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Amgen Inc. Recast of 2021 Non-GAAP Financial Information As Reported to Reflect Updated Non-GAAP Policy Beginning

Tuesday, January 31, 2023 1 min read
Key Takeaway: Amgen Inc. has updated its non-GAAP financial reporting policy, effective January 1, 2022. This change entails including upfront license fees, development milestones, and IPR&D expenses from pre-approval programs in their financial statements. The updated policy complies with recent industry guidelines from the U.S. Securities and Exchange Commission. Consequently, Amgen has recast its 2021 financial results to reflect this policy revision, aiming for more accurate performance representation.

Market Sentiment Analysis

POSITIVE FACTORS

  • Amgen aligns its financial reporting with updated industry guidance.
  • The company demonstrates transparency by recasting financial information.
  • The recast may improve the accuracy of financial performance assessment.

Full Press Release Details

Recast of 2021 Non-GAAP Financial Information As Reported to Reflect Updated Non-GAAP Policy
Beginning January 1, 2022, Amgen Inc. (the Company) no longer excludes adjustments for upfront license fees, development milestones and in-process research and development (IPR D) expenses of pre-approval programs related to licensing, collaboration and asset acquisition transactions from our non-U.S. Generally Accepted Accounting Principles (GAAP) measures. The Company has made these changes to its presentation of non-GAAP measures following industry guidance from the U.S. Securities and Exchange Commission. The tables below show the effects of the application of the updated policy as if it had been adopted at the beginning of 2021.
In millions, except earnings per share (EPS) (unaudited) Q1 '21 Q2 '21 Q3 '21 Q4 '21 FY '21
Net income (as reported) $2,150 $2,522 $2,664 $2,461 $9,797
Five Prime 1 acquisition IPR D expense - (1,505) - - (1,505)
Licensing-related upfront payment to Kyowa Kirin 2 - - (400) - (400)
Tax impact 3 - - 60 26 86
Net income (recast) $2,150 $1,017 $2,324 $2,487 $7,978
Diluted shares 581 576 570 565 573
Diluted EPS (as reported) $3.70 $4.38 $4.67 $4.36 $17.10
Diluted EPS (recast) $3.70 $1.77 $4.08 $4.40 $13.92
Twelve months ended December 31, 2021
In millions (unaudited) Non-GAAP research and development expenses Non-GAAP acquired IPR D Non-GAAP operating expenses
As reported $4,296 $- $13,555
Five Prime 1 acquisition IPR D expense - 1,505 1,505
Licensing-related upfront payment to Kyowa Kirin 2 400 - 400
Recast $4,696 $1,505 $15,460
1.Five Prime Therapeutics, Inc.
2.Kyowa Kirin Co., Ltd.
3.Represents the tax impact of the licensing-related upfront payment to Kyowa Kirin that was recognized based off the pro-rata share of pre-tax income for the remainder of 2021.

Frequently Asked Questions

What changes did Amgen make to its non-GAAP measures?

Amgen now includes upfront license fees, development milestones, and IPR D expenses in its non-GAAP measures since January 1, 2022.

Why did Amgen update its non-GAAP policy?

The changes align with industry guidance from the U.S. Securities and Exchange Commission.

What was Amgen's recast net income for FY '21?

Amgen's recast net income for FY '21 was $7,978 million.

How did the changes affect diluted EPS for FY '21?

The recast diluted EPS for FY '21 was $13.92, down from $17.10 as reported.

What new amount did IPR D expenses reach after the recast?

After the recast, non-GAAP acquired IPR D expenses reached $1,505 million.

Tags: AMGN Viatris Investor Conferences Healthcare Amgen non-GAAP financials SEC guidance UPFRONT license fees
Last updated: Jan 31, 2023