10-KPeriod: FY2017

AMGEN INC Annual Report, Year Ended Dec 31, 2017

Filed February 13, 2018For Securities:AMGN

Summary

Amgen Inc. (AMGN) reported stable total revenues for the fiscal year 2017, nearly matching the previous year's performance at $22.85 billion. The company saw strong growth in key products like Prolia and XGEVA, but faced a notable decline in Enbrel and Epogen sales, largely due to increased competition and patent expirations. Despite a 74% decrease in net income, primarily driven by a significant $6.1 billion charge related to the 2017 U.S. Tax Act, Amgen demonstrated resilience with an 8% increase in operating cash flow to $11.2 billion. The company continued its strategic focus on advancing its robust pipeline across six therapeutic areas, including significant developments in neuroscience with Aimovig™ and cardiovascular health with Repatha®. Amgen also actively returned capital to shareholders through dividends and substantial share repurchases, signaling confidence in its long-term financial health and strategic direction. The company is well-positioned for future growth with a strong cash position and ongoing investments in research and development.

Financial Highlights

55 data points
Beta

Revenue

$22.85B

82.2% Gross Margin

Net Income

$1.98B

8.7% Net Margin

EPS (Diluted)

$2.69

Total Assets

$79.95B

Cash & Equivalents

$3.80B

Free Cash Flow

$10.51B

Financial Statements
Beta
Revenue$22.85B
Cost of Revenue$4.07B
Gross Profit$18.78B
SG&A Expenses$4.87B
Operating Expenses$12.88B
Operating Income$9.97B
Interest Expense$1.30B
Net Income$1.98B
EPS (Basic)$2.71
EPS (Diluted)$2.69
Shares Outstanding (Basic)731.00M
Shares Outstanding (Diluted)735.00M

Key Highlights

  • 1Total revenues remained stable at $22.85 billion for 2017, with product sales at $21.80 billion.
  • 2Net income significantly decreased by 74% to $1.98 billion, largely due to a $6.1 billion charge related to the 2017 U.S. Tax Act.
  • 3Operating cash flow increased by 8% to $11.2 billion, demonstrating operational strength.
  • 4Key products Prolia and XGEVA showed strong growth, with sales increasing by 20% and 3% respectively.
  • 5Enbrel sales decreased by 9% due to competition and patent expirations, while Epogen sales declined by 15%.
  • 6Amgen continued to invest in its pipeline, with regulatory submissions and positive clinical trial data for key candidates like Repatha, Aimovig, and Kyprolis.
  • 7The company returned significant capital to shareholders, repurchasing $3.1 billion in common stock and increasing its quarterly dividend by 15%.

Frequently Asked Questions

The primary driver for the substantial decrease in net income was a $6.1 billion charge recorded in relation to the 2017 U.S. Tax Act, which included a repatriation tax on accumulated foreign earnings and a remeasurement of certain deferred tax liabilities. Excluding this one-time tax impact, the operational performance remained more stable.

Amgen experienced declining sales for Enbrel and Epogen due to increased competition, including from biosimilars and generics, and patent expirations. The company is actively managing these pressures through strategies such as innovation in delivery systems and focusing on its pipeline of new therapies, while also preparing for increased biosimilar competition.

Amgen is committed to returning capital to shareholders through a combination of increasing its quarterly dividend and executing significant share repurchase programs. In 2017, the company increased its dividend by 15% and repurchased $3.1 billion of its common stock. Furthermore, a substantial $10 billion tender offer was announced in early 2018.

Amgen made significant progress in its pipeline, particularly with Repatha® receiving expanded FDA approval for cardiovascular outcomes, Aimovig™ for migraine prevention advancing with regulatory filings, and Kyprolis® showing positive overall survival data for multiple myeloma. The company also advanced its biosimilar development programs, with approvals for MVASI™ and AMGEVITA™.