10-QPeriod: Q2 FY2012

AMGEN INC Quarterly Report for Q2 Ended Jun 30, 2012

Filed August 8, 2012For Securities:AMGN

Summary

Amgen Inc. reported solid financial results for the second quarter and first half of 2012, demonstrating revenue growth driven by key products like Enbrel, Neulasta/Neupogen, and a notable increase in "Other products." Total revenues for the quarter rose 13% year-over-year to $4.48 billion, with net income up 8% to $1.27 billion. Diluted EPS saw a significant 29% increase to $1.61, largely due to a reduced share count from aggressive share repurchases. The company also announced the strategic acquisitions of Micromet, Inc. and Mustafa Nevzat Pharmaceuticals, bolstering its oncology and Turkish market presence, respectively. Despite facing patent expirations on some principal products, Amgen's financial strength is evident in its robust operating cash flow and significant cash reserves, positioning it for continued investment in innovation and return of capital to shareholders.

Financial Highlights

54 data points
Beta

Revenue

$4.48B

77.0% Gross Margin

Net Income

$1.27B

28.3% Net Margin

EPS (Diluted)

$1.61

Total Assets

$52.23B

Cash & Equivalents

$5.85B

Free Cash Flow

$2.20B

Financial Statements
Beta
Revenue$4.48B
Cost of Revenue$752.00M
Gross Profit$3.45B
SG&A Expenses$1.23B
Operating Expenses$2.89B
Operating Income$1.59B
Interest Expense$256.00M
Net Income$1.27B
EPS (Basic)$1.63
EPS (Diluted)$1.61
Shares Outstanding (Basic)776.00M
Shares Outstanding (Diluted)785.00M

Key Highlights

  • 1Total revenues increased by 13% to $4.48 billion in Q2 2012 compared to Q2 2011.
  • 2Net income grew by 8% to $1.27 billion for Q2 2012.
  • 3Diluted Earnings Per Share (EPS) saw a substantial 29% increase to $1.61 in Q2 2012, driven by share repurchases.
  • 4The company completed significant acquisitions: Micromet, Inc. for oncology pipeline expansion and Mustafa Nevzat Pharmaceuticals to strengthen its presence in Turkey.
  • 5Operating income increased by 19% year-over-year for the quarter, indicating strong operational performance.
  • 6Amgen repurchased $2.6 billion of its common stock in the first half of 2012 and maintained its quarterly dividend payment of $0.36 per share.
  • 7Cash, cash equivalents, and marketable securities stood at $22.5 billion as of June 30, 2012.

Frequently Asked Questions

Revenue growth was primarily driven by increases in sales of Enbrel (up 11%), Neulasta®/NEUPOGEN® (up 2%), and a substantial 52% increase in "Other products" sales. U.S. product sales showed strong performance, rising 9%, while Rest of World (ROW) sales grew 3%.

Research and development expenses remained flat year-over-year for both the three and six-month periods ended June 30, 2012. While spending on later-stage clinical programs increased, this was offset by reductions in marketed product support and discovery research.

Amgen continues to prioritize returning capital to shareholders through a combination of stock repurchases and cash dividends. The company repurchased $2.6 billion of stock in the first half of 2012 and paid a quarterly dividend of $0.36 per share. A significant portion of its cash reserves is held overseas and is intended for indefinite reinvestment outside the U.S.

A significant concern for Amgen is the upcoming patent expiration on its principal products, which is expected to lead to increased competition from biosimilars. The company is also navigating legal proceedings and government investigations, including a proposed settlement related to federal investigations. Additionally, economic conditions in Southern Europe are impacting receivable collections.