10-QPeriod: Q1 FY2023

AMGEN INC Quarterly Report for Q1 Ended Mar 31, 2023

Filed April 28, 2023For Securities:AMGN

Summary

Amgen Inc. reported total revenues of $6.105 billion for the first quarter of 2023, a slight decrease from $6.238 billion in the same period of 2022. Despite the revenue dip, net income saw a significant increase, soaring to $2.841 billion ($5.28 diluted EPS) from $1.476 billion ($2.68 diluted EPS) in the prior year. This substantial earnings growth was largely driven by a substantial "Other income (expense), net" of $2.064 billion, primarily attributed to a significant unrealized gain from revaluing their investment in BeiGene. The company's strategic debt issuances totaling $24.0 billion in March 2023 were to finance the proposed acquisition of Horizon Therapeutics, which remains subject to regulatory review. Product sales showed modest growth of 2% to $5.846 billion, bolstered by strong performances from Prolia, Repatha, Nplate, and EVENITY. However, Enbrel and Otezla experienced declines. Operating expenses increased by 12% due to higher costs of sales, R&D investments, and expenses related to a restructuring plan. The company ended the quarter with a robust cash position of $31.6 billion, with a significant portion earmarked for the Horizon acquisition.

Financial Highlights

54 data points
Beta

Revenue

$6.11B

71.8% Gross Margin

Net Income

$2.84B

46.5% Net Margin

EPS (Diluted)

$5.28

Total Assets

$88.72B

Cash & Equivalents

$31.56B

Free Cash Flow

$720.00M

Financial Statements
Beta
Revenue$6.11B
Cost of Revenue$1.72B
Gross Profit$4.38B
SG&A Expenses$1.26B
Operating Expenses$4.18B
Operating Income$1.92B
Interest Expense$543.00M
Net Income$2.84B
EPS (Basic)$5.32
EPS (Diluted)$5.28
Shares Outstanding (Basic)534.00M
Shares Outstanding (Diluted)538.00M

Key Highlights

  • 1Net income more than doubled to $2.84 billion, driven by a significant gain on the BeiGene investment revaluation.
  • 2Total revenues slightly decreased by 2% to $6.105 billion, impacted by lower "Other revenues" from a COVID-19 collaboration.
  • 3Product sales grew by 2% to $5.846 billion, with notable increases in Prolia, Repatha, Nplate, and EVENITY.
  • 4Diluted EPS surged by 97% to $5.28.
  • 5The company issued $24.0 billion in senior notes to finance the proposed acquisition of Horizon Therapeutics, which is currently undergoing FTC review.
  • 6Cash and cash equivalents increased significantly to $31.6 billion, largely due to debt issuances.
  • 7Operating expenses rose by 12% due to higher cost of sales (including amortization from acquisitions and restructuring costs) and increased R&D spending.

Frequently Asked Questions

The substantial increase in net income was primarily driven by a significant unrealized gain of $1.9 billion from reclassifying Amgen's investment in BeiGene from the equity method to accounting for it as an equity security at fair value. This gain, recognized in 'Other income (expense), net', more than offset the slight decline in total revenues.

Amgen issued approximately $24.0 billion in senior notes in March 2023 to finance the proposed acquisition of Horizon Therapeutics. The company also had a $4.0 billion term loan credit agreement in place, though no amounts were outstanding as of the end of the quarter. The acquisition is contingent upon satisfying regulatory conditions, including FTC review.

Products demonstrating strong sales growth include Prolia (9% increase), Repatha (18% increase), Nplate (36% increase), and EVENITY (49% increase). However, Enbrel sales decreased by 33%, and Otezla sales declined by 13%, primarily due to lower net selling prices, inventory changes, and other sales deductions.

Amgen ended the quarter with a strong cash and cash equivalents balance of $31.6 billion. A significant portion, approximately $27.8 billion, is earmarked for the proposed acquisition of Horizon Therapeutics. The company continues to maintain a policy focused on safety of principal, liquidity, and acceptable risk levels for its investments.