10-KPeriod: FY2023

AMGEN INC Annual Report, Year Ended Dec 31, 2023

Filed February 14, 2024For Securities:AMGN

Summary

Amgen Inc. reported strong performance in its 2023 Annual Report, highlighted by a significant increase in total product sales, primarily driven by volume growth in key products like Repatha, TEZSPIRE, EVENITY, Prolia, and BLINCYTO. The acquisition of Horizon Therapeutics plc in October 2023 for $27.8 billion was a major strategic move, bolstering Amgen's rare disease portfolio with the addition of TEPEZZA, KRYSTEXXA, and UPLIZNA. Despite a decline in sales for certain established products like ENBREL and Neulasta due to increased competition and pricing pressures, Amgen's overall revenue grew. The company is actively managing its pipeline, with promising developments in its Phase 3 programs and an increased focus on human genetics and innovative technologies. Amgen also continues its commitment to returning capital to shareholders through dividends and share repurchases, while navigating a complex regulatory and reimbursement landscape, including the ongoing tax dispute with the IRS.

Financial Statements
Beta
Revenue$28.19B
Cost of Revenue$8.45B
Gross Profit$19.74B
SG&A Expenses$6.18B
Operating Expenses$20.29B
Operating Income$7.90B
Interest Expense$2.88B
Net Income$6.72B
EPS (Basic)$12.56
EPS (Diluted)$12.49
Shares Outstanding (Basic)535.00M
Shares Outstanding (Diluted)538.00M

Key Highlights

  • 1Completed the acquisition of Horizon Therapeutics plc in October 2023 for $27.8 billion, significantly strengthening its rare disease portfolio with products like TEPEZZA, KRYSTEXXA, and UPLIZNA.
  • 2Total product sales increased by 9% to $26.9 billion, driven by volume growth in Repatha, TEZSPIRE, EVENITY, Prolia, and BLINCYTO, along with initial sales from the Horizon acquisition.
  • 3Operating income decreased by 17% to $7.9 billion, primarily due to higher amortization and acquisition-related expenses from the Horizon acquisition.
  • 4Net income increased by 3% to $6.7 billion, resulting in diluted EPS of $12.49.
  • 5R&D expenses increased by 8% to $4.8 billion, with higher spending on later-stage clinical programs and marketed product support.
  • 6The company's pipeline advanced, with 24 Phase 3 programs as of January 31, 2024, up from 18 in the prior year, indicating continued investment in future growth.
  • 7Amgen faces ongoing competition from biosimilars and generics, particularly impacting established products like ENBREL and Neulasta, leading to net price declines.

Frequently Asked Questions

The acquisition of Horizon Therapeutics plc for $27.8 billion in October 2023 significantly expanded Amgen's portfolio, particularly in rare and autoimmune diseases, adding key products like TEPEZZA, KRYSTEXXA, and UPLIZNA. This strategic move is expected to drive future growth, although it also contributed to higher operating expenses, including amortization and acquisition-related costs in the current reporting period.

Amgen acknowledges the increasing competition from biosimilars and generics, which has impacted sales of established products like ENBREL and Neulasta through net price declines. The company is focusing on distinguishing its products through innovation, leveraging its global experience, and developing its own biosimilar products to compete in the market.

Key growth drivers include volume increases for products such as Repatha, TEZSPIRE, EVENITY, Prolia, and BLINCYTO. The company is also advancing its pipeline, with 24 Phase 3 programs as of January 31, 2024, up from 18 in the previous year. Promising developments are noted in Tarlatamab for small cell lung cancer and the continued advancement of acquired programs from Horizon.

Amgen highlighted several key financial risks, including dependence on reimbursement from third-party payers and pricing pressures, potential tax liabilities from ongoing disputes and new legislation, significant competition, and risks associated with its substantial debt incurred for the Horizon acquisition. Additionally, operational risks related to manufacturing disruptions and cybersecurity threats were noted.