AMGEN REPORTS THIRD QUARTER 2022 FINANCIAL RESULTS

THOUSAND OAKS, Calif., Nov. 3, 2022 /PRNewswire/ -- Amgen (NASDAQ:AMGN) today announced financial results for the third quarter of 2022. Key results include:

• Total revenues decreased 1% to $6.7 billion in comparison to the third quarter of 2021, resulting from a 1% decline in global product sales, which reflected 8% volume growth offset primarily by 5% lower net selling price and 2% negative impact from foreign exchange. Excluding the 2% negative impact of foreign exchange on product sales, total revenues increased 2%.

• GAAP earnings per share (EPS) increased from $3.31 to $3.98 driven by a decrease in operating expenses due to a $0.4 billion licensing-related upfront payment to Kyowa Kirin Co., Ltd. (KKC) in Q3 2021 and lower weighted-average shares outstanding in Q3 2022.

• Non-GAAP EPS increased from $4.08 to $4.70 driven by a decrease in operating expenses due to a $0.4 billion licensing-related upfront payment to KKC in Q3 2021 and lower weighted-average shares outstanding in Q3 2022.

• The Company generated $2.8 billion of free cash flow for the third quarter versus $2.2 billion in the third quarter of 2021.

• 2022 total revenues guidance revised to $26.0-$26.3 billion; EPS guidance revised to $11.46-$12.17 on a GAAP basis, and $17.25-$17.85 on a non-GAAP basis.

"Our medicines generated 8% volume growth in the quarter globally, with 11 products achieving record quarterly sales," said Robert A. Bradway, chairman and chief executive officer. "This growth reflects the strong underlying demand for our medicines and the value they bring to patients."

Non-GAAP EPS has been recast due to an update to our non-GAAP policy effective January 1, 2022, resulting in a $0.59 reduction of previously-reported non-GAAP EPS for the third quarter of 2021. Refer to Non-GAAP Financial Measures below for further discussion.

$Millions, except EPS, dividends paid per share and percentages		Q3 '22		Q3 '21		YOY Δ
Total Revenues		$ 6,652		$ 6,706		(1 %)
GAAP Operating Income		$ 2,660		$ 2,378		12 %
GAAP Net Income		$ 2,143		$ 1,884		14 %
GAAP EPS		$ 3.98		$ 3.31		20 %
Non-GAAP Operating Income		$ 3,277		$ 3,052		7 %
Non-GAAP Net Income		$ 2,530		$ 2,324		9 %
Non-GAAP EPS		$ 4.70		$ 4.08		15 %
Dividends Paid Per Share		$ 1.94		$ 1.76		10 %

References in this release to "non-GAAP" measures, measures presented "on a non-GAAP basis," "free cash flow" (computed by subtracting capital expenditures from operating cash flow) and "total revenues adjusted for foreign currency impact" (computed by converting our current period local currency product sales using the prior period foreign currency exchange rates and comparing that to our current period product sales) refer to non-GAAP financial measures. Beginning January 1, 2022, the Company's non-GAAP financial measures no longer exclude adjustments for upfront license fees, development milestones and IPR&D expenses of pre-approval programs related to licensing, collaboration and asset acquisition transactions. For purposes of comparability, the non-GAAP financial results for the third quarter of 2021 have been updated to reflect this change. Adjustments to the most directly comparable GAAP financial measures and other items are presented on the attached reconciliations. Refer to Non-GAAP Financial Measures below for further discussion.

Product Sales Performance

Total product sales decreased 1% for the third quarter of 2022 versus the third quarter of 2021. Unit volumes grew 8% but were more than offset by 5% lower net selling price, 2% negative impact from foreign exchange, 1% lower inventory levels and 1% unfavorable changes to estimated sales deductions.

General Medicine

• Prolia^® sales increased 7% year-over-year for the third quarter, driven by 8% volume growth.

• EVENITY^® sales increased 35% year-over-year to a record $201 million for the third quarter, driven by strong volume growth across our markets. U.S. volumes grew 45% year-over-year and volumes outside the U.S. grew 30%.

• Repatha^® sales increased 14% year-over-year for the third quarter, driven by 52% volume growth, partially offset by lower net selling price. In the U.S., sales grew 2%, driven by 32% volume growth, offset by lower net selling price resulting from higher rebates to support and expand access for patients. Outside the U.S., sales grew 26%, driven by 73% volume growth partially offset by lower net selling price; this volume growth and lower net selling price were both impacted by the inclusion of Repatha on China's National Reimbursement Drug List as of January 1, 2022. Repatha remains the global proprotein convertase subtilisin/kexin type 9 (PCSK9) segment leader, with over 1.2 million patients treated since launch.

• Aimovig^® (erenumab-aooe) sales increased 35% year-over-year for the third quarter, driven by favorable changes to estimated sales deductions and higher net selling price, partially offset by a 7% decline in volume.

Inflammation

• TEZSPIRE^® (tezepelumab-ekko) generated $55 million of sales in the third quarter, driven by continued strong adoption in the U.S. by both allergists and pulmonologists across patients with all types of severe asthma. Healthcare providers acknowledge TEZSPIRE's unique, differentiated profile and its broad potential to treat the 2.5 million patients worldwide with severe asthma who are uncontrolled, without any phenotypic and biomarker limitation.

• Otezla^® (apremilast) sales increased 3% year-over-year for the third quarter, driven by 9% volume growth, partially offset by lower inventory levels and unfavorable foreign exchange impact. We expect continued volume growth given Otezla's unique, broad indication to treat patients suffering from mild, moderate or severe psoriasis.

• Enbrel^® (etanercept) sales decreased 14% year-over-year for the third quarter, driven by lower net selling price, a 5% decline from unfavorable changes to estimated sales deductions, and a 3% decline in volume. The 5% unfavorable impact of changes to estimated sales deductions results from a $114 million favorable adjustment in the third quarter of 2021, more than offsetting a $47 million favorable adjustment in this quarter. Going forward, we expect net selling price to continue to decline year-over-year, driven by increased competition.

• AMGEVITA™ (adalimumab) sales increased 5% year-over-year for the third quarter, driven by 27% volume growth, partially offset by foreign exchange impact and lower net selling price resulting from increased competition. AMGEVITA continued to be the most prescribed adalimumab biosimilar in Europe.

Hematology-Oncology

• LUMAKRAS^®/LUMYKRAS™ (sotorasib) generated $75 million of sales for the third quarter, driven by volume growth. Quarter-over-quarter sales declined 3% driven by lower net selling price due to an unfavorable price adjustment resulting from a reimbursement approval in Germany, partially offset by 15% volume growth. In the U.S., LUMAKRAS has been prescribed to over 3,700 patients by over 2,200 physicians in both academic and community settings. Outside the U.S., LUMYKRAS has now been approved in over 45 countries around the world. We are actively launching in 30 markets and pursuing reimbursement in the remaining countries.

• KYPROLIS^® (carfilzomib) sales increased 9% year-over-year for the third quarter, driven by 11% volume growth.

• XGEVA^® (denosumab) sales decreased 4% year-over-year for the third quarter, driven by a 3% decline in volume, lower inventory levels, and unfavorable foreign exchange impact, partially offset by higher net selling price.

• Vectibix^® (panitumumab) sales increased 24% year-over-year for the third quarter, driven by volume growth. In the third quarter, volume growth benefited from the timing of shipments to Takeda, our partner in Japan.

• Nplate^® (romiplostim) sales increased 5% year-over-year for the third quarter, primarily driven by 12% volume growth, partially offset by unfavorable changes to estimated sales deductions. In the third quarter, volume growth benefited from increased shipments to KKC, our partner in Japan.

• BLINCYTO^® (blinatumomab) sales increased 14% year-over-year for the third quarter, driven by volume growth.

• MVASI^® sales decreased 24% year-over-year for the third quarter, primarily driven by lower net selling price. The most recently published Average Selling Price (ASP) for MVASI in the U.S. declined 37% year-over-year and 12% quarter-over-quarter. Looking forward, we expect continued net selling price erosion and declining volume driven by increased competition and continued ASP erosion.

• KANJINTI^® (trastuzumab-anns) sales decreased 38% year-over-year for the third quarter, primarily driven by lower net selling price and decline in volume, partially offset by favorable changes to estimated sales deductions. The most recently published ASP for KANJINTI in the U.S. declined 38% year-over-year and 11% quarter-over-quarter. Going forward, we expect continued net selling price deterioration and volume declines driven by increased competition and continued ASP erosion.

Established Products

• Total sales of our established products, which include Neulasta^® (pegfilgrastim), NEUPOGEN^® (filgrastim), EPOGEN^® (epoetin alfa), Aranesp^® (darbepotein alfa), Parsabiv^® (etelcalcetide), and Sensipar^®/Mimpara™ (cinacalcet), decreased 17% year-over-year for the third quarter, primarily driven by lower net selling price and lower inventory levels. In the third quarter, the published ASP for Neulasta in the U.S. declined 24% year-over-year and 7% quarter-over-quarter. In the aggregate, we expect the year-over-year net selling price and volume erosion for this portfolio of products to continue.

Product Sales Detail by Product and Geographic Region

$Millions, except percentages		Q3 '22						Q3 '21		YOY Δ
		US		ROW		TOTAL		TOTAL		TOTAL
Prolia®		$ 590		$ 272		$ 862		$ 803		7 %
EVENITY®		136		65		201		149		35 %
Repatha®		142		167		309		272		14 %
Aimovig®		103		4		107		79		35 %
TEZSPIRE®		55		—		55		—		NM
Otezla®		529		98		627		609		3 %
Enbrel®		1,086		20		1,106		1,289		(14 %)
AMGEVITA™		—		117		117		111		5 %
LUMAKRAS®/LUMYKRAS™		61		14		75		36		*
KYPROLIS®		217		101		318		293		9 %
XGEVA®		363		132		495		517		(4 %)
Vectibix®		106		141		247		200		24 %
Nplate®		162		126		288		273		5 %
BLINCYTO®		84		58		142		125		14 %
MVASI®		139		70		209		274		(24 %)
KANJINTI®		58		14		72		116		(38 %)
Neulasta®		205		42		247		415		(40 %)
NEUPOGEN®		21		14		35		52		(33 %)
EPOGEN®		136		—		136		138		(1 %)
Aranesp®		128		230		358		396		(10 %)
Parsabiv®		61		39		100		61		64 %
Sensipar®/Mimpara™		4		13		17		19		(11 %)
Other products**		80		34		114		93		23 %
Total product sales		$ 4,466		$ 1,771		$ 6,237		$ 6,320		(1 %)
* Change in excess of 100%
** Other products include Corlanor®,AVSOLA®,IMLYGIC® andRIABNI®, as well as sales byGENSENTA andBergamo subsidiaries
NM = not meaningful

Operating Expense, Operating Margin and Tax Rate Analysis

On a GAAP basis:

• Total Operating Expenses decreased 8%. Cost of Sales margin remained flat. Research & Development (R&D) expenses decreased 22% primarily due to a $400 million licensing-related upfront payment to KKC in 2021. Selling, General & Administrative (SG&A) expenses decreased 1%.

• Operating Margin as a percentage of product sales increased 5.0 percentage points to 42.6%.

• Tax Rate decreased 2.2 percentage points primarily due to the prior year nondeductible Acquired In-Process Research & Development (Acquired IPR&D) expense arising from the acquisition of Five Prime Therapeutics and net favorable items, partially offset by a nondeductible loss from a nonstrategic divestiture.

On a non-GAAP basis:

• Total Operating Expenses decreased 8%. Cost of Sales margin increased 0.3 percentage points driven by changes in product mix, partially offset by lower manufacturing cost and lower costs associated with COVID-19 antibody shipments. R&D expenses decreased 22% primarily due to a $400 million licensing-related upfront payment to KKC in 2021. Without the one-time KKC upfront payment, R&D expenses increased 10% primarily due to higher late-stage program support and research and early pipeline spend, partially offset by lower marketed product support. SG&A expenses increased 1%.

• Operating Margin as a percentage of product sales increased 4.2 percentage points to 52.5%.

• Tax Rate decreased 0.4 percentage points primarily due to net favorable items during the quarter as compared to the prior year.

$Millions, except percentages		GAAP						Non-GAAP
		Q3 '22		Q3 '21		YOY Δ		Q3 '22		Q3 '21		YOY Δ
Cost of Sales		$ 1,588		$ 1,609		(1 %)		$ 1,003		$ 997		1 %
% of product sales		25.5 %		25.5 %		— pts		16.1 %		15.8 %		0.3 pts
Research & Development		$ 1,112		$ 1,422		(22 %)		$ 1,096		$ 1,397		(22 %)
% of product sales		17.8 %		22.5 %		(4.7) pts		17.6 %		22.1 %		(4.5) pts
Acquired IPR&D		$ —		$ —		NM		$ —		$ —		NM
% of product sales		— %		— %		NM		— %		— %		NM
Selling, General & Administrative		$ 1,287		$ 1,305		(1 %)		$ 1,276		$ 1,260		1 %
% of product sales		20.6 %		20.6 %		— pts		20.5 %		19.9 %		0.6 pts
Other		$ 5		$ (8)		*		$ —		$ —		NM
Total Operating Expenses		$ 3,992		$ 4,328		(8 %)		$ 3,375		$ 3,654		(8 %)
Operating Margin
operating income as % of product sales