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    Amgen Inc (AMGN)

    Business Description

    Amgen Inc. is a global biotechnology company that discovers, develops, manufactures, and delivers innovative medicines to address serious diseases . The company operates in the human therapeutics segment, focusing on areas of high unmet medical need . Amgen's principal products include Prolia, ENBREL, XGEVA, Repatha, Otezla, TEPEZZA, EVENITY, KYPROLIS, Nplate, Aranesp, KRYSTEXXA, BLINCYTO, Vectibix, and TEZSPIRE, among others . The company's strategy includes expanding its rare disease portfolio, bolstered by the acquisition of Horizon Therapeutics .

    1. Human Therapeutics - Focuses on developing and delivering medicines for serious diseases, with key products like Prolia, ENBREL, XGEVA, Repatha, and Otezla driving growth.
      • Prolia - Treats osteoporosis by increasing bone mass and strength.
      • ENBREL - Used for treating autoimmune diseases such as rheumatoid arthritis.
      • XGEVA - Prevents skeletal-related events in patients with bone metastases.
      • Repatha - Lowers cholesterol levels in patients with cardiovascular risks.
      • Otezla - Treats moderate to severe plaque psoriasis and psoriatic arthritis.
    2. Rare Disease Portfolio - Expanded through the acquisition of Horizon Therapeutics, focusing on rare diseases with products like TEPEZZA, KRYSTEXXA, and UPLIZNA.
      • TEPEZZA - Treats thyroid eye disease.
      • KRYSTEXXA - Manages chronic gout in adult patients.
      • UPLIZNA - Targets neuromyelitis optica spectrum disorder.
    3. Oncology and Hematology - Develops treatments for cancer and blood disorders, including products like KYPROLIS, Nplate, Aranesp, and BLINCYTO.
      • KYPROLIS - Used in the treatment of multiple myeloma.
      • Nplate - Increases platelet production in patients with chronic immune thrombocytopenia.
      • Aranesp - Treats anemia associated with chronic kidney disease and chemotherapy.
      • BLINCYTO - Engages the immune system to target and destroy leukemia cells.
    4. Bone Health - Offers treatments like EVENITY and Vectibix to improve bone health and treat bone-related conditions.
      • EVENITY - Increases bone formation and reduces the risk of fractures in osteoporosis.
      • Vectibix - Used in the treatment of metastatic colorectal cancer.
    5. Respiratory and Inflammatory Diseases - Provides solutions for respiratory and inflammatory conditions, with products like TEZSPIRE.
      • TEZSPIRE - Treats severe asthma by targeting inflammatory pathways.

    Q2 2024 Summary

    Initial Price$282.11April 1, 2024
    Final Price$311.01July 1, 2024
    Price Change$28.90
    % Change+10.24%

    What went well

    • Strong Financial Performance: Amgen achieved a 20% year-over-year sales growth to $8.4 billion in the second quarter of 2024, with 12 products growing at least double digits, including Repatha, TEZSPIRE, EVENITY, TAVNEOS, and BLINCYTO, demonstrating robust execution across the portfolio.
    • Promising Pipeline with Recent Approvals: The company has a strong and promising R&D pipeline, achieving accelerated approvals for IMDELLTRA, a landmark new medicine for small cell lung cancer, and BLINCYTO in frontline B-cell precursor acute lymphoblastic leukemia, with physicians expressing excitement about these innovations. TEZSPIRE received Breakthrough Therapy designation for COPD, highlighting potential for future growth through new indications and therapies.
    • Growth Opportunities in Rare Diseases with TEPEZZA: Amgen sees significant growth opportunities for TEPEZZA in the U.S., having achieved favorable medical policy changes for over 65% of U.S. covered lives, up from just over 5% a year ago, and is preparing for the launch in Japan next year, expecting it to be an attractive market. The company is on track with synergy targets and aims to gain more leverage by taking full control of the supply chain for rare disease products.

    What went wrong

    • Amgen is facing reimbursement challenges and delays in patient access for TEPEZZA, particularly among low Clinical Activity Score (CAS) patients, which may hinder its growth prospects in the U.S.
    • The company is involved in ongoing tax litigation with the IRS, and recent unfavorable decisions against similar companies like Coca-Cola may have negative implications for Amgen's case, potentially impacting financial reserves and future earnings.
    • Amgen may be lagging behind competitors in the obesity treatment market, with concerns about its positioning as other companies advance multiple products into late-stage development, potentially affecting its future growth in this area.

    Q&A Summary

    1. MariTide's Position in Obesity Market
      Q: How will MariTide compete amid obesity drug competition?
      A: Amgen is confident in MariTide's differentiated profile and its ability to address unmet medical needs in obesity and Type-2 diabetes. Despite intense competition and the rise of oral medications, MariTide's monthly or less frequent dosing offers a unique advantage, potentially improving patient adherence and persistence on weight loss medication.

    2. MariTide's Phase III Timing
      Q: When will MariTide's Phase III enrollment begin?
      A: While focused on completing the Phase II trial, Amgen is moving swiftly into Phase III. Detailed timelines aren't disclosed due to competitive reasons, but the company anticipates providing more information over the coming year.

    3. Enbrel's CMS Price Negotiation Impact
      Q: How will CMS pricing affect Enbrel revenues?
      A: The CMS price reduction will have a mitigated impact since approximately 25% of Enbrel revenues come from Medicare Part D. Amgen continues to monitor how Part D redesign will influence formularies and patient costs, noting that out-of-pocket expenses for some patients may rise despite caps.

    4. CapEx Increase and MariTide Manufacturing
      Q: What's driving the CapEx increase in 2024?
      A: Amgen expects 2024 CapEx of $1.3 billion, up from previous guidance of $1.1 to $1.2 billion, primarily due to expanding MariTide manufacturing capacity. This investment supports the anticipated demand and scalability of the obesity drug.

    5. Tax Dispute with IRS
      Q: What's the status of the tax court case?
      A: The court date is set for November 4, and Amgen remains confident in its position and reserves. The company notes that recent tax court decisions have reinforced the value of manufacturing in Puerto Rico, and there has been no change in their evaluation of the case.

    6. Operating Margins Outlook
      Q: How will investments affect 2025 margins?
      A: While not providing long-term margin guidance, Amgen emphasizes its commitment to investing in innovation with a disciplined approach to capital allocation. Despite increased R&D spend, the company is focused on productivity and prioritization to preserve margins.

    7. TEPEZZA Growth Prospects
      Q: When will TEPEZZA see acceleration in low CAS patients?
      A: Amgen is making progress in expanding access for TEPEZZA, achieving favorable medical policy changes for over 65% of U.S. covered lives, up from 50% last quarter. The focus on endocrinologists and ophthalmologists aims to better serve the 80,000 low CAS patients in the U.S. The Japanese market is expected to contribute positively next year.

    8. IMDELLTRA Launch and Lessons from BLINCYTO
      Q: What feedback is there on the IMDELLTRA launch?
      A: Early feedback on IMDELLTRA is very positive, with clinicians quickly adopting it due to its transformative impact in a difficult disease setting. Amgen is leveraging lessons from BLINCYTO to expedite IMDELLTRA's development into frontline therapies and reduce monitoring requirements.

    9. MariTide in Diabetes
      Q: How will MariTide compete in diabetes market?
      A: Amgen plans to initiate a dedicated Phase II study for MariTide in diabetes patients. This study isn't required for the obesity Phase III but aims to optimize dosing for diabetic patients. The monthly or less frequent dosing offers differentiation in a market with many products controlling HbA1c but lacking in adherence and persistence.

    10. Next Obesity Asset Entering Clinic
      Q: What is the next obesity program entering clinics?
      A: Amgen is advancing a new obesity program into clinical development later this year. While details are limited due to competitive reasons, the company is exploring both incretin pathways and novel targets, including oral medications, aiming for true differentiation and addressing unmet market segments.

    Key Metrics

    View all financials →
    Revenue by Segment - in Millions of USDFY 2013Q1 2014Q2 2014Q3 2014Q4 2014FY 2014Q1 2015Q2 2015Q3 2015Q4 2015FY 2015Q1 2016Q2 2016Q3 2016Q4 2016FY 2016Q1 2017Q2 2017Q3 2017Q4 2017FY 2017Q1 2018Q2 2018Q3 2018Q4 2018FY 2018Q1 2019Q2 2019Q3 2019Q4 2019FY 2019Q1 2020Q2 2020Q3 2020Q4 2020FY 2020Q1 2021Q2 2021Q3 2021Q4 2021FY 2021Q1 2022Q2 2022Q3 2022Q4 2022FY 2022Q1 2023Q2 2023Q3 2023Q4 2023FY 2023Q1 2024Q2 2024Q3 2024
    Prolia9271,0289861,1074,0489991,1651,045
    ENBREL5791,0681,0351,0153,697567909825
    XGEVA5365305195272,112561562541
    Repatha3884244064171,635517532567
    Otezla3926005676292,188394544564
    TEPEZZA----448424479488
    EVENITY2542813073181,160342391399
    KYPROLIS358346349351,403376377378
    Nplate3623104193861,477317346456
    Aranesp3553653233191,362349348337
    KRYSTEXXA----272235294310
    BLINCYTO----861244264327
    Vectibix----984247270282
    TEZSPIRE-----173234269
    Sensipar/Mimpara--------
    EPOGEN--------
    Neulasta--------
    - NEUPOGEN--------
    Other products1,6951,7311,63725,2631,3731,3261,363
    Total Product Sales5,8466,6836,5487,83326,9107,1188,0418,151
    Other Revenues2593033553631,280329347352
    Total Revenues6,1056,9866,9038,19628,1907,4478,3888,503
    Revenue by Geography - in Millions of USDFY 2013Q1 2014Q2 2014Q3 2014Q4 2014FY 2014Q1 2015Q2 2015Q3 2015Q4 2015FY 2015Q1 2016Q2 2016Q3 2016Q4 2016FY 2016Q1 2017Q2 2017Q3 2017Q4 2017FY 2017Q1 2018Q2 2018Q3 2018Q4 2018FY 2018Q1 2019Q2 2019Q3 2019Q4 2019FY 2019Q1 2020Q2 2020Q3 2020Q4 2020FY 2020Q1 2021Q2 2021Q3 2021Q4 2021FY 2021Q1 2022Q2 2022Q3 2022Q4 2022FY 2022Q1 2023Q2 2023Q3 2023Q4 2023FY 2023Q1 2024Q2 2024Q3 2024
    U.S. Product Sales3,9754,7364,6915,8719,2724,9735,8405,979
    ROW Product Sales1,8711,9471,8571,9637,6382,1452,2012,172
    Total Product Sales5,8466,6836,5487,83326,9107,1188,0418,151
    U.S. Other Revenues----534---
    ROW Other Revenues----746---
    Total Other Revenues2593033553631,280329347352
    Total U.S. Revenues3,975---19,806---
    Total ROW Revenues1,871---8,384---
    Total Revenues6,1056,9866,9038,19628,1907,4478,3888,503

    Executive Team

    NamePositionStart DateShort Bio
    Robert A. BradwayChief Executive Officer and President2012Robert A. Bradway has been a director of Amgen since 2011 and has served as Chairman of the Board since 2013. He became the company's President in 2010 and Chief Executive Officer in 2012. Before these roles, he served as Amgen's Chief Operating Officer from 2010 to 2012. Mr. Bradway joined Amgen in 2006 as Vice President, Operations Strategy .
    Murdo GordonExecutive Vice President, Global Commercial Operations2018Murdo Gordon became Executive Vice President, Global Commercial Operations at Amgen in 2018. Before joining Amgen, he was the Chief Commercial Officer at Bristol Myers Squibb Company (BMS) from 2016 to 2018 and served as Head of Worldwide Markets at BMS from 2015 to 2016 .
    David M. ReeseExecutive Vice President and Chief Technology OfficerDec 2023Dr. David M. Reese became the Executive Vice President and Chief Technology Officer at Amgen in December 2023. Prior to this role, he served as the Executive Vice President, Research and Development, from 2018 to December 2023. Dr. Reese joined Amgen in 2005 and has held various leadership roles .
    Peter H. GriffithExecutive Vice President and Chief Financial Officer2020Peter H. Griffith became the Executive Vice President and Chief Financial Officer of Amgen in 2020. He joined the company in 2019 as Executive Vice President, Finance. Before joining Amgen, Mr. Griffith was President of Sherwood Canyon Group, LLC, and a partner at EY from 1997 to 2019 .
    Esteban SantosExecutive Vice President, Operations2016Esteban Santos became Executive Vice President, Operations, at Amgen in 2016. He joined the company in 2007 as Executive Director, Manufacturing Technologies. From 2013 to 2016, he served as Senior Vice President, Manufacturing .
    Dr. James E. BradnerExecutive Vice President, Research and Development, and Chief Scientific OfficerDec 2023Dr. James E. Bradner became the Executive Vice President, Research and Development, and Chief Scientific Officer at Amgen in December 2023. Prior to joining Amgen, he was a clinician at the Dana-Farber Cancer Institute from 2022 to 2023 and served as President of the Novartis Institutes for BioMedical Research from 2016 to 2022 .
    Jonathan P. GrahamExecutive Vice President, General Counsel and Secretary2019Jonathan P. Graham became Executive Vice President, General Counsel and Secretary at Amgen in 2019. He joined the company in 2015 as Senior Vice President, General Counsel and Secretary. Prior to joining Amgen, he was Senior Vice President and General Counsel at Danaher Corporation from 2006 to 2015 .
    Nancy A. GrygielSenior Vice President and Chief Compliance Officer2020Nancy A. Grygiel became Senior Vice President and Chief Compliance Officer at Amgen in 2020. She joined the company in 2015 and served as Vice President, Compliance from 2016 to 2020. Before joining Amgen, she was Vice President, Compliance, Corporate & International at Allergan, Inc. from 2011 to 2015 .
    Rachna KhoslaSenior Vice President, Business Development2021Rachna Khosla is the Senior Vice President, Business Development at Amgen Inc. She joined the company in 2013 as Corporate Development Director. Over the years, she has held various roles, including Vice President, Business Development from 2018 to 2021, and Executive Director, Business Development from 2016 to 2018 .
    Derek MillerSenior Vice President, Human Resources2022Derek Miller became Senior Vice President, Human Resources at Amgen in 2022. He joined the company in 2003 and has held various human resources leadership roles. Prior to his current role, he was Vice President, Global Total Rewards from 2020 to 2022, and Vice President, Human Resources from 2018 to 2020 .

    Questions to Ask Management

    1. Non-GAAP operating expenses increased 30% year-over-year, driven by higher R&D and SG&A spending, including investments in Repatha, Otezla, and EVENITY. How do you plan to manage these increasing expenses to maintain your operating margin, and when do you expect to see a return on these investments?

    2. The Horizon acquisition resulted in a $700 million OI&E expense, up $400 million year-over-year due to increased interest expenses. Can you elaborate on your deleveraging plan to retire over $10 billion of debt by the end of 2025, and how this will impact your financial flexibility and capital allocation priorities?

    3. With Enbrel facing competition in a crowded market and the CMS price negotiations concluding with a price reduction affecting approximately 25% of its revenues from Medicare Part D, what strategies are you implementing to sustain Enbrel's performance, and how are you mitigating the potential impact of Part D redesign on its future sales?

    4. You are significantly ramping up investment in your late-stage pipeline, including MariTide for obesity and Type 2 diabetes, and rocatinlumab for atopic dermatitis. Given the competitive landscape in these areas, how confident are you in the potential success of these programs, and what differentiates your candidates from existing therapies?

    5. Despite the strong initial uptake of IMDELLTRA since its mid-May launch, what challenges do you anticipate in its adoption, given the need for monitoring and establishing new care pathways, and how do you plan to address these to maximize its market potential?

    Share Repurchase Program

    Program DetailsProgram 1
    Approval DateN/A
    End Date/DurationN/A
    Total Additional AmountN/A
    Remaining Authorization$7.0 billion
    DetailsNo repurchase activity during the nine months ended September 30, 2024

    Past Guidance

    Q3 2024 Earnings Call

    • Issued Period: Q3 2024
    • Guided Period: N/A (The documents do not provide specific guidance from the Q3 2024 earnings call.)

    Q2 2024 Earnings Call

    • Issued Period: Q2 2024
    • Guided Period: FY 2024
    • Guidance:
      1. Total Revenues: $32.8 billion to $33.8 billion .
      2. Non-GAAP EPS: $19.10 to $20.10 .
      3. Non-GAAP R&D Expenses: Increase more than 25% year-over-year .
      4. Non-GAAP Operating Margin: Roughly 47% as a percentage of product sales .
      5. OI&E: Approximately $2.5 billion .
      6. Non-GAAP Tax Rate: 15% to 16% .
      7. Capital Expenditures: $1.3 billion .

    Q1 2024 Earnings Call

    • Issued Period: Q1 2024
    • Guided Period: FY 2024
    • Guidance:
      1. Total Revenues: $32.5 billion to $33.8 billion .
      2. Non-GAAP EPS: $19 to $20.20 .
      3. Non-GAAP R&D Expenses: Increase by approximately 25% year-over-year .
      4. Non-GAAP Operating Expenses: Growth rate comparable to Q1 over Q2 and Q3, with normalization in Q4 .
      5. Operating Margin: Expected to improve over the next three quarters .
      6. OI&E: Roughly $2.6 billion .
      7. Non-GAAP Tax Rate: 15% to 16% .
      8. Capital Expenditures: Approximately $1.1 billion .
      9. Full Year Sales of MariTide: Approximately $500 million .

    Q4 2023 Earnings Call

    • Issued Period: Q4 2023
    • Guided Period: FY 2024
    • Guidance:
      1. Total Revenues: $32.4 billion to $33.8 billion .
      2. Non-GAAP EPS: $18.90 to $20.30 .
      3. Other Revenue: Approximately $1.3 billion to $1.4 billion .
      4. Non-GAAP R&D Expenses: Increase by approximately 25% year-over-year .
      5. Operating Margin: Expected to improve over the next three quarters .
      6. OI&E: Roughly $2.6 billion .
      7. Non-GAAP Tax Rate: 15% to 16% .
      8. Capital Expenditures: Approximately $1.1 billion .
      9. Share Repurchases: Expected to exceed $500 million .
      10. Dividend: Expectation to continue increasing the dividend .

    Competitors

    Competitors mentioned in the company's latest 10K filing.

    • Various: Competitors for Prolia in the U.S., Europe, and Asia Pacific include bisphosphonates, including generics .
    • AbbVie: Competitor for ENBREL in the U.S. with HUMIRA and RINVOQ, and for Otezla in the U.S. and Europe with HUMIRA and Skyrizi .
    • Pfizer Inc.: Competitor for ENBREL in the U.S. with Xeljanz, and for BLINCYTO in the U.S. and Europe with BESPONSA .
    • Various: Competitors for ENBREL in Canada with etanercept biosimilars, and for XGEVA in the U.S. and Europe with zoledronate generics .
    • Novartis: Competitor for Otezla in the U.S. and Europe with Cosentyx, for Nplate in the U.S. and Europe with PROMACTA/REVOLADE, and for Repatha in the U.S. and Europe with LEQVIO .
    • Lilly: Competitor for Otezla in the U.S. and Europe with Taltz, and for Vectibix in the U.S. and Europe with ERBITUX .
    • Janssen (a subsidiary of Johnson & Johnson): Competitor for Otezla in the U.S. and Europe with Tremfya, for KYPROLIS in the U.S. and Europe with DARZALEX, and for Aranesp in the U.S. with PROCRIT .
    • Bristol Myers Squibb (BMS): Competitor for Otezla in the U.S. and Europe with SOTYKTU, and for KYPROLIS in the U.S. and Europe with POMALYST/IMNOVID .
    • Various: Competitors for Otezla in the U.S. and Europe with topical products, and for Vectibix in the U.S. and Europe with chemotherapy regimes .
    • Regeneron Pharmaceuticals, Inc. and Sanofi: Competitors for Repatha in the U.S., Europe, and Asia Pacific with PRALUENT .
    • Millennium Pharmaceuticals, Inc. (a subsidiary of Takeda Pharmaceutical Company Limited): Competitor for KYPROLIS in the U.S. with VELCADE .
    • Various: Competitors for KYPROLIS in the U.S. and Europe with REVLIMID (including generics) .
    • Asahi Kasei Pharma: Competitor for EVENITY in Japan with Teribone .
    • F. Hoffmann-La Roche Ltd (Roche): Competitor for Vectibix in the U.S. and Europe with Avastin .
    • Merck & Co., Inc.: Competitor for Vectibix in the U.S. with KEYTRUDA .
    • Sandoz Inc., Sandoz GmbH, Lek Pharmaceuticals d.d., Novartis Pharmaceutical Productions d.o.o., and Novartis AG: Competitors involved in litigation regarding biosimilar versions of Amgen's Prolia and XGEVA products .