Q2 2024 Earnings Summary
- 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.
- 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.
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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. -
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. -
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. -
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. -
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. -
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. -
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. -
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. -
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. -
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.