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Amgen's First Quarter 2013 Revenues Increased 5 Percent To $4.2 Billion And Adjusted Earnings Per Share (EPS) Increased 22



 Amgen's First Quarter 2013 Revenues Increased 5 Percent To $4.2 Billion And
       Adjusted Earnings Per Share (EPS) Increased 22 Percent To $1.96

First Quarter 2013 GAAP EPS Were $1.88

2013 Adjusted EPS Expected to be Above the Midpoint of the Range of
$7.05-$7.35; 2013 Revenue Guidance Range of $17.8-$18.2 Billion Unchanged

PR Newswire

THOUSAND OAKS, Calif., April 23, 2013

THOUSAND OAKS, Calif., April 23, 2013 /PRNewswire/ -- Amgen (NASDAQ:AMGN)
today announced financial results for the first quarter of 2013.  Key results
for the quarter include:

  o Total revenues increased 5 percent to $4,238 million, with 6 percent
    product sales growth driven by Enbrel^® (etanercept), XGEVA^® (denosumab)
    and Prolia^® (denosumab).
  o Adjusted EPS grew 22 percent to $1.96 driven by tax benefits and fewer
    shares outstanding in the quarter.  Adjusted net income increased 16
    percent to $1,498 million.
  o GAAP EPS were $1.88 compared to $1.48 and GAAP net income was $1,434
    million compared to $1,184 million.
  o Free cash flow was $0.9 billion compared to $0.8 billion.

"We are on track to deliver our full-year growth objectives," said Robert A.
Bradway, chairman and chief executive officer at Amgen. "In addition, our key
pipeline projects are progressing well and we are looking forward to clinical
results from ongoing trials."

                                       Year-over-Year
$Millions, except EPS and percentages  Q1 '13  Q1 '12  YOY Δ
Total Revenues                         $4,238  $4,048  5%
Adjusted Net Income                    1,498   1,287   16%
Adjusted EPS                           $1.96   $1.61   22%
GAAP Net Income                        1,434   1,184   21%
GAAP EPS                               $1.88   $1.48   27%

References in this release to "adjusted" measures, measures presented "on an
adjusted basis" or to free cash flow refer to non-GAAP financial measures.
These adjustments and other items are presented on the attached
reconciliations.

Product Sales Performance

  o Total product sales increased  6 percent driven by ENBREL, XGEVA and
    Prolia.
  o Combined Neulasta^® (pegfilgrastim)  and NEUPOGEN^® (Filgrastim) sales
    were in line with the prior year.

       o Global Neulasta sales were in line with the prior year as price
         increases were offset by modest unit declines.
       o Global NEUPOGEN sales declined 2 percent driven by lower units.

  o ENBREL sales  increased 11 percent mainly driven by increases in the
    average net sales price and a favorable change in accounting estimates,
    partially offset by a slight decline in units and a reduction in
    wholesaler inventory.
  o Aranesp^® (darbepoetin alfa)  sales decreased 10 percent year over year
    and 4 percent sequentially.  Outside the U.S., sales were in line with the
    prior quarter.  In the U.S., segment share remained relatively stable, but
    overall demand declined sequentially.
  o EPOGEN^®  (epoetin alfa) sales decreased 2 percent year over year. 
    Sequentially, sales decreased 9 percent driven by a favorable change in
    accounting estimates in the fourth quarter and lower average net prices.
  o Sensipar^®/Mimpara^® (cinacalcet) sales increased 21 percent driven by
    increased unit demand and a favorable change in accounting estimates.
  o Combined sales of Vectibix^® (panitumumab) and Nplate^® (romiplostim)
    increased 2 percent.
  o XGEVA sales increased 46 percent year over year and 4 percent on a
    sequential basis, reflecting increased segment share.
  o Prolia sales increased 61 percent year over year reflecting increased
    segment share and declined 8 percent on a sequential basis primarily due
    to seasonality.

Product Sales Detail by Product and Geographic Region

$Millions, except percentages  Q1 '13              Q1 '12  YOY Δ
                               US     ROW  TOTAL   TOTAL   TOTAL
Neulasta^®/ NEUPOGEN^®         $1,069 $269 $1,338  $1,344  0%
Neulasta^®                     827    212  1,039   1,039   0%
NEUPOGEN^®                     242    57   299     305     (2%)
Enbrel^®                       974    65   1,039   938     11%
Aranesp^®                      168    300  468     518     (10%)
EPOGEN^®                       435    0    435     446     (2%)
Sensipar^® / Mimpara^®         179    85   264     219     21%
Vectibix^®                     27     60   87      90      (3%)
Nplate^®                       55     41   96      90      7%
XGEVA^®/ Prolia^®              265    100  365     241     51%
XGEVA^®                        178    45   223     153     46%
Prolia^®                       87     55   142     88      61%
Other                          0      59   59      15      *
Total product sales            $3,172 $979 $4,151  $3,901  6%
* Change in excess of 100%

Operating Expense and Tax Rate Analysis, on an Adjusted Basis

  o Cost of Sales, excluding the impact of the Puerto Rico excise tax,
    decreased 0.9 points.
  o Research & Development (R&D) expenses increased 18 percent in the first
    quarter of 2013 primarily in support of our later-stage clinical programs,
    including AMG 145.
  o Selling, General & Administrative (SG&A) expenses increased 8 percent in
    the first quarter of 2013 driven primarily by higher ENBREL profit share
    expenses. ENBREL profit share expenses increased 17 percent to $378
    million in the first quarter. 

$Millions, except percentages
On an Adjusted Basis                           Q1 '13  Q1 '12  YOY Δ
Cost of Sales                                  $671    $666    1%
          % of sales                           16.2%   17.1%   (0.9) pts
          % of sales (Excluding PR excise tax) 14.1%   15.0%   (0.9) pts
Research & Development                         $851    $723    18%
          % of sales                           20.5%   18.5%   2.0 pts
Selling, General & Administrative              $1,144  $1,057  8%
          % of sales                           27.6%   27.1%   0.5 pts
TOTAL Operating Expenses                       $2,666  $2,446  9%
pts: percentage points

  o Adjusted Tax Rate for Q1 2013 reflects the federal and state tax benefits
    associated with the resolution of the Company's federal audit for tax
    years 2007-2009.  In addition, the American Taxpayer Relief Act of 2012
    was enacted in the first quarter of 2013, resulting in recognition of the
    full 2012 federal R&D credit in the first quarter of 2013.

On an Adjusted Basis                            Q1 '13  Q1 '12  YOY Δ
Tax Rate*                                       (0.9%)  15.6%   (16.5) pts
Tax Rate (Excluding PR excise tax credits)      4.2%    20.2%   (16.0) pts
pts: percentage points
* Note: Q1 represents a net tax benefit of $13M

Cash Flow and Balance Sheet Discussion

  o The Company generated $0.9 billion of free cash flow in the first quarter
    of 2013 versus $0.8 billion in the first quarter of 2012. The increase was
    driven primarily by higher revenues offset partially by higher cash taxes.
  o During the quarter, the Company repurchased approximately 9 million shares
    of common stock at a total cost of $0.8 billion and at an average price of
    $85.03. The Company has $1.6 billion remaining under its stock repurchase
    authorization.
  o During the quarter, the Company settled in cash $2.5 billion of 0.375
    percent Convertible Senior Notes upon their maturity.
  o The Company previously announced that its Board of Directors declared a
    $0.47 per share dividend for the second quarter of 2013. The dividend will
    be paid on June 7, 2013, to all stockholders of record as of the close of
    business on May 16, 2013.

$Billions, except shares                   Q1 '13  Q1 '12  YOY Δ
Operating Cash Flow                        $1.0    $1.0    $0.1
Free Cash Flow                             0.9     0.8     0.1
Dividend Paid                              0.4     0.3     0.1
Cost of Shares Repurchased                 0.8     1.4     (0.7)
Adjusted Avg. Diluted Shares (millions)    764     799     (35)
Cash Balance                               21.3    19.4    1.9
Debt Outstanding                           23.9    21.4    2.5
Stockholders' Equity                       19.5    18.9    0.6
Note: Numbers may not add due to rounding

2013 Guidance

For the full year 2013, the Company expects:

  o Total revenue guidance range unchanged at  $17.8 billion to $18.2 billion.
  o Adjusted EPS to be above the midpoint of the range of $7.05–$7.35. 
  o Adjusted tax rate to be in the range of 11 percent to 12 percent.  This
    reflects the impact of a higher excise tax enacted by the Puerto Rico
    government, to be effective July 1 of this year. The tax, which is charged
    to Cost of Sales, is creditable against U.S. federal income taxes. 
    Excluding the Puerto Rico excise tax, Amgen expects the adjusted tax rate
    for 2013 to be in the range of 15 percent to 16 percent.
  o Capital expenditures guidance unchanged at approximately $700 million.

First Quarter Product and Pipeline Update

The Company provided the following information on clinical programs:

  o Talimogene laherparepvec:  The Company discussed that data from a Phase 3
    study in melanoma will be presented at the American Society of Clinical
    Oncology (ASCO) 2013 Annual Meeting in June.  The Company also discussed
    that primary analysis of the overall survival secondary end point is
    expected in late 2013.
  o Trebananib:  The Company stated that progression-free survival results
    from a Phase 3 study in recurrent ovarian cancer are expected mid-year.
  o AMG 416:  The Company stated that it recently initiated Phase 3 studies
    for the treatment of secondary hyperparathyroidism.
  o Biosimilars:  The Company discussed plans to commence a pivotal study for
    biosimilar Herceptin^® (trastuzumab) in the second quarter.

Note: Herceptin® is a product of Genentech, a member of the Roche group

Non-GAAP Financial Measures
The Adjusted non-GAAP (U.S. Generally Accepted Accounting Principles)
financial measures included above for the first quarters of 2013 and 2012
exclude, for the applicable periods, certain expenses related to acquisitions,
cost-savings initiatives, various legal proceedings, non-cash interest expense
associated with our convertible notes and certain other adjustments, as
applicable. These adjustments and other items are presented on the attached
reconciliations.

Management has presented its operating results in accordance with GAAP and on
an "adjusted" (or non-GAAP) basis and Free Cash Flow which is a non-GAAP
financial measure for the first quarters of 2013 and 2012.  In addition,
management has presented its full year 2013 EPS and tax rate guidance in
accordance with GAAP and on an "adjusted" (or non-GAAP) basis.  The Company
believes that the presentation of non-GAAP financial measures provides useful
supplementary information to and facilitates additional analysis by
investors.  The Company uses these non-GAAP financial measures in connection
with its own budgeting and financial planning.  These non-GAAP financial
measures are in addition to, not a substitute for, or superior to, measures of
financial performance prepared in conformity with GAAP.

About Amgen
Amgen discovers, develops, manufactures and delivers innovative human
therapeutics. A biotechnology pioneer since 1980, Amgen was one of the first
companies to realize the new science's promise by bringing safe, effective
medicines from lab to manufacturing plant to patient. Amgen therapeutics have
changed the practice of medicine, helping millions of people around the world
in the fight against cancer, kidney disease, rheumatoid arthritis, bone
disease and other serious illnesses. With a deep and broad pipeline of
potential new medicines, Amgen remains committed to advancing science to
dramatically improve people's lives. 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 involve significant
risks and uncertainties, including those discussed below and others that can
be found in our Form 10-K for the year ended Dec. 31, 2012, and in any
subsequent periodic reports on Form 10-Q and Form 8-K.  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.  The Company's results may be affected by
our ability to successfully market both new and existing products domestically
and internationally, clinical and regulatory developments (domestic or
foreign) involving current and future products, sales growth of recently
launched products, competition from other products (domestic or foreign), and
difficulties or delays in manufacturing our products.  In addition, sales of
our products are affected by reimbursement policies imposed by third-party
payors, 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 as well as U.S. legislation affecting
pharmaceutical pricing and reimbursement.  Government and others' regulations
and reimbursement policies may affect the development, usage and pricing of
our products.  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 after they are on the
market.  Our business may be impacted by government investigations, litigation
and product liability claims.  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.  We depend on third parties for a significant portion of
our manufacturing capacity for the supply of certain of our current and future
products and limits on supply may constrain sales of certain of our current
products and product candidate development.  In addition, we compete with
other companies with respect to some of our marketed products as well as for
the discovery and development of new products.  Discovery or identification of
new product candidates cannot be guaranteed and movement from concept to
product is uncertain; consequently, there can be no guarantee that any
particular product candidate 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.  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.

    

 

Amgen Inc.
Condensed Consolidated Statements of Income - GAAP
(In millions, except per share data)
(Unaudited)
                                                           Three months ended
                                                           March 31, 
                                                           2013      2012
Revenues:
         Product sales                                     $ 4,151   $ 3,901
         Other revenues                                    87        147
                      Total revenues                       4,238     4,048
Operating expenses:
         Cost of sales                                     744       750
         Research and development                          878       736
         Selling, general and administrative               1,158     1,079
         Other                                             16        6
                      Total operating expenses             2,796     2,571
Operating income                                           1,442     1,477
Interest expense, net                                      263       235
Interest and other income, net                             164       124
Income before income taxes                                 1,343     1,366
Provision for income taxes                                 (91)      182
Net income                                                 $ 1,434   $ 1,184
Earnings per share:
         Basic                                             $   1.91  $   1.50
         Diluted                                           $   1.88  $   1.48
Average shares used in calculation of earnings per share:
         Basic                                             751       791
         Diluted                                           764       800

 

 

Amgen Inc.
Condensed Consolidated Balance Sheets - GAAP 
(In millions)
(Unaudited)
                                            March 31,       December 31, 
                                            2013            2012
Assets
Current assets:
  Cash, cash equivalents and marketable     $      21,271   $              
  securities                                                24,061
  Trade receivables, net                    2,528           2,518
  Inventories                               2,737           2,744
  Other current assets                      2,159           1,886
       Total current assets                 28,695          31,209
Property, plant and equipment, net          5,296           5,326
Intangible assets, net                      3,897           3,968
Goodwill                                    12,604          12,662
Other assets                                1,148           1,133
Total assets                                $      51,640   $              
                                                            54,298
Liabilities and Stockholders' Equity
Current liabilities:
  Accounts payable and accrued liabilities  $        5,135  $                
                                                            5,696
  Current portion of long-term debt         7               2,495
       Total current liabilities            5,142           8,191
Long-term debt                              23,885          24,034
Other non-current liabilities               3,122           3,013
Stockholders' equity                        19,491          19,060
Total liabilities and stockholders' equity  $      51,640   $              
                                                            54,298
Shares outstanding                          750             756

 

 

Amgen Inc.
GAAP to "Adjusted" Reconciliations
(In millions)
(Unaudited)
                                                    Three months ended
                                                    March 31, 
                                                    2013          2012
 GAAP cost of sales                                 $        744  $        750
 Adjustments to cost of sales:
 Non-cash amortization of product technology rights (71)          (71)
 acquired in a prior year business combination
 Stock option expense (a)                           (2)           (3)
 Certain charges pursuant to our continuing efforts -             (10)
 to improve cost efficiencies in our operations
 Total adjustments to cost of sales                 (73)          (84)
 Adjusted cost of sales                             $        671  $        666
 GAAP research and development expenses             $        878  $        736
 Adjustments to research and development expenses:
 Acquisition-related expenses (b)                   (22)          (7)
 Stock option expense (a)                           (5)           (6)
 Total adjustments to research and development      (27)          (13)
 expenses
 Adjusted research and development expenses         $        851  $        723
 GAAP selling, general and administrative expenses  $     1,158   $     1,079
 Adjustments to selling, general and administrative
 expenses:
 Acquisition-related expenses (c)                   (10)          (15)
 Stock option expense (a)                           (4)           (7)
 Total adjustments to selling, general and          (14)          (22)
 administrative expenses
 Adjusted selling, general and administrative       $     1,144   $     1,057
 expenses
 GAAP operating expenses                            $     2,796   $     2,571
 Adjustments to operating expenses:
 Adjustments to cost of sales                       (73)          (84)
 Adjustments to research and development expenses   (27)          (13)
 Adjustments to selling, general and administrative (14)          (22)
 expenses
 Expense resulting from changes in the estimated
 fair values of the contingent                      (1)           (2)
 consideration obligations related to a prior year
 business combination
 Certain charges pursuant to our continuing efforts -             (1)
 to improve cost efficiencies in our operations
 Expense related to various legal proceedings       (15)          (3)
 Total adjustments to operating expenses            (130)         (125)
 Adjusted operating expenses                        $     2,666   $     2,446
 GAAP income before income taxes                    $     1,343   $     1,366
 Adjustments to income before income taxes:
 Adjustments to operating expenses                  130           125
 Non-cash interest expense associated with our      12            34
 convertible notes
 Total adjustments to income before income taxes    142           159
 Adjusted income before income taxes                $     1,485   $     1,525
 GAAP provision for income taxes                    $             $        182
                                                    (91)
 Adjustments to provision for income taxes:
 Income tax effect of the above adjustments (d)     40            56
 Income tax benefit from resolving certain
 non-routine transfer-pricing and                   38            -
 acquisition-related issues with tax authorities
 Total adjustments to provision for income taxes    78            56
 Adjusted provision for income taxes                $             $        238
                                                    (13)
 GAAP net income                                    $     1,434   $     1,184
 Adjustments to net income:
 Adjustments to income before income taxes, net of  102           103
 the tax effect of the above adjustments
 Income tax benefit from resolving certain
 non-routine transfer-pricing and                   (38)          -
 acquisition-related issues with tax authorities
 Total adjustments to net income                    64            103
 Adjusted net income                                $     1,498   $     1,287

 

 

Amgen Inc.
GAAP to "Adjusted" Reconciliations
(In millions, except per share data)
(Unaudited)
      The following table presents the computations for GAAP and "Adjusted"
      diluted EPS, computed under the treasury stock method
      "Adjusted" EPS presented below excludes stock option expense:
                           Three months ended         Three months ended
                           March 31, 2013             March 31, 2012
                           GAAP      "Adjusted"       GAAP    "Adjusted"  
      Income (Numerator):
      Net income for basic $         $     1,498      $       $     1,287
      and diluted EPS      1,434                      1,184
      Shares
      (Denominator):
      Weighted-average     751       751              791     791
      shares for basic EPS
      Effect of dilutive   13        13           (*) 9       8            (*)
      securities
      Weighted-average
      shares for diluted   764       764              800     799
      EPS
      Diluted EPS          $         $       1.96     $       $       1.61
                           1.88                         1.48
      (*)  Dilutive securities used to compute "Adjusted" diluted EPS for the
      three months ended March 31, 2013 and 2012 were computed under the
      treasury stock method assuming that we do not expense stock options. 
      For the three months ended March 31, 2013 and 2012, the total pre-tax
(a)   expense for employee stock options was $11 million and $16 million,
      respectively
      "Adjusted" diluted EPS including the impact of stock option expense for
      the three months ended March 31, 2013 and 2012 was as follows: 
                           Three months ended
                           March 31, 
                           2013      2012
      "Adjusted" diluted   $      
      EPS, excluding stock 1.96      $       1.61
      option expense
      Impact of stock
      option expense (net  (0.01)    (0.02)
      of tax)
      "Adjusted" diluted   $      
      EPS, including stock 1.95      $       1.59
      option expense
      The adjustments in 2013 related primarily to non-cash amortization of
      intangible assets acquired in prior year business combinations. The
(b)   adjustments in 2012 included non-cash amortization of intangible assets
      acquired in a prior year business combination and other
      acquisition-related expenses
      The adjustments in 2013 related to non-cash amortization of intangible
      assets acquired in prior year business combinations. The adjustments in
(c)   2012 related primarily to transaction costs as well as non-cash
      amortization of intangible assets acquired in prior year business
      combinations
      The tax effect of the adjustments between our GAAP and "Adjusted"
(d)   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 and non-cash interest expense associated with our
      convertible notes, whereas the tax impact of other adjustments,
      including stock option expense, depends on whether the amounts are
      deductible in the tax jurisdictions where the expenses are incurred or
      the asset is located 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 months
      ended March 31, 2013 and 2012, were 28.2% and 35.2%, respectively
      For the three months ended March 31, 2012, expenses related to
Note: amortization of certain acquired intangible assets within operating
      expenses have been reclassified to conform to the current year
      presentation

Amgen Inc.
Reconciliation of Free Cash Flow
(In millions)
(Unaudited)
                            Three months ended
                            March 31, 
                            2013                         2012
 Cash Flows from Operations $                    1,049   $                    
                                                         972
 Capital Expenditures       (158)                        (144)
 Free Cash Flow             $                       891  $                    
                                                         828

 

 

Reconciliation of GAAP EPS Guidance to "Adjusted" 
EPS Guidance for the Year Ending December 31, 2013
(Unaudited)
The Company updated its "Adjusted" EPS guidance to be above the midpoint of
the range of $7.05 to $7.35
                                    2013
GAAP diluted EPS guidance           $  6.68  -       $
                                                      6.98
Known adjustments to arrive at
"Adjusted" earnings*:
     Acquisition-related        (a)          0.36
     expenses
     Stock option expense                    0.03
     Expense related to a legal              0.02
     proceeding
     Non-cash interest expense
     associated with our                     0.01
     convertible notes
     Tax settlement             (b)          (0.05)
"Adjusted" diluted EPS guidance     $  7.05  -       $
                                                      7.35
*    The known adjustments are presented net of their related aggregate tax
     impact of approximately $0.20 per share. 
     To exclude acquisition-related expenses related primarily to non-cash
(a)  amortization of intangible assets acquired in prior year business
     combinations
(b)  To exclude income tax benefit from resolving certain non-routine
     transfer-pricing and acquisition-related issues with tax authorities
Reconciliation of GAAP Tax Rate Guidance to "Adjusted" 
Tax Rate Guidance for the Year Ending December 31, 2013
(Unaudited)
                                    2013 with PR excise tax  2013 without PR
                                    credit                   excise tax credit
GAAP tax rate guidance              9%       -       10%       13%  -   14%
    Tax rate effect of known                 2%                     2%
    adjustments discussed above
"Adjusted" tax rate guidance        11%      -       12%       15%  -   16%

 

CONTACT: Amgen, Thousand Oaks
Ashleigh Koss, 805-313-6151 (media)
Arvind Sood, 805-447-1060 (investors)

(Logo: http://photos.prnewswire.com/prnh/20081015/AMGENLOGO)

SOURCE Amgen

Website: http://www.amgen.com
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