AMGEN INC Quarterly Report for Q1 Ended Mar 31, 2022

Summary

Amgen Inc. reported total revenues of $6.238 billion for the first quarter of 2022, an increase of 6% from $5.901 billion in the prior year period. This growth was primarily driven by a 64% surge in "Other revenues," largely attributable to COVID-19 antibody material sales, and a 2% increase in product sales to $5.731 billion. Despite the top-line growth, net income decreased by 10% to $1.476 billion, or $2.68 per diluted share, compared to $1.646 billion, or $2.83 per diluted share, in Q1 2021. The decrease in net income was influenced by higher interest expenses and net losses on strategic equity investments. Key operational highlights include continued growth in key products like Prolia, XGEVA, Repatha, and Kyprolis, which saw double-digit percentage increases in sales. However, Enbrel and Neulasta experienced sales declines, with Neulasta significantly impacted by biosimilar competition. The company also repurchased a substantial amount of its common stock, totaling $6.4 billion in the first quarter, and declared a quarterly dividend of $1.94 per share. Significant legal matters, particularly a tax dispute with the IRS, continue to be a point of attention, with the company contesting substantial proposed tax liabilities. Investors should note the strong revenue growth driven by non-core product sales, alongside a decline in profitability. While key growth products demonstrate positive momentum, the impact of biosimilar competition on established products like Neulasta remains a significant factor. The company's aggressive capital return program, including substantial stock repurchases, and the ongoing significant tax litigation are critical factors for investors to monitor.

Key Highlights

• 1Total revenues increased by 6% to $6.238 billion, driven by a 64% increase in Other Revenues (primarily COVID-19 antibody material sales) and a 2% increase in Product Sales.
• 2Net income decreased by 10% to $1.476 billion, or $2.68 per diluted share, compared to $1.646 billion, or $2.83 per diluted share, in the prior year period.
• 3Key product sales showed robust growth: Prolia (+12%), Repatha (+15%), Kyprolis (+14%), and Nplate (+17%).
• 4Sales of Neulasta decreased by 28% due to increased biosimilar competition, and Enbrel sales declined by 7%.
• 5The company repurchased $6.4 billion of common stock in the first quarter of 2022, including a significant portion under Accelerated Share Repurchase (ASR) agreements.
• 6Amgen continues to actively contest a substantial IRS tax dispute, with proposed additional federal tax liabilities for 2010-2015 and associated penalties amounting to billions of dollars.
• 7Operating expenses decreased slightly by 1% to $3.738 billion, with R&D expenses remaining stable and SG&A expenses declining by 2%.

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