AMGEN REPORTS FIRST QUARTER 2022 FINANCIAL RESULTS Amgen (NASDAQ: AMGN) today announced financial results for the first quarter of 2022. Key results include: Total revenues increased 6% to $6.2...

THOUSAND OAKS, Calif. , April 27, 2022 /PRNewswire/ -- Amgen (NASDAQ: AMGN ) today announced financial results for the first quarter of 2022. Key results include:

"We achieved strong, volume-driven growth in the quarter, while launching two very promising first-in-class medicines," said Robert A. Bradway , chairman and chief executive officer. "We are also advancing a robust pipeline with data for several mid-to-late stage candidates expected during the year."

References in this release to "non-GAAP" measures, measures presented "on a non-GAAP basis" and "free cash flow" (computed by subtracting capital expenditures from operating cash flow) refer to non-GAAP financial measures. 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 increased 2% for the first quarter of 2022 versus the first quarter of 2021. Unit volumes grew 9%, offset by 7% lower net selling price and 2% negative impact from foreign exchange, and sales in the first quarter benefited 2% ( $110 million ) from year-over-year favorable changes to estimated sales deductions. Consistent with prior years, Enbrel ® (etanercept) and Otezla ® (apremilast) followed the pattern of lower Q1 sales relative to the remainder of the year due to the impact of benefit plan changes, insurance reverifications and increased co-pay expenses as U.S. patients work through deductibles.

COVID-19 continued to affect our business around the world in the first quarter. In March and April, we have seen the impact of the pandemic recede in the U.S., which has led to improved demand patterns and allowed us to engage in increased field-facing activities.

General Medicine

Hematology-Oncology

Established Products

Product Sales Detail by Product and Geographic Region

Operating Expense, Operating Margin and Tax Rate Analysis

On a GAAP basis:

On a non-GAAP basis:

Cash Flow and Balance Sheet

For the full year 2022, the Company now expects:

U.S. Tax Petition

On April 18, 2022 , Amgen received a notice of deficiency from the IRS for the 2013-2015 period proposing adjustments primarily related to the allocation of profits between certain of the Company's entities in the United States and the U.S. territory of Puerto Rico similar to those previously proposed by the IRS for the 2010-2012 period. This notice seeks to increase Amgen's U.S. taxable income for the 2013-2015 period by an amount that would result in additional federal tax of approximately $5.1 billion , plus interest. In addition, the notice proposes penalties of approximately $2 billion .

Amgen firmly believes that the adjustments proposed by the IRS for the 2010-2015 period and the penalties proposed by the IRS for the 2013-2015 period are without merit:

Further, the amount of the adjustments proposed by the IRS for the 2010-2015 period overstates by billions of dollars the magnitude of the dispute:

In addition, Amgen believes the IRS assertion of approximately $2 billion in penalties for the 2013-2015 period is wholly unwarranted. Amgen has applied a consistent transfer pricing methodology since 2002, has documented that transfer pricing methodology as required under relevant tax regulations, and has extensively discussed that methodology with the IRS across multiple tax audits over multiple years. The IRS has never previously proposed transfer pricing penalties.

Amgen believes that the Company has appropriate tax reserves. The Company filed a petition in the U.S. Tax Court in July 2021 to contest the adjustments previously proposed for the 2010-2012 period and plans to file another petition in the U.S. Tax Court to contest the adjustments proposed in the notice for the 2013-2015 period. Amgen will seek consolidation of the two periods into one case in Tax Court. The dispute is expected to take several years to resolve.

The IRS is currently auditing the 2016-2018 period. Amgen expects the audit to continue for several years, and it is possible the 2010-2015 dispute will be resolved before the conclusion of the 2016-2018 audit and administrative appeals process. Any transfer pricing adjustments the IRS may propose for this period will be lessened by the change in tax rates resulting from the 2017 tax reform law, which reduced the difference between the tax rates applicable in the U.S. and Puerto Rico by approximately two thirds beginning in 2018.

First Quarter Product and Pipeline Update

The Company provided the following updates on selected product and pipeline programs:

Rocatinlimab (AMG 451 / KHK4083)

Rozibafusp alfa (AMG 570)

Efavaleukin alfa (AMG 592)

Ordesekimab (AMG 714 / PRV-015)

LUMAKRAS/LUMYKRAS

Tarlatamab (AMG 757)

Acapatamab (AMG 160)

General Medicine

Olpasiran (AMG 890)

Environmental, Social & Governance Report Released Today

Amgen today released its latest Environmental, Social & Governance (ESG) report at amgen.com/responsibility, providing a comprehensive overview of the many ways the Company is building a better, healthier world. The report tracks the Company's progress across four categories:

1 Amgen Safety Net Foundation and The Amgen Foundation, Inc. are separate legal entities entirely funded by Amgen. 2 Valued at Wholesale Acquisition Cost. 3 Carbon neutrality goal refers to Scope 1 and 2 emissions.

TEZSPIRE is being developed in collaboration with AstraZeneca. Rocatinlimab, formerly AMG 451 / KHK4083 is being developed in collaboration with Kyowa Kirin. Ordesekimab formerly AMG 714 and also known as PRV-015 is being developed in collaboration with Provention Bio. AMG 509 is being developed in collaboration with Xencor. STELARA is a registered trademark of Janssen Pharmaceutica NV. EYLEA is a registered trademark of Regeneron Pharmaceuticals, Inc. SOLIRIS is a registered trademark of Alexion Pharmaceuticals, Inc.

Non-GAAP Financial Measures In this news release, management has presented its operating results for the first quarters of 2022 and 2021, in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and on a non-GAAP basis. In addition, management has presented its full year 2022 EPS and tax guidance in accordance with GAAP and on a non-GAAP basis. These non-GAAP financial measures are computed by excluding certain items related to acquisitions, restructuring and certain other items from the related GAAP financial measures. Reconciliations for these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the news release. Management has also presented Free Cash Flow (FCF), which is a non-GAAP financial measure, for the first quarters of 2022 and 2021. FCF is computed by subtracting capital expenditures from operating cash flow, each as determined in accordance with GAAP.

The Company believes that its presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. The Company uses certain non-GAAP financial measures to enhance an investor's overall understanding of the financial performance and prospects for the future of the Company's ongoing business activities by facilitating comparisons of results of ongoing business operations among current, past and future periods. The Company believes that FCF provides a further measure of the Company's liquidity.

The Company uses the non-GAAP financial measures set forth in the news release in connection with its own budgeting and financial planning internally to evaluate the performance of the business, including to allocate resources and to evaluate results relative to incentive compensation targets. The non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

Amgen is committed to unlocking the potential of biology for patients suffering from serious illnesses by discovering, developing, manufacturing and delivering innovative human therapeutics. This approach begins by using tools like advanced human genetics to unravel the complexities of disease and understand the fundamentals of human biology.

Amgen focuses on areas of high unmet medical need and leverages its expertise to strive for solutions that improve health outcomes and dramatically improve people's lives. A biotechnology pioneer since 1980, Amgen has grown to be one of the world's leading independent biotechnology companies, has reached millions of patients around the world and is developing a pipeline of medicines with breakaway potential.

Amgen is one of the 30 companies that comprise the Dow Jones Industrial Average and is also part of the Nasdaq-100 index. In 2021, Amgen was named one of the 25 World's Best Workplaces™ by Fortune and Great Place to Work™ and one of the 100 most sustainable companies in the world by Barron's.

Forward-Looking Statements

This news release contains forward-looking statements that are based on the current expectations and beliefs of Amgen. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including any statements on the outcome, benefits and synergies of collaborations, or potential collaborations, with any other company (including BeiGene, Ltd., Kyowa-Kirin Co., Ltd., Generate Biomedicines, Inc., Arrakis Therapeutics, Inc., Plexium, Inc., or any collaboration to manufacture therapeutic antibodies against COVID-19), the performance of Otezla ® (apremilast) (including anticipated Otezla sales growth and the timing of non-GAAP EPS accretion), the Five Prime Therapeutics, Inc. acquisition, or the Teneobio, Inc. acquisition, as well as estimates of revenues, operating margins, capital expenditures, cash, other financial metrics, expected legal, arbitration, political, regulatory or clinical results or practices, customer and prescriber patterns or practices, reimbursement activities and outcomes, effects of pandemics or other widespread health problems such as the ongoing COVID-19 pandemic on our business, outcomes, progress, and other such estimates and results. Forward-looking statements involve significant risks and uncertainties, including those discussed below and more fully described in the Securities and Exchange Commission reports filed by Amgen, including our most recent annual report on Form 10-K and any subsequent periodic reports on Form 10-Q and current reports on Form 8-K. Unless otherwise noted, Amgen is providing this information as of the date of this news release and does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.

No forward-looking statement can be guaranteed and actual results may differ materially from those we project. Our results may be affected by our ability to successfully market both new and existing products domestically and internationally, clinical and regulatory developments involving current and future products, sales growth of recently launched products, competition from other products including biosimilars, difficulties or delays in manufacturing our products and global economic conditions. In addition, sales of our products are affected by pricing pressure, political and public scrutiny and reimbursement policies imposed by third-party payers, including governments, private insurance plans and managed care providers and may be affected by regulatory, clinical and guideline developments and domestic and international trends toward managed care and healthcare cost containment. Furthermore, our research, testing, pricing, marketing and other operations are subject to extensive regulation by domestic and foreign government regulatory authorities. We or others could identify safety, side effects or manufacturing problems with our products, including our devices, after they are on the market. Our business may be impacted by government investigations, litigation and product liability claims. In addition, our business may be impacted by the adoption of new tax legislation or exposure to additional tax liabilities. If we fail to meet the compliance obligations in the corporate integrity agreement between us and the U.S. government, we could become subject to significant sanctions. Further, while we routinely obtain patents for our products and technology, the protection offered by our patents and patent applications may be challenged, invalidated or circumvented by our competitors, or we may fail to prevail in present and future intellectual property litigation. We perform a substantial amount of our commercial manufacturing activities at a few key facilities, including in Puerto Rico , and also depend on third parties for a portion of our manufacturing activities, and limits on supply may constrain sales of certain of our current products and product candidate development. An outbreak of disease or similar public health threat, such as COVID-19, and the public and governmental effort to mitigate against the spread of such disease, could have a significant adverse effect on the supply of materials for our manufacturing activities, the distribution of our products, the commercialization of our product candidates, and our clinical trial operations, and any such events may have a material adverse effect on our product development, product sales, business and results of operations. We rely on collaborations with third parties for the development of some of our product candidates and for the commercialization and sales of some of our commercial products. In addition, we compete with other companies with respect to many of our marketed products as well as for the discovery and development of new products. Discovery or identification of new product candidates or development of new indications for existing products cannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no guarantee that any particular product candidate or development of a new indication for an existing product will be successful and become a commercial product. Further, some raw materials, medical devices and component parts for our products are supplied by sole third-party suppliers. Certain of our distributors, customers and payers have substantial purchasing leverage in their dealings with us. The discovery of significant problems with a product similar to one of our products that implicate an entire class of products could have a material adverse effect on sales of the affected products and on our business and results of operations. Our 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 we have acquired, may not be successful. A breakdown, cyberattack or information security breach could compromise the confidentiality, integrity and availability of our systems and our data. Our stock price is volatile and may be affected by a number of events. Global economic conditions may magnify certain risks that affect our business. Our business performance could affect or limit the ability of our Board of Directors to declare a dividend or our ability to pay a dividend or repurchase our common stock. We may not be able to access the capital and credit markets on terms that are favorable to us, or at all.

CONTACT: Amgen, Thousand Oaks Jessica Akopyan , 805-440-5721 (media) Arvind Sood , 805-447-1060 (investors)