How is Amgen managing its capital allocation and returning value to shareholders?

Amgen continues to return capital to shareholders through dividends and stock repurchases. In Q1 2019, the company paid dividends and repurchased $3.0 billion of its common stock, though this was a notable decrease from the prior year's repurchase activity. The company also has $2.1 billion remaining under its stock repurchase program.

What are the key challenges Amgen is facing regarding its product sales?

Amgen is facing significant challenges from biosimilar competition, particularly impacting sales of Neulasta® and Sensipar®/Mimpara®. Sensipar®/Mimpara® experienced a 57% decline in sales due to generic launches. The company is also involved in ongoing patent litigations related to these and other products facing biosimilar or generic entrants.

Are there any significant new product developments or regulatory approvals mentioned?

Yes, Amgen, along with its partner UCB, announced the FDA approval of EVENITY™ for the treatment of osteoporosis in postmenopausal women at high risk for fracture in April 2019.

AMGN 10-Q Quarterly Report Q1 FY2019 — Revenue, Net Income, EPS

Q: What is the primary driver behind the decrease in Amgen's net income and EPS?

The decrease in net income and EPS was primarily driven by a significant increase in operating expenses, particularly in Cost of Sales and Research and Development, which outpaced the marginal increase in total revenues.

Summary

Amgen Inc. reported a slight decrease in total revenues for the first quarter of 2019 compared to the same period in 2018, driven by a modest decline in product sales that was offset by an increase in other revenues, primarily royalties. While total revenues remained largely flat, net income and diluted Earnings Per Share (EPS) experienced a more significant decline, indicating pressure on profitability. This was attributed to a notable increase in operating expenses, particularly in Cost of Sales and Research & Development, impacting the bottom line. The company continued its capital return program, with substantial share repurchases and dividend payments. However, these activities, alongside operating costs, contributed to a decrease in cash and cash equivalents and marketable securities. Amgen faces ongoing challenges from biosimilar competition for key products like Neulasta® and Sensipar®/Mimpara®, which are impacting sales. Despite these headwinds, the company highlighted growth in Prolia® and KYPROLIS®, and strategic advancements such as the FDA approval of EVENITY™.

Financial Highlights

54 data points

Beta

Revenue

$5.56B

0.8% Gross Margin

Net Income

$1.99B

0.4% Net Margin

EPS (Diluted)

$3.18

Total Assets

$64.00B

Cash & Equivalents

$7.36B

Free Cash Flow

$1.73B

Financial Statements

Beta

Revenue	$5.56B
Cost of Revenue	$1.05B
Gross Profit	$4.23B
SG&A Expenses	$1.15B
Operating Expenses	$3.08B
Operating Income	$2.47B
Interest Expense	$343.00M
Net Income	$1.99B
EPS (Basic)	$3.20
EPS (Diluted)	$3.18
Shares Outstanding (Basic)	622.00M
Shares Outstanding (Diluted)	626.00M

Key Highlights

1Total revenues for Q1 2019 were $5,557 million, a slight increase of 0.04% compared to $5,554 million in Q1 2018.
2Net income decreased by 14% to $1,992 million in Q1 2019 from $2,311 million in Q1 2018.
3Diluted Earnings Per Share (EPS) declined by 2% to $3.18 in Q1 2019 from $3.25 in Q1 2018.
4Operating expenses increased by 9% year-over-year, driven by higher Cost of Sales (+12%) and Research and Development (+16%).
5The company repurchased $3.0 billion of common stock in Q1 2019, a significant decrease from $10.7 billion in Q1 2018.
6Product sales for Sensipar®/Mimpara® saw a substantial decrease of 57% due to generic competition.
7EVENITY™ received FDA approval in April 2019 for osteoporosis treatment.

AMGEN INC Quarterly Report for Q1 Ended Mar 31, 2019

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions