Company Overview - Amgen Inc. is a biotechnology company based in Thousand Oaks, California, established in 1980, focusing on recombinant DNA technology and recombinant human insulin [1] - The company has evolved into one of the most diversified firms in the biotechnology sector [1] Investment Philosophy - The investment philosophy emphasizes the importance of compounding, dividend reinvesting, and patient investing through various market conditions to achieve significant rewards [1] - The approach combines steady accumulation of high-quality assets with high-risk/high-reward opportunities, underappreciated turnaround plays, and transformative technologies [1] Personal Background of the Investor - The investor describes themselves as an amateur, self-taught in investing, with no formal education in the field, but emphasizes the value of learning from others [1] - The investor holds a PhD from Brunel University and is an accomplished academic writer and editor, also teaching at the college/university level [1]

Core Viewpoint - Amgen (AMGN) reported strong first-quarter earnings and sales for 2025, with total revenues increasing by 9% year over year and product revenues rising by 11% to $7.87 billion, driven by volume growth despite price declines [1][2][3] Revenue Performance - Total revenues rose 9% year over year, with product revenues increasing 11% to $7.87 billion, reflecting strong volume growth across all areas [1][2] - Sales of key products such as Prolia, Xgeva, Repatha, Blincyto, and Evenity exceeded estimates, with 14 products achieving double-digit volume growth [3][4] Key Drug Performance - Repatha generated $656 million in sales, up 27% year over year, with volume growth of 41% offset by a 9% price decline [4] - Evenity recorded sales of $442 million, a 29% increase year over year, driven by strong demand [5] - Prolia revenues reached $1.1 billion, up 10% from the previous year, as higher volumes mitigated lower pricing impacts [5] Rare Disease Drug Sales - Sales of rare disease drugs rose 3% year over year to $1 billion, with Tepezza and Krystexxa impacted by U.S. wholesaler inventory changes [8][9] - Tepezza sales declined 10% to $381 million, while Krystexxa remained flat at $236 million; Uplizna grew 14% to $91 million, and Tavneos saw a 76% increase to $90 million [9] Oncology Portfolio - Amgen's oncology portfolio grew 10% year over year, generating over $2 billion in sales, with Blincyto as a key driver at $370 million, up 52% [10][11] - Xgeva delivered revenues of $566 million, while Kyprolis saw a 14% decline to $324 million due to competitive pressures [11] Biosimilars Contribution - Biosimilar portfolio sales increased by 35% year over year to $735 million, with new products like Wezlana contributing significantly [12][13] - Wezlana generated $150 million in sales, while Pavblu brought in $99 million [13] Inflammation Drugs - Otezla sales were $437 million, up 11%, while Enbrel revenues declined 10% to $510 million, with both products beating estimates [15] Overall Conclusion - Amgen's key medicines, including Evenity, Repatha, and Blincyto, drove sales growth, offsetting declines from oncology biosimilars and established products like Enbrel [16] - Increased pricing pressures and competition are expected to impact sales of several products, with potential revenue headwinds from brands like Otezla and Lumakras [17]

Group 1 - The Q1 earnings season is performing well, with 72% of S&P 500 companies that have reported beating estimates [1] - The blended year-over-year earnings advance is currently at 12.8%, which is five percentage points above the previous level [1]

Core Viewpoint - Amgen reported strong first-quarter 2025 results, exceeding earnings and revenue estimates, driven by robust product sales despite rising operating costs [1][20][21]. Financial Performance - Adjusted earnings per share were $4.90, surpassing the Zacks Consensus Estimate of $4.16, marking a 24% year-over-year increase [1]. - Total revenues reached $8.1 billion, exceeding the Zacks Consensus Estimate of $7.95 billion, reflecting a 9% year-over-year growth [1]. Product Revenue Breakdown - Total product revenues increased by 11% year-over-year to $7.87 billion, with volume growth of 14% partially offset by price declines [2]. - Prolia generated $1.1 billion in revenue, up 10% year-over-year, beating estimates [3]. - Evenity sales rose 29% year-over-year to $442 million, exceeding expectations [4]. - Repatha revenues increased by 27% year-over-year to $656 million, driven by a 41% rise in volumes [5]. - Xgeva delivered revenues of $566 million, up 1% year-over-year, beating estimates despite currency headwinds [6]. - Kyprolis sales declined 14% year-over-year to $324 million due to competitive pressures [7]. - Otezla sales were $437 million, up 11% year-over-year, beating estimates [9]. - Enbrel revenues fell 10% year-over-year to $510 million due to lower prices [10]. - Tezspire recorded sales of $285 million, up 65% year-over-year, exceeding expectations [11]. - New biosimilars, Wezlana and Pavblu, generated $150 million and $99 million in sales, respectively [12]. Cost and Margin Analysis - Adjusted operating margin increased by 2.5 percentage points to 45.7% [15]. - Adjusted operating expenses rose by 4% to $4.55 billion, with R&D expenses increasing by 11% [15]. Guidance and Future Outlook - Amgen reaffirmed its 2025 guidance, expecting total revenues between $34.3 billion and $35.7 billion and adjusted earnings per share between $20.00 and $21.20 [16]. - The company is developing MariTide, a new obesity treatment, with ongoing phase III studies [17][18][19]. Market Performance - Amgen's stock has risen 9.4% year-to-date, outperforming the industry, which has seen a 1.2% decline [21].

Financial Performance - Total revenues for Q1 2025 were $8,149 million, a 9.4% increase from $7,447 million in Q1 2024[14] - Product sales increased to $7,873 million in Q1 2025, up 10.6% from $7,118 million in Q1 2024[14] - Net income for Q1 2025 was $1,730 million, compared to a net loss of $113 million in Q1 2024[14] - Earnings per share (EPS) for Q1 2025 were $3.22 (basic) and $3.20 (diluted), a significant improvement from a loss of $0.21 per share in Q1 2024[14] - Operating income rose to $1,178 million in Q1 2025, up from $991 million in Q1 2024, reflecting an 18.8% increase[14] - Segment net income for the three months ended March 31, 2025, was $1,730 million, compared to a net loss of $113 million in the same period of 2024[38] - Total product sales increased by 11% for the three months ended March 31, 2025, reaching $7,873 million, driven by a volume growth of 14%[140] - U.S. product sales grew by 14% to $5,662 million, while the Rest of the World (ROW) sales increased by 3% to $2,211 million[140] Cash and Assets - Cash and cash equivalents decreased to $8,810 million as of March 31, 2025, down from $11,973 million at the end of 2024[18] - Total assets decreased to $89,367 million as of March 31, 2025, compared to $91,839 million at the end of 2024[18] - Total stockholders' equity increased to $6,207 million as of March 31, 2025, up from $5,877 million at the end of 2024[18] - The total interest-bearing securities as of March 31, 2025, amounted to $8.302 billion, a decrease from $11.486 billion as of December 31, 2024[54] - The total inventories as of March 31, 2025, were $6.729 billion, a decrease from $6.998 billion as of December 31, 2024[65] Expenses and Costs - Operating expenses increased by 8% to $6,971 million, influenced by an impairment charge related to the Otezla intangible asset[146] - Research and development expenses for the three months ended March 31, 2025, were $1,486 million, compared to $1,343 million in 2024, reflecting a 10.6% increase[38] - Manufacturing cost of sales for the three months ended March 31, 2025, was $2,528 million, down from $2,814 million in 2024, a decrease of 10.1%[38] - Selling, general and administrative expenses decreased by 7% to $1,687 million for the three months ended March 31, 2025, due to lower commercial product-related expenses[177] - Cost of sales decreased to 36.4% of total revenues for the three months ended March 31, 2025, down from 43.0% in 2024, primarily due to lower amortization expenses and manufacturing costs[175] Debt and Financing - Total principal amount of debt decreased to $58.945 billion as of March 31, 2025, from $61.778 billion as of December 31, 2024[72] - Debt repayments during the three months ended March 31, 2025, totaled $2.5 billion, compared to no repayments in the same period of the prior year[74] - The total carrying value of debt as of March 31, 2025, was $57.381 billion, down from $60.099 billion as of December 31, 2024[72] - Cash used in financing activities for Q1 2025 included debt repayment of $2.5 billion, extinguishment of debt of $301 million, and dividend payments of $1.3 billion[205] Dividends and Shareholder Returns - The company declared dividends of $2.38 per share in Q1 2025, totaling $1,280 million[20] - The Board of Directors declared a quarterly cash dividend of $2.38 per share in March 2025, to be paid in June 2025[78] - As of March 31, 2025, $6.8 billion of authorization remained available under the stock repurchase program[77] Legal and Regulatory Matters - The company is involved in various legal proceedings, which may have a material adverse effect on its consolidated results of operations, financial position, or cash flows[108] - A confidential settlement was reached with Fresenius Kabi USA, allowing them to launch denosumab biosimilar products in the U.S. as early as June 30, 2025[116] - The trial for the antitrust action against Amgen is scheduled to begin on May 5, 2025[120] Research and Development - The FDA approved UPLIZNA for the treatment of Immunoglobulin G4-related disease (IgG4-RD) in April 2025, marking it as the first FDA-approved treatment for this condition[138] - The ongoing ROCKET Phase 3 clinical trial program for rocatinlimab met its co-primary endpoints, indicating promising results for moderate to severe atopic dermatitis[136] Market Risks and Controls - The company is exposed to price risk on equity securities in its investment portfolio, which includes investments in BeiGene and Neumora[209] - The Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of March 31, 2025[210] - No changes in internal control over financial reporting occurred during the fiscal quarter ended March 31, 2025, that materially affected the internal control[211]

Core Insights - Amgen reported $8.15 billion in revenue for Q1 2025, a year-over-year increase of 9.4% and an EPS of $4.90, up from $3.96 a year ago, exceeding both revenue and EPS consensus estimates [1] Financial Performance - Revenue of $8.15 billion surpassed the Zacks Consensus Estimate of $7.95 billion by 2.47% [1] - EPS of $4.90 exceeded the consensus estimate of $4.16 by 17.79% [1] - Total product sales reached $7.87 billion, compared to the average estimate of $7.59 billion, reflecting a year-over-year change of 10.6% [4] Product Sales Breakdown - Neulasta (ROW): $20 million, -35.5% YoY, below estimate of $26.10 million [4] - Neulasta (U.S.): $109 million, +25.3% YoY, above estimate of $67.86 million [4] - Otezla (ROW): $94 million, -6.9% YoY, below estimate of $103.34 million [4] - Otezla (U.S.): $343 million, +17.1% YoY, above estimate of $299.70 million [4] - BLINCYTO: $370 million, +51.6% YoY, above estimate of $337.78 million [4] - Repatha: $656 million, +26.9% YoY, above estimate of $615.59 million [4] - KYPROLIS: $324 million, -13.8% YoY, below estimate of $381.49 million [4] - Vectibix: $267 million, +8.1% YoY, above estimate of $250.50 million [4] - Enbrel: $510 million, -10.1% YoY, slightly above estimate of $502.53 million [4] - Other revenues: $276 million, -16.1% YoY, below estimate of $347.10 million [4] - Neulasta (Total): $129 million, +9.3% YoY, above estimate of $93.87 million [4] Stock Performance - Amgen shares returned -4.8% over the past month, compared to the Zacks S&P 500 composite's -0.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Core Viewpoint - Amgen reported quarterly earnings of $4.90 per share, exceeding the Zacks Consensus Estimate of $4.16 per share, and showing an increase from $3.96 per share a year ago, representing an earnings surprise of 17.79% [1][2] Financial Performance - The company achieved revenues of $8.15 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.47%, and up from $7.45 billion year-over-year [2] - Over the last four quarters, Amgen has exceeded consensus EPS estimates four times and topped revenue estimates three times [2] Stock Performance - Amgen shares have increased approximately 11.6% since the beginning of the year, contrasting with a decline of -5.3% in the S&P 500 [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $5.29 on revenues of $8.82 billion, and for the current fiscal year, it is $20.57 on revenues of $34.99 billion [7] - The outlook for the Medical - Biomedical and Genetics industry is favorable, ranking in the top 32% of over 250 Zacks industries, suggesting potential for outperformance [8]

Financial Data and Key Metrics Changes - Revenue grew 9% year over year, reaching $8.1 billion, with volume growth of 14% reflecting increased patient demand for innovative medicines [4][49] - Non-GAAP operating expenses rose 4%, with R&D expenses increasing by 12% year over year [50] - Non-GAAP operating margin was 45.7%, above previous guidance due to timing of R&D spending [50] Business Line Data and Key Metrics Changes - General Medicine saw Repatha sales increase by 27% year over year, generating $656 million in Q1 [18] - Rare Disease portfolio grew 3% year over year, delivering $1 billion in sales, with TEPEZZA and KRYSTEXXA impacted by U.S. wholesaler inventory changes [23] - Oncology portfolio generated over $2 billion in sales, growing 10% year over year, driven by the bispecific T cell engager platform [28] Market Data and Key Metrics Changes - U.S. product sales grew 14%, with 14 products delivering double-digit growth [17] - Repatha sales outside the U.S. increased by 29% year over year, reaching $442 million [21] - Evenity sales in the U.S. grew 36% year over year, with Prolia sales reaching nearly $1.1 billion [22][23] Company Strategy and Development Direction - The company is focused on addressing large underserved patient populations with multiple products, particularly in general medicine and rare diseases [5][6] - Continued investment in manufacturing and R&D, with nearly $5 billion invested in U.S. capital projects since 2017 [14][58] - The company aims to maintain leadership in biosimilars and innovative therapies while navigating potential tariff and tax changes [13][58] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong patient demand and ongoing product launches [16] - The company is well-positioned to deliver innovation and growth, despite operating in a volatile environment [16] - Management reaffirmed 2025 revenue guidance of $34.3 billion to $35.7 billion and non-GAAP EPS guidance of $20 to $21.2 [54] Other Important Information - The company generated $1 billion in free cash flow in Q1, reflecting operational momentum [51] - The FDA granted breakthrough therapy designation for blinatumomab for subcutaneous treatment of B-ALL [11][46] - The company is advancing multiple Phase 3 studies across various therapeutic areas, including obesity and rare diseases [36][42] Q&A Session Summary Question: What should be expected at ADA regarding Meritide? - Management highlighted strong efficacy and tolerability data from Phase II studies, with a focus on mechanistic insights and ongoing Phase III trials [62][64] Question: What is the commercial strategy for Aplisna in IgG4? - The company is excited about being the first approved therapy for IgG4, with a focus on engaging rheumatologists and leveraging its experience in autoimmune diseases [68][70] Question: How does the company view competition from oral obesity medications? - Management expressed confidence in Meritide's efficacy and tolerability, noting that while oral medications may enter the market, Meritide's unique dosing schedule provides a competitive advantage [80][84] Question: How is Repatha performing against competitors like Lecvio? - Management acknowledged competition but emphasized Repatha's strong profile and ongoing efforts to improve access and affordability for patients [88][90] Question: What is the expected uptake of Tableau following the Q code implementation? - The company reported positive reception of PABLUE among retina specialists and is working on contracting with larger groups [95] Question: How is the company addressing payer dynamics in the obesity market? - Management is focused on ensuring broad access to obesity medications and is monitoring recent changes in the payer environment [99]

Financial Data and Key Metrics Changes - The company reported revenues of $8.1 billion for Q1 2025, reflecting a 9% year-over-year increase, driven by 14% volume growth from key brands [48] - Non-GAAP operating expenses rose by 4%, with R&D expenses increasing by 12% year-over-year, indicating continued investment in the late-stage pipeline [49] - The non-GAAP operating margin was 45.7%, above previous guidance due to the timing of R&D spending [49] Business Line Data and Key Metrics Changes - Global product sales grew by 11% year-over-year, with the U.S. market showing a 14% increase [18] - Repatha sales increased by 27% year-over-year, reaching $656 million in Q1, driven by improved access and prescriber engagement [19] - The rare disease portfolio grew by 3% year-over-year, generating $1 billion in sales, although sales of TEPEZZA and KRYSTEXXA were impacted by changes in U.S. wholesaler inventory levels [23] Market Data and Key Metrics Changes - The biosimilars portfolio generated $735 million in sales, a 35% increase year-over-year, with PABLUE sales reaching $99 million [31] - Evenity sales grew by 36% in the U.S., highlighting the potential for further market penetration as fewer than 250,000 patients have been treated to date [22] - The oncology portfolio, including products like BLINCYTO and IMDELTRA, grew by 10% year-over-year, generating over $2 billion in sales [29] Company Strategy and Development Direction - The company is focused on addressing large underserved patient populations in general medicine, rare diseases, and oncology, with multiple product launches and positive clinical trial data [5][6] - There is a commitment to innovation, with significant investments in R&D and manufacturing capacity in the U.S. [14][56] - The company aims to adapt to potential changes in tariffs and taxes while maintaining long-term growth strategies [13][55] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong patient demand for innovative medicines and the successful execution of multiple Phase 3 studies [16] - The company reaffirmed its 2025 total revenue guidance in the range of $34.3 billion to $35.7 billion, along with non-GAAP earnings per share guidance between $20 and $21.2 [52] - Management acknowledged the competitive landscape but emphasized the unique value propositions of their products, particularly in the PCSK9 category [88] Other Important Information - The company has invested nearly $5 billion in U.S. capital projects since 2017 and announced an additional $2 billion in expansions in Ohio and North Carolina [14] - The integration of Horizon is progressing well, with expectations to achieve $500 million in pre-tax cost synergies by the end of the year [49] Q&A Session Summary Question: What should be expected at ADA regarding Meritide? - Management highlighted strong efficacy and tolerability data from Phase II studies, with a focus on new mechanistic data to be presented at ADA [60][62] Question: What is the commercial strategy for Uplenza in IgG4? - The company is excited about being the first approved therapy for IgG4, with a focus on engaging rheumatologists and leveraging its existing presence in inflammation and autoimmune diseases [68][70] Question: How does the company view competition from oral obesity medications? - Management acknowledged the competition but emphasized the unique dosing schedule and efficacy of Meritide, which they believe will maintain its competitive edge [82][84] Question: What is the outlook for Repatha amidst increasing competition? - The company recognizes competition but believes Repatha has the best profile in the PCSK9 category, with ongoing efforts to improve access and affordability for patients [88][90]

Q1 2025 Financial Performance - Total revenue increased by 9% year-over-year, reaching $8.149 billion[97] - Product sales increased by 11% year-over-year, totaling $7.873 billion[97] - Non-GAAP EPS increased by 24% year-over-year, reaching $4.90[97] - Research and development investment increased by 12% year-over-year, reaching $1.5 billion[9] - Free cash flow was $980 million in Q1 2025, compared to $459 million in Q1 2024[117] Product Performance Highlights - Repatha sales increased by 27% year-over-year, reaching $656 million, driven by 41% volume growth[12, 22] - EVENITY sales increased by 29% year-over-year, reaching $442 million, driven by volume growth[12, 22] - Prolia sales increased by 10% year-over-year, reaching $1.099 billion, driven by 13% volume growth[12, 22] - TEZSPIRE sales increased by 65% year-over-year, reaching $285 million, driven by volume growth[12, 32] - BLINCYTO sales increased by 52% year-over-year, reaching $370 million, primarily driven by volume growth[12, 37] - IMDELLTRA generated $81 million in sales in Q1 2025[12, 17, 37] Pipeline and Regulatory Updates - FDA approved UPLIZNA for the treatment of IgG4-RD in adult patients[9, 51] - Positive Phase 3 data from IMDELLTRA, UPLIZNA, and rocatinlimab[9] - Initiated multiple Phase 3 trials of MariTide and TEZSPIRE[9] - The company expects 2025 revenue to be in the range of $34.3 billion to $35.7 billion[101]