Amgen

Amgen Inc. (formerly Applied Molecular Genetics inc.) is an American biopharmaceutical company. Their main focus is on molecular biology and biochemistry to develop DNA technology in the world of healthcare.

Employees: 25,000 +

Revenue: $26.323B for FY2022

HQ Location: Thousand Oaks, California

What they do:

• They focus on 6 therapeutic areas: Cardiovascular disease, oncology, bone health, neuroscience, nephrology (kidney disease), and inflammation.

• Their medicines mainly address diseases where there are limited or viable treatment options available to the patient.

• Cardiovascular = heart

• Oncology = cancer

• Neuroscience = brain

• Nephrology = Kidney

Their vision:

• Their main focus is to serve the patient by using the scientific research and biotechnology they have developed and converting them into therapy modalities that can save lives.

• A key value is to compete intensely and win:

  “We compete against time, past performance, and industry rivals to rapidly achieve high-quality results. Winning requires taking risks. We cannot be lulled into complacency by previous achievements. Though we compete intensely, we maintain high ethical standards and demand integrity in our dealings with competitors, customers, partners, and each other.”

  Business outlook for 2023:

• 2023 revenue guidance is $26.0 billion to $27.2 billion

• Their non-GAAP earnings per share guidance are $17.40 to $18.60 per share.

  • For total revenue, they expect the year-over-year comparison will not include about $700 million related to several items from 2022 that they do not expect to benefit from in 2023.

    They assume they will not generate COVID-19 antibody revenues in 2023. They also assume a lower amount of Nplate sales in 2023 compared to 2022.

• For product sales, they project volume growth at a portfolio level, driven by strong growth in their priority products, TEZSPIRE, EVENITY, Repatha, Prolia, and TAVNEOS. Consistent with industry trends and their recent history, they expect mid-single-digit price declines in their portfolio in 2023.

• With Neulasta and their oncology biosimilars, they expect the recent trends to continue through 2023. This will likely result in full-year Neulasta sales to be less than $700 million. They also expect less than $750 million in combined product sales for their oncology biosimilars, KANJINTI and MVASI. They also expect product sales of less than $300 million for EPOGEN as they transition through the expiry of their contract with DaVita.

• For the full year, they are guiding other revenues to a range of $1.2 billion to $1.5 billion.

  Competitors

• Merck

• Genentech

• Genzyme

• MedImmune

• Celgene

Things to know right now

• New Acquisitions

  Their portfolio has been strengthened through their acquisition of ChemoCentryx and they announced the acquisition of Horizon Therapeutics.

  Through the acquisition of ChemoCentryx, they added TAVNEOS, a first-in-class treatment for ANCA-associated vasculitis.

  The acquisition of Horizon Therapeutics will add several additional first-in-class early-in-life cycle biologic medicines, including TEPEZZA, KRYSTEXXA, and UPLIZNA that will add to their growth profile through 2030 and beyond. This acquisition is hoping to close mid-2023.

• AMJEVITA Product Launched

  AMJEVITA, is the first U.S. biosimilar to HUMIRA, a medicine used by more than 1 million patients living with serious inflammatory diseases. With its track record of developing and manufacturing biologics and decades of experience in inflammation, Amgen is uniquely equipped to supply patients with this biosimilar medicine. AMJEVITA is the first significant U.S. biosimilar in the pharmacy benefits space, and they expect gradual uptake in the coming months as this market evolves.

What does each business segment do?

Innovative Medicines

This unit focuses on 6 major therapy areas: cardiovascular disease, oncology, bone health, neuroscience, nephrology, and inflammation. This unit addresses diseases where there is limited treatment or another treatment is not a viable option.

Transformative Research

This unit focuses on a ‘biology first’ approach where the complex molecular pathway of the disease is determined before they determine what medicine or modality is most likely to work the best.

Biomanufacturing

This unit delivers high-quality medicines that have been produced in it’s manufacturing sites.

Corporate Citizenship

This unit focuses on changing society for the better by removing barriers that limit access to healthcare products and focus on finding ways to minimise the environmental impact during the manufacturing process of their products.

Their financial calendar
Q1: January - March - Earnings 27th April

Q2: April -June - Earnings August 4th

Q3: July - September - Earnings 3rd November

Q4: October - December - Earnings 25th January

Next Earnings Report:

Around 27th April 2023

Positives from the last earnings report Q4(FY22):

• Q4 revenues of $6.8 billion were unchanged year-over-year.

• Product sales grew 4% in Q4, driven by volume growth of 10%

  • Delivered double-digit volume growth for a number of products in Q4, including LUMAKRAS®/LUMYKRAS™, Nplate®, EVENITY®, Repatha®, Parsabiv®, AMGEVITATM, KYPROLIS®, and Prolia®

  • PROLIA® had record sales in Q4 sales with an increase of 14% for the quarter and year-on-year volumes grew 11% for the quarter.

  • EVENITY® had record sales in Q4, sales increased 57% for the quarter and year-on-year volumes grew 62%.

  • REPATHA® year on year sales increased 22% for the quarter

  • AIMOVIG® year on year sales increased 27% for the quarter

  • ARANESP® volume increased by 2% year on year in Q4.

  • TAVNEOS® delivered $ 21 million in sales in Q4. TAVNEOS® was added through their acquisition of ChemoCentryx.

    TAVNEOS® was a recently launched, first in-class treatment for severe active ANCA-associated vasculitis (AAV), an autoimmune disease that leads to inflammation and eventual destruction of small blood vessels

  • AMGEVITA™ had record quarterly sales in Q4, sales increased 3% for the quarter

  • KYPROLIS® sales increased 14% for the quarter driven by 13% volume growth

Challenges from the last earnings report Q4 (FY22):

• Q4 Non-GAAP EPS of $4.09 declined 7% versus their recast Q4 2021 results.

• Non-GAAP Q4 operating expenses were unchanged year-over-year

• On a non-GAAP basis, Q4 cost of sales as a percent of product sales decreased 1.2 percentage points on a year-over-year basis down to 16.3%.

• In product sales:

  • EPOGEN® sales decreased 11% for Q4, primarily driven by lower net selling price

  • ARANESP® sales decreased 4% Year on year for Q4, driven by unfavorable foreign exchange and a lower net selling price

  • LUMAKRAS® sales declined 5%, driven by lower net selling price and unfavorable changes to estimated sales deductions, partially offset by 12% volume growth

  • VECTIBIX® Q4 sales decreased 2%, driven by unfavorable foreign exchange impact, partially offset by higher net selling price

  • NPLATE® had record quarterly sales, sales increased 24%, primarily driven by favorable changes to estimated sales deductions and higher net selling price

  • MVASI® sales decreased by 33% primarily driven by lower net selling price.

  • KANJINTI® decreased 55%, driven by lower net selling price and unfavorable changes to estimated sales deductions

  • NEULASTA® sales decreased 37% for Q4 and 35% for the full year, driven by declines in both net selling price and volume

Highlights for year-end 2022:

• Achieved volume-driven growth and record sales of 16 brands

• Full-year product sales increased 2% year on year, driven by 9% volume growth, partially offset by a 5% lower net selling price and a 2% negative foreign exchange impact

• Progressed multiple potential first-in-class molecules in their innovative pipeline

• Advanced their industry-leading biosimilar business with positive Phase 3 data for three molecules and AMJEVITATM launch in the U.S.

• Delivered robust operating margins while investing in product launches and pipeline opportunities

• In product sales:

  • TEZSPIRE® generated $170 million in sales in 2022. It continued its strong adoption in the U.S. by both allergists and pulmonologists

    Healthcare providers acknowledge the unique, differentiated profile of TEZSPIRE® and its broad potential to treat 2.5 million patients worldwide with severe asthma who are uncontrolled, without any phenotypic or biomarker limitation

  • OTEZLA® volume grew 7% in 2022

  • ENBREL®'S full year-on-year sales decreased by 8%, driven by a 5% unfavorable impact of changes to estimated sales deductions related to prior periods.

  Risks to the Business:

• Risks Related to Economic Conditions and Operating a Global Business, Including During the COVID-19 Pandemic

  • The COVID-19 pandemic, and the public and governmental efforts to mitigate against the spread of the disease, have had, and are expected to continue to have an adverse effect, and may have a material adverse effect, on their clinical trials, operations, manufacturing, supply chains, distribution systems, product development, product sales, business and results of operations.

  • A breakdown of their information technology systems, cyberattack, or information security breach could compromise the confidentiality, integrity, and availability of our information technology systems, network-connected control systems, and/or their data, interrupt the operation of our business and/or affect their reputation.

  • Their sales and operations are subject to the risks of doing business internationally, including in emerging markets.

• Risks Related to Government Regulations and Third-Party Policies

  • Their sales depend on coverage and reimbursement from government and commercial third-party payers, and pricing and reimbursement pressures have affected, and are likely to continue to affect their profitability.

  • Guidelines and recommendations published by various organizations can reduce the use of their products.

  • The adoption and interpretation of new tax legislation or exposure to additional tax liabilities could affect their profitability.

  • Their business may be affected by litigation and government investigations.

• Risks Related to Competition

  • Their products face substantial competition and their product candidates are also likely to face substantial competition.

  • Their intellectual property positions may be challenged, invalidated or circumvented, or they may fail to prevail in current and future intellectual property litigation.

  • They currently face competition from biosimilars and generics and expect to face increasing competition from biosimilars and generics in the future.

  • The concentration of sales at certain of their wholesaler-distributors and consolidation of private payers may negatively affect their business.

  • Risks Related to Research and Development

  • They may not be able to develop commercial products despite significant investments in R&D.

  • They must conduct clinical trials in humans before they commercialize and sell any of their product candidates or existing products for new indications.

  • Their current products and products in development cannot be sold without regulatory approval.

  • Some of their products are used with drug delivery or companion diagnostic devices that have their own regulatory, manufacturing, and other risks.

  • Some of their pharmaceutical pipeline and their commercial product sales rely on collaborations with third parties, which may adversely affect the development and sales of their products.

  • Their efforts to collaborate with or acquire other companies, products, or technology, and to integrate the operations of companies or to support the products or technology they have acquired, may not be successful and may result in unanticipated costs, delays, or failures to realize the benefits of the transactions.

• Risks Related to Operations

  • They perform a substantial majority of their commercial manufacturing activities at their facility in the U.S. territory of Puerto Rico and a substantial majority of their clinical manufacturing activities at their facility in Thousand Oaks, California; significant disruptions or production failures at these facilities could significantly impair their ability to supply their products or continue their clinical trials.

  • They rely on third-party suppliers for certain of their raw materials, medical devices, and components.

  • Manufacturing difficulties, disruptions, or delays could limit the supply of their products and limit their product sales.

  • Their business and operations may be negatively affected by the failure, or perceived failure, of achieving their environmental, social, and governance objectives.

  • The effects of global climate change and related natural disasters could negatively affect their business and operations.

• General Risk Factors

  • Global economic conditions may negatively affect them and may magnify certain risks that affect their business.

  • Their stock price is volatile.

  • They may not be able to access the capital and credit markets on terms that are favorable to them, or at all.