Amgen Reports First Quarter 2017 Financial Results

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Amgen Reports First Quarter 2017 Financial Results

BUZ INVESTORS PRESS RELEASE Amgen Reports First Quarter THOUSAND OAKS, Calif., April 26, 2017 /PRNewswire/ -- Amgen <span data-recalc-dims=(NASDAQ:AMGN) today announced financial results for the first quarter of 2017. Key results include:" width="300" height="225" srcset="https://i1.wp.com/investorsbuz.com/wp-content/uploads/2016/11/amgen-stock-300x225.resized-1.jpg?resize=300%2C225 300w, https://i1.wp.com/investorsbuz.com/wp-content/uploads/2016/11/amgen-stock-300x225.resized-1.jpg?w=640 640w" sizes="(max-width: 300px) 100vw, 300px" />

BUZ INVESTORS  PRESS RELEASE  Amgen Reports First Quarter Amgen (NASDAQ:AMGN) today announced financial results for the first quarter of 2017. Key results include:

  • Total revenues decreased 1 percent versus the first quarter of 2016 to $5.5 billion.
  • GAAP earnings per share (EPS) increased 12 percent to $2.79 driven by higher operating margins.
    • GAAP operating income increased 8 percent to $2.6 billion and GAAP operating margin increased 4 percentage points to 49.8 percent.
  • Non-GAAP EPS increased 9 percent to $3.15 driven by higher operating margins.
    • Non-GAAP operating income increased 5 percent to $3.0 billion and non-GAAP operating margin increased 3 percentage points to 57.6 percent.
  • 2017 EPS guidance increased to $10.64-$11.32 on a GAAP basis and $12.00-$12.60 on a non-GAAP basis; total revenues guidance unchanged at $22.3-$23.1 billion.
  • The Company generated $2.2 billion of free cash flow in the first quarter versus $1.8 billion in the first quarter of 2016.




 Amgen Reports First Quarter

“We are well positioned for the long term with our newer products demonstrating volume growth around the world and our tight operational expense management of the Company,” said Robert A. Bradway, chairman and chief executive officer. “With robust Repatha® (evolocumab) outcomes data, we are working with payers to improve access to this important therapy for patients at risk for heart attacks and strokes.”

$Millions, except EPS and percentages Q1’17 Q1’16 YOY Δ
Total Revenues $ 5,464 $ 5,527 (1%)
GAAP Operating Income $ 2,591 $ 2,402 8%
GAAP Net Income $ 2,071 $ 1,900 9%
GAAP EPS $   2.79 $   2.50 12%
Non-GAAP Operating Income $ 2,995 $ 2,859 5%
Non-GAAP Net Income $ 2,333 $ 2,203 6%
Non-GAAP EPS $   3.15 $   2.90 9%
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 percent for the first quarter of 2017 versus the first quarter of 2016.

  • Neulasta® (pegfilgrastim) sales increased 2 percent as favorable changes in accounting estimates and net selling price were offset partially by lower unit demand.

  • Enbrel® (etanercept) sales decreased 15 percent due to the impact of competition as well as lower rheumatology and dermatology segment growth compared to prior quarters.

  • Aranesp® (darbepoetin alfa) sales decreased 4 percent as higher unit demand was more than offset by unfavorable changes in foreign exchange rates, inventory and net selling price.

  • Prolia® (denosumab) sales increased 21 percent driven by higher unit demand.

  • Sensipar/Mimpara® (cinacalcet) sales increased 15 percent driven primarily by net selling price.

  • XGEVA® (denosumab) sales increased 6 percent driven by higher unit demand.

  • EPOGEN® (epoetin alfa) sales decreased 10 percent driven by net selling price.

  • KYPROLIS® (carfilzomib) sales increased 23 percent driven by higher unit demand.

  • Nplate® (romiplostim) sales increased 9 percent driven by higher unit demand.

  • NEUPOGEN® (filgrastim) sales decreased 31 percent driven primarily by the impact of competition.

  • Vectibix® (panitumumab) sales increased 2 percent driven by higher unit demand, offset partially by unfavorable changes in foreign exchange rates.

  • Repatha sales increased driven by higher unit demand.

  • BLINCYTO® (blinatumomab) sales increased 26 percent driven by higher unit demand.

Product Sales Detail by Product and Geographic Region
$Millions, except percentages Q1’17 Q1’16 YOY Δ
US ROW TOTAL TOTAL TOTAL
Neulasta® $1,048 $162 $1,210 $1,183 2%
Enbrel® 1,118 63 1,181 1,385 (15%)
Aranesp® 278 233 511 532 (4%)
Prolia® 279 146 425 352 21%
Sensipar® / Mimpara® 337 84 421 367 15%
XGEVA® 298 104 402 378 6%
EPOGEN® 270 0 270 300 (10%)
KYPROLIS® 137 53 190 154 23%
Nplate® 97 57 154 141 9%
NEUPOGEN® 101 47 148 213 (31%)
Vectibix® 61 86 147 144 2%
Repatha® 33 16 49 16 *
BLINCYTO® 23 11 34 27 26%
Other** 15 42 57 47 21%
Total product sales $4,095 $1,104 $5,199 $5,239 (1%)
* Change in excess of 100%
** Other includes Bergamo, MN Pharma, IMLYGIC®and Corlanor®

Operating Expense, Operating Margin and Tax Rate Analysis

On a GAAP basis:

  • Total Operating Expenses decreased 8 percent, with all expense categories reflecting savings from our transformation and process improvement efforts. Cost of Sales margin improved by 0.2 percentage points driven primarily by manufacturing efficiencies, offset partially by product mix. Research & Development (R&D) expenses decreased 12 percent driven by a payment in the first quarter of 2016 related to a third-party collaboration agreement, as well as lower spending required to support certain later-stage clinical programs. Selling, General & Administrative (SG&A) expenses decreased 12 percent due to the expiration of ENBREL residual royalty payments and an acquisition charge in the first quarter of 2016, offset partially by investments in product launches.

  • Operating Margin improved by 4 percentage points to 49.8 percent.

  • Tax Rate decreased 0.1 percentage points as changes in the geographic mix of earnings were offset partially by lower tax benefits from share-based compensation payments.

On a non-GAAP basis:

  • Total Operating Expenses decreased 7 percent, with all expense categories reflecting savings from our transformation and process improvement efforts. Cost of Sales margin improved by 0.4 percentage points driven primarily by manufacturing efficiencies, offset partially by product mix. R&D expenses decreased 13 percent driven by a payment in the first quarter of 2016 related to a third-party collaboration agreement, as well as lower spending required to support certain later-stage clinical programs. SG&A expenses decreased 6 percent due to the expiration of ENBREL residual royalty payments, offset partially by investments in product launches.

  • Operating Margin improved by 3 percentage points to 57.6 percent.

  • Tax Rate decreased 0.4 percentage points as changes in the geographic mix of earnings were offset partially by lower tax benefits from share-based compensation payments.

$Millions, except percentages
GAAP Non-GAAP
Q1’17 Q1’16 YOY Δ Q1’17 Q1’16 YOY Δ
Cost of Sales $996 $1,018 (2%) $682 $707 (4%)
% of product sales 19.2% 19.4% (0.2)pts 13.1% 13.5% (0.4) pts
Research & Development $769 $872 (12%) $748 $858 (13%)
% of product sales 14.8% 16.6% (1.8) pts 14.4% 16.4% (2) pts
Selling, General & Administrative $1,064 $1,203 (12%) $1,039 $1,103 (6%)
% of product sales 20.5% 23.0% (2.5) pts 20.0% 21.1% (1.1) pts
Other $44 $32 38% $0 $0 NM
TOTAL Operating Expenses $2,873 $3,125 (8%) $2,469 $2,668 (7%)
Operating Margin
operating income as a % of product sales 49.8% 45.8% 4 pts 57.6% 54.6% 3 pts
Tax Rate 15.8% 15.9% (0.1) pts 18.5% 18.9% (0.4) pts
NM: Not Meaningful
pts: percentage points

Cash Flow and Balance Sheet

  • The Company generated $2.2 billion of free cash flow in the first quarter of 2017 versus $1.8 billion in the first quarter of 2016 driven by the timing of tax payments and higher net income.

  • The Company’s second quarter 2017 dividend of $1.15 per share declared on March 7, 2017, will be paid on June 8, 2017, to all stockholders of record as of May 17, 2017.

  • During the first quarter, the Company repurchased 3.4 million shares of common stock at a total cost of $555 million. At the end of the first quarter, the Company had $3.5 billion remaining under its stock repurchase authorization.

$Billions, except shares Q1’17 Q1’16 YOY Δ
Operating Cash Flow $2.4 $1.9 $0.5
Capital Expenditures 0.2 0.2 0.0
Free Cash Flow 2.2 1.8 0.5
Dividends Paid 0.8 0.8 0.1
Share Repurchase 0.6 0.7 (0.1)
Avg. Diluted Shares (millions) 741 760 (19)
Cash and Investments 38.4 34.7 3.7
Debt Outstanding 34.1 34.3 (0.2)
Stockholders’ Equity 30.6 28.7 2.0
Note: Numbers may not add due to rounding

2017 Guidance

For the full year 2017, the Company now expects:

  • Total revenues in the range of $22.3 billion to $23.1 billion, unchanged from previous guidance.

  • On a GAAP basis, EPS in the range of $10.64 to $11.32 and a tax rate in the range of 16 percent to 18 percent.

    • Previously, the Company expected GAAP EPS in the range of $10.45 to $11.31. Tax rate guidance is unchanged.

  • On a non-GAAP basis, EPS in the range of $12.00 to $12.60 and a tax rate in the range of 18.5 percent to 19.5 percent.

    • Previously, the Company expected non-GAAP EPS in the range of $11.80 to $12.60. Tax rate guidance is unchanged.

  • Capital expenditures to be approximately $700 million.

First Quarter Product and Pipeline Update
Key development milestones:
Clinical Program Indication Projected Milestone
Repatha Hyperlipidemia Regulatory submissions (CV outcomes data)
KYPROLIS Relapsed or refractory  multiple myeloma Phase 3 study initiation with DARZALEX® Q2 ’17
XGEVA Prevention of SREs in multiple myeloma Regulatory reviews
EVENITY™ (romosozumab) Postmenopausal osteoporosis July 19, 2017, PDUFA target action date in U.S.

Active controlled Phase 3 fracture data Q2 2017*

Erenumab (AMG 334) Migraine prevention Regulatory submissions
ABP 215

(biosimilar bevacizumab)

Oncology Regulatory reviews

Sept. 14, 2017, BsUFA target action date in U.S.

ABP 980

(biosimilar trastuzumab)

Breast cancer U.S. regulatory submission
Trade name provisionally approved by FDA; CV = cardiovascular; SRE = skeletal-related event; PDUFA = Prescription Drug User Fee Act; BsUFA = Biosimilar User Fee Act; *Event driven study

The Company provided the following updates on selected product and pipeline programs:

Repatha

  • In February, the European Commission (EC) approved a new 420 mg single-dose delivery option for Repatha.

  • In March, positive Phase 3 data from a cardiovascular outcomes study and a cognitive function study were presented at the American College of Cardiology 66th Annual Scientific Session.

KYPROLIS

  • In February,  the Phase 3 ENDEAVOR study showed KYPROLIS and dexamethasone reduced the risk of death by 21 percent and extended overall survival by an additional 7.6 months compared to Velcade® (bortezomib) and dexamethasone in relapsed or refractory multiple myeloma patients.

XGEVA

  • In April, a supplemental Biologics License Application (sBLA) was submitted to the U.S. Food and Drug Administration (FDA) and an application for a variation to the marketing authorization was submitted to the European Medicines Agency (EMA) for the prevention of SREs in patients with multiple myeloma.

BLINCYTO

  • In March, FDA accepted the sBLA for priority review for BLINCYTO to include overall survival data from the Phase 3 TOWER study. The application also included new data supporting the treatment of patients with Philadelphia chromosome-positive relapsed or refractory B-cell precursor acute lymphoblastic leukemia.

EVENITY

  • Primary analysis of an event driven active controlled Phase 3 fracture study (ARCH) in postmenopausal women with osteoporosis is expected in Q2 2017.

Erenumab

  • Regulatory submissions for migraine prevention are expected in Q2 2017.

CNP520

  • In February, Phase 3 enrollment commenced for CNP520, a small molecule beta-site amyloid precursor protein-cleaving enzyme-1 (BACE) inhibitor for the potential treatment of Alzheimer’s disease.

Parsabiv (etelcalcetide)

  • In February, FDA approved Parsabiv for the treatment of secondary hyperparathyroidism (sHPT) in adult patients with chronic kidney disease (CKD) on hemodialysis.

AMG 157/MEDI9929 (tezepelumab)

  • In February, tezepelumab demonstrated a significant reduction in the rate of asthma exacerbations compared to placebo over the 52-week treatment period in patients with severe asthma in a Phase 2b study.

AMGEVITA™ (biosimilar adalimumab)

  • In March, EC granted marketing authorization for AMGEVITA™ (biosimilar adalimumab) in all available indications. AMGEVITA is authorized for the treatment of certain inflammatory diseases in adults, including moderate-to-severe rheumatoid arthritis; psoriatic arthritis; severe active ankylosing spondylitis (AS); severe axial spondyloarthritis without radiographic evidence of AS; moderate-to-severe chronic plaque psoriasis; moderate-to-severe hidradenitis suppurativa; non-infectious intermediate, posterior and panuveitis; moderate-to-severe Crohn’s disease and moderate-to-severe ulcerative colitis. The EC also approved AMGEVITA for the treatment of certain pediatric inflammatory diseases, including moderate-to-severe Crohn’s disease (ages six and older), severe chronic plaque psoriasis (ages four and older), enthesitis-related arthritis (ages six and older) and polyarticular juvenile idiopathic arthritis (ages two and older).

ABP 980 (biosimilar trastuzumab)

  • In March, a Marketing Authorization Application was submitted to the EMA.

Erenumab and CNP520 are developed in collaboration with Novartis AG
EVENITY™ trade name is provisionally approved by FDA
EVENITY™ is developed in collaboration with UCB globally, as well as our joint venture partner Astellas in Japan
Tezepelumab is developed in collaboration with AstraZeneca
AMGEVITA™ is registered in the U.S. as AMJEVITA™
Velcade® is a registered trademark of Millennium Pharmaceuticals, Inc.

Non-GAAP Financial Measures

In this news release, management has presented its operating results for the first quarters of 2017 and 2016, in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and on a non-GAAP basis. In addition, management has presented its full year 2017 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 first quarters of 2017 and 2016. 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.

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Buz Investors Best Biotech Stock 2017 The biotech industry is one of the more lucrative–if volatile–sectors around for heady investors.

Amgen Stock: The One Best Biotech Stock Play for 2017

Amgen Stock – the Best Biotech Stock 2017?

Buz Investors Best Biotech Stock 2017 The biotech industry is one of the more lucrative–if volatile–sectors around for heady investors.

Buz Investors Best Biotech Stock 2017  The biotech industry is one of the more lucrative–if volatile–sectors around for heady investors. With so much depending on government regulation, competition, and public opinion, there’s a lot of room to make big gains in the biotech industry, and a lot of room to see your money evaporate before you can say “Phase III approval.” That’s why it’s so important to find a solid company with both longevity and strong growth potential; otherwise, you might find yourself on the losing end of a biotech trade. For me, Amgen, Inc. (NASDAQ:AMGN) stock is the best biotech stock for 2017 for exactly the reasons mentioned above.

Amgen is among the world’s largest biotechnology firms, and as such, AMGN stock is one of the more valuable tickers on the market. One of its flagship treatments is “Neulasta,” two drugs used to prevent infections in patients undergoing cancer chemotherapy.



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Best Biotech Stock 2017

It’s leading seller is “Enbrel,” a tumor necrosis factor blocker used to deal with rheumatoid arthritis and other autoimmune diseases. Both Enbrel and Neulasta account for over $1.0 billion each in sales and are strong propellants of the AMGN stock price.

New results from the “Repatha” (a heart medication) cardiovascular outcomes trial are forthcoming and likely to show positive results for the medication. Repatha was a big part of Amgen’s gains in the last year, growing from $10.0 million in sales during 2015 to $141.0 million in 2016. Being a newer drug, this coincides with the approval process of various government drug administrations, but shows promise for the company heading into 2017. (Source: “Amgen Highlights Landmark Repatha® (Evolocumab) Cardiovascular Outcomes Study Amongst Data To Be Presented At ACC.17,” Yahoo! Finance, March 6, 2017.)

The sales potential for Repatha is in the billions as heart disease is the leading cause of the death in the U.S. In fact, according to Centers for Disease Control and Prevention numbers, one if four deaths in the U.S. comes as a result of heart disease. The price, however, could present a barrier to adoption by insurance companies. (Source: “Heart Disease Facts,” Centers for Disease Control and Prevention, August 10, 2015.)

We have to get our drug industry coming back. Our drug industry has been disastrous, they’re leaving left and right. They supply our drugs but they don’t make them here, to a large extent,” Trump said during a press conference in January. “And the other thing we have to do is create new bidding procedures for the drug industry, because they’re getting away with murder.” (Source: “Trump says drugmakers are ‘getting away with murder,’ and biotech stocks plunge,” CNBC, January 11, 2017.)

Combine this with other problems in public perception, like infamous “Pharma Bro” Martin Shkreli and the various other scandals involving big pharmaceutical companies, and you have a climate that is certainly not friendly towards the biotech industry. One misstep can cost a company billions on the market, if they don’t play their cards right.


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Amgen, Inc.: This Is Why AMGN Stock is Going Nuts Today

Amgen, Inc.: This Is Why AMGN Stock is Going Nuts Today

Amgen, Inc.: This Is Why AMGN Stock is Going Nuts Today

  • Buz Investors AMGN Stock is Going Nuts  Equities were hammered on Wednesday following news that Donald Trump won the U.S. presidency, but shares of Amgen, Inc. (NASDAQ:AMGN) stock are bucking that trend.
  • At the opening bell, shares of AMGN stock surged to $150.74, up nearly nine percent from the Tuesday close. The move was followed by broad-based gains into other biotech and pharma stocks, including Pfizer Inc. (NYSE:PFE), Mylan NV(NASDAQ:MYL), and Eli Lilly and Co (NYSE:LLY).
  • The presidential election cycle has been a brutal period for AMGN stock, which fell by some 20% leading up to election night. Analysts feared that a Hillary Clinton administration, which seemed like a sure thing as voters arrived to the polls

AMGN Stock is Going Nuts Surging This Morning

AMGN Stock is Going Nuts

AMGN Stock is Going Nuts  The presidential election cycle has been a brutal period for AMGN stock, which fell by some 20% leading up to election night. Analysts feared that a Hillary Clinton administration, which seemed like a sure thing as voters arrived to the polls, would strangle the pharmaceutical industry.

Clinton had vowed to crack down on industry practices, issuing new regulations, limiting drug approvals, and reducing the ability of companies to increase drug prices. That concern dimmed investor interest for biotech stocks, in what had previously been a golden age for the industry.

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In contrast, President-elect Donald Trump has talked little about the issue of drug prices. His campaign was focused on limiting the regulations on business during the race for the White House, and he has not made an issue of drug prices.

A Trump presidency could also result in a special dividend for AMGN stockholders. Today, the biotech giant has billions of dollars in cash held by foreign subsidiaries overseas. Because of the structure of the U.S. tax code, Amgen would have to pay billions of dollars in taxes if it were to repatriate that cash back to the parent company in the United States.