Summary
Amgen Inc. filed an 8-K report on April 24, 2006, detailing its unaudited financial results for the first quarter ended March 31, 2006. The report primarily focuses on the company's use of non-GAAP financial measures, which adjust for significant items like stock option expensing (SFAS No. 123R), amortization of acquired intangible assets from the Immunex acquisition (specifically related to Enbrel®), and retention compensation for Tularik employees. These adjustments are presented to provide investors with a clearer view of operational performance, enabling better comparisons across periods by excluding one-time or non-cash charges.
Key Highlights
- 1Amgen released its Q1 2006 unaudited financial results on April 18, 2006, via press release.
- 2The company utilized non-GAAP financial measures to present adjusted earnings, excluding SFAS No. 123R impacts (stock option expensing).
- 3Adjustments were also made for non-cash amortization of acquired intangible assets from the Immunex acquisition, notably related to Enbrel®.
- 4Retention compensation for Tularik employees was excluded from R&D expenses to provide a clearer operational view.
- 5Amgen believes these non-GAAP measures offer useful supplementary information for investor analysis and facilitate period-to-period comparisons.
- 6A pivotal Phase 3 osteoporosis trial in postmenopausal women is expected to conclude in 2008 and support regulatory submissions in the U.S. and Europe.
- 7The report includes a forward-looking statement section outlining significant risks and uncertainties affecting the company's business and financial outlook.
Frequently Asked Questions
Amgen is using non-GAAP financial measures to provide investors with supplementary information that facilitates additional analysis. These measures exclude items like the impact of expensing stock options (SFAS No. 123R), non-cash amortization of acquired intangible assets (e.g., from the Immunex acquisition related to Enbrel®), and certain employee retention compensation. The company believes these adjustments help in comparing financial performance across different periods and provide a clearer view of its core operations.
The adjustments discussed in the report are primarily related to the acquisitions of Tularik Inc. (in August 2004) and Immunex Corporation (in July 2002). The Tularik acquisition impacts include employee retention compensation, while the Immunex acquisition's impact relates to the ongoing, non-cash amortization of acquired intangible assets, particularly those associated with Enbrel®.
The company reported that a pivotal Phase 3 clinical trial in women with postmenopausal osteoporosis is a three-year trial with no current plans for a two-year interim analysis. It is expected to be completed in 2008 and will support U.S. and European regulatory submissions.
SFAS No. 123R refers to a Statement of Financial Accounting Standards concerning the accounting for stock-based compensation, which requires companies to expense stock options. Amgen is adjusting for the impact of expensing stock options to allow for easier comparisons of financial results between periods before and after the adoption of this standard, and across companies that may have different accounting treatments for these expenses.