THOUSAND OAKS, Calif.,
July 30, 2019 /PRNewswire/
-- Amgen (NASDAQ: AMGN) today announced financial results for
the second quarter of 2019. Key results include:
- Total revenues decreased 3% to $5.9
billion in comparison to the second quarter of 2018
reflecting increasing competition due to patent expirations.
-
- Product sales declined 2% globally. Prolia®
(denosumab), Repatha® (evolocumab), Parsabiv®
(etelcalcitide) and Aimovig® (erenumab-aooe) units grew
double-digits or better.
- GAAP earnings per share (EPS) increased 3% to $3.57 benefited by lower weighted-average shares
outstanding.
-
- GAAP operating income decreased 5% to $2.7 billion and GAAP operating margin decreased
1.9 percentage points to 48.0%.
- Non-GAAP EPS increased 4% to $3.97 benefited by lower weighted-average shares
outstanding.
-
- Non-GAAP operating income decreased 5% to $3.0 billion and non-GAAP operating margin
decreased 1.8 percentage points to 53.3%.
- The Company generated $1.3
billion of free cash flow in the second quarter versus
$1.9 billion in the second quarter of
2018 driven primarily by an advanced tax deposit payment.
- 2019 total revenues guidance revised to $22.4-$22.9
billion; EPS guidance to $12.10-$12.71 on a
GAAP basis and $13.75-$14.30 on a non-GAAP basis.
"With our newer products generating strong
volume gains globally and many first-in-class medicines advancing
through our pipeline, we are well positioned to serve patients and
deliver long-term growth for our shareholders," said Robert A. Bradway, chairman and chief executive
officer.
$Millions, except EPS
and percentages
|
|
Q2'19
|
|
Q2'18
|
|
YOY
Δ
|
Total
Revenues
|
|
$
|
5,871
|
|
|
$
|
6,059
|
|
|
(3%)
|
GAAP Operating
Income
|
|
$
|
2,678
|
|
|
$
|
2,832
|
|
|
(5%)
|
GAAP Net
Income
|
|
$
|
2,179
|
|
|
$
|
2,296
|
|
|
(5%)
|
GAAP EPS
|
|
$
|
3.57
|
|
|
$
|
3.48
|
|
|
3%
|
Non-GAAP Operating
Income
|
|
$
|
2,973
|
|
|
$
|
3,131
|
|
|
(5%)
|
Non-GAAP Net
Income
|
|
$
|
2,423
|
|
|
$
|
2,529
|
|
|
(4%)
|
Non-GAAP
EPS
|
|
$
|
3.97
|
|
|
$
|
3.83
|
|
|
4%
|
|
References in this
release to "non-GAAP" measures, measures presented "on a non-GAAP
basis" and to "free cash flow" (computed by subtracting capital
expenditures from operating cash flow) refer to non-GAAP financial
measures. Adjustments to the most directly comparable GAAP
financial measures and other items are presented on the attached
reconciliations.
|
Product Sales Performance
- Total product sales decreased 2% for the second quarter
of 2019 versus the second quarter of 2018.
- Prolia sales increased 14% driven by higher unit
demand.
- EVENITY™ (romosozumab-aqqg) generated
$28 million of sales in the second
quarter of 2019.
- Repatha sales increased 3% driven by higher unit demand,
offset partially by net selling price.
- Aimovig was launched in the U.S. in the second quarter
of 2018 and generated $83 million in
sales in the second quarter of 2019.
- Parsabiv sales increased 130% driven by higher unit
demand, offset partially by net selling price.
- KYPROLIS® (carfilzomib) sales increased 2%
driven by higher unit demand.
- XGEVA® (denosumab) sales increased 10% driven
primarily by higher unit demand.
- Vectibix® (panitumumab) sales increased 13%
driven by higher unit demand.
- Nplate® (romiplostim) sales increased 12%
driven by higher unit demand.
- BLINCYTO® (blinatumomab) sales increased 30%
driven by higher unit demand.
- Biosimilar sales generated $82
million in the second quarter of 2019.
- Enbrel® (etanercept) sales increased 5%
driven primarily by net selling price and favorable changes in
inventory levels, offset partially by lower unit demand.
- Neulasta® (pegfilgrastim) sales decreased 25%
driven by lower net selling price and the impact of biosimilar
competition on unit demand.
- NEUPOGEN® (filgrastim) sales decreased 26%
driven primarily by the impact of competition on unit demand and
lower net selling price, offset partially by favorable changes in
accounting estimates of sales deductions.
- EPOGEN® (epoetin alfa) sales decreased 11%
driven by lower net selling price.
- Aranesp® (darbepoetin alfa) sales decreased
8% driven by the impact of competition on unit demand.
- Sensipar/Mimpara® (cinacalcet) sales
decreased 71% driven by the impact of generic competition on unit
demand.
Product Sales Detail by Product and Geographic Region
$Millions, except
percentages
|
|
Q2'19
|
|
Q2'18
|
|
YOY
Δ
|
|
|
US
|
|
ROW
|
|
TOTAL
|
|
TOTAL
|
|
TOTAL
|
Prolia®
|
|
$
|
458
|
|
|
$
|
240
|
|
|
$
|
698
|
|
|
$
|
610
|
|
|
14%
|
EVENITY™
|
|
3
|
|
|
25
|
|
|
28
|
|
|
—
|
|
|
*
|
Repatha®
|
|
91
|
|
|
61
|
|
|
152
|
|
|
148
|
|
|
3%
|
Aimovig®
|
|
83
|
|
|
—
|
|
|
83
|
|
|
2
|
|
|
*
|
Parsabiv®
|
|
148
|
|
|
20
|
|
|
168
|
|
|
73
|
|
|
*
|
KYPROLIS®
|
|
166
|
|
|
101
|
|
|
267
|
|
|
263
|
|
|
2%
|
XGEVA®
|
|
379
|
|
|
120
|
|
|
499
|
|
|
452
|
|
|
10%
|
Vectibix®
|
|
79
|
|
|
117
|
|
|
196
|
|
|
173
|
|
|
13%
|
Nplate®
|
|
122
|
|
|
79
|
|
|
201
|
|
|
179
|
|
|
12%
|
BLINCYTO®
|
|
39
|
|
|
39
|
|
|
78
|
|
|
60
|
|
|
30%
|
Biosimilars**
|
|
—
|
|
|
82
|
|
|
82
|
|
|
2
|
|
|
*
|
Enbrel®
|
|
1,315
|
|
|
48
|
|
|
1,363
|
|
|
1,302
|
|
|
5%
|
Neulasta®
|
|
719
|
|
|
105
|
|
|
824
|
|
|
1,100
|
|
|
(25%)
|
NEUPOGEN®
|
|
55
|
|
|
20
|
|
|
75
|
|
|
102
|
|
|
(26%)
|
EPOGEN®
|
|
223
|
|
|
—
|
|
|
223
|
|
|
250
|
|
|
(11%)
|
Aranesp®
|
|
192
|
|
|
244
|
|
|
436
|
|
|
472
|
|
|
(8%)
|
Sensipar®/Mimpara®
|
|
43
|
|
|
79
|
|
|
122
|
|
|
420
|
|
|
(71%)
|
Other***
|
|
27
|
|
|
52
|
|
|
79
|
|
|
71
|
|
|
11%
|
Total product
sales
|
|
$
|
4,142
|
|
|
$
|
1,432
|
|
|
$
|
5,574
|
|
|
$
|
5,679
|
|
|
(2%)
|
|
* Change in excess of
100%
|
** Biosimilars
includes AMGEVITA™ and KANJINTI™.
|
*** Other includes
Bergamo, MN Pharma, IMLYGIC®
and Corlanor®.
|
Operating Expense, Operating Margin and Tax Rate
Analysis
On a GAAP basis:
- Total Operating Expenses decreased 1%. Cost of
Sales margin increased 0.2 percentage points due primarily to
product mix, offset partially by the benefit of Hurricane Maria
insurance proceeds and lower manufacturing costs. Research &
Development (R&D) expenses increased 6% driven primarily by
increased spending in research and early pipeline in support of our
oncology programs, offset partially by decreased spending in
support of marketed products. Selling, General &
Administrative (SG&A) expenses decreased 7% driven
primarily by reduced discretionary general and administrative
expenses and the end of certain acquisition-related intangible
asset amortization charges in 2018.
- Operating Margin decreased 1.9 percentage points to
48.0%.
- Tax Rate increased 1.7 percentage points due primarily
to a prior-year tax benefit associated with intercompany sales
under U.S. corporate tax reform.
On a non-GAAP basis:
- Total Operating Expenses decreased 1%. Cost of
Sales margin increased 0.1 percentage points due primarily to
product mix, offset partially by the benefit of Hurricane Maria
insurance proceeds and lower manufacturing costs. R&D
expenses increased 7% driven primarily by increased spending in
research and early pipeline in support of our oncology programs,
offset partially by decreased spending in support of marketed
products. Selling, General & Administrative
(SG&A) expenses decreased 6% driven primarily by reduced
discretionary general and administrative expenses.
- Operating Margin decreased 1.8 percentage points to
53.3%.
- Tax Rate increased 1.1 percentage points due primarily
to a prior-year tax benefit associated with intercompany sales
under U.S. corporate tax reform.
$Millions, except
percentages
|
|
GAAP
|
|
Non-GAAP
|
|
|
Q2'19
|
|
Q2'18
|
|
YOY
Δ
|
|
Q2'19
|
|
Q2'18
|
|
YOY
Δ
|
Cost of
Sales
|
|
$
|
1,012
|
|
|
$
|
1,024
|
|
|
(1%)
|
|
$
|
736
|
|
|
$
|
745
|
|
|
(1%)
|
% of product
sales
|
|
18.2%
|
|
|
18.0%
|
|
|
0.2 pts.
|
|
13.2%
|
|
|
13.1%
|
|
|
0.1 pts.
|
Research &
Development
|
|
$
|
924
|
|
|
$
|
869
|
|
|
6%
|
|
$
|
906
|
|
|
$
|
850
|
|
|
7%
|
% of product
sales
|
|
16.6%
|
|
|
15.3%
|
|
|
1.3 pts.
|
|
16.3%
|
|
|
15.0%
|
|
|
1.3 pts.
|
Selling, General
& Administrative
|
|
$
|
1,260
|
|
|
$
|
1,353
|
|
|
(7%)
|
|
$
|
1,256
|
|
|
$
|
1,333
|
|
|
(6%)
|
% of product
sales
|
|
22.6%
|
|
|
23.8%
|
|
|
(1.2) pts.
|
|
22.5%
|
|
|
23.5%
|
|
|
(1.0) pts.
|
Other
|
|
$
|
(3)
|
|
|
$
|
(19)
|
|
|
(84%)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—%
|
Total Operating
Expenses
|
|
$
|
3,193
|
|
|
$
|
3,227
|
|
|
(1%)
|
|
$
|
2,898
|
|
|
$
|
2,928
|
|
|
(1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
operating income as %
of product sales
|
|
48.0%
|
|
|
49.9%
|
|
|
(1.9) pts.
|
|
53.3%
|
|
|
55.1%
|
|
|
(1.8) pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
Rate
|
|
15.0%
|
|
|
13.3%
|
|
|
1.7
pts.
|
|
15.3%
|
|
|
14.2%
|
|
|
1.1
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
pts: percentage
points
|
|
|
|
|
|
Cash Flow and Balance Sheet
- The Company generated $1.3
billion of free cash flow in the second quarter of 2019
versus $1.9 billion in the second
quarter of 2018 driven primarily by an advanced tax deposit
payment.
- The Company's second quarter 2019 dividend of $1.45 per share was declared on March 7, 2019, and was paid on June 7, 2019, to all stockholders of record as of
May 17, 2019, representing a 10%
increase from 2018.
- During the second quarter, the Company repurchased 13.1 million
shares of common stock at a total cost of $2.3 billion. At the end of the second quarter,
the Company had $4.7 billion
remaining under its stock repurchase authorization.
$Billions, except
shares
|
|
Q2'19
|
|
Q2'18
|
|
YOY
Δ
|
|
Operating Cash
Flow
|
|
$
|
1.4
|
|
|
$
|
2.1
|
|
|
$
|
(0.7)
|
|
|
Capital
Expenditures
|
|
0.1
|
|
|
0.2
|
|
|
0.0
|
|
|
Free Cash
Flow
|
|
1.3
|
|
|
1.9
|
|
|
(0.6)
|
|
|
Dividends
Paid
|
|
0.9
|
|
|
0.9
|
|
|
0.0
|
|
|
Share
Repurchase
|
|
2.3
|
|
|
3.2
|
|
|
(0.8)
|
|
|
Average Diluted
Shares (millions)
|
|
610
|
|
|
660
|
|
|
(50)
|
|
|
|
|
|
|
|
|
|
|
Cash and
Investments
|
|
21.8
|
|
|
29.4
|
|
|
(7.6)
|
|
|
Debt
Outstanding
|
|
30.6
|
|
|
34.5
|
|
|
(3.9)
|
|
|
Stockholders'
Equity
|
|
10.8
|
|
|
14.9
|
|
|
(4.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Numbers may not
add due to rounding
|
2019 Guidance
For the full year 2019, the Company now expects:
- Total revenues in the range of $22.4 billion to $22.9
billion.
-
- Previously, the Company expected total revenues in the range of
$22.0 billion to $22.9 billion.
- On a GAAP basis, EPS in the range of $12.10 to $12.71
and a tax rate in the range of 13% to 14%.
-
- Previously, the Company expected GAAP EPS in the range of
$11.68 to $12.73 and a tax rate in the range of 13% to
14%.
- On a non-GAAP basis, EPS in the range of $13.75 to $14.30
and a tax rate in the range of 14% to 15%.
-
- Previously, the Company expected non-GAAP EPS in the range of
$13.25 to $14.30 and a tax rate in the range of 14% to
15%.
- Capital expenditures to be approximately $700 million.
Second Quarter Product and Pipeline Update
The Company provided the following updates on selected product
and pipeline programs:
Research
- In June, Intermountain Healthcare and deCODE genetics, a
wholly-owned subsidiary of Amgen based in Iceland, announced a global collaboration that
combines Intermountain's internationally-recognized expertise in
precision medicine and clinical care with deCODE's world-class
expertise in human population genetics and will involve the
participation of up to half a million individuals.
- In July, the Company completed the acquisition of Nuevolution,
and is rapidly integrating its world-class DNA-encoded library and
other technologies.
Omecamtiv mecarbil
- In July, the Phase 3 GALACTIC-HF cardiovascular outcomes
clinical trial completed enrollment.
EVENITY
- In June, the Committee for Medicinal Products for Human Use
(CHMP) of the European Medicines Agency adopted a negative opinion
on the Marketing Authorization Application for EVENITY for the
treatment of severe osteoporosis. In July, UCB submitted a written
notice to the European Medicines Agency requesting a re-examination
of the CHMP opinion.
Aimovig
- The Company discussed long-term efficacy and safety data
recently presented at the meetings of the American Academy of
Neurology and American Headache Society.
AMG 510
- The Company provided a clinical update, including tumor
responses in colorectal and appendiceal cancer patients, completion
of enrollment in the dose expansion arm and enrollment initiation
in the checkpoint inhibitor combination arm of the first-in-human
study. Initiation of a potentially registrational monotherapy study
is planned for this year.
ABP 798 (biosimilar rituximab)
- Results from a Phase 3 study of ABP 798, a biosimilar candidate
to Rituxan® (rituximab), in patients with
Non-Hodgkin's lymphoma are expected in Q3 2019.
ABP 710 (biosimilar infliximab)
- The Company announced that the U.S. Food and Drug
Administration (FDA) has set a Dec. 14,
2019, Biosimilar User Fee Act target action date for the
Biologics License Application of ABP 710, a biosimilar candidate to
REMICADE® (infliximab).
Omecamtiv mecarbil is being developed under a collaboration
between Amgen and Cytokinetics, with funding and strategic support
from Servier
EVENITY is developed in collaboration with UCB globally, as
well as our joint venture partner Astellas in Japan
Aimovig is developed in collaboration with Novartis
Rituxan is a registered trademark of Genentech
REMICADE is a registered trademark of Johnson and
Johnson
Non-GAAP Financial Measures
In this news release, management has presented its operating
results for the second quarters of 2019 and 2018, in accordance
with U.S. Generally Accepted Accounting Principles (GAAP) and on a
non-GAAP basis. In addition, management has presented its full year
2019 EPS and tax rate guidance in accordance with GAAP and on a
non-GAAP basis. These non-GAAP financial measures are computed by
excluding certain items related to acquisitions, restructuring and
certain other items from the related GAAP financial measures.
Reconciliations for these non-GAAP financial measures to the most
directly comparable GAAP financial measures are included in the
news release. Management has also presented Free Cash Flow (FCF),
which is a non-GAAP financial measure, for the second quarters of
2019 and 2018. FCF is computed by subtracting capital expenditures
from operating cash flow, each as determined in accordance with
GAAP.
The Company believes that its presentation of non-GAAP financial
measures provides useful supplementary information to and
facilitates additional analysis by investors. The Company uses
certain non-GAAP financial measures to enhance an investor's
overall understanding of the financial performance and prospects
for the future of the Company's ongoing business activities by
facilitating comparisons of results of ongoing business operations
among current, past and future periods. The Company believes that
FCF provides a further measure of the Company's liquidity.
The Company uses the non-GAAP financial measures set forth in
the news release in connection with its own budgeting and financial
planning internally to evaluate the performance of the business,
including to allocate resources and to evaluate results relative to
incentive compensation targets. The non-GAAP financial measures are
in addition to, not a substitute for, or superior to, measures of
financial performance prepared in accordance with GAAP.
About Amgen
Amgen is committed to unlocking the potential of biology for
patients suffering from serious illnesses by discovering,
developing, manufacturing and delivering innovative human
therapeutics. This approach begins by using tools like advanced
human genetics to unravel the complexities of disease and
understand the fundamentals of human biology.
Amgen focuses on areas of high unmet medical need and leverages
its expertise to strive for solutions that improve health outcomes
and dramatically improve people's lives. A biotechnology pioneer
since 1980, Amgen has grown to be one of the world's leading
independent biotechnology companies, has reached millions of
patients around the world and is developing a pipeline of medicines
with breakaway potential.
For more information, visit www.amgen.com and follow us on
www.twitter.com/amgen.
Forward-Looking Statements
This news release contains forward-looking statements that are
based on the current expectations and beliefs of Amgen. All
statements, other than statements of historical fact, are
statements that could be deemed forward-looking statements,
including estimates of revenues, operating margins, capital
expenditures, cash, other financial metrics, expected legal,
arbitration, political, regulatory or clinical results or
practices, customer and prescriber patterns or practices,
reimbursement activities and outcomes and other such estimates and
results. Forward-looking statements involve significant risks and
uncertainties, including those discussed below and more fully
described in the Securities and Exchange Commission reports filed
by Amgen, including our most recent annual report on Form 10-K and
any subsequent periodic reports on Form 10-Q and current reports on
Form 8-K. Unless otherwise noted, Amgen is providing this
information as of the date of this news release and does not
undertake any obligation to update any forward-looking statements
contained in this document as a result of new information, future
events or otherwise.
No forward-looking statement can be guaranteed and actual
results may differ materially from those we project. Our results
may be affected by our ability to successfully market both new and
existing products domestically and internationally, clinical and
regulatory developments involving current and future products,
sales growth of recently launched products, competition from other
products including biosimilars, difficulties or delays in
manufacturing our products and global economic conditions. In
addition, sales of our products are affected by pricing pressure,
political and public scrutiny and reimbursement policies imposed by
third-party payers, including governments, private insurance plans
and managed care providers and may be affected by regulatory,
clinical and guideline developments and domestic and international
trends toward managed care and healthcare cost containment.
Furthermore, our research, testing, pricing, marketing and other
operations are subject to extensive regulation by domestic and
foreign government regulatory authorities. We or others could
identify safety, side effects or manufacturing problems with our
products, including our devices, after they are on the market. Our
business may be impacted by government investigations, litigation
and product liability claims. In addition, our business may be
impacted by the adoption of new tax legislation or exposure to
additional tax liabilities. If we fail to meet the compliance
obligations in the corporate integrity agreement between us and the
U.S. government, we could become subject to significant sanctions.
Further, while we routinely obtain patents for our products and
technology, the protection offered by our patents and patent
applications may be challenged, invalidated or circumvented by our
competitors, or we may fail to prevail in present and future
intellectual property litigation. We perform a substantial amount
of our commercial manufacturing activities at a few key facilities,
including in Puerto Rico, and also
depend on third parties for a portion of our manufacturing
activities, and limits on supply may constrain sales of certain of
our current products and product candidate development. We rely on
collaborations with third parties for the development of some of
our product candidates and for the commercialization and sales of
some of our commercial products. In addition, we compete with other
companies with respect to many of our marketed products as well as
for the discovery and development of new products. Discovery or
identification of new product candidates or development of new
indications for existing products cannot be guaranteed and movement
from concept to product is uncertain; consequently, there can be no
guarantee that any particular product candidate or development of a
new indication for an existing product will be successful and
become a commercial product. Further, some raw materials, medical
devices and component parts for our products are supplied by sole
third-party suppliers. Certain of our distributors, customers and
payers have substantial purchasing leverage in their dealings with
us. The discovery of significant problems with a product similar to
one of our products that implicate an entire class of products
could have a material adverse effect on sales of the affected
products and on our business and results of operations. Our efforts
to acquire other companies or products and to integrate the
operations of companies we have acquired may not be successful. A
breakdown, cyberattack or information security breach could
compromise the confidentiality, integrity and availability of our
systems and our data. Our stock price is volatile and may be
affected by a number of events. Our business performance could
affect or limit the ability of our Board of Directors to declare a
dividend or our ability to pay a dividend or repurchase our common
stock. We may not be able to access the capital and credit markets
on terms that are favorable to us, or at all.
CONTACT: Amgen, Thousand
Oaks
Trish Hawkins, 805-447-5631
(media)
Arvind Sood, 805-447-1060
(investors)
Amgen
Inc.
|
Consolidated
Statements of Income - GAAP
|
(In millions,
except per-share data)
|
(Unaudited)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues:
|
|
|
|
|
|
|
|
Product
sales
|
$
|
5,574
|
|
|
$
|
5,679
|
|
|
$
|
10,860
|
|
|
$
|
11,022
|
|
Other
revenues
|
297
|
|
|
380
|
|
|
568
|
|
|
591
|
|
Total
revenues
|
5,871
|
|
|
6,059
|
|
|
11,428
|
|
|
11,613
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of
sales
|
1,012
|
|
|
1,024
|
|
|
2,067
|
|
|
1,968
|
|
Research and
development
|
924
|
|
|
869
|
|
|
1,803
|
|
|
1,629
|
|
Selling, general and
administrative
|
1,260
|
|
|
1,353
|
|
|
2,414
|
|
|
2,480
|
|
Other
|
(3)
|
|
|
(19)
|
|
|
(6)
|
|
|
(22)
|
|
Total operating
expenses
|
3,193
|
|
|
3,227
|
|
|
6,278
|
|
|
6,055
|
|
|
|
|
|
|
|
|
|
Operating
income
|
2,678
|
|
|
2,832
|
|
|
5,150
|
|
|
5,558
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
332
|
|
|
347
|
|
|
675
|
|
|
685
|
|
Interest and other
income, net
|
218
|
|
|
162
|
|
|
403
|
|
|
393
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
2,564
|
|
|
2,647
|
|
|
4,878
|
|
|
5,266
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
385
|
|
|
351
|
|
|
707
|
|
|
659
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
2,179
|
|
|
$
|
2,296
|
|
|
$
|
4,171
|
|
|
$
|
4,607
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
3.59
|
|
|
$
|
3.50
|
|
|
$
|
6.78
|
|
|
$
|
6.76
|
|
Diluted
|
$
|
3.57
|
|
|
$
|
3.48
|
|
|
$
|
6.75
|
|
|
$
|
6.73
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares used in calculation of earnings per share:
|
|
|
|
|
|
|
|
Basic
|
607
|
|
656
|
|
|
615
|
|
|
682
|
|
Diluted
|
610
|
|
660
|
|
|
618
|
|
|
685
|
|
Amgen
Inc.
|
Consolidated
Balance Sheets - GAAP
|
(In
millions)
|
|
|
June
30,
|
|
December
31,
|
|
2019
|
|
2018
|
|
(Unaudited)
|
|
|
Assets
|
Current
assets:
|
|
|
|
Cash, cash
equivalents and marketable securities
|
$
|
21,758
|
|
|
$
|
29,304
|
|
Trade receivables,
net
|
3,801
|
|
|
3,580
|
|
Inventories
|
3,176
|
|
|
2,940
|
|
Other current
assets
|
2,011
|
|
|
1,794
|
|
Total current
assets
|
30,746
|
|
|
37,618
|
|
|
|
|
|
Property, plant and
equipment, net
|
4,882
|
|
|
4,958
|
|
Intangible assets,
net
|
6,813
|
|
|
7,443
|
|
Goodwill
|
14,689
|
|
|
14,699
|
|
Other
assets
|
2,243
|
|
|
1,698
|
|
Total
assets
|
$
|
59,373
|
|
|
$
|
66,416
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
7,806
|
|
|
$
|
9,069
|
|
Current portion of
long-term debt
|
2,816
|
|
|
4,419
|
|
Total current
liabilities
|
10,622
|
|
|
13,488
|
|
|
|
|
|
Long-term
debt
|
27,798
|
|
|
29,510
|
|
Long-term deferred
tax liabilities
|
763
|
|
|
864
|
|
Long-term tax
liabilities
|
7,861
|
|
|
8,770
|
|
Other noncurrent
liabilities
|
1,535
|
|
|
1,284
|
|
Total stockholders'
equity
|
10,794
|
|
|
12,500
|
|
Total liabilities and
stockholders' equity
|
$
|
59,373
|
|
|
$
|
66,416
|
|
|
|
|
|
Shares
outstanding
|
602
|
|
|
630
|
|
Amgen
Inc.
|
GAAP to Non-GAAP
Reconciliations
|
(Dollars in
millions)
|
(Unaudited)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP cost of
sales
|
$
|
1,012
|
|
|
$
|
1,024
|
|
|
$
|
2,067
|
|
|
$
|
1,968
|
|
Adjustments to
cost of sales:
|
|
|
|
|
|
|
|
Acquisition-related
expenses (a)
|
(276)
|
|
|
(279)
|
|
|
(552)
|
|
|
(545)
|
|
Total adjustments
to cost of sales
|
(276)
|
|
|
(279)
|
|
|
(552)
|
|
|
(545)
|
|
Non-GAAP cost of
sales
|
$
|
736
|
|
|
$
|
745
|
|
|
$
|
1,515
|
|
|
$
|
1,423
|
|
|
|
|
|
|
|
|
|
GAAP cost of sales
as a percentage of product sales
|
18.2
|
%
|
|
18.0
|
%
|
|
19.0
|
%
|
|
17.9
|
%
|
Acquisition-related
expenses (a)
|
-5.0
|
|
|
-4.9
|
|
|
-5.0
|
|
|
-5.0
|
|
Non-GAAP cost of
sales as a percentage of product sales
|
13.2
|
%
|
|
13.1
|
%
|
|
14.0
|
%
|
|
12.9
|
%
|
|
|
|
|
|
|
|
|
GAAP research and
development expenses
|
$
|
924
|
|
|
$
|
869
|
|
|
$
|
1,803
|
|
|
$
|
1,629
|
|
Adjustments to
research and development expenses:
|
|
|
|
|
|
|
|
Acquisition-related
expenses (a)
|
(18)
|
|
|
(19)
|
|
|
(38)
|
|
|
(40)
|
|
Total adjustments
to research and development expenses
|
(18)
|
|
|
(19)
|
|
|
(38)
|
|
|
(40)
|
|
Non-GAAP research
and development expenses
|
$
|
906
|
|
|
$
|
850
|
|
|
$
|
1,765
|
|
|
$
|
1,589
|
|
|
|
|
|
|
|
|
|
GAAP research and
development expenses as a percentage of product
sales
|
16.6
|
%
|
|
15.3
|
%
|
|
16.6
|
%
|
|
14.8
|
%
|
Acquisition-related
expenses (a)
|
-0.3
|
|
|
-0.3
|
|
|
-0.3
|
|
|
-0.4
|
|
Non-GAAP research
and development expenses as a percentage of product
sales
|
16.3
|
%
|
|
15.0
|
%
|
|
16.3
|
%
|
|
14.4
|
%
|
|
|
|
|
|
|
|
|
GAAP selling,
general and administrative expenses
|
$
|
1,260
|
|
|
$
|
1,353
|
|
|
$
|
2,414
|
|
|
$
|
2,480
|
|
Adjustments to
selling, general and administrative expenses:
|
|
|
|
|
|
|
|
Acquisition-related
expenses (a)
|
(5)
|
|
|
(20)
|
|
|
(9)
|
|
|
(45)
|
|
Certain net charges
pursuant to our restructuring initiative
|
1
|
|
|
—
|
|
|
—
|
|
|
(3)
|
|
Total adjustments
to selling, general and administrative expenses
|
(4)
|
|
|
(20)
|
|
|
(9)
|
|
|
(48)
|
|
Non-GAAP selling,
general and administrative expenses
|
$
|
1,256
|
|
|
$
|
1,333
|
|
|
$
|
2,405
|
|
|
$
|
2,432
|
|
|
|
|
|
|
|
|
|
GAAP selling,
general and administrative expenses as a percentage of product
sales
|
22.6
|
%
|
|
23.8
|
%
|
|
22.2
|
%
|
|
22.5
|
%
|
Acquisition-related
expenses (a)
|
-0.1
|
|
|
-0.3
|
|
|
-0.1
|
|
|
-0.4
|
|
Certain net charges
pursuant to our restructuring initiative
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
Non-GAAP selling,
general and administrative expenses as a percentage of product
sales
|
22.5
|
%
|
|
23.5
|
%
|
|
22.1
|
%
|
|
22.1
|
%
|
|
|
|
|
|
|
|
|
GAAP operating
expenses
|
$
|
3,193
|
|
|
$
|
3,227
|
|
|
$
|
6,278
|
|
|
$
|
6,055
|
|
Adjustments to
operating expenses:
|
|
|
|
|
|
|
|
Adjustments to cost
of sales
|
(276)
|
|
|
(279)
|
|
|
(552)
|
|
|
(545)
|
|
Adjustments to
research and development expenses
|
(18)
|
|
|
(19)
|
|
|
(38)
|
|
|
(40)
|
|
Adjustments to
selling, general and administrative expenses
|
(4)
|
|
|
(20)
|
|
|
(9)
|
|
|
(48)
|
|
Certain net charges
pursuant to our restructuring initiative
|
1
|
|
|
7
|
|
|
2
|
|
|
6
|
|
Certain other
expenses
|
—
|
|
|
(25)
|
|
|
—
|
|
|
(25)
|
|
Acquisition-related
adjustments
|
2
|
|
|
37
|
|
|
4
|
|
|
41
|
|
Total adjustments
to operating expenses
|
(295)
|
|
|
(299)
|
|
|
(593)
|
|
|
(611)
|
|
Non-GAAP operating
expenses
|
$
|
2,898
|
|
|
$
|
2,928
|
|
|
$
|
5,685
|
|
|
$
|
5,444
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
$
|
2,678
|
|
|
$
|
2,832
|
|
|
$
|
5,150
|
|
|
$
|
5,558
|
|
Adjustments to
operating expenses
|
295
|
|
|
299
|
|
|
593
|
|
|
611
|
|
Non-GAAP operating
income
|
$
|
2,973
|
|
|
$
|
3,131
|
|
|
$
|
5,743
|
|
|
$
|
6,169
|
|
|
|
|
|
|
|
|
|
GAAP operating
income as a percentage of product sales
|
48.0
|
%
|
|
49.9
|
%
|
|
47.4
|
%
|
|
50.4
|
%
|
Adjustments to cost
of sales
|
5.0
|
|
|
4.9
|
|
|
5.0
|
|
|
5.0
|
|
Adjustments to
research and development expenses
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|
0.4
|
|
Adjustments to
selling, general and administrative expenses
|
0.1
|
|
|
0.3
|
|
|
0.1
|
|
|
0.4
|
|
Certain net charges
pursuant to our restructuring initiative
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
Certain other
expenses
|
0.0
|
|
|
0.4
|
|
|
0.0
|
|
|
0.2
|
|
Acquisition-related
adjustments
|
-0.1
|
|
|
-0.7
|
|
|
0.1
|
|
|
-0.4
|
|
Non-GAAP operating
income as a percentage of product sales
|
53.3
|
%
|
|
55.1
|
%
|
|
52.9
|
%
|
|
56.0
|
%
|
|
|
|
|
|
|
|
|
|
Three months
ended June
30,
|
|
Six months
ended June
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP interest and
other income, net
|
$
|
218
|
|
|
$
|
162
|
|
|
$
|
403
|
|
|
$
|
393
|
|
Adjustments to other
income (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
(75)
|
|
Non-GAAP interest
and other income, net
|
$
|
218
|
|
|
$
|
162
|
|
|
$
|
403
|
|
|
$
|
318
|
|
|
|
|
|
|
|
|
|
GAAP income before
income taxes
|
$
|
2,564
|
|
|
$
|
2,647
|
|
|
$
|
4,878
|
|
|
$
|
5,266
|
|
Adjustments to
operating expenses
|
295
|
|
|
299
|
|
|
593
|
|
|
611
|
|
Adjustments to other
income (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
(75)
|
|
Non-GAAP income
before income taxes
|
$
|
2,859
|
|
|
$
|
2,946
|
|
|
$
|
5,471
|
|
|
$
|
5,802
|
|
|
|
|
|
|
|
|
|
GAAP provision for
income taxes
|
$
|
385
|
|
|
$
|
351
|
|
|
$
|
707
|
|
|
$
|
659
|
|
Adjustments to
provision for income taxes:
|
|
|
|
|
|
|
|
Income tax effect of
the above adjustments (c)
|
70
|
|
|
74
|
|
|
138
|
|
|
138
|
|
Other income tax
adjustments (d)
|
(19)
|
|
|
(8)
|
|
|
(27)
|
|
|
10
|
|
Total adjustments
to provision for income taxes
|
51
|
|
|
66
|
|
|
111
|
|
|
148
|
|
Non-GAAP provision
for income taxes
|
$
|
436
|
|
|
$
|
417
|
|
|
$
|
818
|
|
|
$
|
807
|
|
|
|
|
|
|
|
|
|
GAAP tax as a
percentage of income before taxes
|
15.0
|
%
|
|
13.3
|
%
|
|
14.5
|
%
|
|
12.5
|
%
|
Adjustments to
provision for income taxes:
|
|
|
|
|
|
|
|
Income tax effect of
the above adjustments (c)
|
0.9
|
|
|
1.2
|
|
|
1.0
|
|
|
1.2
|
|
Other income tax
adjustments (d)
|
-0.6
|
|
|
-0.3
|
|
|
-0.5
|
|
|
0.2
|
|
Total adjustments
to provision for income taxes
|
0.3
|
|
|
0.9
|
|
|
0.5
|
|
|
1.4
|
|
Non-GAAP tax as a
percentage of income before taxes
|
15.3
|
%
|
|
14.2
|
%
|
|
15.0
|
%
|
|
13.9
|
%
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$
|
2,179
|
|
|
$
|
2,296
|
|
|
$
|
4,171
|
|
|
$
|
4,607
|
|
Adjustments to net
income:
|
|
|
|
|
|
|
|
Adjustments to income
before income taxes, net of the income tax effect
|
225
|
|
|
225
|
|
|
455
|
|
|
398
|
|
Other income tax
adjustments (d)
|
19
|
|
|
8
|
|
|
27
|
|
|
(10)
|
|
Total adjustments
to net income
|
244
|
|
|
233
|
|
|
482
|
|
|
388
|
|
Non-GAAP net
income
|
$
|
2,423
|
|
|
$
|
2,529
|
|
|
$
|
4,653
|
|
|
$
|
4,995
|
|
Amgen
Inc.
|
GAAP to Non-GAAP
Reconciliations
|
(In millions,
except per-share data)
|
(Unaudited)
|
|
The following table
presents the computations for GAAP and non-GAAP diluted earnings
per share:
|
|
|
Three months ended June 30, 2019
|
|
Three months ended June 30, 2018
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
Net income
|
$
|
2,179
|
|
|
$
|
2,423
|
|
|
$
|
2,296
|
|
|
$
|
2,529
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares for diluted EPS
|
610
|
|
|
610
|
|
|
660
|
|
|
660
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
$
|
3.57
|
|
|
$
|
3.97
|
|
|
$
|
3.48
|
|
|
$
|
3.83
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, 2019
|
|
Six months ended June 30, 2018
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
Net income
|
$
|
4,171
|
|
|
$
|
4,653
|
|
|
$
|
4,607
|
|
|
$
|
4,995
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares for diluted EPS
|
618
|
|
|
618
|
|
|
685
|
|
|
685
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
$
|
6.75
|
|
|
$
|
7.53
|
|
|
$
|
6.73
|
|
|
$
|
7.29
|
|
|
|
(a)
|
The adjustments
related primarily to noncash amortization of intangible assets
acquired in business combinations.
|
|
|
(b)
|
For the six months
ended June 30, 2018, the adjustment related to the net gain
associated with the Kirin-Amgen share acquisition.
|
|
|
(c)
|
The tax effect of the
adjustments between our GAAP and non-GAAP results takes into
account the tax treatment and related tax rate(s) that apply to
each adjustment in the applicable tax jurisdiction(s). Generally,
this results in a tax impact at the U.S. marginal tax rate for
certain adjustments, including the majority of amortization of
intangible assets, whereas the tax impact of other adjustments,
including restructuring expense, depends on whether the amounts are
deductible in the respective tax jurisdictions and the applicable
tax rate(s) in those jurisdictions. Due to these factors, the
effective tax rates for the adjustments to our GAAP income before
income taxes, for the three and six months ended June 30, 2019,
were 23.7% and 23.3%, compared with 24.7% and 25.7% for the
corresponding periods of the prior year.
|
|
|
(d)
|
The adjustments
related primarily to certain acquisition items and prior-period
items excluded from GAAP earnings.
|
Amgen
Inc.
|
Reconciliations of
Cash Flows
|
(In
millions)
|
(Unaudited)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net cash provided by
operating activities
|
$
|
1,414
|
|
|
$
|
2,102
|
|
|
$
|
3,259
|
|
|
$
|
4,829
|
|
Net cash provided by
investing activities
|
2,745
|
|
|
2,938
|
|
|
6,300
|
|
|
17,844
|
|
Net cash used in
financing activities
|
(5,992)
|
|
|
(4,650)
|
|
|
(10,979)
|
|
|
(16,342)
|
|
(Decrease) increase
in cash and cash equivalents
|
(1,833)
|
|
|
390
|
|
|
(1,420)
|
|
|
6,331
|
|
Cash and cash
equivalents at beginning of period
|
7,358
|
|
|
9,741
|
|
|
6,945
|
|
|
3,800
|
|
Cash and cash
equivalents at end of period
|
$
|
5,525
|
|
|
$
|
10,131
|
|
|
$
|
5,525
|
|
|
$
|
10,131
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net cash provided by
operating activities
|
$
|
1,414
|
|
|
$
|
2,102
|
|
|
$
|
3,259
|
|
|
$
|
4,829
|
|
Capital
expenditures
|
(144)
|
|
|
(187)
|
|
|
(260)
|
|
|
(342)
|
|
Free cash
flow
|
$
|
1,270
|
|
|
$
|
1,915
|
|
|
$
|
2,999
|
|
|
$
|
4,487
|
|
Reconciliation of
GAAP EPS Guidance to Non-GAAP
|
EPS Guidance for
the Year Ending December 31, 2019
|
(Unaudited)
|
|
GAAP diluted EPS
guidance
|
|
$12.10
|
—
|
$12.71
|
Known adjustment
to arrive at non-GAAP*:
|
|
|
|
|
Acquisition-related
expenses (a)
|
|
1.55
|
—
|
1.61
|
Tax
adjustments
|
|
|
0.04
|
|
Non-GAAP diluted
EPS guidance
|
|
$13.75
|
—
|
$14.30
|
|
* The known
adjustments are presented net of their related tax impact, which
amount to approximately $0.38 per share.
|
|
(a) The adjustments
relate primarily to non-cash amortization of intangible assets
acquired in business combinations.
|
|
Our GAAP diluted EPS
guidance does not include the effect of GAAP adjustments triggered
by events that may occur subsequent to this press release such as
acquisitions, asset impairments, litigation and changes in the fair
value or our contingent consideration.
|
Reconciliation of
GAAP Tax Rate Guidance to Non-GAAP
|
Tax Rate Guidance
for the Year Ending December 31, 2019
|
(Unaudited)
|
|
GAAP tax rate
guidance
|
|
13%
|
—
|
14%
|
Tax rate of known
adjustments discussed above
|
|
|
1%
|
|
Non-GAAP diluted EPS
guidance
|
|
14%
|
—
|
15%
|
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SOURCE Amgen