THOUSAND OAKS, Calif.,
Oct. 29, 2019 /PRNewswire/
-- Amgen (NASDAQ:AMGN) today announced financial results for
the third quarter of 2019. Key results include:
- Total revenues decreased 3% to $5.7
billion in comparison to the third quarter of 2018,
reflecting the impact of biosimilar and generic competition against
key products.
-
- Although product sales declined 1% globally, units grew double
digits or better for Prolia® (denosumab),
Repatha® (evolocumab), Aimovig®
(erenumab-aooe), Parsabiv® (etelcalcetide),
KYPROLIS® (carfilzomib) and BLINCYTO®
(blinatumomab).
- GAAP earnings per share (EPS) increased 14% to $3.27 benefited by lower weighted-average shares
outstanding and higher operating income.
-
- GAAP operating income increased 7% to $2.5 billion and GAAP operating margin increased
3.1 percentage points to 45.3%.
- Non-GAAP EPS decreased 1% to $3.66 as a result of lower revenue, offset
partially by lower weighted-average shares outstanding.
-
- Non-GAAP operating income decreased 6% to $2.8 billion and non-GAAP operating margin
decreased 2.8 percentage points to 51.1%.
- The Company generated $3.2
billion of free cash flow in the third quarter of 2019
versus $3.1 billion in the third
quarter of 2018.
- 2019 total revenues guidance revised to $22.8-$23.0
billion; EPS guidance to $12.50-$12.80 on a
GAAP basis and $14.20-$14.45 on a non-GAAP basis. This guidance
excludes the impact of the Otezla® (apremilast)
acquisition.
- The Company expects the Otezla acquisition to close before the
end of the fourth quarter.
"Amgen continues to execute well in a
dynamic environment, with many of our innovative medicines
delivering double-digit, volume-driven growth, complemented by the
strong performance of our recently launched biosimilar products,"
said Robert A. Bradway, chairman and
chief executive officer. "We continue to advance numerous
first-in-class medicines in our pipeline, while also pursuing
external opportunities that will contribute to our long-term
growth, such as our pending acquisition of Otezla."
$Millions, except
EPS, dividend per share and percentages
|
|
Q3'19
|
|
Q3'18
|
|
YOY
Δ
|
Total
Revenues
|
|
$
|
5,737
|
|
|
$
|
5,904
|
|
|
(3%)
|
GAAP Operating
Income
|
|
$
|
2,476
|
|
|
$
|
2,323
|
|
|
7%
|
GAAP Net
Income
|
|
$
|
1,968
|
|
|
$
|
1,859
|
|
|
6%
|
GAAP EPS
|
|
$
|
3.27
|
|
|
$
|
2.86
|
|
|
14%
|
Non-GAAP Operating
Income
|
|
$
|
2,793
|
|
|
$
|
2,971
|
|
|
(6%)
|
Non-GAAP Net
Income
|
|
$
|
2,201
|
|
|
$
|
2,392
|
|
|
(8%)
|
Non-GAAP
EPS
|
|
$
|
3.66
|
|
|
$
|
3.69
|
|
|
(1%)
|
Dividend Per
Share
|
|
$
|
1.45
|
|
|
$
|
1.32
|
|
|
10%
|
|
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 1% for the third quarter
of 2019 versus the third quarter of 2018.
- Prolia sales increased 18% driven by higher unit
demand.
- EVENITY® (romosozumab-aqqg) was launched in
the first half of this year and generated $59 million of sales in the third quarter of
2019.
- Repatha sales increased 40% driven by higher unit
demand, offset partially by lower net selling price.
- Aimovig generated $66
million in sales in the third quarter of 2019.
- Parsabiv sales increased 54% driven by higher unit
demand, offset partially by lower net selling price.
- KYPROLIS sales increased 15% driven primarily by higher
unit demand.
- XGEVA® (denosumab) sales increased 10% driven
primarily by higher unit demand.
- Vectibix® (panitumumab) sales increased 8%
driven primarily by higher unit demand.
- Nplate® (romiplostim) sales increased 10%
driven primarily by higher unit demand.
- BLINCYTO sales increased 47% driven by higher unit
demand.
- Biosimilar sales generated $173
million in the third quarter of 2019.
- Enbrel® (etanercept) sales increased 6%
driven by higher net selling price and favorable changes in
accounting estimates, offset partially by lower unit demand.
- Neulasta® (pegfilgrastim) sales decreased 32%
driven by the impact of biosimilar competition on unit demand and
lower net selling price.
- NEUPOGEN® (filgrastim) sales decreased 36%
driven primarily by lower net selling price, unfavorable changes in
accounting estimates and the impact of biosimilar competition on
unit demand.
- EPOGEN® (epoetin alfa) sales decreased 15%
driven primarily by lower net selling price.
- Aranesp® (darbepoetin alfa) sales decreased
5% driven primarily by the impact of competition on unit
demand.
- Sensipar/Mimpara® (cinacalcet) sales
decreased 73% driven by the impact of generic competition on unit
demand.
Product Sales Detail by Product and Geographic Region
$Millions, except
percentages
|
|
Q3'19
|
|
Q3'18
|
|
YOY
Δ
|
|
|
US
|
|
ROW
|
|
TOTAL
|
|
TOTAL
|
|
TOTAL
|
Prolia®
|
|
$
|
425
|
|
|
$
|
205
|
|
|
$
|
630
|
|
|
$
|
532
|
|
|
18%
|
EVENITY®
|
|
12
|
|
|
47
|
|
|
59
|
|
|
—
|
|
|
*
|
Repatha®
|
|
85
|
|
|
83
|
|
|
168
|
|
|
120
|
|
|
40%
|
Aimovig®
|
|
66
|
|
|
—
|
|
|
66
|
|
|
22
|
|
|
*
|
Parsabiv®
|
|
137
|
|
|
20
|
|
|
157
|
|
|
102
|
|
|
54%
|
KYPROLIS®
|
|
163
|
|
|
103
|
|
|
266
|
|
|
232
|
|
|
15%
|
XGEVA®
|
|
356
|
|
|
120
|
|
|
476
|
|
|
433
|
|
|
10%
|
Vectibix®
|
|
79
|
|
|
117
|
|
|
196
|
|
|
181
|
|
|
8%
|
Nplate®
|
|
119
|
|
|
76
|
|
|
195
|
|
|
177
|
|
|
10%
|
BLINCYTO®
|
|
47
|
|
|
38
|
|
|
85
|
|
|
58
|
|
|
47%
|
Biosimilars**
|
|
81
|
|
|
92
|
|
|
173
|
|
|
19
|
|
|
*
|
Enbrel®
|
|
1,323
|
|
|
43
|
|
|
1,366
|
|
|
1,292
|
|
|
6%
|
Neulasta®
|
|
619
|
|
|
92
|
|
|
711
|
|
|
1,051
|
|
|
(32%)
|
NEUPOGEN®
|
|
32
|
|
|
22
|
|
|
54
|
|
|
85
|
|
|
(36%)
|
EPOGEN®
|
|
215
|
|
|
—
|
|
|
215
|
|
|
252
|
|
|
(15%)
|
Aranesp®
|
|
204
|
|
|
248
|
|
|
452
|
|
|
477
|
|
|
(5%)
|
Sensipar®/Mimpara®
|
|
38
|
|
|
71
|
|
|
109
|
|
|
409
|
|
|
(73%)
|
Other***
|
|
28
|
|
|
57
|
|
|
85
|
|
|
68
|
|
|
25%
|
Total product
sales
|
|
$
|
4,029
|
|
|
$
|
1,434
|
|
|
$
|
5,463
|
|
|
$
|
5,510
|
|
|
(1%)
|
|
|
|
|
|
|
|
|
|
|
|
* Change in excess of
100%
|
|
|
** Biosimilars
includes KANJINTI™, AMGEVITA™ and MVASI™.
|
*** Other includes
Bergamo, MN Pharma, IMLYGIC®
and Corlanor®.
|
Operating Expense, Operating Margin and Tax Rate
Analysis
On a GAAP basis:
- Total Operating Expenses decreased 9%. Cost of
Sales margin increased 0.2 percentage points due primarily to
unfavorable product mix, offset partially by lower manufacturing
costs. Research & Development (R&D) expenses
increased 8% 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 5% driven primarily by lower general and administrative
expenses as well as the end of certain amortization of intangible
assets in 2018. Other operating expenses decreased due primarily to
an impairment charge in the prior period associated with a nonkey
intangible asset acquired in a business combination.
- Operating Margin increased 3.1 percentage points to
45.3%.
- Tax Rate increased 2.4 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 were flat. Cost of Sales
margin increased 0.1 percentage points due primarily to unfavorable
product mix, offset partially by lower manufacturing costs.
R&D expenses increased 8% 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. SG&A expenses decreased 5% driven
primarily by lower general and administrative expenses.
- Operating Margin decreased 2.8 percentage points to
51.1%.
- Tax Rate increased 2.2 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
|
|
|
Q3'19
|
|
Q3'18
|
|
YOY
Δ
|
|
Q3'19
|
|
Q3'18
|
|
YOY
Δ
|
Cost of
Sales
|
|
$
|
1,036
|
|
|
$
|
1,037
|
|
|
—%
|
|
$
|
760
|
|
|
$
|
759
|
|
|
—%
|
% of product
sales
|
|
19.0%
|
|
|
18.8%
|
|
|
0.2 pts.
|
|
13.9%
|
|
|
13.8%
|
|
|
0.1 pts.
|
Research &
Development
|
|
$
|
1,001
|
|
|
$
|
926
|
|
|
8%
|
|
$
|
977
|
|
|
$
|
906
|
|
|
8%
|
% of product
sales
|
|
18.3%
|
|
|
16.8%
|
|
|
1.5 pts.
|
|
17.9%
|
|
|
16.4%
|
|
|
1.5 pts.
|
Selling, General
& Administrative
|
|
$
|
1,223
|
|
|
$
|
1,293
|
|
|
(5%)
|
|
$
|
1,207
|
|
|
$
|
1,268
|
|
|
(5%)
|
% of product
sales
|
|
22.4%
|
|
|
23.5%
|
|
|
(1.1) pts.
|
|
22.1%
|
|
|
23.0%
|
|
|
(0.9) pts.
|
Other
|
|
$
|
1
|
|
|
$
|
325
|
|
|
(100%)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—%
|
Total Operating
Expenses
|
|
$
|
3,261
|
|
|
$
|
3,581
|
|
|
(9%)
|
|
$
|
2,944
|
|
|
$
|
2,933
|
|
|
—%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
operating income as %
of product sales
|
|
45.3%
|
|
|
42.2%
|
|
|
3.1 pts.
|
|
51.1%
|
|
|
53.9%
|
|
|
(2.8) pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
Rate
|
|
13.6%
|
|
|
11.2%
|
|
|
2.4
pts.
|
|
15.2%
|
|
|
13.0%
|
|
|
2.2
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
pts: percentage
points
|
|
|
|
|
Cash Flow and Balance Sheet
- The Company generated $3.2
billion of free cash flow in the third quarter of 2019
versus $3.1 billion in the third
quarter of 2018 driven primarily by favorable changes in working
capital.
- The Company's third quarter 2019 dividend of $1.45 per share was declared on Aug. 2, 2019, and was paid on Sept. 6, 2019, to all stockholders of record as
of Aug. 15, 2019, representing a 10%
increase from 2018.
- During the third quarter of 2019, the Company repurchased 6.2
million shares of common stock at a total cost of $1.2 billion. At the end of the third quarter,
the Company had $3.6 billion
remaining under its stock repurchase authorization.
$Billions, except
shares
|
|
Q3'19
|
|
Q3'18
|
|
YOY
Δ
|
|
Operating Cash
Flow
|
|
$
|
3.4
|
|
|
$
|
3.3
|
|
|
$
|
0.1
|
|
|
Capital
Expenditures
|
|
0.2
|
|
|
0.2
|
|
|
0.0
|
|
|
Free Cash
Flow
|
|
3.2
|
|
|
3.1
|
|
|
0.1
|
|
|
Dividends
Paid
|
|
0.9
|
|
|
0.9
|
|
|
0.0
|
|
|
Share
Repurchase
|
|
1.2
|
|
|
1.7
|
|
|
(0.5)
|
|
|
Average Diluted
Shares (millions)
|
|
602
|
|
|
649
|
|
|
(47)
|
|
|
|
|
|
|
|
|
|
|
Cash and
Investments
|
|
20.9
|
|
|
29.9
|
|
|
(9.1)
|
|
|
Debt
Outstanding
|
|
29.8
|
|
|
34.4
|
|
|
(4.6)
|
|
|
Stockholders'
Equity
|
|
10.9
|
|
|
14.3
|
|
|
(3.4)
|
|
|
|
|
|
|
|
|
|
|
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 $22.8 billion to $23.0
billion.
-
- Previously, the Company expected total revenues in the range of
$22.4 billion to $22.9 billion.
- On a GAAP basis, EPS in the range of $12.50 to $12.80
and a tax rate in the range of 13% to 14%.
-
- Previously, the Company expected GAAP EPS in the range of
$12.10 to $12.71 and a tax rate in the range of 13% to
14%.
- On a non-GAAP basis, EPS in the range of $14.20 to $14.45
and a tax rate in the range of 14% to 15%.
-
- Previously, the Company expected non-GAAP EPS in the range of
$13.75 to $14.30 and a tax rate in the range of 14% to
15%.
- Capital expenditures to be approximately $650 million.
- 2019 Guidance does not include the Otezla acquisition which is
expected to close by the end of the fourth quarter.
Third Quarter Product and Pipeline Update
The Company provided the following updates on selected product
and pipeline programs:
Research
- In September, the Company announced that it joined a consortium
to perform the whole genome sequencing of approximately 500,000
participants in the UK Biobank. deCODE Genetics, a wholly-owned
subsidiary of Amgen, will provide the whole genome sequencing for
the project, along with the Wellcome Sanger Institute.
Tezepelumab
- A Phase 3 Study evaluating the efficacy and safety of
tezepelumab in adults and adolescents with severe uncontrolled
asthma has completed enrollment, with the primary analysis expected
in late 2020.
- A Phase 2 study evaluating the efficacy and safety of
tezepelumab in adults with moderate to very severe chronic
obstructive pulmonary disease is enrolling patients.
AMG 570
- A Phase 2 study of AMG 570, a bispecific inhibitor of ICOSL and
BAFF, is enrolling patients with systemic lupus erythematosus.
EVENITY
- In October, the Committee for Medicinal Products for Human Use
of the European Medicines Agency adopted a positive opinion
recommending Marketing Authorization for EVENITY for the treatment
of severe osteoporosis in postmenopausal women at high risk of
fracture, with a contraindication for patients with a history of
myocardial infarction or stroke.
KYPROLIS
- In September, the Phase 3 CANDOR study evaluating KYPROLIS in
combination with dexamethasone and DARZALEX®
(daratumumab) (KdD) compared to KYPROLIS and dexamethasone alone
(Kd) met its primary endpoint of progression-free survival (PFS),
demonstrating a 37% reduction in the risk of disease progression or
death in patients with relapsed or refractory multiple myeloma
treated with KdD. The median PFS for patients treated with Kd alone
was 15.8 months, while the median PFS for patients treated with KdD
had not been reached by the cut-off date.
BLINCYTO
- In September, an open-label, randomized, controlled global
multicenter Phase 3 trial evaluating BLINCYTO compared to
conventional consolidation chemotherapy in pediatric patients with
high-risk, B-cell acute lymphoblastic leukemia (ALL) at first
relapse met its primary endpoint of event-free survival at a
prespecified interim analysis.
- In September, an open-label, randomized, controlled multicenter
Phase 3 trial in Australia,
Canada, New Zealand and the U.S. conducted by the
Children's Oncology Group (COG) in pediatric B-cell ALL patients at
first relapse closed to accrual for the high-risk and intermediate
risk-arm based on the recommendation of the COG Data Monitoring
Committee. The closure decision was based on a strong trend towards
improved disease-free survival and improved overall survival,
markedly lower toxicity and better minimal residual disease
clearance for BLINCYTO compared to chemotherapy.
Nplate
- In October, the U.S. Food and Drug Administration approved a
Supplemental Biologics License Application for Nplate to include
new data in its U.S. prescribing information showing sustained
platelet responses in adults with immune thrombocytopenia. The
updated indication expands treatment to newly diagnosed and
persistent adult ITP patients who have had an insufficient response
to corticosteroids, immunoglobulins or splenectomy.
- A Phase 3 trial evaluating Nplate for the treatment of
chemotherapy-induced thrombocytopenia in patients receiving
chemotherapy for the treatment of non-small cell lung cancer,
ovarian cancer or breast cancer is enrolling patients.
AMG 510
- The Company discussed clinical data from the first-in-human
study that was presented at medical conferences in Q3.
- The Phase 2 non-small cell lung cancer monotherapy study
continues to enroll patients.
- Initial cohort of colorectal cancer patients has been enrolled
at the target dose in a Phase 2 monotherapy study, and as the data
mature, the Company will determine the development path for
colorectal cancer.
- The next clinical data update for AMG 510 is expected in
2020.
ABP 798 (biosimilar rituximab)
- In August, a Phase 3 study in patients with CD20-positive
B-cell non-Hodgkin's lymphoma met its primary endpoint. The primary
endpoint, as assessment of overall response rate by week 28, was
within the prespecified margin for ABP 798 compared to
Rituxan® (rituximab), showing clinical equivalence.
- Submission of a Biologics License Application in the U.S. for
ABP 798 is expected in Q1 2020.
Tezepelumab is being developed in collaboration with
AstraZeneca PLC
EVENITY is developed in collaboration with UCB globally, as
well as our joint venture partner Astellas in Japan
Rituxan is a registered trademark of Genentech
Non-GAAP Financial Measures
In this news release, management has presented its operating
results for the third 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 third 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 any statements on the outcome, benefits and synergies of
the acquisition of Otezla, including anticipated Otezla sales
growth and the timing of non-GAAP EPS accretion, as well as
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
September 30,
|
|
Nine months
ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues:
|
|
|
|
|
|
|
|
Product
sales
|
$
|
5,463
|
|
|
$
|
5,510
|
|
|
$
|
16,323
|
|
|
$
|
16,532
|
|
Other
revenues
|
274
|
|
|
394
|
|
|
842
|
|
|
985
|
|
Total
revenues
|
5,737
|
|
|
5,904
|
|
|
17,165
|
|
|
17,517
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of
sales
|
1,036
|
|
|
1,037
|
|
|
3,103
|
|
|
3,005
|
|
Research and
development
|
1,001
|
|
|
926
|
|
|
2,804
|
|
|
2,555
|
|
Selling, general and
administrative
|
1,223
|
|
|
1,293
|
|
|
3,637
|
|
|
3,773
|
|
Other
|
1
|
|
|
325
|
|
|
(5)
|
|
|
303
|
|
Total operating
expenses
|
3,261
|
|
|
3,581
|
|
|
9,539
|
|
|
9,636
|
|
|
|
|
|
|
|
|
|
Operating
income
|
2,476
|
|
|
2,323
|
|
|
7,626
|
|
|
7,881
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
313
|
|
|
355
|
|
|
988
|
|
|
1,040
|
|
Interest and other
income, net
|
114
|
|
|
126
|
|
|
517
|
|
|
519
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
2,277
|
|
|
2,094
|
|
|
7,155
|
|
|
7,360
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
309
|
|
|
235
|
|
|
1,016
|
|
|
894
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
1,968
|
|
|
$
|
1,859
|
|
|
$
|
6,139
|
|
|
$
|
6,466
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
3.29
|
|
|
$
|
2.88
|
|
|
$
|
10.08
|
|
|
$
|
9.67
|
|
Diluted
|
$
|
3.27
|
|
|
$
|
2.86
|
|
|
$
|
10.01
|
|
|
$
|
9.61
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares used in calculation of earnings per share:
|
|
|
|
|
|
|
|
Basic
|
599
|
|
645
|
|
|
609
|
|
|
669
|
|
Diluted
|
602
|
|
649
|
|
|
613
|
|
|
673
|
|
Amgen
Inc.
|
Consolidated
Balance Sheets - GAAP
|
(In
millions)
|
|
|
September
30,
|
|
December
31,
|
|
2019
|
|
2018
|
|
(Unaudited)
|
|
|
Assets
|
Current
assets:
|
|
|
|
Cash, cash
equivalents and marketable securities
|
$
|
20,853
|
|
|
$
|
29,304
|
|
Trade receivables,
net
|
3,606
|
|
|
3,580
|
|
Inventories
|
3,243
|
|
|
2,940
|
|
Other current
assets
|
3,349
|
|
|
1,794
|
|
Total current
assets
|
31,051
|
|
|
37,618
|
|
|
|
|
|
Property, plant and
equipment, net
|
4,901
|
|
|
4,958
|
|
Intangible assets,
net
|
6,702
|
|
|
7,443
|
|
Goodwill
|
14,705
|
|
|
14,699
|
|
Other
assets
|
2,176
|
|
|
1,698
|
|
Total
assets
|
$
|
59,535
|
|
|
$
|
66,416
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
8,688
|
|
|
$
|
9,069
|
|
Current portion of
long-term debt
|
2,049
|
|
|
4,419
|
|
Total current
liabilities
|
10,737
|
|
|
13,488
|
|
|
|
|
|
Long-term
debt
|
27,742
|
|
|
29,510
|
|
Long-term deferred
tax liabilities
|
665
|
|
|
864
|
|
Long-term tax
liabilities
|
7,921
|
|
|
8,770
|
|
Other noncurrent
liabilities
|
1,543
|
|
|
1,284
|
|
Total stockholders'
equity
|
10,927
|
|
|
12,500
|
|
Total liabilities and
stockholders' equity
|
$
|
59,535
|
|
|
$
|
66,416
|
|
|
|
|
|
Shares
outstanding
|
596
|
|
|
630
|
|
Amgen
Inc.
|
GAAP to Non-GAAP
Reconciliations
|
(Dollars in
millions)
|
(Unaudited)
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP cost of
sales
|
$
|
1,036
|
|
|
$
|
1,037
|
|
|
$
|
3,103
|
|
|
$
|
3,005
|
|
Adjustments to
cost of sales:
|
|
|
|
|
|
|
|
Acquisition-related
expenses (a)
|
(276)
|
|
|
(278)
|
|
|
(828)
|
|
|
(823)
|
|
Total adjustments
to cost of sales
|
(276)
|
|
|
(278)
|
|
|
(828)
|
|
|
(823)
|
|
Non-GAAP cost of
sales
|
$
|
760
|
|
|
$
|
759
|
|
|
$
|
2,275
|
|
|
$
|
2,182
|
|
|
|
|
|
|
|
|
|
GAAP cost of sales
as a percentage of product sales
|
19.0
|
%
|
|
18.8
|
%
|
|
19.0
|
%
|
|
18.2
|
%
|
Acquisition-related
expenses (a)
|
-5.1
|
|
|
-5.0
|
|
|
-5.1
|
|
|
-5.0
|
|
Non-GAAP cost of
sales as a percentage of product sales
|
13.9
|
%
|
|
13.8
|
%
|
|
13.9
|
%
|
|
13.2
|
%
|
|
|
|
|
|
|
|
|
GAAP research and
development expenses
|
$
|
1,001
|
|
|
$
|
926
|
|
|
$
|
2,804
|
|
|
$
|
2,555
|
|
Adjustments to
research and development expenses:
|
|
|
|
|
|
|
|
Acquisition-related
expenses (a)
|
(24)
|
|
|
(19)
|
|
|
(62)
|
|
|
(59)
|
|
Certain net charges
pursuant to our restructuring initiative
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(1)
|
|
Total adjustments
to research and development expenses
|
(24)
|
|
|
(20)
|
|
|
(62)
|
|
|
(60)
|
|
Non-GAAP research
and development expenses
|
$
|
977
|
|
|
$
|
906
|
|
|
$
|
2,742
|
|
|
$
|
2,495
|
|
|
|
|
|
|
|
|
|
GAAP research and
development expenses as a percentage of product
sales
|
18.3
|
%
|
|
16.8
|
%
|
|
17.2
|
%
|
|
15.5
|
%
|
Acquisition-related
expenses (a)
|
-0.4
|
|
|
-0.4
|
|
|
-0.4
|
|
|
-0.4
|
|
Certain net charges
pursuant to our restructuring initiative
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
Non-GAAP research
and development expenses as a percentage of product
sales
|
17.9
|
%
|
|
16.4
|
%
|
|
16.8
|
%
|
|
15.1
|
%
|
|
|
|
|
|
|
|
|
GAAP selling,
general and administrative expenses
|
$
|
1,223
|
|
|
$
|
1,293
|
|
|
$
|
3,637
|
|
|
$
|
3,773
|
|
Adjustments to
selling, general and administrative expenses:
|
|
|
|
|
|
|
|
Acquisition-related
expenses (a)
|
(17)
|
|
|
(20)
|
|
|
(26)
|
|
|
(65)
|
|
Certain net charges
pursuant to our restructuring initiative
|
1
|
|
|
(5)
|
|
|
1
|
|
|
(8)
|
|
Total adjustments
to selling, general and administrative expenses
|
(16)
|
|
|
(25)
|
|
|
(25)
|
|
|
(73)
|
|
Non-GAAP selling,
general and administrative expenses
|
$
|
1,207
|
|
|
$
|
1,268
|
|
|
$
|
3,612
|
|
|
$
|
3,700
|
|
|
|
|
|
|
|
|
|
GAAP selling,
general and administrative expenses as a percentage of product
sales
|
22.4
|
%
|
|
23.5
|
%
|
|
22.3
|
%
|
|
22.8
|
%
|
Acquisition-related
expenses (a)
|
-0.3
|
|
|
-0.4
|
|
|
-0.2
|
|
|
-0.4
|
|
Certain net charges
pursuant to our restructuring initiative
|
0.0
|
|
|
-0.1
|
|
|
0.0
|
|
|
0.0
|
|
Non-GAAP selling,
general and administrative expenses as a percentage of product
sales
|
22.1
|
%
|
|
23.0
|
%
|
|
22.1
|
%
|
|
22.4
|
%
|
|
|
|
|
|
|
|
|
GAAP operating
expenses
|
$
|
3,261
|
|
|
$
|
3,581
|
|
|
$
|
9,539
|
|
|
$
|
9,636
|
|
Adjustments to
operating expenses:
|
|
|
|
|
|
|
|
Adjustments to cost
of sales
|
(276)
|
|
|
(278)
|
|
|
(828)
|
|
|
(823)
|
|
Adjustments to
research and development expenses
|
(24)
|
|
|
(20)
|
|
|
(62)
|
|
|
(60)
|
|
Adjustments to
selling, general and administrative expenses
|
(16)
|
|
|
(25)
|
|
|
(25)
|
|
|
(73)
|
|
Certain net charges
pursuant to our restructuring initiative
|
—
|
|
|
2
|
|
|
2
|
|
|
8
|
|
Certain other
expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(25)
|
|
Acquisition-related
adjustments (b)
|
(1)
|
|
|
(327)
|
|
|
3
|
|
|
(286)
|
|
Total adjustments
to operating expenses
|
(317)
|
|
|
(648)
|
|
|
(910)
|
|
|
(1,259)
|
|
Non-GAAP operating
expenses
|
$
|
2,944
|
|
|
$
|
2,933
|
|
|
$
|
8,629
|
|
|
$
|
8,377
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
$
|
2,476
|
|
|
$
|
2,323
|
|
|
$
|
7,626
|
|
|
$
|
7,881
|
|
Adjustments to
operating expenses
|
317
|
|
|
648
|
|
|
910
|
|
|
1,259
|
|
Non-GAAP operating
income
|
$
|
2,793
|
|
|
$
|
2,971
|
|
|
$
|
8,536
|
|
|
$
|
9,140
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP operating
income as a percentage of product sales
|
45.3
|
%
|
|
42.2
|
%
|
|
46.7
|
%
|
|
47.7
|
%
|
Adjustments to cost
of sales
|
5.1
|
|
|
5.0
|
|
|
5.1
|
|
|
5.0
|
|
Adjustments to
research and development expenses
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
Adjustments to
selling, general and administrative expenses
|
0.3
|
|
|
0.5
|
|
|
0.2
|
|
|
0.4
|
|
Certain net charges
pursuant to our restructuring initiative
|
0.0
|
|
|
-0.1
|
|
|
0.0
|
|
|
0.0
|
|
Certain other
expenses
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
0.1
|
|
Acquisition-related
adjustments (b)
|
0.0
|
|
|
5.9
|
|
|
-0.1
|
|
|
1.7
|
|
Non-GAAP operating
income as a percentage of product sales
|
51.1
|
%
|
|
53.9
|
%
|
|
52.3
|
%
|
|
55.3
|
%
|
|
|
|
|
|
|
|
|
GAAP interest and
other income, net
|
$
|
114
|
|
|
$
|
126
|
|
|
$
|
517
|
|
|
$
|
519
|
|
Adjustments to other
income (c)
|
—
|
|
|
7
|
|
|
—
|
|
|
(68)
|
|
Non-GAAP interest
and other income, net
|
$
|
114
|
|
|
$
|
133
|
|
|
$
|
517
|
|
|
$
|
451
|
|
|
|
|
|
|
|
|
|
GAAP income before
income taxes
|
$
|
2,277
|
|
|
$
|
2,094
|
|
|
$
|
7,155
|
|
|
$
|
7,360
|
|
Adjustments to
operating expenses
|
317
|
|
|
648
|
|
|
910
|
|
|
1,259
|
|
Adjustments to other
income (c)
|
—
|
|
|
7
|
|
|
—
|
|
|
(68)
|
|
Non-GAAP income
before income taxes
|
$
|
2,594
|
|
|
$
|
2,749
|
|
|
$
|
8,065
|
|
|
$
|
8,551
|
|
|
|
|
|
|
|
|
|
GAAP provision for
income taxes
|
$
|
309
|
|
|
$
|
235
|
|
|
$
|
1,016
|
|
|
$
|
894
|
|
Adjustments to
provision for income taxes:
|
|
|
|
|
|
|
|
Income tax effect of
the above adjustments (d)
|
92
|
|
|
147
|
|
|
230
|
|
|
285
|
|
Other income tax
adjustments (e)
|
(8)
|
|
|
(25)
|
|
|
(35)
|
|
|
(15)
|
|
Total adjustments
to provision for income taxes
|
84
|
|
|
122
|
|
|
195
|
|
|
270
|
|
Non-GAAP provision
for income taxes
|
$
|
393
|
|
|
$
|
357
|
|
|
$
|
1,211
|
|
|
$
|
1,164
|
|
|
|
|
|
|
|
|
|
GAAP tax as a
percentage of income before taxes
|
13.6
|
%
|
|
11.2
|
%
|
|
14.2
|
%
|
|
12.1
|
%
|
Adjustments to
provision for income taxes:
|
|
|
|
|
|
|
|
Income tax effect of
the above adjustments (d)
|
1.9
|
|
|
2.7
|
|
|
1.2
|
|
|
1.7
|
|
Other income tax
adjustments (e)
|
-0.3
|
|
|
-0.9
|
|
|
-0.4
|
|
|
-0.2
|
|
Total adjustments
to provision for income taxes
|
1.6
|
|
|
1.8
|
|
|
0.8
|
|
|
1.5
|
|
Non-GAAP tax as a
percentage of income before taxes
|
15.2
|
%
|
|
13.0
|
%
|
|
15.0
|
%
|
|
13.6
|
%
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$
|
1,968
|
|
|
$
|
1,859
|
|
|
$
|
6,139
|
|
|
$
|
6,466
|
|
Adjustments to net
income:
|
|
|
|
|
|
|
|
Adjustments to income
before income taxes, net of the income tax effect
|
225
|
|
|
508
|
|
|
680
|
|
|
906
|
|
Other income tax
adjustments (e)
|
8
|
|
|
25
|
|
|
35
|
|
|
15
|
|
Total adjustments
to net income
|
233
|
|
|
533
|
|
|
715
|
|
|
921
|
|
Non-GAAP net
income
|
$
|
2,201
|
|
|
$
|
2,392
|
|
|
$
|
6,854
|
|
|
$
|
7,387
|
|
|
|
|
|
|
|
|
|
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
September 30, 2019
|
|
Three months
ended
September 30, 2018
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
Net income
|
$
|
1,968
|
|
|
$
|
2,201
|
|
|
$
|
1,859
|
|
|
$
|
2,392
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares for diluted EPS
|
602
|
|
|
602
|
|
|
649
|
|
|
649
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
$
|
3.27
|
|
|
$
|
3.66
|
|
|
$
|
2.86
|
|
|
$
|
3.69
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended
September 30, 2019
|
|
Nine months
ended
September 30, 2018
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
Net income
|
$
|
6,139
|
|
|
$
|
6,854
|
|
|
$
|
6,466
|
|
|
$
|
7,387
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares for diluted EPS
|
613
|
|
|
613
|
|
|
673
|
|
|
673
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
$
|
10.01
|
|
|
$
|
11.18
|
|
|
$
|
9.61
|
|
|
$
|
10.98
|
|
|
|
|
(a)
|
|
The adjustments
related primarily to noncash amortization of intangible assets
acquired in business combinations.
|
|
|
|
(b)
|
|
For the three and
nine months ended September 30, 2018, the adjustments related
primarily to an impairment charge associated with a nonkey
in-process research and development asset.
|
|
|
|
(c)
|
|
For the nine months
ended September 30, 2018, the adjustment related to the net gain
associated with the Kirin-Amgen, Inc., share
acquisition.
|
|
|
|
(d)
|
|
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 nine months ended September 30,
2019, were 29.0% and 25.3%, compared with 22.4% and 23.9% for the
corresponding periods of the prior year.
|
|
|
|
(e)
|
|
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
September 30,
|
|
Nine months
ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net cash provided by
operating activities
|
$
|
3,377
|
|
|
$
|
3,273
|
|
|
$
|
6,636
|
|
|
$
|
8,102
|
|
Net cash provided by
investing activities
|
5,372
|
|
|
1,132
|
|
|
11,672
|
|
|
18,976
|
|
Net cash used in
financing activities
|
(2,859)
|
|
|
(2,580)
|
|
|
(13,838)
|
|
|
(18,922)
|
|
Increase in cash and
cash equivalents
|
5,890
|
|
|
1,825
|
|
|
4,470
|
|
|
8,156
|
|
Cash and cash
equivalents at beginning of period
|
5,525
|
|
|
10,131
|
|
|
6,945
|
|
|
3,800
|
|
Cash and cash
equivalents at end of period
|
$
|
11,415
|
|
|
$
|
11,956
|
|
|
$
|
11,415
|
|
|
$
|
11,956
|
|
|
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net cash provided by
operating activities
|
$
|
3,377
|
|
|
$
|
3,273
|
|
|
$
|
6,636
|
|
|
$
|
8,102
|
|
Capital
expenditures
|
(170)
|
|
|
(171)
|
|
|
(430)
|
|
|
(513)
|
|
Free cash
flow
|
$
|
3,207
|
|
|
$
|
3,102
|
|
|
$
|
6,206
|
|
|
$
|
7,589
|
|
Amgen
Inc.
|
Reconciliation of
GAAP EPS Guidance to Non-GAAP
|
EPS Guidance for
the Year Ending December 31, 2019
|
(Unaudited)
|
|
GAAP diluted EPS
guidance
|
|
$12.50
|
—
|
$12.80
|
Known adjustment
to arrive at non-GAAP*:
|
|
|
|
|
Acquisition-related
expenses (a) (b)
|
|
1.59
|
—
|
1.64
|
Tax
adjustments
|
|
|
0.06
|
|
Non-GAAP diluted
EPS guidance
|
|
$14.20
|
—
|
$14.45
|
|
* The known
adjustments are presented net of their related tax impact, which
amount to approximately $0.39 to $0.40 per share.
|
|
(a) The adjustments
relate primarily to noncash amortization of intangible assets
acquired in business combinations.
|
|
(b) The adjustments
exclude transactions that have not yet closed.
|
|
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