AMGEN INC (AMGN) Earnings Summary for Q3 FY2024

Key Metrics

• Total Revenue: $8,503 million (23% yoy)
• Prolia: $1,045 million (6% yoy)
• Repatha: $567 million (40% yoy)
• Evenity: $399 million (30% yoy)
• Blincyto: $327 million (49% yoy)
• Vectibix: $282 million (12% yoy)
• Kyprolis: $378 million (8% yoy)
• Nplate: $456 million (9% yoy)
• Tezspire: $269 million (67% yoy)
• Krystexxa: $310 million (23% yoy)
• R&D: $1,450 million (34% yoy)
• SG&A: $1,625 million (20% yoy)

Forward guidance

1. 2024 Total Revenues: Expected in the range of $33.0 billion to $33.8 billion.
2. Non-GAAP EPS: Projected between $19.20 to $20 for 2024.
3. Q4 Non-GAAP EPS: Anticipated to be lower than Q3 due to planned investment increases.
4. TEPEZZA Sales: Expected to be flat to slightly down in Q4, with full year sales up roughly 5% year-over-year.
5. Non-GAAP Operating Expenses: Projected to grow approximately 25% year-over-year for the full year.
6. Non-GAAP R&D Growth: Expected to exceed 25% year-over-year.
7. Non-GAAP Tax Rate: Anticipated to be in the 14% to 15% range for the full year.

Key takeaways

• Positives:
  • Bob Bradway highlighted a 23% revenue increase to $8.5 billion, with 10 products showing double-digit growth, indicating strong demand across therapeutic areas.
  • The ongoing Phase II study of MariTide is progressing well, with expectations for significant data release by year-end, suggesting potential for addressing unmet medical needs in obesity and type 2 diabetes.
  • Murdo Gordon noted a 67% year-over-year growth for TEZSPIRE, indicating strong market adoption and potential expansion into COPD, which could enhance revenue streams.
  • The rare disease portfolio, particularly TEPEZZA and UPLIZNA, showed robust growth, with UPLIZNA receiving breakthrough therapy designation, enhancing its market potential.
  • Amgen's biosimilars, including PAVBLU, are positioned well in a competitive market, with strong initial feedback from healthcare providers.
• Negatives:
  • Peter Griffith mentioned a 27% year-over-year increase in non-GAAP operating expenses, primarily due to the Horizon acquisition, which could pressure margins.
  • Enbrel sales decreased 20% year-over-year, attributed to unfavorable pricing changes, indicating competitive pressures in the market.
  • The anticipated decline in net selling prices across several products, including Repatha and Prolia, could impact future revenue growth.
  • The integration of Horizon is ongoing, and while expected to yield $500 million in synergies, the initial costs and complexities may pose operational challenges.
  • The competitive landscape in diabetes and obesity treatments is intensifying, with other companies advancing similar therapies, which could dilute market share for MariTide.

Peer Summary

• Competitive Pressures: Gilead Sciences noted challenges in the CAR-T space, indicating increased competition that could impact market share for similar therapies, relevant to AMGEN's oncology products. "We face competitive pressures in the CAR-T space," stated Cindy Perettie.
• Pricing Dynamics: Biogen highlighted competitive pressures leading to a 9% decline in MS product revenue, emphasizing the impact of biosimilars, which could also affect AMGEN's products facing similar market dynamics. "TYSABRI has seen impacts from a biosimilar entrant in Europe," noted Mike McDonnell.
• Market Volatility: Gilead's HIV sales are expected to be flat in Q4 due to pricing dynamics and inventory adjustments, suggesting potential revenue volatility in therapeutic areas where AMGEN operates. "The HIV market is expected to see flat sales in Q4," mentioned Johanna Mercier.
• Regulatory Uncertainties: Vertex Pharmaceuticals pointed out regulatory uncertainties that could impact revenue projections, relevant for AMGEN's pipeline products. "Regulatory uncertainties persist, particularly regarding approval timelines," stated Dr. Reshma Kewalramani.
• Cost Management: Merck's focus on managing operating expenses amidst growth pressures reflects broader industry trends, as they project significant operating costs. "We expect to see a decline in shipments into China into 2025," Rob Davis noted, indicating potential cost pressures.