What is the impact of the BeiGene agreement amendment on Amgen's financials?

The amendment changes how Amgen accounts for its equity investment in BeiGene. It will move from the equity method of accounting to the fair value method. This means the investment's value will be reported at its current market value on Amgen's balance sheet, and changes in value will be recognized in earnings, potentially leading to increased volatility in reported earnings compared to the equity method.

Why is Amgen changing its non-GAAP reporting policy?

Amgen has updated its non-GAAP policy starting Q1 2022 to no longer exclude certain upfront or milestone payments for licensing/collaboration agreements and asset acquisitions. The company states this change is intended to provide a more consistent presentation and facilitate better comparison of ongoing business operations by treating acquired intellectual property similarly to internally developed IP.

What is the significance of the FTC's Second Request regarding the Horizon Therapeutics acquisition?

The Second Request from the FTC is a standard part of the antitrust review process. It means the FTC requires more information, which extends the waiting period under the Hart-Scott-Rodino (HSR) Act. This delays the closing of the acquisition until 30 days after Amgen and Horizon substantially comply with the request, unless otherwise agreed or terminated by the FTC. Both companies intend to respond promptly and cooperate with the FTC.

How will the change in non-GAAP policy affect reported 2021 results?

The company has recast its previously reported 2021 non-GAAP results to conform to the new policy. This means that the 2021 non-GAAP figures presented now exclude fewer items (specifically, the upfront/milestone payments that were previously excluded) compared to the original reporting. This recasting is done to ensure comparability between 2021 and 2022 non-GAAP results under the updated policy.

AMGN 8-K: Earnings & Results & Material Agreements

Summary

Amgen Inc. (AMGN) filed an 8-K on January 31, 2023, detailing two key events. Firstly, the company amended its Share Purchase Agreement with BeiGene, Ltd., relinquishing its right to appoint a director to BeiGene's board. This change will shift Amgen's equity investment in BeiGene from the equity method to the fair value method of accounting, impacting financial reporting for this investment. Secondly, Amgen announced its fourth-quarter and full-year 2022 results via a press release furnished with the filing. The report also elaborates on Amgen's use and presentation of non-GAAP financial measures, including earnings per share, operating income, and revenue adjusted for foreign currency impacts. A significant update notes a modification to their non-GAAP policy starting Q1 2022, where upfront or milestone payments from licensing/collaboration agreements and asset acquisitions will no longer be excluded from non-GAAP measures, with prior periods being recast for comparability.

Key Highlights

1Amgen amended its agreement with BeiGene, relinquishing its right to a board seat and changing its accounting for the equity investment from the equity method to the fair value method.
2The company issued its Fourth Quarter and Full Year 2022 financial results via a press release, furnished as an exhibit.
3Amgen provided detailed explanations and reconciliations for its various non-GAAP financial measures, including non-GAAP EPS, operating income, and revenue adjusted for foreign currency.
4A change in Amgen's non-GAAP policy was announced, effective Q1 2022, no longer excluding certain upfront/milestone payments and asset acquisition costs from non-GAAP measures.
5Prior period (2021) non-GAAP results have been recast to conform to the updated non-GAAP policy for improved comparability.
6The FTC has issued a Second Request regarding Amgen's proposed acquisition of Horizon Therapeutics, extending the regulatory review period.
7Amgen and Horizon expect to respond promptly to the FTC's Second Request and continue cooperating with the review.

AMGEN INC 8-K Report, Material Agreement (Jan 31, 2023)

Summary

Key Highlights

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