10-QPeriod: Q1 FY2016

AMGEN INC Quarterly Report for Q1 Ended Mar 31, 2016

Filed May 2, 2016For Securities:AMGN

Summary

Amgen Inc. reported strong financial results for the first quarter of 2016, with total revenues increasing by 10% to $5.53 billion and net income growing by 17% to $1.90 billion. Diluted earnings per share (EPS) also saw a significant increase of 18% to $2.50. This growth was driven by a 7% increase in product sales, reaching $5.24 billion, with key products like Enbrel, Prolia, and Aranesp showing robust performance. The company also benefited from an 81% surge in other revenues, largely due to an upfront partner payment and increased royalty income. Despite a 4% increase in operating expenses, the company's operating income grew by 19%, demonstrating effective cost management and revenue expansion. Amgen continued its commitment to returning capital to shareholders, declaring a quarterly dividend and actively engaging in stock repurchases.

Financial Highlights

54 data points
Beta

Revenue

$5.53B

76.4% Gross Margin

Net Income

$1.90B

34.4% Net Margin

EPS (Diluted)

$2.50

Total Assets

$75.12B

Cash & Equivalents

$2.90B

Free Cash Flow

$1.76B

Financial Statements
Beta
Revenue$5.53B
Cost of Revenue$1.02B
Gross Profit$4.22B
SG&A Expenses$1.20B
Operating Expenses$3.13B
Operating Income$2.40B
Interest Expense$294.00M
Net Income$1.90B
EPS (Basic)$2.52
EPS (Diluted)$2.50
Shares Outstanding (Basic)753.00M
Shares Outstanding (Diluted)760.00M

Key Highlights

  • 1Total revenues increased 10% year-over-year to $5.53 billion.
  • 2Net income rose 17% to $1.90 billion, with diluted EPS growing 18% to $2.50.
  • 3Product sales increased 7% to $5.24 billion, driven by strong performance in key therapeutic areas and products like Enbrel, Prolia, and Aranesp.
  • 4Other revenues saw a significant jump of 81% to $288 million, primarily due to a license agreement upfront payment and higher royalty income.
  • 5Operating income increased by 19% to $2.40 billion, indicating improved operational efficiency.
  • 6The company declared a quarterly dividend of $1.00 per share and repurchased $690 million of its stock in the quarter, signaling confidence in future cash flows.
  • 7Significant progress was made in the development of romosozumab, with two Phase 3 studies meeting their primary endpoints.

Frequently Asked Questions

Amgen's revenue growth was primarily driven by a 7% increase in product sales, totaling $5.24 billion, with strong contributions from key products such as Enbrel, Prolia, and Aranesp. Additionally, 'other revenues' saw a substantial increase of 81% to $288 million, largely due to an upfront payment from a licensing transaction and higher royalty income.

Operating expenses increased by 4% to $3.13 billion. However, the company benefited from cost savings resulting from its ongoing transformation and process improvement efforts. These savings helped to offset increased support for launch products and a charge related to an acquisition, leading to a significant 19% increase in operating income.

Amgen remains committed to returning capital to shareholders through dividends and stock repurchases. In the first quarter of 2016, the company declared a quarterly cash dividend of $1.00 per share and repurchased approximately $690 million of its stock. As of March 31, 2016, $4.2 billion remained available under its stock repurchase program.

The filing highlights ongoing legal proceedings, notably patent litigations related to PCSK9 antibodies with Sanofi/Regeneron and biosimilar patent litigations concerning products like Neulasta, Enbrel, and Epogen. Amgen reported a favorable jury verdict in a U.S. patent litigation concerning its PCSK9 patents. The company also notes potential impacts from the ongoing economic challenges in Puerto Rico on its manufacturing operations there.