,732				432,630				411,230				145,473				80,847
Convertible notes			—				—				—				—				—				13,374				—
Other long-term liabilities			3,939				3,008				3,679				3,737				3,824				8,144				190
Redeemable convertible preferred stock			—				—				—				—				—				—				135,987
Accumulated deficit			(263,223	)			(162,628	)			(226,839	)			(135,827	)			(138,096	)			(120,559	)			(62,950	)
Total stockholders’ equity (deficit)			380,033				330,651				273,082				346,624				351,953				104,914				(62,216	)

(1)		Pharmion acquired Laphal Developpement S.A. on March 25, 2003 and its operations are included in Pharmion’s results since that date.
(2)		In November 2003 Pharmion completed its initial public offering, which resulted in $76.2 million of net proceeds through the issuance of 6,000,000 shares of Pharmion common stock. Concurrent with the effective date of the initial public offering, all outstanding shares of Pharmion’s redeemable convertible preferred stock were converted into 17,030,956 shares of Pharmion common stock.

 

SELECTED UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA

		Unaudited Pro Forma Consolidated
		(In thousands, except for per share data)
		Nine Months Ended				Twelve Months Ended
		September 30, 2007				December 31, 2006
EARNINGS DATA
Revenue		$	1,169,834			$	1,115,546
Expenses		$	1,022,280			$	1,193,622
Operating income (loss)		$	147,554			$	(78,076	)
Other income (expense)		$	35,193			$	(17,286	)
Income (loss) before income taxes		$	182,747			$	(95,362	)
Income tax provision		$	150,800			$	55,175
Net income (loss)		$	31,947			$	(150,537	)
Basic earnings (loss) per share		$	0.08			$	(0.39	)
Diluted earnings (loss) per share		$	0.07			$	(0.39	)

		September 30, 2007
BALANCE SHEET DATA
Total assets		$	3,938,815
Total liabilities		$	1,092,867
Shareholders’ equity		$	2,845,948

 

COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

										Unaudited
										Pro Forma				Unaudited
										Consolidated				Pro Forma-
										per Share				Equivalent per
										of				Share of
										Celgene				Pharmion
		Celgene				Pharmion				Common				Common
		Historical				Historical				Stock				Stock(1)
NET INCOME PER SHARE:
For the year ended December 31, 2006:
Basic		$	.20			$	(2.84	)		$	(.39	)		$	(.33	)
Diluted		$	.18			$	(2.84	)		$	(.39	)		$	(.33	)
For the nine months ended September 30, 2007:
Basic		$	.40			$	(1.05	)		$	.08			$	.07
Diluted		$	.36			$	(1.05	)		$	.07			$	.06
BOOK VALUE PER SHARE:
As of December 31, 2006		$	5.26			$	8.51			$	5.24			$	4.39
As of September 30, 2007		$	6.43			$	10.22			$	6.76			$	5.66

(1)		Since the exchange ratio is not currently known and will not be known at the time of the special meeting, this column sets forth the maximum exchange ratio (0.8370), as provided in the merger agreement. See “RISK FACTORS — The value of the shares of Celgene common stock that Pharmion stockholders receive in the merger could vary as a result of fluctuations in the price of Celgene common stock” on page 25.

 

COMPARATIVE STOCK PRICES

 

Comparison

		Celgene Common Stock								Pharmion Common Stock
		High				Low				High				Low
Year ended December 31, 2005
First Quarter		$	17.62			$	12.35			$	44.55			$	28.75
Second Quarter			21.62				16.60				29.35				18.68
Third Quarter			29.41				19.77				30.12				21.05
Fourth Quarter			32.68				22.59				22.45				16.49
Year ended December 31, 2006
First Quarter		$	44.22			$	31.51			$	18.77			$	14.76
Second Quarter			48.40				36.02				20.87				15.66
Third Quarter			49.41				39.31				22.38				15.56
Fourth Quarter			60.12				41.68				26.70				21.07
Year ended December 31, 2007
First Quarter		$	58.60			$	49.46			$	32.83			$	24.49
Second Quarter			66.95				52.40				32.03				26.13
Third Quarter			72.23				56.50				47.25				23.27
Fourth Quarter			75.44				41.26				68.04				45.77
Year ended December 31, 2008
First Quarter (through February 1, 2008)		$	59.99			$	46.07			$	70.12			$	62.30

 

Dividend Policy

 

Before you vote, you should carefully consider the risks related to the merger described below, those described in the section entitled “Special Note Regarding Forward-Looking Statements” beginning on page iii and the other information contained in this proxy statement/prospectus or in Celgene’s and Pharmion’s documents incorporated by reference herein, particularly the risk factors set forth in Celgene’s and Pharmion’s documents incorporated herein, as set forth under “Where You Can Find More Information” beginning on page 100 (including the risk factors contained in Celgene’s Annual Report on Form 10-K for the year ended December 31, 2006, as supplemented by Celgene’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2007, June 30, 2007 and September 30, 2007 and in Pharmion’s Annual Report on Form 10-K for the year ended December 31, 2006, as supplemented by Pharmion’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2007, June 30, 2007 and September 30, 2007). By voting in favor of the adoption of the merger agreement, you will be choosing to invest in Celgene common stock. The risks and uncertainties described below and incorporated by reference are not the only ones facing Celgene. If any of the following risks actually occur, Celgene’s business, financial condition or results of operations could be materially adversely affected, the value of Celgene common stock could decline and you could lose all or part of your investment.

 

Failure to complete the merger will subject Pharmion to financial and operational risks and could negatively impact the market price of Pharmion common stock.

 

If the merger is not consummated for any reason, Pharmion will be subject to a number of material risks, including:

 

 

In addition, if the merger agreement is terminated and the board of directors of Pharmion determines to seek another business combination, there can be no assurance that Pharmion will be able to find a partner willing to provide equivalent or more attractive consideration than the consideration to be provided in the merger.

 

Satisfying closing conditions may delay or prevent completion of the merger or affect the combined company in an adverse manner.

 

Completion of the merger is conditioned upon having obtained approval or the applicable waiting period having expired under the antitrust laws of any applicable foreign jurisdiction and the failure to obtain such approvals or to allow such waiting periods to expire would have a material adverse effect on Celgene. Celgene and Pharmion

intend to pursue all required approvals in accordance with the merger agreement. The requirement that these approvals be obtained could delay the completion of the merger for a significant period of time after Pharmion stockholders have approved the merger. Celgene and Pharmion filed notification and report forms under the HSR Act with the FTC and the Antitrust Division on December 3, 2007 and the waiting period under the HSR Act expired on January 2, 2008. In addition, on December 28, 2007, Celgene, on behalf of both parties, advised a foreign governmental agency responsible for regulating competition laws of the proposed merger and the agency cleared the merger on January 25, 2008. Although the waiting period under the HSR Act has expired, and the foreign agency has cleared the merger, at any time before or after the effective time of the merger, the Antitrust Division, the FTC or others, including other foreign government agencies responsible for regulating competition laws, could take action under the antitrust laws with respect to the merger, including seeking to enjoin the consummation of the merger, to rescind the merger, or to require the divestiture of certain assets of Celgene or Pharmion. There can be no assurance that a challenge to the merger on antitrust grounds will not be made or, if such a challenge is made, that it would not be successful.

 

The value of the shares of Celgene common stock that Pharmion stockholders receive in the merger could vary as a result of fluctuations in the price of Celgene common stock.

 

At the effective time of the merger, each outstanding share of Pharmion common stock will be converted into the right to receive (i) that number of shares of Celgene common stock equal to the quotient, which we refer to as the exchange ratio, determined by dividing $47.00 by the volume weighted average price per share of Celgene common stock (rounded to the nearest cent) on The Nasdaq Global Select Market for the 15 consecutive trading days ending on (and including) the third trading day immediately prior to the effective time of the merger, or the measurement price; provided, however, that if the measurement price is less than $56.15, each share of Pharmion common stock will be converted into the right to receive 0.8370 shares of Celgene common stock and if the measurement price is greater than $72.93, each share of Pharmion common stock will be converted into the right to receive 0.6445 shares of Celgene Common Stock and (ii) $25.00 in cash, without interest. Accordingly, at the time of the special meeting at which Pharmion stockholders will be asked to approve and adopt the merger agreement, the amount of the stock portion of the merger consideration or the value thereof will not be known. Changes in the price of Celgene common stock may affect the value of the consideration that Pharmion stockholders receive in the merger. If the measurement price is less than $56.15, the value of the stock portion of the merger consideration to be received by Pharmion stockholders will decrease. Variations in the price of Celgene common stock could be the result of changes in the business, operations or prospects of Celgene or Pharmion, market assessments of the likelihood that the merger will be consummated within the anticipated time or at all, general market and economic conditions and other factors which are beyond the control of Celgene or Pharmion. There is no provision in the merger agreement that guarantees a minimum value for the Celgene common stock to be issued at the effective time or that permits Pharmion to terminate the merger agreement if the price of Celgene common stock declines. The measurement price cannot now be determined, since it is a function of the market price of Celgene common stock in the future. If the measurement price is less than $56.15, the merger consideration will be less than $72.00 per share of Pharmion common stock. For example, were the measurement price determined over the 15 trading days ended on February 1, 2008, the measurement price would have been $53.78 and therefore Pharmion stockholders would have been entitled to receive 0.8370 shares of Celgene common stock with a value, based on that measurement price, of $45.01, plus $25.00 in cash, for a total hypothetical merger consideration value of $70.01 per each share of Pharmion common stock.

 

The merger may fail to qualify as a “reorganization” within the meaning of Section 368(a) of the Code.

 

We expect the merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, if as of the date of the closing of the merger, the value of the Celgene common stock to be issued to Pharmion stockholders pursuant to the merger is not less than approximately 40% of the value of the aggregate consideration to be issued in the merger and expected to be paid with respect to shares of Pharmion common stock as to which appraisal rights have been exercised under the DGCL. If, as of the date of the closing of the merger, the value of the Celgene common stock to be issued to Pharmion stockholders pursuant to the merger is less than approximately 40% of the value of the aggregate consideration to be issued in the merger and expected to be paid with respect to shares of Pharmion common stock as to which appraisal rights have been exercised under the DGCL, the merger

will not qualify as a “reorganization,” the tax opinion conditions described under the caption “THE MERGER — Material United States Federal Income Tax Consequences” will be waived and the holders of Pharmion common stock will recognize a taxable gain or loss on the exchange of their shares in the merger.

 

For a more detailed description of the tax consequences of the exchange of Pharmion common stock in the merger, see “THE MERGER — Material United States Federal Income Tax Consequences” beginning on page 57.

 

The market price for Celgene common stock may be affected by factors different from those affecting the market price for Pharmion common stock.

 

Upon the consummation of the merger, holders of Pharmion common stock will become holders of Celgene common stock. Celgene’s businesses differ from those of Pharmion and, accordingly, the results of operations of the combined operations will be affected by factors different from those currently affecting the results of operations of Pharmion. For a discussion of the businesses of Pharmion and Celgene and of certain risk factors to consider in connection with those businesses, see the documents incorporated by reference in this proxy statement/prospectus and referred to under “Where You Can Find More Information” beginning on page 100.

 

The market price of Celgene common stock may decline as a result of the merger.

 

The market price of Celgene common stock may decline as a result of the merger if the integration of Celgene and Pharmion is unsuccessful or takes longer than expected; the perceived benefits of the merger are not achieved as rapidly as anticipated, or to the extent anticipated, by financial analysts or investors; or the effect of the merger on Celgene’s financial results is not consistent with the expectations of financial analysts or investors.

 

The integration of Pharmion and other acquired businesses may present significant challenges to Celgene.

 

Achieving the anticipated benefits of the merger will depend in part upon whether Celgene and Pharmion can integrate their businesses in an efficient and effective manner. In addition, Celgene may acquire additional businesses from time to time. The integration of Pharmion and any future businesses that Celgene may acquire involves a number of risks, including, but not limited to:

 

 

If Celgene cannot successfully integrate Pharmion or other acquired businesses, Celgene may experience material negative consequences to its business, financial condition or results of operations. Successful integration of Pharmion and other acquired businesses will depend on Celgene’s ability to manage these operations, to realize opportunities for revenue growth presented by offerings and expanded geographic market coverage and, to some degree, to eliminate redundant and excess costs. Because of difficulties in combining geographically distant operations, Celgene may not be able to achieve the benefits that it hopes to achieve as a result of the merger.

Celgene may be unable to hire and retain sufficient qualified personnel; the loss of any of its key executive officers could adversely affect Celgene.

 

Celgene believes that its future success will depend in large part on its ability to attract and retain highly skilled, knowledgeable, sophisticated and qualified managerial, professional and technical personnel. In addition, the success of the combined operations after the merger will depend in part upon Celgene’s ability to retain key employees of Pharmion. Key employees may depart because of issues relating to the difficulty of integration or accelerated retirement as a result of change in control severance provisions in their employment agreements with Pharmion. Accordingly, no assurance can be given that Celgene will be able to retain key employees of Pharmion.

 

Pharmion stockholders will have different rights with respect to their stock ownership following the merger.

 

Upon consummation of the merger, Pharmion stockholders will become stockholders of Celgene. There are material differences between the rights of stockholders of Pharmion and the rights of stockholders of Celgene. See “Comparative Rights of Celgene and Pharmion Stockholders” beginning on page 80.

 

The merger agreement limits Pharmion’s ability to pursue alternatives to the merger.

 

The merger agreement contains “no shop” provisions that, subject to limited exceptions, preclude Pharmion, whether directly or indirectly through affiliates or other representatives, from soliciting, initiating, knowingly encouraging or taking any other action to facilitate the submission of any acquisition proposal or participating in or knowingly encouraging any discussion or negotiations regarding, or furnishing to any person any information with respect to, or knowingly facilitating or taking any other action with respect to any acquisition proposal (or any proposal reasonably likely to lead to an acquisition proposal). The merger agreement also provides that Pharmion will be required to pay a termination fee of $70 million to Celgene upon termination of the merger agreement under certain circumstances. These provisions might discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of Pharmion from considering or proposing an acquisition even if it were prepared to pay consideration with a higher per share market price than that proposed in the merger, or might result in a potential competing acquirer proposing to pay a lower per share price to acquire Pharmion than it might otherwise have proposed to pay.

 

Pharmion executive officers and directors have financial interests in the merger that may be different from, or in addition to, the interests of Pharmion stockholders.

 

Executive officers of Pharmion negotiated the terms of the merger agreement with their counterparts at Celgene, and the board of directors of Pharmion approved the merger agreement and unanimously recommended that Pharmion stockholders vote to approve the merger. In considering these facts and the other information contained in this proxy statement/prospectus, you should be aware that Pharmion’s executive officers and directors have financial interests in the merger that may be different from, or in addition to, the interests of Pharmion stockholders. For a detailed discussion of the special interests that Pharmion’s directors and executive officers may have in the merger, please see the section captioned “THE MERGER — Interests of Certain Persons in the Merger” beginning on page 49.

 

The price of Celgene common stock may fluctuate significantly, which may make it difficult for you to sell the common stock when you want or at prices you find attractive.

 

There has been significant volatility in the market prices for publicly traded shares of biopharmaceutical companies, including shares of Celgene common stock. Celgene expects that the market price of its common stock will continue to fluctuate. The price of Celgene common stock fluctuated from a high of $75.44 per share to a low of $41.26 per share in 2007. The price of Celgene common stock may not remain at or exceed current levels. The following key factors may have an adverse impact on the market price of Celgene common stock:

 

 

 

In addition, the stock market in general and the biotechnology sector in particular have experienced extreme volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations may adversely affect the market price of Celgene common stock.

 

The number of shares of Celgene common stock eligible for future sale could adversely affect the market price of Celgene common stock.

 

Future sales of substantial amounts of Celgene common stock or debt or other securities convertible into common stock could adversely affect the market price of Celgene common stock. As of December 31, 2007, there were outstanding stock options and warrants to purchase 33,096,086 shares of Celgene common stock, of which 22,320,094 were then vested and exercisable at an exercise price of between $0.04 per share and $73.55 per share, with a weighted average exercise price of $19.25 per share. In addition, in June 2003, Celgene issued $400.0 million of unsecured convertible notes that are currently convertible into 16,227,441 shares of Celgene common stock at conversion price of $12.1125. These notes will mature in June 2008. The conversion of some or all of these notes will dilute the ownership interest of Celgene stockholders. In addition, Celgene will issue (assuming the merger is consummated in March 2008) between approximately 24,320,000 and 31,587,000 shares of Celgene common stock in the merger, all of which may be immediately resold.

 

This section contains information for Pharmion stockholders about the special meeting of Pharmion stockholders being held to consider and vote upon:

 

 

Together with this proxy statement/prospectus, Pharmion is also sending you a notice of the special meeting of Pharmion stockholders and a form of proxy that is being solicited by the board of directors of Pharmion for use at the special meeting of Pharmion stockholders. The information and instructions contained in this section are addressed to Pharmion stockholders and all references to “you” in this section should be understood to be addressed to Pharmion stockholders.

 

This proxy statement/prospectus is being furnished by the board of directors of Pharmion in connection with the solicitation of proxies from holders of Pharmion common stock for use at the special meeting of Pharmion stockholders to be held at the Omni Interlocken Resort, 500 Interlocken Boulevard, Broomfield, Colorado on March 6, 2008, beginning at 8:30 a.m., local time, and at any adjournment of the special meeting of Pharmion stockholders.

 

The special meeting of Pharmion stockholders will be held to consider and vote upon a proposal to adopt and approve the merger agreement and approve the merger.

 

THE BOARD OF DIRECTORS OF PHARMION HAS DETERMINED AND BELIEVES THAT THE MERGER AGREEMENT AND THE MERGER ARE FAIR TO, ADVISABLE FOR, AND IN THE BEST INTERESTS OF, PHARMION AND ITS STOCKHOLDERS AND HAS APPROVED SUCH ITEMS. THE BOARD OF DIRECTORS OF PHARMION UNANIMOUSLY RECOMMENDS THAT PHARMION STOCKHOLDERS VOTE “FOR” PROPOSAL NO. 1 TO APPROVE AND ADOPT THE MERGER AGREEMENT AND APPROVE THE MERGER.

 

THE BOARD OF DIRECTORS OF PHARMION UNANIMOUSLY RECOMMENDS THAT PHARMION STOCKHOLDERS VOTE “FOR” PROPOSAL NO. 2 TO APPROVE THE POSSIBLE ADJOURNMENT OF THE SPECIAL MEETING OF PHARMION STOCKHOLDERS.

 

The board of directors of Pharmion has fixed February 4, 2008 as the record date. Only stockholders of record of Pharmion common stock on the books of Pharmion as of the close of business on the record date will be entitled to notice of, and to vote at, the special meeting of Pharmion stockholders and any adjournments of the special meeting of Pharmion stockholders. At the close of business on the record date, there were 37,411,057 shares of Pharmion common stock issued and outstanding held by 46 stockholders of record. The number of record stockholders does not include persons whose stock is held in nominee or “street name” accounts through brokers.

 

A majority of all shares of Pharmion common stock outstanding on the record date, represented in person or by proxy, constitutes a quorum for the transaction of business at the special meeting of Pharmion stockholders. You will be considered part of the quorum if you return a signed and dated proxy card, if you vote by telephone or the Internet, or if you vote in person at the special meeting of Pharmion stockholders. Shares of Pharmion common stock voted by a bank or broker holding shares of Pharmion common stock for a beneficial owner are counted as present and entitled to vote for purposes of determining a quorum. Both abstentions and broker non-votes are treated

as present for the purpose of determining the presence of a quorum. A “broker non-vote” occurs on a proposal when a broker is not permitted to vote on that proposal without instruction from the beneficial owner of the shares and no instruction is given by the beneficial owner. If a quorum is not present at the special meeting of Pharmion stockholders, Pharmion intends to postpone or seek to adjourn the special meeting to solicit additional proxies.

 

Each holder of Pharmion common stock will be entitled to one vote, in person or by proxy, for each share of Pharmion common stock registered in the holder’s name on the books of Pharmion as of the record date on any matter submitted for the vote of Pharmion stockholders. Proposal No. 1 to approve and adopt the merger agreement and approve the merger will be approved if a majority of the outstanding shares of Pharmion common stock entitled to vote at the special meeting of Pharmion stockholders is voted in favor of such proposal. Your shares may be voted at the special meeting only if you are present or represented by a valid proxy. Proposal No. 2 to adjourn the special meeting, if necessary, to solicit additional proxies in the event there are not sufficient votes in favor of the approval and adoption of the merger agreement and approval of the merger at the time of the special meeting, will be approved if a majority of the shares present in person or represented by proxy at the special meeting and entitled to vote is voted in favor of such proposal.

 

Failures to vote, abstentions and broker non-votes will have the same effect as a vote against Proposal No. 1. Failures to vote, abstentions and broker non-votes will have no effect on Proposal No. 2. A broker is not permitted to vote on the proposals without instruction from the beneficial owner of the shares of Pharmion common stock held by the broker. Therefore, if your shares of Pharmion common stock are held in an account at a brokerage firm or bank, and you do not provide the broker or bank with instructions on how to vote the shares of Pharmion common stock which you beneficially own in accordance with the instructions received from the brokerage firm or bank, a broker non-vote will occur with respect to those shares of Pharmion common stock.

 

As of the record date, Pharmion’s executive officers and directors, together with their respective affiliates, owned an aggregate of 3,386,358 shares of Pharmion common stock, which is equal to approximately 9.1% of the outstanding shares of Pharmion common stock as of the record date, and Pharmion expects that all such shares will be voted in favor of the merger. In particular, certain executive officers and directors of Pharmion, specifically Brian G. Atwood, M. James Barrett, James C. Blair, Cam L. Garner, Gillian C. Ivers-Read, Patrick J. Mahaffy, Erle T. Mast, Edward McKinley, and Thorlef Spickschen, owning an aggregate of 588,168 shares of Pharmion common stock, which represents approximately 1.6% of all shares entitled to vote at the special meeting, have entered into voting agreements with Celgene pursuant to which such executive officers and directors have agreed to vote their shares in favor of the merger agreement and the merger at the special meeting of Pharmion stockholders and to grant Celgene a proxy to vote their shares at the special meeting. Celgene intends to vote all of these shares in favor of the merger.

 

As of the record date, Celgene owned approximately 1,939,600 shares of Pharmion common stock, which is equal to approximately 5.2% of all shares entitled to vote at the special meeting. Celgene intends to vote all of these shares in favor of the merger.

 

If you are a Pharmion stockholder of record on the record date and you attend the special meeting of Pharmion stockholders, you may vote in person by completing a ballot at the special meeting of Pharmion stockholders even if you already have signed, dated and returned a proxy card. If your shares of Pharmion common stock are held in the name of a broker or nominee, you may not vote your shares of Pharmion common stock in person at the special meeting of Pharmion stockholders unless you obtain a signed proxy from the record holder giving you the right to vote the shares of Pharmion common stock.

 

Pharmion stockholders of record may submit their proxies by mail by completing, signing and dating the enclosed proxy card and returning it in the enclosed prepaid envelope. We recommend you do so promptly to help ensure timely delivery so that your shares may be voted at the special meeting. Your proxy card will instruct the persons named on the

card to vote your shares at the special meeting as you direct on the card. Pharmion stockholders of record may submit their proxies by using the telephone or the Internet. Instructions for voting by using the telephone or the Internet are printed on the proxy voting instructions attached to the proxy card. In order to submit a proxy via the Internet, please have your proxy card available so you can input the required information from the card. The proxy card shows the Internet website address. When you log on to the Internet website address, you will receive instructions on how to proceed with submitting a proxy for your shares. The telephone and Internet proxy submission procedures are designed to authenticate votes cast by use of a personal identification number. These procedures allow Pharmion stockholders to appoint a proxy to vote their shares of Pharmion common stock, and to confirm that their instructions have been properly recorded.

 

Shares Held Through Brokerage Accounts.  If your shares of Pharmion common stock are held in the name of a broker or nominee, you should follow the instructions provided by that broker or nominee on how to direct the voting of your shares of Pharmion common stock.

 

How Proxies Will Be Voted.  All shares of Pharmion common stock represented by proxies properly executed and received by Pharmion before or at the special meeting of Pharmion stockholders will be voted in accordance with the instructions indicated on the proxies. If the proxy is properly completed, signed and returned but no instructions are indicated, the shares of Pharmion common stock will be voted FOR Proposal No. 1, the approval and adoption of the merger agreement and approval of the merger, and the shares of Pharmion common stock will be voted FOR Proposal No, 2, the proposal to adjourn the special meeting of Pharmion stockholders, if necessary.

 

The grant of a proxy will confer discretionary authority on the persons named in the proxy as proxy appointees to vote in accordance with their best judgment on procedural matters incident to the conduct of the Pharmion special meeting. Unless otherwise indicated, proxies which specify a vote against approval and adoption of the merger agreement and approval of the merger will not be voted in favor of any adjournment of the Pharmion special meeting for the purpose of soliciting additional votes in favor of the approval and adoption of the merger agreement and approval of the merger.

 

Revoking Your Proxy.  If you grant a proxy in respect of your shares of Pharmion common stock and then attend the special meeting of Pharmion stockholders, your attendance at the special meeting of Pharmion stockholders, or at any adjournment of the special meeting of Pharmion stockholders, will not automatically revoke your proxy. You can, however, revoke a proxy at any time prior to its exercise by:

 

 

If you hold shares through a broker, trustee or nominee, you must contact your financial institution, broker or nominee for information on how to revoke your proxy or change your vote.

 

Pharmion is conducting this proxy solicitation. In addition to these mailed proxy materials, Pharmion’s directors and employees may also solicit proxies or votes in person, by telephone or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. Pharmion has also retained MacKenzie Partners, Inc., a proxy solicitation firm, to solicit proxies on behalf of Pharmion. Pharmion has agreed to pay MacKenzie Partners, Inc. an estimated fee of $100,000, plus its out-of-pocket expenses in connection with such solicitation of proxies on behalf of Pharmion. Pharmion will bear the costs it incurs in the solicitation of proxies under this proxy statement/prospectus, and will also reimburse brokerage firms, banks and other nominees for their costs in forwarding proxy materials to Pharmion’s beneficial owners.

 

As of the date of this proxy statement/prospectus, the board of directors of Pharmion is not aware of any business to be acted upon at the special meeting of Pharmion stockholders other than as described in this proxy statement/prospectus. A specific proposal has been included on the proxy card to authorize the holder of the proxy to act in accordance with the recommendation of the board of directors of Pharmion with respect to any other matter that may properly come before the special meeting or any adjournment or postponement thereof.

 

In December 2000, the SEC adopted a rule concerning the delivery of proxy materials. The rule allows Pharmion or your broker to send a single set of Pharmion’s proxy materials to any household at which two or more Pharmion stockholders reside, if Pharmion or your broker believes that the stockholders are members of the same family. This practice, referred to as “householding,” benefits both you and Pharmion. It reduces the volume of duplicate information received at your household and helps to reduce Pharmion’s expenses. The rule applies to Pharmion’s annual reports, proxy statements and information statements. Once you receive notice from your broker or from Pharmion that communications to your address will be “householded,” the practice will continue until you are otherwise notified or until you revoke your consent to the practice. Each stockholder will continue to receive a separate proxy card or voting instruction card.

 

If your household received a single set of proxy materials but you would prefer to receive a set for each stockholder, or if you share a household with another stockholder and you received multiple sets of proxy materials and would like to receive only one set, please follow these instructions:

 

 

Only stockholders as of the close of business on the record date, authorized proxy holders and Pharmion’s guests may attend the special meeting. Your name will be verified against the list of stockholders of record on the record date prior to your being admitted to the special meeting. If you are not a stockholder of record but hold shares through a broker, trustee or nominee (i.e., in street name), you should provide proof of beneficial ownership on the record date, such as your most recent account statement prior to February 4, 2008, a copy of the voting instruction card provided by your broker, trustee or nominee, or other similar evidence of ownership. If you do not provide photo identification or comply with the other procedures outlined above, you will not be admitted to the special meeting.

 

Any written revocation of a proxy or demand for appraisal should be addressed to Pharmion Corporation, Attention: Corporate Secretary, 2525 28th Street, Suite 200, Boulder, Colorado 80301. All other communications in connection with this proxy statement/prospectus and any requests for additional copies of this proxy statement and prospectus or the proxy card should be addressed to Pharmion Corporation, Attention: Investor Relations, 2525 28th Street, Suite 200, Boulder, Colorado 80301. If you have any questions or need further assistance in voting your shares of Pharmion common stock, please call Pharmion at (720) 564-9150.

 

Your vote is important. Please sign, date and return your proxy card or submit

your proxy and/or voting instructions by telephone or through the Internet promptly.

 

On November 17, 2006 and November 18, 2007, respectively, each of Pharmion’s and Celgene’s board of directors approved the merger agreement, which provides for the acquisition of Pharmion by Celgene through a merger of Pharmion with Merger Sub, a newly formed and wholly-owned subsidiary of Celgene, with the surviving company remaining a wholly-owned subsidiary of Celgene. Upon consummation of the merger, each share of Pharmion common stock will be converted into the right to receive (i) that number of shares of Celgene common stock equal to the quotient, which we refer to as the exchange ratio, determined by dividing $47.00 by the volume weighted average price per share of Celgene common stock (rounded to the nearest cent) on The Nasdaq Global Select Market for the 15 consecutive trading days ending on (and including) the third trading day immediately prior to the effective time of the merger, which we refer to as the measurement price; provided, however, that if the measurement price is less than $56.15, each share of Pharmion common stock will be converted into the right to receive 0.8370 shares of Celgene common stock and if the measurement price is greater than $72.93, each share of Pharmion common stock will be converted into the right to receive 0.6445 shares of Celgene common stock and (ii) $25.00 in cash, without interest. Pharmion stockholders will not receive any fractional shares of Celgene common stock in the merger. Instead, any stockholder who would otherwise be entitled to a fractional share of Celgene common stock will be entitled to receive an amount in cash (rounded down to the nearest whole cent), without interest, equal to the product of such fraction multiplied by the measurement price.

 

Since 2001, Pharmion and Celgene have been parties to an agreement under which Pharmion has exclusive rights to market Thalidomide Pharmion in all countries other than the United States, Canada, Mexico, Japan and all provinces of China except Hong Kong. In addition, in connection with transactions occurring in 2001 and 2003, Celgene acquired 1,939,600 shares of Pharmion common stock, which represented approximately 5.2% of the outstanding shares of Pharmion common stock as of the record date. See “Certain Relationships Between Celgene and Pharmion” on page 53.

 

During the period from January 2004 to January 2007, representatives of Celgene and Pharmion, from time to time, engaged in a number of informal discussions regarding changes to the then existing relationship between Celgene and Pharmion, including the possibility of Celgene acquiring Pharmion. Celgene consulted with J.P. Morgan Securities Inc. and Merrill Lynch & Co. and discussed retaining them as financial advisors to Celgene with respect to a potential transaction with Pharmion. These discussions between Celgene and Pharmion did not lead to any specific proposals or agreements and were ultimately discontinued.

 

In the first quarter of 2007, Sol Barer, Chairman and Chief Executive Officer of Celgene, called Patrick J. Mahaffy, President and Chief Executive Officer of Pharmion, to discuss the possibility of Celgene acquiring Pharmion. Mr. Mahaffy indicated to Dr. Barer that Pharmion was not actively seeking a sale of the company, but would consider any bona fide, reasonable proposal.

 

In May and June 2007, Pharmion completed a public offering of 4,600,000 shares of its common stock at $30.00 per share.

 

On May 18, 2007, Robert J. Hugin, President and Chief Operating Officer of Celgene, met with Mr. Mahaffy, at a conference in Florence, Italy that each was attending, and indicated that Celgene was still interested in possibly acquiring Pharmion.

 

On August 2, 2007, Pharmion announced topline results from the multi-institutional, international, randomized, Phase 3 controlled trial of Vidaza versus conventional care regimens (CCR) in the treatment of patients with higher- risk myelodysplastic syndromes (MDS).

 

On August 17, 2007, Celgene consulted with J.P. Morgan Securities Inc. and Merrill Lynch & Co. as its financial advisors in connection with the possible acquisition of Pharmion by Celgene.

On August 22, 2007, at a regular meeting of the board of directors of Celgene, the board of directors received reports from Celgene’s management concerning potential acquisition transactions, including a potential transaction with Pharmion. The board of directors encouraged Celgene’s management to pursue a potential transaction with Pharmion.

 

On August 23, 2007, Dr. Barer, Mr. Hugin and Mr. Mahaffy met in New York City. At this meeting Dr. Barer reiterated Celgene’s interest in possibly acquiring Pharmion and conveyed a non-binding expression of interest for Celgene to acquire all of the outstanding shares of Pharmion common stock in a merger transaction at $57 per share of Pharmion common stock.

 

Thereafter, Pharmion contacted Banc of America Securities, an investment banking firm with which Pharmion had worked in the past, to act as its financial advisor in connection with the possible acquisition of Pharmion by Celgene.

 

On August 24, 2007, Pharmion received a letter from Celgene confirming the non-binding expression of interest for Celgene to acquire all of the outstanding shares of Pharmion common stock in a merger transaction at $57 per share of Pharmion common stock. Mr. Mahaffy promptly contacted the members of Pharmion’s board of directors to advise them of this offer, and he indicated that a meeting of the board would be convened to discuss this offer.

 

On September 15, 2007, at a special meeting of the board of directors of Pharmion, Mr. Mahaffy formally presented to the directors the offer made by Celgene to acquire Pharmion. After discussing the offer, the board of directors of Pharmion determined that Celgene’s offer significantly undervalued Pharmion. Mr. Mahaffy conveyed such determination of the board of directors to Dr. Barer by letter dated September 17, 2007. In addition, the board of directors of Pharmion discussed whether to conduct a sale process for Pharmion at such time and concluded that an auction process would not be in the best interests of Pharmion or its stockholders as it was likely to become known within Pharmion and could significantly damage ongoing efforts inside Pharmion to complete key regulatory processes and to begin the process of augmenting Pharmion’s sales force in anticipation of the receipt of European marketing approval for thalidomide and ultimately Vidaza as well. The board of directors of Pharmion also determined that, given Celgene’s repeated indications of interest in acquiring Pharmion, it was worth exploring whether Celgene would be prepared to make an offer that might be considered compelling. Accordingly, the board of directors instructed Mr. Mahaffy to advise Dr. Barer that Pharmion was not prepared to engage in further discussions with Celgene regarding an acquisition of Pharmion at offers that valued Pharmion below $70 per share of Pharmion common stock, which Mr. Mahaffy conveyed to Dr. Barer in a telephone conversation the following day.

 

From September 17, 2007 to October 14, 2007, Mr. Mahaffy, Erle T. Mast, Chief Financial Officer of Pharmion, Dr. Barer and Mr. Hugin engaged in a number of conversations and meetings regarding the possible acquisition of Pharmion by Celgene. During these conversations and meetings Mr. Mahaffy and Mr. Mast shared with Dr. Barer and Mr. Hugin certain non-confidential information about the business, operations and products of Pharmion. They also shared their views, based on public information, concerning product development activities involving both Pharmion products and the products of third parties that compete with Pharmion, including the probable outcomes of ongoing clinical trials of competing products.

 

On September 27, 2007, Mr. Mahaffy received a call from an executive officer of another pharmaceutical company during which conversation that executive officer expressed an interest in engaging in discussions with Pharmion on a range of possible business relationships, including a potential acquisition of Pharmion by such other pharmaceutical company. Mr. Mahaffy indicated that Pharmion was not actively seeking a sale of the company, but would consider a proposal of $70 or more per share of Pharmion common stock. Pharmion did not receive a specific indication of interest from this other pharmaceutical company, nor did it receive a request from it for confidential information or to conduct a due diligence investigation of Pharmion.

 

On October 11, 2007, at a regular meeting of the board of directors of Celgene, the board of directors received a report of the prior discussions between the managements of Celgene and Pharmion and preliminarily discussed the potential acquisition of Pharmion. The board of directors instructed Celgene’s management to continue to engage in discussions with Pharmion’s management concerning the potential acquisition.

On October 14, 2007, Dr. Barer called Mr. Mahaffy to convey a non-binding expression of interest for Celgene to acquire all of the outstanding shares of Pharmion common stock in a merger transaction in the range of $69 to $75 per share of Pharmion common stock payable in an unspecified combination of cash and shares of Celgene common stock. Celgene was able to increase its range based in part on information and views conveyed to Celgene by Pharmion. Dr. Barer indicated that Celgene believed that it could further refine this proposal only if it were permitted to conduct confirmatory due diligence under a confidentiality agreement.

 

On October 14, 2007, at a special meeting of the board of directors of Pharmion at which representatives of Pharmion’s management and legal and financial advisors were present, Mr. Mahaffy informed the directors about his conversations with Dr. Barer regarding Celgene’s latest expression of interest to acquire Pharmion. The board of directors of Pharmion authorized Mr. Mahaffy to engage in discussions with representatives of Celgene regarding a possible transaction along the parameters proposed by Celgene, but expressed its belief that it was important to have increased certainty as to the value of the merger consideration to be received by the stockholders of Pharmion at closing and, in that light, specifically directed Mr. Mahaffy to negotiate for (i) a significant portion of the merger consideration to be payable in cash, (ii) a “collar” around the stock portion of the merger consideration and (iii) a “walk-away” right if the trading price of Celgene common stock should significantly decrease during the time between signing and closing of the transaction. In addition, recognizing that the antitrust clearance process may take several months, during which time Pharmion would be constrained in implementing its expansion and marketing plans, the board of directors of Pharmion directed Mr. Mahaffy to negotiate for a “reverse termination fee” in case the transaction did not receive antitrust clearance by some outside date. In addition, the board of directors of Pharmion again discussed whether to conduct a sale process for Pharmion and again concluded that an auction process would not be in the best interests of Pharmion or its stockholders for the same reasons as outlined above and would also risk the withdrawal of Celgene’s offer or an adverse change in such offer in the context of an auction. The board of directors of Pharmion also believed that it could negotiate for a sufficiently modest termination fee under the merger agreement that would not unreasonably deter another potential bidder from considering a transaction with Pharmion at a higher price. After this meeting of the board of directors of Pharmion, Mr. Mahaffy called Dr. Barer and conveyed to Dr. Barer the discussions that had taken place at the meeting of the board of directors of Pharmion. Mr. Mahaffy and Dr. Barer agreed to pursue further discussions both directly and through their respective representatives and to begin a due diligence review of the business and operations of the other.

 

On October 17, 2007, Pharmion and Celgene entered into a mutual confidentiality agreement and each of Celgene and Pharmion began sharing confidential information with the other as part of each company’s due diligence review of the other. As part of the due diligence process, the senior management of each of Pharmion and Celgene made presentations to the other and their respective advisors.

 

On October 18, 2007, Proskauer Rose LLP, counsel to Celgene, provided to Willkie Farr & Gallagher LLP, counsel to Pharmion, an initial draft of the merger agreement.

 

On October 22, 2007, Willkie Farr provided a revised draft of the merger agreement to Proskauer Rose. Thereafter, Willkie Farr and Proskauer Rose had numerous conversations concerning the terms of the merger agreement.

 

On October 24, 2007, at a regular meeting of the board of directors of Pharmion, Mr. Mahaffy updated the directors as to the status of negotiations with Celgene and discussed certain diligence items and contract issues that were still under negotiation.

 

From October 24, 2007 to November 16, 2007, the parties, together with their respective outside counsel and financial advisors, engaged in negotiations of the merger agreement, voting agreement and other related documentation, including with respect to representations and warranties, interim operating covenants, non-solicitation of alternative transactions, conditions to closing, termination rights, including a “walk-away” right in the event the trading price of Celgene common stock should significantly decline during the time between signing and closing of the transaction, and termination fees, including a “reverse termination fee” in case the transaction did not receive antitrust clearance by some outside date. During this period, final agreement on these and other issues was reached over the course of numerous discussions involving Mr. Mahaffy, Mr. Mast and Steven N. Dupont, General Counsel of Pharmion, on the one hand, and Dr. Barer, Mr. Hugin and David W. Gryska, Chief Financial Officer of Celgene,

on the other hand, and the companies’ respective legal and financial advisors. In addition, during this period, the parties continued their respective due diligence reviews of the business and operations of the other.

 

On November 1, 2007, Dr. Barer and Mr. Hugin met with Mr. Mahaffy, Mr. Mast and Mr. Dupont in Boulder, Colorado to discuss certain diligence items.

 

On November 2, 2007, the board of directors of Pharmion held a telephonic meeting to discuss the status of negotiations with Celgene.

 

On November 5, 2007, Dr. Barer, Mr. Hugin and David W. Gryska, Chief Financial Officer of Celgene, met with Mr. Mahaffy, Mr. Mast and Mr. Dupont in Short Hills, New Jersey to discuss the key outstanding issues in the draft merger agreement, certain diligence items and employee related matters.

 

On November 6, 2007, Mr. Mahaffy, Mr. Dupont and representatives from Willkie Farr met with Dr. Barer, Mr. Hugin and representatives from Proskauer Rose and Arnold & Porter at the offices of Proskauer Rose to discuss certain potential antitrust issues related to the proposed merger.

 

On November 8, 2007, the board of directors of Pharmion held a telephonic meeting to discuss the status of negotiations with Celgene.

 

On November 16, 2007, Dr. Barer, Mr. Hugin, Mr. Mahaffy, Mr. Mast and Mr. Dupont, together with the companies’ respective legal and financial advisors, met at the offices of Willkie Farr to finalize the terms of the merger agreement and to resolve outstanding due diligence matters. At this meeting, Pharmion’s legal advisors reported to Celgene and its advisors that two funds affiliated with certain of Pharmion’s directors would not execute the voting agreement in the absence of a Pharmion “walk-away” right in the event the trading price of Celgene common stock should significantly decline during the time between signing and closing of the transaction. The merger agreement did not contain such a “walk-away” right and the two funds did not execute the voting agreement.

 

On November 17, 2007, the board of directors of Pharmion convened in person at the offices of Willkie Farr to discuss the merger agreement. Representatives of Willkie Farr were present to answer questions from the members of the board of directors relating to the merger agreement and the collateral documents. Representatives of Banc of America Securities were also present for portions of the meeting. Banc of America Securities reviewed with the board of directors of Pharmion its financial analysis of the per share merger consideration and delivered to the board of directors of Pharmion an oral opinion, which was confirmed by delivery of a written opinion dated November 17, 2007, to the effect that, as of that date and based on and subject to various assumptions and limitations described in its opinion, the per share merger consideration to be received by holders of Pharmion common stock (other than Celgene, Merger Sub and their respective affiliates) was fair, from a financial point of view, to such holders. The board of directors of Pharmion unanimously approved the merger agreement and the transactions contemplated thereby, including the merger.

 

On November 18, 2007, the board of directors of Celgene convened a special meeting of the board at the offices of Celgene to consider the merger agreement. Representatives of Proskauer Rose, J.P. Morgan Securities Inc. and Merrill Lynch & Co. were present to advise the members of the board of directors with respect to the merger agreement and the collateral documents. The board of directors of Celgene reviewed, among other matters, Celgene’s management’s business rationale for the acquisition of Pharmion, the results of Celgene’s due diligence review of information provided by Pharmion, financial analyses concerning the merger consideration, and the terms of the merger agreement. The board of directors of Celgene and the manager of Merger Sub unanimously approved the merger agreement and the transactions contemplated thereby, including the merger.

 

On the evening of November 18, 2007, Pharmion, Celgene and Merger Sub executed and delivered the merger agreement. Following the execution and delivery of the merger agreement, Pharmion and Celgene issued a joint press release announcing the execution of the merger agreement.

 

In evaluating the merger agreement and the merger, the board of directors of Pharmion consulted with Pharmion’s management and legal and financial advisors and, in reaching its decision to approve the merger agreement and to recommend that Pharmion stockholders vote for the approval and adoption of the merger

agreement and the merger, the board of directors of Pharmion considered a variety of factors supporting the approval of the merger, including the following:

 

 

 

 

 

 

 

 

The board of directors of Pharmion also considered the following factors supporting the procedural fairness of the merger, including the following:

 

 

The board of directors of Pharmion also considered a variety of risks and other potentially negative factors, including the following:

 

 

 

The board of directors of Pharmion considered all of the foregoing factors as a whole and concluded that such factors supported a favorable determination to approve and adopt the merger agreement and to recommend the merger agreement to the Pharmion stockholders.

 

The foregoing discussion of the information and factors discussed by the board of directors of Pharmion is not exhaustive but does include the material factors considered by the board of directors of Pharmion. The board of directors of Pharmion did not quantify or assign any relative or specific weight to the various factors that it considered. Rather, the board of directors of Pharmion considered and based its recommendation on the totality of the information presented to it. In addition, individual members of the board of directors of Pharmion may have given no weight or different weights to different factors.

 

Pharmion has retained Banc of America Securities to act as Pharmion’s financial advisor in connection with the merger. Banc of America Securities is an internationally recognized investment banking firm which is regularly

engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. Pharmion selected Banc of America Securities to act as Pharmion’s financial advisor in connection with the merger on the basis of Banc of America Securities’ experience in transactions similar to the merger, its reputation in the investment community and its familiarity with Pharmion and its business.

 

On November 17, 2007, at a meeting of the board of directors of Pharmion held to evaluate the merger, Banc of America Securities delivered to the board of directors of Pharmion an oral opinion, which was confirmed by delivery of a written opinion dated November 17, 2007, to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations described in its opinion, the per share merger consideration to be received by holders of Pharmion common stock (other than Celgene, Merger Sub and their respective affiliates) was fair, from a financial point of view, to such holders.

 

The full text of Banc of America Securities’ written opinion to the board of directors of Pharmion, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex D to this proxy statement/prospectus and is incorporated by reference in its entirety into this proxy statement/prospectus. The following summary of Banc of America Securities’ opinion is qualified in its entirety by reference to the full text of the opinion. Banc of America Securities delivered its opinion to the board of directors of Pharmion for the benefit and use of the board of directors of Pharmion in connection with and for purposes of its evaluation of the merger consideration from a financial point of view. Banc of America Securities’ opinion does not address any other aspect of the merger and does not constitute a recommendation to any stockholder as to how to vote or act in connection with the proposed merger.

 

In connection with rendering its opinion, Banc of America Securities:

 

 

 

In arriving at its opinion, Banc of America Securities assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information reviewed by it. With respect to the Pharmion forecasts, Banc of America Securities assumed, at Pharmion’s direction, that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of Pharmion’s management as to Pharmion’s future financial performance. Banc of America Securities was not provided with, and did not have access to, any financial forecasts of Celgene prepared by Celgene’s management. Accordingly, based upon discussions with Celgene’s management concerning Celgene and at Pharmion’s direction, Banc of America Securities assumed that the Celgene research analysts’ estimates were a reasonable basis upon which to evaluate the future financial performance of Celgene and used such estimates in performing its analysis.

 

Banc of America Securities relied, at Pharmion’s direction, upon the assessments of senior executives of Pharmion and Celgene as to the products and product candidates of Pharmion and Celgene, including, without limitation, the probability of successful testing, development and marketing and approval by appropriate governmental authorities of, and the potential impact of competition on, such products and product candidates. Banc of America Securities did not make any independent valuation or appraisal of the assets or liabilities, contingent or otherwise, of Pharmion or Celgene, and Banc of America Securities was not furnished with any such valuations or appraisals. Banc of America Securities assumed, at Pharmion’s direction, that the merger would qualify for federal income tax purposes as a reorganization under the provisions of Section 368(a) of the Code. Banc of America Securities also assumed, at Pharmion’s direction, that the final executed agreement would not differ in any material respect from the draft agreement reviewed by Banc of America Securities, and that the merger would be consummated as provided in the draft agreement with full satisfaction of all covenants and conditions set forth in the draft agreement and without any waivers. Banc of America Securities further assumed, with Pharmion’s consent, that all governmental and third party consents and approvals necessary for the consummation of the merger would be obtained without any adverse effect on Pharmion, Celgene or the merger.

 

Banc of America Securities expressed no view or opinion as to any terms or aspects of the merger (other than the per share merger consideration to the extent expressly specified in its opinion), including, without limitation, the form or structure of the merger or the merger consideration. Banc of America Securities was not requested to, and did not, solicit indications of interest or proposals from third parties regarding the acquisition of all or a portion of Pharmion. In addition, no view or opinion was expressed as to the relative merits of the merger in comparison to other transactions available to Pharmion or in which Pharmion might engage or as to whether any transaction might be more favorable to Pharmion as an alternative to the merger, nor did Banc of America Securities express any opinion as to the underlying business decision of the board of directors of Pharmion to proceed with or effect the merger. Banc of America Securities did not express any opinion as to what the value of Celgene common stock actually would be when issued or the prices at which Pharmion common stock or Celgene common stock might trade at any time. Except as described above, Pharmion imposed no other limitations on the investigations made or procedures followed by Banc of America Securities in rendering its opinion.

 

Banc of America Securities’ opinion was necessarily based on economic, market and other conditions as in effect on, and the information made available to Banc of America Securities as of, the date of its opinion. Accordingly, although subsequent developments may affect its opinion, Banc of America Securities did not assume any obligation to update, revise or reaffirm its opinion.

 

The following represents a brief summary of the material financial analyses presented by Banc of America Securities to the board of directors of Pharmion in connection with its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by Banc of America Securities, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by Banc of America Securities. Considering the data set forth in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the

analyses, could create a misleading or incomplete view of the financial analyses performed by Banc of America Securities. For purposes of the “Pharmion Financial Analyses” summarized below, the “per share merger consideration” refers to the $72.00 implied per share value of the merger consideration based on the $25.00 per share cash portion of the merger consideration and the implied per share value of the stock portion of the merger consideration on November 16, 2007 of $47.00.

 

Pharmion Financial Analyses

 

Selected Publicly Traded Companies Analysis.  Banc of America Securities reviewed publicly available financial and stock market information for Pharmion and the following 13 publicly traded biopharmaceutical and biotechnology companies:

 

 

Banc of America Securities reviewed, among other things, per share equity values, based on closing stock prices on November 16, 2007, of the selected publicly traded companies as a multiple of calendar year 2009 estimated earnings per share, commonly referred to as EPS. Banc of America Securities also reviewed enterprise values of the selected publicly traded companies, calculated as equity values based on closing stock prices on November 16, 2007, plus debt, less cash, as a multiple of calendar years 2007 and 2008 estimated revenue. Banc of America Securities then applied a range of selected multiples of calendar year 2009 estimated EPS derived from the selected publicly traded companies to Pharmion’s estimated calendar years 2009 and 2010 estimated EPS (discounted one year, in the case of calendar year 2010 estimated EPS, by applying a discount rate of 15.0%) and applied a range of selected multiples of calendar years 2007 and 2008 estimated revenue derived from the selected publicly traded companies to corresponding data of Pharmion. Estimated financial data of the selected publicly traded companies were based on publicly available research analysts’ estimates. Estimated financial data of Pharmion were based on the Pharmion forecasts. This analysis indicated the following implied per share equity value reference ranges for Pharmion, as compared to the per share merger consideration:

 

 

No company used in this analysis is identical or directly comparable to Pharmion. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the public trading or other values of the companies to which Pharmion was compared.

Selected Precedent Transactions Analysis.  Banc of America Securities reviewed, to the extent publicly available, financial information relating to the following 18 selected transactions involving biopharmaceutical and biotechnology companies: