THOUSAND OAKS, Calif.,
Oct. 28, 2020 /PRNewswire/ -- Amgen
(NASDAQ:AMGN) today announced financial results for the third
quarter of 2020.
Key results include:
- Total revenues increased 12% to $6.4
billion in comparison to the third quarter of 2019 driven by
higher volume growth, partially offset by lower net selling prices
and the effects of the COVID-19 pandemic.
-
- Product sales increased 12% globally, driven by 18% volume
growth across a number of our newer products, including
Otezla® (apremilast), MVASI®
(bevacizumab-awwb), KANJINTI® (trastuzumab-anns), and
Repatha® (evolocumab), partially offset by declines in
select products from the impact of COVID-19, and biosimilar and
generic competition.
- GAAP earnings per share (EPS) increased 5% to $3.43 primarily driven by increased revenues and
lower weighted-average shares outstanding, partially offset by the
amortization of costs associated with our November 2019 acquisition of Otezla.
-
- GAAP operating income decreased 1% to $2.5 billion and GAAP operating margin decreased
5.1 percentage points to 40.2%, primarily driven by the
amortization of intangible assets from our Otezla acquisition.
- Non-GAAP EPS increased 19% to $4.37 driven by increased revenues.
-
- Non-GAAP operating income increased 14% to $3.2 billion and non-GAAP operating margin
increased 1.0 percentage point to 52.1%.
- The Company generated $3.2
billion of free cash flow in the third quarter versus
$3.2 billion in the third quarter of
2019.
- 2020 total revenues guidance narrowed to $25.1-$25.5
billion; EPS guidance revised to $11.53-$11.93 on a
GAAP basis and revised to $15.80-$16.15 on a
non-GAAP basis.
"Amgen continues to deliver strong,
volume-driven growth in a challenging environment, while also
advancing new medicines in our pipeline," said Robert A. Bradway, chairman and chief executive
officer.
$Millions, except
EPS, dividends paid per share and percentages
|
Q3
'20
|
|
Q3
'19
|
|
YOY
Δ
|
Total
Revenues
|
$
|
6,423
|
|
$
|
5,737
|
|
12%
|
GAAP Operating
Income
|
$
|
2,453
|
|
$
|
2,476
|
|
(1%)
|
GAAP Net
Income
|
$
|
2,021
|
|
$
|
1,968
|
|
3%
|
GAAP EPS
|
$
|
3.43
|
|
$
|
3.27
|
|
5%
|
Non-GAAP Operating
Income
|
$
|
3,183
|
|
$
|
2,793
|
|
14%
|
Non-GAAP Net
Income
|
$
|
2,572
|
|
$
|
2,201
|
|
17%
|
Non-GAAP
EPS
|
$
|
4.37
|
|
$
|
3.66
|
|
19%
|
Dividends Paid Per
Share
|
$
|
1.60
|
|
$
|
1.45
|
|
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 increased 12% versus the third
quarter of 2019 driven by 18% volume growth, partially offset by
declines in net selling prices.
- COVID-19 update: During the third quarter,
physician-patient interactions and prescribing volumes continued to
increase, but remained modestly below pre-COVID-19 levels on a
portfolio basis. While prescription trends were more consistent
throughout the third quarter versus the second quarter, we continue
to expect quarter-to-quarter variability due to the pandemic.
- Prolia® (denosumab) sales increased 11%
year-over-year driven by 10% volume growth as patients returned for
treatment in the quarter, with rates of osteoporosis diagnoses in
the U.S. recovering to ~70% of pre-COVID-19 levels. Our efforts
remain focused on assisting patients with continuity of care to
improve product access from the initial stages of the pandemic.
Prior to the pandemic, the first and third quarters of each year
had lower sales than the second and fourth quarters. Given the
impact of the pandemic in the second quarter of 2020 and 6-month
dosing regimen of Prolia, we expect year-over-year growth rates in
the fourth quarter to be lower than pre-COVID-19 growth trends.
- EVENITY® (romosozumab-aqqg) generated
$59 million of sales in the third
quarter of 2020. U.S. sales increased 35% quarter-over-quarter
driven by 30% volume growth. Japan
sales declined quarter-over-quarter driven by an inventory drawdown
by our partner Astellas following large purchases during the first
half of 2020, as well as an unfavorable change to estimated sales
deductions.
- Repatha sales increased 22% year-over-year driven
by 60% volume growth, partially offset by lower net selling price
and unfavorable changes to estimated sales deductions. Despite a
modest disruption in access in the third quarter, Repatha remains
the global segment leader in the proprotein convertase
subtilisin/kexin type 9 (PCSK9) class. Repatha's year-over-year net
selling price declined as a result of additional contracting to
improve Medicare Part D patient access and affordability. At the
end of the third quarter, more than 60% of Medicare patients had
access to affordable, fixed co-pays of $50 or less.
- Aimovig® (erenumab-aooe) sales increased 59%
year-over-year driven by 36% volume growth and the effect of
unfavorable changes to estimated sales deductions in the prior
year. Net selling price declined minimally year-over-year. Aimovig
remains the segment leader within the preventive calcitonin
gene-related peptide (CGRP) class with 46% share of total
prescriptions (TRx) and 38% share of new-to-brand prescriptions
(NBRx) in the quarter. With five-year efficacy and safety data,
Aimovig is well positioned for the preventive segment which impacts
more than 4 million individuals in the U.S.
- Parsabiv® (etelcalcetide) sales increased 17%
year-over-year driven by 24% volume growth, partially offset by
lower net selling price. The final rule from the Centers for
Medicare & Medicaid Services (CMS) to include calcimimetics in
the end stage renal disease (ESRD) bundled payment system is
expected in November 2020, with
implementation projected for January
2021. In anticipation of this change, we believe U.S. sales
were negatively impacted late in the third quarter and we expect
this trend to continue in the fourth quarter.
- Otezla generated $538
million of sales in the third quarter of 2020. U.S. Otezla
TRx volume growth remained strong with an 11% year-over-year
increase, and NBRx volumes continued to recover from the impacts of
COVID-19. Net selling price was flat year-over-year in the U.S.
Third quarter year-over-year Otezla sales* were negatively impacted
by lower inventory levels and unfavorable changes to estimated
sales deductions. Otezla continues to lead in biologic-naïve
patient share in moderate-to-severe psoriasis.
- Enbrel® (etanercept) sales decreased 3%
year-over-year driven by lower volumes, partially offset by
favorable changes to estimated sales deductions. Enbrel continued
to lose share in the third quarter, and that dynamic was compounded
with lower growth of the rheumatology segment due to COVID-19. Net
selling price was flat year-over-year.
- AMGEVITA™ (adalimumab) increased 31%
year-over-year driven by 49% volume growth, partially offset by
lower net selling price. AMGEVITA continues to be the most
prescribed adalimumab biosimilar in Europe.
- KYPROLIS® (carfilzomib) sales decreased
2% year-over-year driven by volume declines, as fewer new patients
began treatment due to COVID-19. Early indications point to a
strong launch of the new once-weekly KYPROLIS and
DARZALEX® (daratumumab) combination regimen that
was approved by the U.S. Food and Drug Administration (FDA) in
August.
- XGEVA® (denosumab) sales increased 1%
year-over-year. Sales increased 11% quarter-over-quarter,
reflecting a recovery in the number of patients returning to
treatment.
- Vectibix® (panitumumab) sales declined
2% year-over-year driven by volume declines.
- Nplate® (romiplostim) sales increased 9%
year-over-year driven by volume growth.
- BLINCYTO® (blinatumomab) sales increased 5%
year-over-year driven by volume growth as we continued to see
broader adoption in the community hospital setting.
- MVASI generated $231 million of sales in the third quarter of
2020, with 44% exit share of the bevacizumab segment in the U.S.
Sales increased 34% quarter-over-quarter driven by 36% volume
growth, partially offset by a decline in net selling price. Going
forward, we expect the launch of additional competing biosimilars
in the U.S.
- KANJINTI generated $167 million of sales in the third quarter of
2020, with 34% exit share of the trastuzumab segment in the U.S.
Sales increased 36% quarter-over-quarter driven by 11% volume
growth and favorable changes to estimated sales deductions. Moving
forward, we expect volume growth will be offset by a decline in net
selling price due to increased competition.
- Neulasta® (pegfilgrastim) sales
decreased 22% year-over-year driven by declines in volumes and net
selling price due to increased biosimilar competition, partially
offset by favorable changes to estimated sales deductions. Within
the long-acting granulocyte colony-stimulating factor (G-CSF)
segment, Neulasta Onpro® continues to be the
preferred choice for physicians and patients, with volume share of
55% in the quarter. CMS's most recently published average selling
price for Neulasta in the U.S. declined 19% year-over-year and
declined 6% quarter-over-quarter. Going forward, we expect the
pricing and volume trends to continue.
- NEUPOGEN® (filgrastim) sales increased 20%
year-over-year driven by favorable changes to estimated sales
deductions, partially offset by 19% volume decline due to
competition.
- EPOGEN® (epoetin alfa) sales decreased
31% year-over-year driven by volume declines as well as lower net
selling price resulting from our existing contractual commitment
with DaVita.
- Aranesp® (darbepoetin alfa) sales decreased
15% year-over-year driven by lower net selling price and volume
declines due to competition.
- Sensipar/Mimpara® (cinacalcet) sales
decreased 64% year-over-year driven by declines in volume and net
selling price due to generic competition.
*Third quarter 2019 Sales information derived from Celgene
Corporation's reporting for that period.
Product Sales Detail by Product and Geographic Region
$Millions, except
percentages
|
Q3
'20
|
|
Q3
'19
|
|
YOY
Δ
|
|
US
|
|
ROW
|
|
TOTAL
|
|
TOTAL
|
|
TOTAL
|
Prolia®
|
$
|
478
|
|
|
$
|
223
|
|
|
$
|
701
|
|
|
$
|
630
|
|
|
11%
|
EVENITY®
|
54
|
|
|
5
|
|
|
59
|
|
|
59
|
|
|
—
|
Repatha®
|
92
|
|
|
113
|
|
|
205
|
|
|
168
|
|
|
22%
|
Aimovig®
|
105
|
|
|
—
|
|
|
105
|
|
|
66
|
|
|
59%
|
Parsabiv®
|
156
|
|
|
27
|
|
|
183
|
|
|
157
|
|
|
17%
|
Otezla®
|
439
|
|
|
99
|
|
|
538
|
|
|
—
|
|
|
NM
|
Enbrel®
|
1,289
|
|
|
36
|
|
|
1,325
|
|
|
1,366
|
|
|
(3%)
|
AMGEVITA™
|
—
|
|
|
80
|
|
|
80
|
|
|
61
|
|
|
31%
|
KYPROLIS®
|
173
|
|
|
87
|
|
|
260
|
|
|
266
|
|
|
(2%)
|
XGEVA®
|
363
|
|
|
118
|
|
|
481
|
|
|
476
|
|
|
1%
|
Vectibix®
|
90
|
|
|
103
|
|
|
193
|
|
|
196
|
|
|
(2%)
|
Nplate®
|
118
|
|
|
94
|
|
|
212
|
|
|
195
|
|
|
9%
|
BLINCYTO®
|
54
|
|
|
35
|
|
|
89
|
|
|
85
|
|
|
5%
|
MVASI®
|
185
|
|
|
46
|
|
|
231
|
|
|
43
|
|
|
*
|
KANJINTI®
|
149
|
|
|
18
|
|
|
167
|
|
|
69
|
|
|
*
|
Neulasta®
|
484
|
|
|
71
|
|
|
555
|
|
|
711
|
|
|
(22%)
|
NEUPOGEN®
|
44
|
|
|
21
|
|
|
65
|
|
|
54
|
|
|
20%
|
EPOGEN®
|
149
|
|
|
—
|
|
|
149
|
|
|
215
|
|
|
(31%)
|
Aranesp®
|
158
|
|
|
226
|
|
|
384
|
|
|
452
|
|
|
(15%)
|
Sensipar®/Mimpara®
|
7
|
|
|
32
|
|
|
39
|
|
|
109
|
|
|
(64%)
|
Other**
|
31
|
|
|
52
|
|
|
83
|
|
|
85
|
|
|
(2%)
|
Total product
sales
|
$
|
4,618
|
|
|
$
|
1,486
|
|
|
$
|
6,104
|
|
|
$
|
5,463
|
|
|
12%
|
|
|
|
|
|
|
|
|
|
|
NM = not
meaningful
|
|
|
|
|
* Change in excess of
100%
|
|
|
** Other includes
GENSENTA, IMLYGIC®, Corlanor®, Bergamo
and AVSOLA®
|
Operating Expense, Operating Margin and Tax Rate
Analysis
On a GAAP basis:
- Total Operating Expenses increased 22%. Cost of
Sales margin increased 6.6 percentage points driven by
amortization expense related to the Otezla acquisition. Research
& Development (R&D) expenses increased 6% driven by
higher spend in support of our late-stage development programs,
primarily sotorasib, our biosimilar programs and Otezla, partially
offset by recoveries from our collaboration with BeiGene.
Selling, General & Administrative (SG&A) expenses
increased 10% primarily due to Otezla commercial related
expenses.
- Operating Margin decreased 5.1 percentage points to
40.2% primarily driven by the amortization of intangible assets
from our Otezla acquisition.
- Tax Rate decreased 5.2 percentage points primarily
driven by favorable items in the quarter, including effective
settlement of certain federal income tax matters and adjustments to
prior year tax liabilities, partially offset by changes in
jurisdictional mix of earnings.
On a non-GAAP basis:
- Total Operating Expenses increased 10%. Cost of
Sales margin increased 0.4 percentage points primarily driven
by an increase in royalties, partially offset by favorable product
mix. R&D expenses increased 6% driven by higher spend in
support of our late-stage development programs, primarily
sotorasib, our biosimilar programs and Otezla, partially offset by
recoveries from our collaboration with BeiGene. SG&A
expenses increased 10% primarily due to Otezla commercial related
expenses.
- Operating Margin increased 1.0 percentage point to
52.1%.
- Tax Rate decreased 1.7 percentage points primarily
driven by favorable items in the quarter, including adjustments to
prior year tax liabilities, partially offset by changes in
jurisdictional mix of earnings.
$Millions, except
percentages
|
|
GAAP
|
|
Non-GAAP
|
|
|
Q3
'20
|
|
Q3
'19
|
|
YOY
Δ
|
|
Q3
'20
|
|
Q3
'19
|
|
YOY
Δ
|
Cost of
Sales
|
|
$
|
1,561
|
|
|
$
|
1,036
|
|
|
51%
|
|
$
|
874
|
|
|
$
|
760
|
|
|
15%
|
% of product
sales
|
|
|
25.6%
|
|
|
|
19.0%
|
|
|
6.6 pts
|
|
|
14.3%
|
|
|
|
13.9%
|
|
|
0.4 pts
|
Research &
Development
|
|
$
|
1,062
|
|
|
$
|
1,001
|
|
|
6%
|
|
$
|
1,037
|
|
|
$
|
977
|
|
|
6%
|
% of product
sales
|
|
|
17.4%
|
|
|
|
18.3%
|
|
|
(0.9) pts
|
|
|
17.0%
|
|
|
|
17.9%
|
|
|
(0.9) pts
|
Selling, General
& Administrative
|
|
$
|
1,346
|
|
|
$
|
1,223
|
|
|
10%
|
|
$
|
1,329
|
|
|
$
|
1,207
|
|
|
10%
|
% of product
sales
|
|
|
22.1%
|
|
|
|
22.4%
|
|
|
(0.3) pts
|
|
|
21.8%
|
|
|
|
22.1%
|
|
|
(0.3) pts
|
Other
|
|
$
|
1
|
|
|
$
|
1
|
|
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—%
|
Total Operating
Expenses
|
|
$
|
3,970
|
|
|
$
|
3,261
|
|
|
22%
|
|
$
|
3,240
|
|
|
$
|
2,944
|
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
operating income as %
of product sales
|
|
40.2%
|
|
|
45.3%
|
|
|
(5.1) pts
|
|
52.1%
|
|
|
51.1%
|
|
|
1.0 pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
Rate
|
|
8.4%
|
|
|
13.6%
|
|
|
(5.2)
pts
|
|
13.5%
|
|
|
15.2%
|
|
|
(1.7)
pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
pts: percentage
points
|
|
|
|
Cash Flow and Balance Sheet
- The Company generated $3.2
billion of free cash flow in the third quarter of 2020
versus $3.2 billion in the third
quarter of 2019.
- The Company's third quarter 2020 dividend of $1.60 per share was declared on July 23, 2020, and was paid on September 8, 2020 to all stockholders of record
as of August 17, 2020, representing a 10% increase from
2019.
- During the third quarter, the Company repurchased 3.0 million
shares of common stock at a total cost of $752 million. At the end of the third quarter,
the Company had $4.2
billion remaining under its stock repurchase
authorization.
- Cash and investments totaled $12.4
billion and debt outstanding totaled $34.3 billion at the end of Q3 2020.
$Billions, except
shares
|
|
Q3
'20
|
|
Q3
'19
|
|
YOY
Δ
|
Operating Cash
Flow
|
|
$
|
3.4
|
|
|
$
|
3.4
|
|
|
$
|
0.0
|
|
Capital
Expenditures
|
|
0.1
|
|
|
0.2
|
|
|
0.0
|
|
Free Cash
Flow
|
|
3.2
|
|
|
3.2
|
|
|
0.0
|
|
Dividends
Paid
|
|
0.9
|
|
|
0.9
|
|
|
0.1
|
|
Share
Repurchases
|
|
0.8
|
|
|
1.2
|
|
|
(0.4)
|
|
Average Diluted
Shares (millions)
|
|
589
|
|
|
602
|
|
|
(13)
|
|
|
|
|
|
|
|
|
|
|
9/30/20
|
|
12/31/19
|
|
YTD
Δ
|
Cash and
Investments
|
|
$
|
12.4
|
|
|
$
|
8.9
|
|
|
$
|
3.5
|
|
Debt
Outstanding
|
|
34.3
|
|
|
29.9
|
|
|
4.4
|
|
|
|
|
|
|
|
|
Note: Numbers may not
add due to rounding
|
|
|
|
|
|
|
2020 Guidance
For the full year 2020, the Company now expects:
- Total revenues in the range of $25.1 billion to $25.5
billion.
-
- Previously, the Company expected total revenues in the range of
$25.0 billion to $25.6 billion.
- On a GAAP basis, EPS in the range of $11.53 to $11.93
and a tax rate in the range of 9.5% to 10.5%.
-
- Previously, the Company expected GAAP EPS in the range of
$10.73 to $11.43 and a tax rate in the range of 10.5% to
11.5%.
- On a non-GAAP basis, EPS in the range of $15.80 to $16.15
and a tax rate in the range of 13.0% to 14.0%.
-
- Previously, the Company expected non-GAAP EPS in the range of
$15.10 to $15.75 and a tax rate in the range of 13.5% to
14.5%.
- Capital expenditures to be approximately
$600 million.
- Quarterly dividend maintained at $1.60 per share.
- Share repurchases at the lower end of our previous
guidance of $3 billion to
$5 billion.
Third Quarter Product and Pipeline Update
The Company provided the following updates on selected product
and pipeline programs:
Sotorasib
- The Company discussed the previously announced Phase 1 data and
positive topline results from the Phase 2 monotherapy study of
sotorasib in patients with advanced non-small cell lung cancer
(NSCLC).
- Data from the Phase 2 monotherapy study in advanced colorectal
cancer patients are expected in H1 2021.
- A Phase 3 study comparing sotorasib to docetaxel is enrolling
patients with advanced NSCLC.
- 7 Phase 1b combination cohorts
are now enrolling patients.
Bispecific Programs
- The Company expects initial data from Phase 1 dose escalation
studies of the following half-life extended (HLE)
BiTE® constructs in Q4 2020:
-
- AMG 701 targeting BCMA (B-cell maturation antigen) for relapsed
or refractory multiple myeloma
- AMG 757 targeting DLL3 (delta-like ligand 3) for relapsed or
refractory small cell lung cancer, to be presented at the Society
for Immunotherapy of Cancer Annual Meeting, November 9-14, 2020
- Phase 1 development of the HLE BiTE®
construct, AMG 562, targeting CD19 for non-Hodgkin's lymphoma has
been stopped due to portfolio prioritization.
BLINCYTO
- The Company discussed encouraging results recently published in
the New England Journal of Medicine from an independent clinical
study of an investigational regimen of dasatinib induction therapy
followed by blinatumomab consolidation therapy in adults with
Philadelphia chromosome positive
acute lymphoblastic leukemia.
Tezepelumab
- Data are expected in Q4 from the pivotal Phase 3 NAVIGATOR
study evaluating tezepelumab in adults and adolescents with severe,
uncontrolled asthma.
- Data are expected in Q4 from the Phase 3 SOURCE study
evaluating tezepelumab for the reduction of oral corticosteroid use
in adults with oral corticosteroid dependent asthma.
Efavaleukin alfa (AMG 592)
- In October, the Company announced that the planned Phase 2
study of efavaleukin alfa in patients with Systemic Lupus
Erythematosus was selected for participation in the FDA's Complex
Innovative Trial Designs (CID) Pilot Program. The CID Pilot Program
aims to facilitate and advance the use of novel clinical trial
designs that support the development and regulatory review of new
therapeutics. The FDA considers several eligibility factors when
selecting qualifying programs, including the level of innovation of
the trial design, and the therapeutic need.
ABP 654 (biosimilar ustekinumab)
- The Company has advanced ABP 654, a biosimilar candidate to
STELARA® (ustekinumab), into Phase 3
development.
KYPROLIS
- In August, the FDA approved the expansion of the KYPROLIS U.S.
prescribing information to include its use in combination with
DARZALEX® plus dexamethasone in two dosing
regimens—once weekly and twice weekly—for the treatment of patients
with relapsed or refractory multiple myeloma who have received one
to three previous lines of therapy.
MCL-1 Inhibitor Program
- Phase 1 studies of MCL-1 inhibitors AMG 176 and AMG 397 are
reinitiating enrollment of patients with hematologic
malignancies.
Nplate
- The FDA has granted priority review for Nplate for the
treatment of Hematopoietic Syndrome of Acute Radiation Syndrome,
with a Prescription Drug User Fee Act target action date of
January 28, 2021. Research was
conducted in collaboration with and support from both the National
Institute of Allergy and Infectious Diseases and the Biomedical
Advanced Research and Development Authority.
ABP 798 (biosimilar rituximab)
- The FDA Biosimilar User Fee Act target action date for the
Biologics License Application for ABP 798, a biosimilar candidate
to RITUXAN® (rituximab), is December 19,
2020.
Omecamtiv mecarbil
- The Company discussed the topline results from the Phase 3
GALACTIC-HF trial of omecamtiv mecarbil in patients with heart
failure with reduced ejection fraction.
Olpasiran (AMG 890)
- The FDA granted Fast Track designation for olpasiran, a
lipoprotein(a) small interfering RNA currently in Phase 2
development for the treatment of atherosclerotic cardiovascular
disease.
Otezla
- Otezla is being investigated as a potential immunomodulatory
treatment in patients hospitalized with SARS-CoV-2 infections in
multiple COVID-19 platform trials.
Aimovig
- In September, a marketing authorization application was filed
with the Japan Pharmaceuticals and Medical Devices Agency for
Aimovig for the prevention of migraine.
- In October, results from the five-year, open-label treatment
period of a Phase 2 study in episodic migraine prevention showed
Aimovig helped patients achieve sustained reductions in monthly
migraine days and in use of acute migraine-specific medication. The
safety profile was consistent with what was observed in the
double-blind treatment phase of the study, with no increases in
adverse event rates over five years of exposure.
COVID-19 Therapeutics
- In September, the Company announced a global antibody
manufacturing collaboration to significantly increase the supply
capacity available for Eli Lilly's potential COVID-19
therapies.
DARZALEX and STELARA are registered trademarks of Janssen
Pharmaceutica NV
Omecamtiv mecarbil is being developed under a collaboration
between Amgen and Cytokinetics, with funding and strategic support
from Servier
Tezepelumab is being developed in collaboration with
AstraZeneca
RITUXAN is a registered trademark of Biogen Inc.
Non-GAAP Financial Measures
In this news release, management has presented its operating
results for the third quarters of 2020 and 2019, in accordance with
U.S. Generally Accepted Accounting Principles (GAAP) and on a
non-GAAP basis. In addition, management has presented its full year
2020 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
2020 and 2019. 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
collaborations, or potential collaborations, with any other
company, including BeiGene, Ltd. or any collaboration or potential
collaboration in pursuit of therapeutic antibodies against COVID-19
(including statements regarding such collaboration's, or our own,
ability to discover and develop fully-human neutralizing antibodies
targeting SARS-CoV-2 or antibodies against targets other than the
SARS-CoV-2 receptor binding domain, and/or to produce any such
antibodies to potentially prevent or treat COVID-19), or the Otezla
acquisition (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, effects of pandemics or other widespread health problems
such as the ongoing COVID-19 pandemic on our business, outcomes,
progress, or effects relating to studies of Otezla as a potential
treatment for COVID-19, 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. An outbreak
of disease or similar public health threat, such as COVID-19, and
the public and governmental effort to mitigate against the spread
of such disease, could have a significant adverse effect on the
supply of materials for our manufacturing activities, the
distribution of our products, the commercialization of our product
candidates, and our clinical trial operations, and any such events
may have a material adverse effect on our product development,
product sales, business and results of operations. 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 collaborate with or acquire other companies, products or
technology, and to integrate the operations of companies or to
support the products or technology 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 Rowland, 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,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues:
|
|
|
|
|
|
|
|
Product
sales
|
$
|
6,104
|
|
|
$
|
5,463
|
|
|
$
|
17,906
|
|
|
$
|
16,323
|
|
Other
revenues
|
319
|
|
|
274
|
|
|
884
|
|
|
842
|
|
Total
revenues
|
6,423
|
|
|
5,737
|
|
|
18,790
|
|
|
17,165
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of
sales
|
1,561
|
|
|
1,036
|
|
|
4,562
|
|
|
3,103
|
|
Research and
development
|
1,062
|
|
|
1,001
|
|
|
2,978
|
|
|
2,804
|
|
Selling, general and
administrative
|
1,346
|
|
|
1,223
|
|
|
3,957
|
|
|
3,637
|
|
Other
|
1
|
|
|
1
|
|
|
162
|
|
|
(5)
|
|
Total operating
expenses
|
3,970
|
|
|
3,261
|
|
|
11,659
|
|
|
9,539
|
|
|
|
|
|
|
|
|
|
Operating
income
|
2,453
|
|
|
2,476
|
|
|
7,131
|
|
|
7,626
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
302
|
|
|
313
|
|
|
944
|
|
|
988
|
|
Interest and other
income, net
|
55
|
|
|
114
|
|
|
69
|
|
|
517
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
2,206
|
|
|
2,277
|
|
|
6,256
|
|
|
7,155
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
185
|
|
|
309
|
|
|
607
|
|
|
1,016
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
2,021
|
|
|
$
|
1,968
|
|
|
$
|
5,649
|
|
|
$
|
6,139
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
3.45
|
|
|
$
|
3.29
|
|
|
$
|
9.61
|
|
|
$
|
10.08
|
|
Diluted
|
$
|
3.43
|
|
|
$
|
3.27
|
|
|
$
|
9.54
|
|
|
$
|
10.01
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares used in calculation of earnings per share:
|
|
|
|
|
|
|
|
Basic
|
585
|
|
|
599
|
|
|
588
|
|
|
609
|
|
Diluted
|
589
|
|
|
602
|
|
|
592
|
|
|
613
|
|
|
|
|
Amgen
Inc.
|
Consolidated
Balance Sheets - GAAP
|
(In
millions)
|
|
|
September
30,
|
|
December
31,
|
|
2020
|
|
2019
|
|
(Unaudited)
|
|
|
Assets
|
Current
assets:
|
|
|
|
Cash, cash equivalents
and marketable securities
|
$
|
12,360
|
|
|
$
|
8,911
|
|
Trade receivables,
net
|
4,094
|
|
|
4,057
|
|
Inventories
|
3,942
|
|
|
3,584
|
|
Other current
assets
|
2,265
|
|
|
1,888
|
|
Total current
assets
|
22,661
|
|
|
18,440
|
|
|
|
|
|
Property, plant and
equipment, net
|
4,816
|
|
|
4,928
|
|
Intangible assets,
net
|
17,254
|
|
|
19,413
|
|
Goodwill
|
14,674
|
|
|
14,703
|
|
Other
assets
|
5,232
|
|
|
2,223
|
|
Total
assets
|
$
|
64,637
|
|
|
$
|
59,707
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
9,862
|
|
|
$
|
9,882
|
|
Current portion of
long-term debt
|
91
|
|
|
2,953
|
|
Total current
liabilities
|
9,953
|
|
|
12,835
|
|
|
|
|
|
Long-term
debt
|
34,196
|
|
|
26,950
|
|
Long-term deferred
tax liabilities
|
210
|
|
|
606
|
|
Long-term tax
liabilities
|
7,560
|
|
|
8,037
|
|
Other noncurrent
liabilities
|
1,759
|
|
|
1,606
|
|
Total stockholders'
equity
|
10,959
|
|
|
9,673
|
|
Total liabilities and
stockholders' equity
|
$
|
64,637
|
|
|
$
|
59,707
|
|
|
|
|
|
Shares
outstanding
|
584
|
|
|
591
|
|
|
|
|
Amgen
Inc.
|
GAAP to Non-GAAP
Reconciliations
|
(Dollars in
millions)
|
(Unaudited)
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
GAAP cost of
sales
|
$
|
1,561
|
|
|
$
|
1,036
|
|
|
$
|
4,562
|
|
|
$
|
3,103
|
|
Adjustments to cost
of sales:
|
|
|
|
|
|
|
|
Acquisition-related expenses (a)
|
(687)
|
|
|
(276)
|
|
|
(2,159)
|
|
|
(828)
|
|
Non-GAAP cost of
sales
|
$
|
874
|
|
|
$
|
760
|
|
|
$
|
2,403
|
|
|
$
|
2,275
|
|
|
|
|
|
|
|
|
|
GAAP cost of sales
as a percentage of product sales
|
25.6
|
%
|
|
19.0
|
%
|
|
25.5
|
%
|
|
19.0
|
%
|
Acquisition-related
expenses (a)
|
-11.3
|
|
|
-5.1
|
|
|
-12.1
|
|
|
-5.1
|
|
Non-GAAP cost of
sales as a percentage of product sales
|
14.3
|
%
|
|
13.9
|
%
|
|
13.4
|
%
|
|
13.9
|
%
|
|
|
|
|
|
|
|
|
GAAP research and
development expenses
|
$
|
1,062
|
|
|
$
|
1,001
|
|
|
$
|
2,978
|
|
|
$
|
2,804
|
|
Adjustments to
research and development expenses:
|
|
|
|
|
|
|
|
Acquisition-related expenses (a)
|
(24)
|
|
|
(24)
|
|
|
(77)
|
|
|
(62)
|
|
Certain net
charges pursuant to our restructuring initiatives
|
(1)
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
Total adjustments
to research and development expenses
|
(25)
|
|
|
(24)
|
|
|
(78)
|
|
|
(62)
|
|
Non-GAAP research
and development expenses
|
$
|
1,037
|
|
|
$
|
977
|
|
|
$
|
2,900
|
|
|
$
|
2,742
|
|
|
|
|
|
|
|
|
|
GAAP research and
development expenses as a percentage of product
sales
|
17.4
|
%
|
|
18.3
|
%
|
|
16.6
|
%
|
|
17.2
|
%
|
Acquisition-related
expenses (a)
|
-0.4
|
|
|
-0.4
|
|
|
-0.4
|
|
|
-0.4
|
|
Certain net charges
pursuant to our restructuring initiatives
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
Non-GAAP research
and development expenses as a percentage of product
sales
|
17.0
|
%
|
|
17.9
|
%
|
|
16.2
|
%
|
|
16.8
|
%
|
|
|
|
|
|
|
|
|
GAAP selling,
general and administrative expenses
|
$
|
1,346
|
|
|
$
|
1,223
|
|
|
$
|
3,957
|
|
|
$
|
3,637
|
|
Adjustments to
selling, general and administrative expenses:
|
|
|
|
|
|
|
|
Acquisition-related expenses (a)
|
(15)
|
|
|
(17)
|
|
|
(74)
|
|
|
(26)
|
|
Certain net
charges pursuant to our restructuring initiatives
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Other
|
(2)
|
|
|
—
|
|
|
(2)
|
|
|
—
|
|
Total adjustments
to selling, general and administrative expenses
|
(17)
|
|
|
(16)
|
|
|
(76)
|
|
|
(25)
|
|
Non-GAAP selling,
general and administrative expenses
|
$
|
1,329
|
|
|
$
|
1,207
|
|
|
$
|
3,881
|
|
|
$
|
3,612
|
|
|
|
|
|
|
|
|
|
GAAP selling,
general and administrative expenses as a percentage of product
sales
|
22.1
|
%
|
|
22.4
|
%
|
|
22.1
|
%
|
|
22.3
|
%
|
Acquisition-related
expenses (a)
|
-0.3
|
|
|
-0.3
|
|
|
-0.4
|
|
|
-0.2
|
|
Certain net charges
pursuant to our restructuring initiatives
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
Other
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
Non-GAAP selling,
general and administrative expenses as a percentage of product
sales
|
21.8
|
%
|
|
22.1
|
%
|
|
21.7
|
%
|
|
22.1
|
%
|
|
|
|
|
|
|
|
|
GAAP operating
expenses
|
$
|
3,970
|
|
|
$
|
3,261
|
|
|
$
|
11,659
|
|
|
$
|
9,539
|
|
Adjustments to
operating expenses:
|
|
|
|
|
|
|
|
Adjustments to
cost of sales
|
(687)
|
|
|
(276)
|
|
|
(2,159)
|
|
|
(828)
|
|
Adjustments to
research and development expenses
|
(25)
|
|
|
(24)
|
|
|
(78)
|
|
|
(62)
|
|
Adjustments to
selling, general and administrative expenses
|
(17)
|
|
|
(16)
|
|
|
(76)
|
|
|
(25)
|
|
Certain net
charges pursuant to our restructuring initiatives
|
—
|
|
|
—
|
|
|
4
|
|
|
2
|
|
Certain other
expenses (b)
|
(1)
|
|
|
(1)
|
|
|
(166)
|
|
|
3
|
|
Total adjustments
to operating expenses
|
(730)
|
|
|
(317)
|
|
|
(2,475)
|
|
|
(910)
|
|
Non-GAAP operating
expenses
|
$
|
3,240
|
|
|
$
|
2,944
|
|
|
$
|
9,184
|
|
|
$
|
8,629
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
$
|
2,453
|
|
|
$
|
2,476
|
|
|
$
|
7,131
|
|
|
$
|
7,626
|
|
Adjustments to
operating expenses
|
730
|
|
|
317
|
|
|
2,475
|
|
|
910
|
|
Non-GAAP operating
income
|
$
|
3,183
|
|
|
$
|
2,793
|
|
|
$
|
9,606
|
|
|
$
|
8,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
GAAP operating
income as a percentage of product sales
|
40.2
|
%
|
|
45.3
|
%
|
|
39.8
|
%
|
|
46.7
|
%
|
Adjustments to cost of
sales
|
11.3
|
|
|
5.1
|
|
|
12.1
|
|
|
5.1
|
|
Adjustments to
research and development expenses
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
Adjustments to
selling, general and administrative expenses
|
0.3
|
|
|
0.3
|
|
|
0.4
|
|
|
0.2
|
|
Certain net charges
pursuant to our restructuring initiatives
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
Certain other expenses
(b)
|
0.0
|
|
|
0.0
|
|
|
0.9
|
|
|
-0.1
|
|
Non-GAAP operating
income as a percentage of product sales
|
52.1
|
%
|
|
51.1
|
%
|
|
53.6
|
%
|
|
52.3
|
%
|
|
|
|
|
|
|
|
|
GAAP interest and
other income, net
|
$
|
55
|
|
|
$
|
114
|
|
|
$
|
69
|
|
|
$
|
517
|
|
Adjustments to
interest and other income, net (c)
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Non-GAAP interest
and other income, net
|
$
|
91
|
|
|
$
|
114
|
|
|
$
|
69
|
|
|
$
|
517
|
|
|
|
|
|
|
|
|
|
GAAP income before
income taxes
|
$
|
2,206
|
|
|
$
|
2,277
|
|
|
$
|
6,256
|
|
|
$
|
7,155
|
|
Adjustments to
operating expenses
|
730
|
|
|
317
|
|
|
2,475
|
|
|
910
|
|
Adjustments to
interest and other income, net
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Non-GAAP income
before income taxes
|
$
|
2,972
|
|
|
$
|
2,594
|
|
|
$
|
8,731
|
|
|
$
|
8,065
|
|
|
|
|
|
|
|
|
|
GAAP provision for
income taxes
|
$
|
185
|
|
|
$
|
309
|
|
|
$
|
607
|
|
|
$
|
1,016
|
|
Adjustments to
provision for income taxes:
|
|
|
|
|
|
|
|
Income tax
effect of the above adjustments (d)
|
160
|
|
|
92
|
|
|
495
|
|
|
230
|
|
Other income
tax adjustments (e)
|
55
|
|
|
(8)
|
|
|
63
|
|
|
(35)
|
|
Total adjustments
to provision for income taxes
|
215
|
|
|
84
|
|
|
558
|
|
|
195
|
|
Non-GAAP provision
for income taxes
|
$
|
400
|
|
|
$
|
393
|
|
|
$
|
1,165
|
|
|
$
|
1,211
|
|
|
|
|
|
|
|
|
|
GAAP tax as a
percentage of income before taxes
|
8.4
|
%
|
|
13.6
|
%
|
|
9.7
|
%
|
|
14.2
|
%
|
Adjustments to
provision for income taxes:
|
|
|
|
|
|
|
|
Income tax
effect of the above adjustments (d)
|
3.2
|
|
|
1.9
|
|
|
2.9
|
|
|
1.2
|
|
Other income
tax adjustments (e)
|
1.9
|
|
|
-0.3
|
|
|
0.7
|
|
|
-0.4
|
|
Total adjustments
to provision for income taxes
|
5.1
|
|
|
1.6
|
|
|
3.6
|
|
|
0.8
|
|
Non-GAAP tax as a
percentage of income before taxes
|
13.5
|
%
|
|
15.2
|
%
|
|
13.3
|
%
|
|
15.0
|
%
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$
|
2,021
|
|
|
$
|
1,968
|
|
|
$
|
5,649
|
|
|
$
|
6,139
|
|
Adjustments to net
income:
|
|
|
|
|
|
|
|
Adjustments to
income before income taxes, net of the income tax effect
|
606
|
|
|
225
|
|
|
1,980
|
|
|
680
|
|
Other income
tax adjustments (e)
|
(55)
|
|
|
8
|
|
|
(63)
|
|
|
35
|
|
Total adjustments
to net income
|
551
|
|
|
233
|
|
|
1,917
|
|
|
715
|
|
Non-GAAP net
income
|
$
|
2,572
|
|
|
$
|
2,201
|
|
|
$
|
7,566
|
|
|
$
|
6,854
|
|
|
|
|
|
|
|
|
|
Note: Numbers may not
add due to rounding
|
|
|
|
|
|
|
|
|
|
|
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, 2020
|
|
Three months
ended
September 30, 2019
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
Net income
|
$
|
2,021
|
|
|
$
|
2,572
|
|
|
$
|
1,968
|
|
|
$
|
2,201
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares for diluted EPS
|
589
|
|
|
589
|
|
|
602
|
|
|
602
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
$
|
3.43
|
|
|
$
|
4.37
|
|
|
$
|
3.27
|
|
|
$
|
3.66
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended
September 30, 2020
|
|
Nine months
ended
September 30, 2019
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
Net income
|
$
|
5,649
|
|
|
$
|
7,566
|
|
|
$
|
6,139
|
|
|
$
|
6,854
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares for diluted EPS
|
592
|
|
|
592
|
|
|
613
|
|
|
613
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
$
|
9.54
|
|
|
$
|
12.78
|
|
|
$
|
10.01
|
|
|
$
|
11.18
|
|
|
|
|
(a)
|
|
The adjustments
related primarily to noncash amortization of intangible assets from
business acquisitions.
|
|
|
|
(b)
|
|
For the nine months
ended September 30, 2020, the adjustment related primarily to legal
settlement expenses and an impairment charge associated with an
in-process research and development asset.
|
|
|
|
(c)
|
|
For the three months
ended September 30, 2020, the adjustment related to the
amortization of the basis difference from our BeiGene equity method
investment. For the nine months ended September 30, 2020, the
adjustment related primarily to a gain from legal judgment proceeds
offset by amortization of the basis difference from our BeiGene
equity method investment.
|
|
|
|
(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 initiatives, 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, 2020, were 20.9% and 20.0%, compared with 29.0% and
25.3% for the corresponding periods of the prior year.
|
|
|
|
(e)
|
|
The adjustments
related 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,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net cash provided by
operating activities
|
$
|
3,368
|
|
|
$
|
3,377
|
|
|
$
|
8,344
|
|
|
$
|
6,636
|
|
Net cash (used in)
provided by investing activities
|
(1,628)
|
|
|
5,372
|
|
|
(4,017)
|
|
|
11,672
|
|
Net cash used in
financing activities
|
(1,798)
|
|
|
(2,859)
|
|
|
(1,277)
|
|
|
(13,838)
|
|
(Decrease) increase
in cash and cash equivalents
|
(58)
|
|
|
5,890
|
|
|
3,050
|
|
|
4,470
|
|
Cash and cash
equivalents at beginning of period
|
9,145
|
|
|
5,525
|
|
|
6,037
|
|
|
6,945
|
|
Cash and cash
equivalents at end of period
|
$
|
9,087
|
|
|
$
|
11,415
|
|
|
$
|
9,087
|
|
|
$
|
11,415
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net cash provided by
operating activities
|
$
|
3,368
|
|
|
$
|
3,377
|
|
|
$
|
8,344
|
|
|
$
|
6,636
|
|
Capital
expenditures
|
(135)
|
|
|
(170)
|
|
|
(435)
|
|
|
(430)
|
|
Free cash
flow
|
$
|
3,233
|
|
|
$
|
3,207
|
|
|
$
|
7,909
|
|
|
$
|
6,206
|
|
|
|
|
Amgen
Inc.
|
Reconciliation of
GAAP EPS Guidance to Non-GAAP
|
EPS Guidance for
the Year Ending December 31, 2020
|
(Unaudited)
|
|
GAAP diluted EPS
guidance
|
|
$
|
11.53
|
|
—
|
$
|
11.93
|
|
Known adjustments
to arrive at non-GAAP*:
|
|
|
|
|
Acquisition-related
expenses (a)
|
|
4.24
|
|
—
|
4.29
|
|
Net legal
proceedings
|
|
|
0.09
|
|
Other tax adjustments
(b)
|
|
|
(0.11)
|
|
Non-GAAP diluted
EPS guidance
|
|
$
|
15.80
|
|
—
|
$
|
16.15
|
|
|
|
*
|
The known adjustments
are presented net of their related tax impact, which amount to
approximately $1.17 - $1.18 per share.
|
|
|
(a)
|
The adjustments
relate primarily to noncash amortization of intangible assets
acquired in business acquisitions.
|
|
|
(b)
|
The adjustments
related to certain acquisition items and prior period items
excluded from GAAP earnings.
|
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, 2020
|
(Unaudited)
|
|
GAAP tax rate
guidance
|
|
9.5
|
%
|
—
|
10.5
|
%
|
Tax rate of known
adjustments discussed above
|
|
|
3.5%
|
|
Non-GAAP diluted EPS
guidance
|
|
13.0
|
%
|
—
|
14.0
|
%
|
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SOURCE Amgen