Amgen(US:AMGN)2025-08-05 23:13PART I Item 1. Financial Statements This section presents Amgen's unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025, covering income, balance sheets, equity, and cash flows with detailed notes Condensed Consolidated Statements of Income For the six months ended June 30, 2025, Amgen reported total revenues of $17.33 billion, a 9% increase year-over-year, with net income rising to $3.16 billion and diluted EPS to $5.84 Condensed Consolidated Statements of Income (Six Months Ended June 30) | Financial Metric | 2025 (in millions) | 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | Total revenues | $17,328 | $15,835 | +9.4% | | Operating income | $3,834 | $2,900 | +32.2% | | Net income | $3,162 | $633 | +399.5% | | Diluted EPS | $5.84 | $1.17 | +399.1% | Condensed Consolidated Statements of Comprehensive Income For the six months ended June 30, 2025, comprehensive income was $2.68 billion, a significant increase from $767 million in the prior year, driven by higher net income despite other comprehensive losses Condensed Consolidated Statements of Comprehensive Income (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Net Income | $3,162 | $633 | | Other comprehensive (loss) income | $(478) | $134 | | Comprehensive Income | $2,684 | $767 | Condensed Consolidated Balance Sheets As of June 30, 2025, Amgen's total assets decreased to $87.9 billion, primarily due to reduced cash, while total liabilities decreased to $80.5 billion from lower long-term debt, and stockholders' equity increased to $7.4 billion Condensed Consolidated Balance Sheet Highlights | Account | June 30, 2025 (in millions) | Dec 31, 2024 (in millions) | | :--- | :--- | :--- | | Cash and cash equivalents | $8,028 | $11,973 | | Total assets | $87,897 | $91,839 | | Long-term debt | $53,760 | $56,549 | | Total liabilities | $80,469 | $85,962 | | Total stockholders' equity | $7,428 | $5,877 | Condensed Consolidated Statements of Stockholders' Equity For the six months ended June 30, 2025, total stockholders' equity increased from $5.88 billion to $7.43 billion, driven by net income, partially offset by dividends and other comprehensive loss - Key drivers for the change in stockholders' equity in the first six months of 2025 were net income of $3.16 billion, offset by $1.28 billion in dividends and a $478 million other comprehensive loss21 Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash from operating activities was $3.67 billion, while investing activities used $836 million and financing activities used $6.78 billion, resulting in a $3.95 billion decrease in cash Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $3,671 | $3,148 | | Net cash used in investing activities | $(836) | $(434) | | Net cash used in financing activities | $(6,780) | $(4,357) | | Decrease in cash and cash equivalents | $(3,945) | $(1,643) | Notes to Condensed Consolidated Financial Statements These notes detail Amgen's accounting policies and financial results, covering operating segments, revenue breakdowns, tax disputes, fair value measurements, hedging, and legal proceedings - The company operates in a single segment: human therapeutics The Chief Executive Officer is the chief operating decision maker (CODM) and allocates resources on a consolidated basis3738 - In January 2025, Otezla was selected for Medicare price negotiation under the IRA, leading to an $800 million impairment charge on its developed-product-technology rights intangible asset74 - Amgen is in a significant tax dispute with the IRS for the 2010-2012 and 2013-2015 periods, involving proposed additional federal taxes of approximately $3.6 billion and $5.1 billion, respectively, plus interest and penalties505152 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) This section provides management's perspective on Amgen's financial performance, highlighting 9% revenue growth to $17.3 billion, 32% operating income increase, key product sales drivers, and capital allocation strategies including debt reduction and dividends Financial Highlights (Six Months Ended June 30, 2025) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Total Product Sales | $16,644M | $15,159M | +10% | | Total Revenues | $17,328M | $15,835M | +9% | | Operating Income | $3,834M | $2,900M | +32% | | Diluted EPS | $5.84 | $1.17 | +399% | - Product sales growth for the first six months of 2025 was driven by a 14% increase in volume, partially offset by a 4% decline in net selling price160 - Operating expenses for the first half of 2025 increased by 4%, primarily due to an $800 million impairment charge for the Otezla intangible asset and higher R&D expenses related to later-stage clinical programs like MariTide164201204 - The company's capital allocation strategy focuses on investing in the business, reducing debt, and returning capital to shareholders via dividends and stock repurchases In the first half of 2025, Amgen repaid $4.1 billion in debt and paid $2.6 billion in dividends222232 Item 3. Quantitative and Qualitative Disclosures About Market Risk This section reports no material changes to the company's market risk disclosures during the six months ended June 30, 2025, referencing the prior annual report - There were no material changes to the company's market risk profile during the first six months of 2025235 Item 4. Controls and Procedures Management concluded that Amgen's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of June 30, 2025236 - No material changes to internal control over financial reporting were identified during the quarter ended June 30, 2025237 PART II—OTHER INFORMATION Item 1. Legal Proceedings This section refers to Note 13 of the financial statements for recent developments in the company's legal proceedings, including contingencies and commitments - For updates on legal proceedings, the report directs readers to Note 13, "Contingencies and commitments," in Part I of this 10-Q240 Item 1A. Risk Factors This section updates Amgen's risk factors, including pricing pressures from government initiatives, significant potential tax liabilities, geopolitical risks in international operations, complex manufacturing challenges, and global economic conditions - Significant pricing pressure continues from government and commercial payers The Inflation Reduction Act (IRA) has led to Medicare price setting for ENBREL (effective 2026) and Otezla (effective 2027) The Most-Favored-Nations (MFN) Executive Order and state-level Prescription Drug Affordability Boards (PDABs) pose additional risks243245249 - The company faces substantial potential tax liabilities from its ongoing U.S. Tax Court dispute with the IRS over profit allocation for the 2010-2015 tax years and risks from the OECD's global minimum tax agreement257259260 - International operations face risks from geopolitical tensions and new regulations The proposed BIOSECURE Act could restrict collaborations with certain Chinese biotech companies, and newly imposed tariffs are increasing production costs268269282 - Manufacturing is complex and subject to disruptions Risks include regulatory compliance, reliance on third-party manufacturers, and potential impacts from new regulations on chemicals like PFAS in manufacturing and packaging272279 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's stock repurchase activity, noting no repurchases during Q2 2025 and $6.8 billion remaining authorized for future repurchases - No shares were repurchased during the three months ended June 30, 2025284 - As of June 30, 2025, $6.8 billion remained available for future stock repurchases under the authorized program285 Item 5. Other Information This section discloses that no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No directors or officers adopted or terminated a Rule 10b5-1 trading plan during the second quarter of 2025286 Item 6. Exhibits This section references the Index to Exhibits, listing all documents filed as part of this quarterly report, including agreements, governance, and data files - This section contains the index listing all exhibits filed with the Form 10-Q287288