Amgen(US:AMGN)2024-05-02 20:03Revenue Growth and Sales Performance - Total revenues increased 22% to $7.4 billion in Q1 2024, driven by 25% volume growth[2] - U.S. volume grew 29% and ex-U.S. volume grew 17% in Q1 2024[2] - Horizon Therapeutics acquisition contributed $914 million in sales, with products like TEPEZZA, KRYSTEXXA, and UPLIZNA driving growth[3] - Repatha sales increased 33% year-over-year to $517 million, driven by 44% volume growth[6] - TEZSPIRE sales increased 80% year-over-year to $173 million, primarily driven by volume growth[10] - TEPEZZA generated $424 million in sales, KRYSTEXXA $235 million, and UPLIZNA $80 million in Q1 2024[12] - Total revenues for Q1 2024 were $7.447 billion, compared to $6.105 billion in Q1 2023, representing a 22% increase[61] - Product sales for Q1 2024 were $7.118 billion, up from $5.846 billion in Q1 2023, a 21.8% increase[61] Operating Income and Margins - GAAP operating income decreased from $1.9 billion to $1.0 billion, with GAAP operating margin dropping 19.0 percentage points to 13.9%[3] - Non-GAAP operating income increased from $2.8 billion to $3.1 billion, but non-GAAP operating margin decreased 5.1 percentage points to 43.2%[4] - Operating Margin as a percentage of product sales decreased 19.0 percentage points in Q1 2024 to 13.9%[16] - GAAP operating income for Q1 2024 was $991 million, compared to $1,921 million in Q1 2023, with Non-GAAP operating income at $3,078 million, up from $2,821 million in the same period last year[65] - GAAP operating income as a percentage of product sales decreased to 13.9% in Q1 2024 from 32.9% in Q1 2023, while Non-GAAP operating income as a percentage of product sales was 43.2%, down from 48.3%[65] Free Cash Flow and Financial Position - Free cash flow decreased to $0.5 billion in Q1 2024 from $0.7 billion in Q1 2023, due to an $800 million tax deposit[4] - Free Cash Flow decreased to $0.5 billion in Q1 2024 from $0.7 billion in Q1 2023, impacted by an $800 million tax deposit[19] - Cash and investments totaled $9.7 billion, while debt outstanding was $64.0 billion as of March 31, 2024[19] - Net cash provided by operating activities decreased to $689 million in Q1 2024 from $1,064 million in Q1 2023, with free cash flow also declining to $459 million from $720 million[68] - Capital expenditures decreased to $230 million in Q1 2024 from $344 million in Q1 2023, contributing to the decline in free cash flow[68] - The company's cash and cash equivalents decreased by $1,236 million in Q1 2024, ending the quarter at $9,708 million, compared to an increase of $23,931 million in Q1 2023, ending at $31,560 million[68] Operating Expenses and Cost Structure - Total operating expenses increased 54% on a GAAP basis, driven by higher amortization and R&D expenses related to the Horizon acquisition[15] - Total Operating Expenses increased 33% on a non-GAAP basis, driven by higher R&D and SG&A expenses[16] - GAAP cost of sales for Q1 2024 was $3.200 billion, representing 45.0% of product sales, compared to $1.720 billion (29.4% of product sales) in Q1 2023[64] - Research and development expenses for Q1 2024 were $1.343 billion, or 18.9% of product sales, compared to $1.058 billion (18.1% of product sales) in Q1 2023[64] - Selling, general and administrative expenses for Q1 2024 were $1.808 billion, or 25.4% of product sales, compared to $1.258 billion (21.5% of product sales) in Q1 2023[64] - Adjustments to cost of sales increased significantly to 26.2% in Q1 2024 from 12.0% in Q1 2023, primarily due to noncash amortization of intangible assets and fair value step-up of inventory[65] Tax and Net Income - Tax Rate decreased 83.7 percentage points primarily due to GAAP net loss and the inclusion of the Horizon business[16] - Net loss for Q1 2024 was $113 million, compared to a net income of $2.841 billion in Q1 2023[61] - GAAP net loss for Q1 2024 was $113 million, compared to a net income of $2,841 million in Q1 2023, with Non-GAAP net income remaining stable at $2,140 million and $2,141 million respectively[65][67] - Net losses from equity investments were $510 million in Q1 2024, compared to net gains of $1,853 million in Q1 2023, primarily related to BeiGene, Ltd. equity fair value adjustments[65][67] - The GAAP tax rate guidance for 2024 is 9.5%, with the Non-GAAP tax rate guidance set at 15.0%[72] Debt and Assets - Long-term debt decreased to $60.061 billion as of March 31, 2024, from $63.170 billion as of December 31, 2023[63] - Total assets decreased to $92.980 billion as of March 31, 2024, from $97.154 billion as of December 31, 2023[63] - Cash and cash equivalents decreased to $9.708 billion as of March 31, 2024, from $10.944 billion as of December 31, 2023[63] Revenue and EPS Guidance - 2024 revenue guidance is projected to be in the range of $32.5 billion to $33.8 billion[21] - GAAP diluted EPS guidance for 2024 is projected between $7.15 and $8.40, while Non-GAAP diluted EPS guidance is expected to range from $19.00 to $20.20[70] Clinical Trials and Pipeline Updates - MariTide Phase 2 study in overweight or obesity with or without type 2 diabetes is ongoing, with topline data expected in late 2024[23] - Tarlatamab BLA for small cell lung cancer is under FDA priority review with a PDUFA date of June 12, 2024[27] - BLINCYTO supplemental BLA for early-stage B-ALL is under FDA priority review with a PDUFA date of June 21, 2024[28] - LUMAKRAS Phase 3 CodeBreaK 300 trial overall survival data will be presented at ASCO in June 2024[32] - FORTITUDE-101, a Phase 3 study of bemarituzumab in first-line gastric cancer, continues to enroll patients[33] - TEZSPIRE reduced the annualized rate of moderate or severe COPD exacerbations by 17% compared to placebo, with a 37% reduction in patients with baseline BEC ≥ 150 cells/μL[34] - The ROCKET Phase 3 program for rocatinlimab has enrolled over 2,800 patients, with three studies completed and data readout anticipated in H2 2024[36] - Otezla demonstrated sustained efficacy in pediatric patients with moderate to severe plaque psoriasis over 52 weeks in the SPROUT Phase 3 study[37] - The Phase 4 AGILE study of KRYSTEXXA with methotrexate showed a 67.2% response rate at a 60-minute infusion duration[43] - A Phase 3 study of UPLIZNA in myasthenia gravis is fully enrolled, with data readout expected in H2 2024[44] - Two Phase 3 studies of dazodalibep in Sjögren's disease are enrolling patients, with Phase 2 data accepted for publication in Nature Medicine[45] - A Phase 2 study of fipaxalparant in idiopathic pulmonary fibrosis has completed enrollment, with data readout anticipated in H2 2024[47] - The company initiated a Phase 3 study comparing ABP 234 to Keytruda in advanced or metastatic non-squamous non-small cell lung cancer[48] Non-GAAP Financial Measures - The company presented non-GAAP financial measures for Q1 2024, including Free Cash Flow (FCF), to enhance understanding of financial performance[50] Risks and Integration Challenges - The company faces risks related to the integration of Horizon, including potential delays, difficulties, and higher-than-expected costs[58]