Celgene Corp. (NASDAQ:CELG)

Acquired Developed Product Rights

Remained constant at US$ 3,406 million throughout the observed period from 2014 to 2018, showing no change over time.

Technology

Exhibited variability with an initial increase from US$ 334 million in 2014 to US$ 566 million in 2015, a decline to US$ 483 million in 2016 and 2017, followed by a substantial rise to US$ 1,743 million in 2018.

Licenses

Remained relatively stable over the five years, with a slight decrease from US$ 67 million in 2014-2016 to US$ 66 million in 2017 and 2018.

Other Intangible Assets

Displayed minor fluctuations, beginning at US$ 43 million in 2014 and 2016-2017, marginally increasing to US$ 44 million in 2015 and reaching US$ 54 million by 2018.

Amortizable Intangible Assets, Gross Carrying Value

Rose from US$ 3,849 million in 2014 to a peak of US$ 4,082 million in 2015, then experienced a slight decline to US$ 3,999 million in 2016 and US$ 3,998 million in 2017, before significantly increasing to US$ 5,269 million in 2018.

Accumulated Amortization

Demonstrated a consistent upward trend in absolute value, increasing from a negative US$ 1,410 million in 2014 to negative US$ 2,887 million in 2018, indicating ongoing amortization expenses over the years.

Amortizable Intangible Assets, Net

Depicted a declining trend from US$ 2,439 million in 2014 to US$ 1,585 million in 2017, followed by an appreciable recovery to US$ 2,382 million in 2018, corresponding with the rise in gross carrying value.

Acquired IPR&D Product Rights (Non-amortized Intangible Assets)

Experienced substantial growth, beginning at US$ 1,629 million in 2014, surging to US$ 8,471 million in 2015 and 2016, then declining to US$ 6,851 million in 2017, before sharply increasing to US$ 13,831 million in 2018.

Intangible Assets, Net

Increased notably from US$ 4,068 million in 2014 to US$ 10,858 million in 2015, followed by a slight decrease through 2016 and 2017 to US$ 8,436 million, then rose again significantly to US$ 16,213 million in 2018.

Goodwill

Marked a strong upward movement, growing from US$ 2,191 million in 2014 to US$ 4,879 million in 2015, stabilizing near that level through 2017, and then experiencing a significant rise to US$ 8,003 million in 2018.

Intangible Assets and Goodwill Combined

Showed substantial growth overall, increasing from US$ 6,259 million in 2014 to US$ 15,737 million in 2015, followed by a gradual decline to US$ 13,302 million in 2017, before escalating markedly to US$ 24,216 million in 2018.

Reported Total Assets

The reported total assets of the company showed a consistent upward trend from 2014 to 2018. Starting at US$17,340 million in 2014, there was a significant increase to US$27,053 million in 2015. Following this, the asset base continued to grow each year, reaching US$35,480 million by the end of 2018. This indicates substantial expansion in the company's asset holdings over the five-year period.

Adjusted Total Assets

Adjusted total assets, which exclude goodwill, followed a similar upward trajectory but at a consistently lower level compared to reported total assets. Values rose from US$15,149 million in 2014 to US$27,477 million in 2018. While the growth pattern aligns with the reported figures, the gap between reported and adjusted total assets widened somewhat, suggesting that goodwill and intangible assets represent a growing portion of total assets over time.

Reported Stockholders’ Equity

Reported stockholders’ equity exhibited fluctuations over the period under review. Beginning at US$6,525 million in 2014, equity decreased to US$5,919 million in 2015, then increased to US$6,599 million in 2016 and reached a peak of US$6,921 million in 2017. However, it declined again to US$6,161 million in 2018. Overall, this shows some volatility in equity capital, with a moderate downward trend in the latter years.

Adjusted Stockholders’ Equity

In contrast, adjusted stockholders’ equity, which likely removes goodwill or intangible asset effects, presented a markedly different trend. Starting at US$4,334 million in 2014, it sharply declined to US$1,040 million in 2015. Although there was a slight recovery to US$1,734 million in 2016 and US$2,055 million in 2017, the metric turned negative, reaching -US$1,842 million in 2018. This negative equity figure suggests that when goodwill and intangible assets are excluded, the company’s net asset value is substantially impaired, indicating potential concerns about the sustainability of its equity base without accounting for goodwill.

Total Asset Turnover

The reported total asset turnover exhibited a declining trend from 0.44 in 2014 to 0.34 in 2015, followed by a recovery to 0.40 in 2016, and then a stabilization around 0.43 in 2017 and 2018. The adjusted total asset turnover, which accounts for goodwill, follows a similar pattern but at generally higher levels, starting at 0.50 in 2014, dipping to 0.41 in 2015, then increasing steadily to reach 0.56 in 2018. This suggests that when goodwill is excluded, the turnover of assets appears more efficient and shows an improving trend in more recent years.

Financial Leverage

Reported financial leverage rose significantly from 2.66 in 2014 to 4.57 in 2015, remained relatively stable around 4.3 in 2016 and 2017, then increased sharply to 5.76 in 2018. Adjusted financial leverage, however, shows extreme volatility: it jumped from 3.5 in 2014 to a very high 21.32 in 2015, then declined to 13.39 in 2016 and further to 12.3 in 2017, with no data available for 2018. This fluctuation likely indicates the impact of goodwill adjustments on leverage ratios, reflecting substantial changes in the capital structure or asset base relative to equity after excluding goodwill.

Return on Equity (ROE)

Reported ROE reveals an upward trajectory, increasing from 30.65% in 2014 to 65.67% in 2018, with a noticeable spike in 2017 (42.48%) and 2018. The adjusted ROE, which removes goodwill effects, is markedly higher and more erratic. It surged from 46.15% in 2014 to an exceptional peak of 154.04% in 2015, then decreased to 115.33% in 2016, and rose again to 143.07% in 2017, with no data available for 2018. This suggests that the company's profitability relative to equity, excluding goodwill, has been extremely high but volatile, possibly due to adjustments that influence equity base size and net income.

Return on Assets (ROA)

The reported ROA increased steadily from 11.53% in 2014 to 11.4% in 2018, despite a drop to 5.92% in 2015. After this dip, ROA gradually improved year over year. The adjusted ROA follows a similar pattern but at higher levels, beginning at 13.2% in 2014 and rising consistently to 14.73% in 2018. The data indicates an overall improvement in asset profitability over the period, more pronounced when goodwill is excluded.

The analysis of the financial data over the five-year period reveals several significant trends in asset values and efficiency ratios.

Total Assets

Reported total assets showed a consistent upward trend, increasing from US$17,340 million at the end of 2014 to US$35,480 million by the end of 2018. This nearly doubled the reported asset base over the period, indicating substantial growth in the company's asset holdings.

Adjusted total assets, which exclude goodwill, similarly exhibited growth, rising from US$15,149 million in 2014 to US$27,477 million in 2018. Although the adjusted asset base is lower than the reported total assets, the upward trajectory mirrors the reported figures, confirming the expansion of core asset investments beyond intangible assets.

Total Asset Turnover Ratios

The reported total asset turnover ratio declined from 0.44 in 2014 to 0.34 in 2015, suggesting reduced efficiency in generating sales from asset investments during that interval. However, the ratio recovered steadily thereafter, reaching 0.43 by 2017 and remaining stable through 2018. This pattern points to an initial dip followed by improvement in asset utilization efficiency on a reported basis.

The adjusted total asset turnover showed a similar initial decline from 0.5 in 2014 to 0.41 in 2015 but demonstrated a stronger recovery in subsequent years. It rose consistently, reaching 0.56 in 2018, surpassing the 2014 level. This improvement indicates increasing efficiency when goodwill is excluded, signifying stronger core asset productivity over time.

Overall, the data reflects robust asset growth coupled with improving efficiency in the use of adjusted assets to generate revenue. The more pronounced improvement in the adjusted asset turnover ratio suggests that the company's tangible and operational assets have become more effective in supporting sales, even as the total asset base expanded significantly.

Total Assets

Reported total assets show a consistent upward trend, increasing from US$17,340 million in 2014 to US$35,480 million in 2018. Similarly, adjusted total assets—excluding goodwill—also rose steadily from US$15,149 million in 2014 to US$27,477 million in 2018, indicating overall growth in asset base even after adjusting for intangible assets.

Stockholders’ Equity

Reported stockholders’ equity demonstrated moderate fluctuations over the period, beginning at US$6,525 million in 2014, dipping to US$5,919 million in 2015, peaking at US$6,921 million in 2017, before declining to US$6,161 million in 2018. In contrast, the adjusted stockholders’ equity, which excludes goodwill, displayed significant volatility and an overall negative trend, starting at US$4,334 million in 2014, sharply decreasing to US$1,040 million in 2015, slightly recovering through 2017, but ultimately falling to a negative value of US$-1,842 million by 2018. This negative adjusted equity in 2018 suggests substantial goodwill impairment or other intangible asset amortizations impacting net assets negatively.

Financial Leverage

The reported financial leverage ratio increased notably from 2.66 in 2014 to 5.76 in 2018, indicating a rising proportion of debt relative to equity during the period. The adjusted financial leverage, calculated excluding goodwill, exhibited extreme variability, increasing drastically from 3.5 in 2014 to an unusually high 21.32 in 2015, then decreasing to 13.39 in 2016 and 12.3 in 2017. Data for 2018 was not provided. This high adjusted leverage ratio reflects the impact of significantly reduced adjusted equity and suggests elevated financial risk when goodwill is excluded from the capital structure.

Stockholders' Equity Trends

The reported stockholders' equity showed moderate fluctuations over the five-year span, beginning at 6,525 million USD in 2014 and decreasing to 5,919 million USD in 2015. The value then increased to 6,599 million USD in 2016, further rising slightly to 6,921 million USD in 2017 before declining again to 6,161 million USD in 2018. Overall, the reported equity maintained a relatively stable range with some volatility, finishing slightly below the initial 2014 value.

In contrast, the adjusted stockholders' equity exhibited significant volatility and a pronounced downward trend. Starting at 4,334 million USD in 2014, it sharply dropped to 1,040 million USD in 2015, then recovered somewhat to 1,734 million USD in 2016 and increased marginally to 2,055 million USD in 2017. However, 2018 saw a substantial decline to a negative equity balance of -1,842 million USD, indicating potential impairment or adjustments negatively impacting net asset value.

Return on Equity (ROE) Analysis

The reported ROE demonstrated a general upward trajectory with some oscillation. Beginning at 30.65% in 2014, it slightly decreased to 27.07% in 2015, before rising again to 30.29% in 2016. There was a notable increase in 2017 to 42.48%, culminating in a pronounced spike to 65.67% in 2018. This pattern suggests improving profitability relative to reported equity, with the most substantial gains occurring in the latter two years.

Adjusted ROE values were considerably higher than reported ROE throughout the observed period, starting at 46.15% in 2014 and surging dramatically to 154.04% in 2015. It remained elevated but decreased somewhat to 115.33% in 2016 and then increased again to 143.07% in 2017. Data for 2018 is unavailable. The elevated adjusted ROE figures imply high returns relative to adjusted equity, which may be influenced by adjustments to goodwill or other asset valuations, although the absence of 2018 data prevents assessment of the latest trend.

Overall Insights

The disparity between reported and adjusted equity figures highlights significant accounting adjustments impacting the valuation of net assets, particularly affecting goodwill. The drastic fluctuations in adjusted equity culminating in a negative figure in 2018 suggest possible impairments or write-downs affecting the company’s net asset base.

Despite the negative adjusted equity in 2018, reported equity remained positive, and reported ROE increased substantially, indicating that profitability based on reported figures improved notably in that year. The elevated and volatile adjusted ROE figures reflect the sensitivity of profitability measures to adjustments, emphasizing the need for further investigation into the nature of the adjustments and their impact on long-term financial health.

Total Assets

The reported total assets exhibit a consistent upward trend from 17,340 million US dollars at the end of 2014 to 35,480 million US dollars by the end of 2018, indicating significant growth in the company's asset base over the five-year period. The adjusted total assets, which account for goodwill adjustments, follow a similar increasing pattern, rising from 15,149 million US dollars in 2014 to 27,477 million US dollars in 2018. However, the adjusted figures are consistently lower than the reported totals, reflecting the deduction of goodwill from total assets.

Return on Assets (ROA)

The reported ROA displays some fluctuation but generally trends upward over the period. Starting at 11.53% in 2014, it decreases sharply to 5.92% in 2015, then gradually recovers, reaching 11.4% in 2018, nearly returning to the initial level observed in 2014. The adjusted ROA, which excludes goodwill effects, follows a similar pattern but at higher percentage points. It starts at 13.2% in 2014, dips to 7.22% in 2015, then steadily improves each year, culminating at 14.73% in 2018. This suggests an improvement in asset utilization and profitability when excluding goodwill.