On August 6, 2024, Amgen Inc (AMGN, Financial) released its 8-K filing for the second quarter of 2024. Amgen, a leader in biotechnology-based human therapeutics, reported a significant increase in total revenues but faced challenges with higher operating expenses impacting its earnings per share (EPS).
Company Overview
Amgen is a leader in biotechnology-based human therapeutics. Flagship drugs include red blood cell boosters Epogen and Aranesp, immune system boosters Neupogen and Neulasta, and Enbrel and Otezla for inflammatory diseases. Amgen introduced its first cancer therapeutic, Vectibix, in 2006 and markets bone-strengthening drug Prolia/Xgeva (approved 2010) and Evenity (2019). The acquisition of Onyx bolstered the firm's therapeutic oncology portfolio with Kyprolis. Recent launches include Repatha (cholesterol-lowering), Aimovig (migraine), Lumakras (lung cancer), and Tezspire (asthma). The 2023 Horizon acquisition brings several rare-disease drugs, including thyroid eye disease drug Tepezza. Amgen also has a growing biosimilar portfolio.
Financial Performance and Challenges
Amgen Inc (AMGN, Financial) reported total revenues of $8.4 billion for Q2 2024, a 20% increase compared to the same period in 2023. This growth was driven by a 26% increase in product sales volume, partially offset by a 3% decrease in net selling price. Excluding sales from the Horizon Therapeutics acquisition, product sales grew by 5%, driven by a 10% increase in volume.
Despite the revenue growth, GAAP EPS decreased by 46% from $2.57 to $1.38, primarily due to higher operating expenses, including amortization expenses from Horizon-acquired assets and incremental expenses from Horizon. Non-GAAP EPS saw a slight decrease of 1% from $5.00 to $4.97.
Key Financial Achievements
Amgen's financial achievements in Q2 2024 include:
- Product sales of $8.04 billion, a 20% year-over-year increase.
- GAAP operating income of $1.9 billion, down from $2.7 billion in Q2 2023.
- Non-GAAP operating income increased from $3.5 billion to $3.9 billion.
- Free cash flow of $2.2 billion, down from $3.8 billion in Q2 2023 due to the timing of tax payments.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Total Revenues | $8.4 billion | $6.99 billion | 20% |
| GAAP EPS | $1.38 | $2.57 | -46% |
| Non-GAAP EPS | $4.97 | $5.00 | -1% |
Balance Sheet and Cash Flow
Amgen reported cash and investments totaling $9.3 billion and debt outstanding of $62.6 billion as of June 30, 2024. The company generated $2.2 billion in free cash flow during the quarter, a decrease from $3.8 billion in Q2 2023, primarily due to the timing of tax payments.
Product Sales Performance
Several products delivered double-digit sales growth, including:
- Prolia® (denosumab): $1.2 billion, up 13% year-over-year.
- EVENITY® (romosozumab-aqqg): $391 million, up 39% year-over-year.
- Repatha® (evolocumab): $532 million, up 25% year-over-year.
- TEZSPIRE® (tezepelumab-ekko): $234 million, up 76% year-over-year.
Analysis and Outlook
Amgen's strong revenue growth is a positive indicator of its robust product portfolio and successful integration of Horizon Therapeutics. However, the significant increase in operating expenses poses a challenge to maintaining profitability. The company's focus on innovative medicines and expanding its biosimilar portfolio will be crucial for sustaining long-term growth.
For the full year 2024, Amgen expects total revenues in the range of $32.8 billion to $33.8 billion, with GAAP EPS between $6.57 and $7.62, and non-GAAP EPS between $19.10 and $20.10.
For more detailed insights, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Amgen Inc for further details.
