Full Press Release Details
THOUSAND OAKS, Calif. , Oct. 31, 2023 /PRNewswire/ -- Amgen (NASDAQ: AMGN ) today announced financial results for the third quarter of 2023 1 .
"We are excited about our pipeline progress and our operating performance in the third quarter," said Robert A. Bradway , chairman and chief executive officer. "With the completion of the Horizon acquisition, Amgen has added rare disease medicines that fit well with our broad innovative portfolio."
Key results include:
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 5% for the third quarter of 2023 versus the third quarter of 2022. Unit volumes grew 11%, partially offset by 3% lower net selling price and 3% unfavorable changes to estimated sales deductions.
General Medicine
Hematology-Oncology
Established Products
Product Sales Detail by Product and Geographic Region
| $Millions, except percentages | Q3 '23 | Q3 '22 | YOY Δ | |||||||
| US | ROW | TOTAL | TOTAL | TOTAL | ||||||
| Repatha ® | $ 183 | $ 223 | $ 406 | $ 309 | 31 % | |||||
| Prolia ® | 673 | 313 | 986 | 862 | 14 % | |||||
| EVENITY ® | 214 | 93 | 307 | 201 | 53 % | |||||
| Aimovig ® | 88 | 6 | 94 | 107 | (12 %) | |||||
| TEZSPIRE ® | 161 | — | 161 | 55 | * | |||||
| TAVNEOS ® | 32 | 5 | 37 | — | NM | |||||
| Otezla ® | 462 | 105 | 567 | 627 | (10 %) | |||||
| Enbrel ® | 1,026 | 9 | 1,035 | 1,106 | (6 %) | |||||
| AMJEVITA ® /AMGEVITA ™ | 23 | 129 | 152 | 117 | 30 % | |||||
| BLINCYTO ® | 147 | 73 | 220 | 142 | 55 % | |||||
| Vectibix ® | 116 | 136 | 252 | 247 | 2 % | |||||
| KYPROLIS ® | 231 | 118 | 349 | 318 | 10 % | |||||
| LUMAKRAS ® /LUMYKRAS ™ | 48 | 4 | 52 | 75 | (31 %) | |||||
| XGEVA ® | 374 | 145 | 519 | 495 | 5 % | |||||
| Nplate ® | 322 | 97 | 419 | 288 | 45 % | |||||
| MVASI ® | 140 | 73 | 213 | 209 | 2 % | |||||
| KANJINTI ® | 7 | 13 | 20 | 72 | (72 %) | |||||
| EPOGEN ® | 50 | — | 50 | 136 | (63 %) | |||||
| Aranesp ® | 107 | 216 | 323 | 358 | (10 %) | |||||
| Parsabiv ® | 59 | 36 | 95 | 100 | (5 %) | |||||
| Neulasta ® | 92 | 32 | 124 | 247 | (50 %) | |||||
| Other products** | 136 | 31 | 167 | 166 | 1 % | |||||
| Total product sales | $ 4,691 | $ 1,857 | $ 6,548 | $ 6,237 | 5 % | |||||
| *Change in excess of 100% | ||||||||||
| **Consists of AVSOLA ® , RIABNI ® , Corlanor ® , NEUPOGEN ® , IMLYGIC ® , Sensipar ® /Mimpara ™ and BEKEMV ™ , as well as sales in prior periods of our divested Bergamo and GENSENTA subsidiaries. | ||||||||||
| NM = not meaningful |
Operating Expense, Operating Margin and Tax Rate Analysis
On a GAAP basis:
On a non-GAAP basis:
| $Millions, except percentages | GAAP | Non-GAAP | ||||||||||
| Q3 '23 | Q3 '22 | YOY Δ | Q3 '23 | Q3 '22 | YOY Δ | |||||||
| Cost of Sales | $ 1,806 | $ 1,588 | 14 % | $ 1,137 | $ 1,003 | 13 % | ||||||
| % of product sales | 27.6 % | 25.5 % | 2.1 pts | 17.4 % | 16.1 % | 1.3 pts | ||||||
| Research & Development | $ 1,079 | $ 1,112 | (3 %) | $ 1,070 | $ 1,096 | (2 %) | ||||||
| % of product sales | 16.5 % | 17.8 % | (1.3) pts | 16.3 % | 17.6 % | (1.3) pts | ||||||
| Selling, General & Administrative | $ 1,353 | $ 1,287 | 5 % | $ 1,293 | $ 1,276 | 1 % | ||||||
| % of product sales | 20.7 % | 20.6 % | 0.1 pts | 19.7 % | 20.5 % | (0.8) pts | ||||||
| Other | $ 644 | $ 5 | * | $ — | $ — | NM | ||||||
| Total Operating Expenses | $ 4,882 | $ 3,992 | 22 % | $ 3,500 | $ 3,375 | 4 % | ||||||
| Operating Margin | ||||||||||||
| operating income as % of product sales | 30.9 % | 42.6 % | (11.7) pts | 52.0 % | 52.5 % | (0.5) pts | ||||||
| Tax Rate | 11.1 % | 10.4 % | 0.7 pts | 16.1 % | 12.9 % | 3.2 pts | ||||||
| pts: percentage points | ||||||||||||
| * change in excess of 100% | ||||||||||||
| NM = not meaningful |
Cash Flow and Balance Sheet
| $Billions, except shares | Q3 '23 | Q3 '22 | YOY Δ | |||
| Operating Cash Flow | $ 2.8 | $ 3.0 | $ (0.2) | |||
| Capital Expenditures | $ 0.2 | $ 0.2 | $ 0.1 | |||
| Free Cash Flow | $ 2.5 | $ 2.8 | $ (0.3) | |||
| Dividends Paid | $ 1.1 | $ 1.0 | $ 0.1 | |||
| Share Repurchases | $ — | $ — | $ 0.0 | |||
| Average Diluted Shares (millions) | 538 | 538 | 0 | |||
| Note: Numbers may not add due to rounding | ||||||
| $Billions | 9/30/23 | 12/31/22 | YTD Δ | |||
| Cash and Investments | $ 34.7 | $ 9.3 | $ 25.4 | |||
| Debt Outstanding | $ 60.5 | $ 38.9 | $ 21.5 | |||
| Note: Numbers may not add due to rounding |
For the full year 2023, the Company now expects:
Third Quarter Product and Pipeline Update
The Company provided the following updates on selected product and pipeline programs:
Oncology Tarlatamab (AMG 757)
Xaluritamig (AMG 509)
LUMAKRAS/LUMYKRAS
General Medicine Maridebart cafraglutide (AMG 133)
Olpasiran (AMG 890)
Inflammation TEZSPIRE
Rocatinlimab (AMG 451/KHK4083)
Efavaleukin alfa (AMG 592)
Ordesekimab (AMG 714/PRV-015)
1 National Comprehensive Cancer Network ® (NCCN ® ) makes no warranties of any kind whatsoever regarding their content, use or application and disclaims any responsibility for their application or use in any way. 2 Previously provided in the publicly available ODAC briefing book. 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, a Sanofi company. For the purposes of the collaboration, Provention Bio conducts a clinical trial and leads certain development and regulatory activities for the program. Xaluritamig, formerly AMG 509, is being developed pursuant to a research collaboration with Xencor, Inc. IDE397 is an investigational MAT2A inhibitor from IDEAYA Biosciences. OPDIVO is a registered trademark of Bristol-Myers Squibb Company. EYLEA is a registered trademark of Regeneron Pharmaceuticals, Inc.
Non-GAAP Financial Measures
In this news release, management has presented its operating results for the third quarters of 2023 and 2022, in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and on a non-GAAP basis. In addition, management has presented its full year 2023 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, divestitures, restructuring and certain other items from the related GAAP financial measures. Beginning January 1, 2022 , following industry guidance from the U.S. Securities and Exchange Commission, 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 its non-GAAP financial measures. Management has presented Free Cash Flow (FCF), which is a non-GAAP financial measure, for the third quarters of 2023 and 2022. 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 normal and recurring business activities by facilitating comparisons of results of normal and recurring 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 2023, Amgen was named one of "America's Greatest Workplaces" by Newsweek, one of "America's Climate Leaders" by USA Today and one of the "World's Best Companies" by TIME.
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. or Kyowa Kirin Co., Ltd.), the performance of Otezla ® (apremilast) (including anticipated Otezla sales growth and the timing of non-GAAP EPS accretion), our acquisitions of Teneobio, Inc., ChemoCentryx, Inc., or Horizon Therapeutics plc (including the prospective performance and outlook of Horizon's business, performance and opportunities and any potential strategic benefits, synergies or opportunities expected as a result of such acquisition, and any projected impacts from the Horizon acquisition on our acquisition-related expenses going forward), 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 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. There can be no guarantee that we will be able to realize any of the strategic benefits, synergies or opportunities arising from the Horizon acquisition, and such benefits, synergies or opportunities may take longer to realize than expected. We may not be able to successfully integrate Horizon, and such acquisition or integration may take longer, be more difficult or cost more than expected. A breakdown, cyberattack or information security breach of our information technology systems 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. Our business and operations may be negatively affected by the failure, or perceived failure, of achieving our environmental, social and governance objectives. The effects of global climate change and related natural disasters could negatively affect our business and operations. 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) Justin Claeys , 805-313-9775 (investors)
| Amgen Inc. Consolidated Statements of Income - GAAP (In millions, except per-share data) (Unaudited) | |||||||
| Three months ended September 30, | Nine months ended September 30, | ||||||
| 2023 | 2022 | 2023 | 2022 | ||||
| Revenues: | |||||||
| Product sales | $ 6,548 | $ 6,237 | $ 19,077 | $ 18,249 | |||
| Other revenues | 355 | 415 | 917 | 1,235 | |||
| Total revenues | 6,903 | 6,652 | 19,994 | 19,484 | |||
| Operating expenses: | |||||||
| Cost of sales | 1,806 | 1,588 | 5,339 | 4,659 | |||
| Research and development | 1,079 | 1,112 | 3,250 | 3,110 | |||
| Selling, general and administrative | 1,353 | 1,287 | 3,905 | 3,842 | |||
| Other | 644 | 5 | 874 | 537 | |||
| Total operating expenses | 4,882 | 3,992 | 13,368 | 12,148 | |||
| Operating income | 2,021 | 2,660 | 6,626 | 7,336 | |||
| Other income (expense): | |||||||
| Interest expense, net | (759) | (368) | (2,054) | (991) | |||
| Other income (expense), net | 685 | 100 | 2,431 | (747) | |||
| Income before income taxes | 1,947 | 2,392 | 7,003 | 5,598 | |||
| Provision for income taxes | 217 | 249 | 1,053 | 662 | |||
| Net income | $ 1,730 | $ 2,143 | $ 5,950 | $ 4,936 | |||
| Earnings per share: | |||||||
| Basic | $ 3.23 | $ 4.01 | $ 11.12 | $ 9.16 | |||
| Diluted | $ 3.22 | $ 3.98 | $ 11.06 | $ 9.11 | |||
| Weighted-average shares used in calculation of earnings per share: | |||||||
| Basic | 535 | 535 | 535 | 539 | |||
| Diluted | 538 | 538 | 538 | 542 |
| Amgen Inc. Consolidated Balance Sheets - GAAP (In millions) | |||
| September 30, | December 31, | ||
| 2023 | 2022 | ||
| (Unaudited) | |||
| Assets | |||
| Current assets: | |||
| Cash, cash equivalents and marketable securities | $ 34,741 | $ 9,305 | |
| Trade receivables, net | 6,145 | 5,563 | |
| Inventories | 5,026 | 4,930 | |
| Other current assets | 2,565 | 2,388 | |
| Total current assets | 48,477 | 22,186 | |
| Property, plant and equipment, net | 5,563 | 5,427 | |
| Intangible assets, net | 13,150 | 16,080 | |
| Goodwill | 15,509 | 15,529 | |
| Other noncurrent assets | 7,835 | 5,899 | |
| Total assets | $ 90,534 | $ 65,121 | |
| Liabilities and Stockholders' Equity | |||
| Current liabilities: | |||
| Accounts payable and accrued liabilities | $ 15,526 | $ 14,096 | |
| Current portion of long-term debt | 1,428 | 1,591 | |
| Total current liabilities | 16,954 | 15,687 | |
| Long-term debt | 59,040 | 37,354 | |
| Long-term tax liabilities | 4,579 | 5,757 | |
| Other noncurrent liabilities | 2,305 | 2,662 | |
| Total stockholders' equity | 7,656 | 3,661 | |
| Total liabilities and stockholders' equity | $ 90,534 | $ 65,121 | |
| Shares outstanding | 535 | 534 |
| Amgen Inc. GAAP to Non-GAAP Reconciliations (Dollars in millions) (Unaudited) | |||||||
| Three months ended September 30, | Nine months ended September 30, | ||||||
| 2023 | 2022 | 2023 | 2022 | ||||
| GAAP cost of sales | $ 1,806 | $ 1,588 | $ 5,339 | $ 4,659 | |||
| Adjustments to cost of sales: | |||||||
| Acquisition-related expenses (a) | (668) | (585) | (2,008) | (1,779) | |||
| Certain net charges pursuant to our restructuring and cost savings initiatives | (1) | — | (36) | — | |||
| Total adjustments to cost of sales | (669) | (585) | (2,044) | (1,779) | |||
| Non-GAAP cost of sales | $ 1,137 | $ 1,003 | $ 3,295 | $ 2,880 | |||
| GAAP cost of sales as a percentage of product sales | 27.6 % | 25.5 % | 28.0 % | 25.5 % | |||
| Acquisition-related expenses (a) | (10.2) | (9.4) | (10.5) | (9.7) | |||
| Certain net charges pursuant to our restructuring and cost savings initiatives | 0.0 | 0.0 | (0.2) | 0.0 | |||
| Non-GAAP cost of sales as a percentage of product sales | 17.4 % | 16.1 % | 17.3 % | 15.8 % | |||
| GAAP research and development expenses | $ 1,079 | $ 1,112 | $ 3,250 | $ 3,110 | |||
| Adjustments to research and development expenses: | |||||||
| Acquisition-related expenses (a) | (9) | (16) | (27) | (60) | |||
| Certain net charges pursuant to our restructuring and cost savings initiatives | — | — | (17) | — | |||
| Total adjustments to research and development expenses | (9) | (16) | (44) | (60) | |||
| Non-GAAP research and development expenses | $ 1,070 | $ 1,096 | $ 3,206 | $ 3,050 | |||
| GAAP research and development expenses as a percentage of product sales | 16.5 % | 17.8 % | 17.0 % | 17.0 % | |||
| Acquisition-related expenses (a) | (0.2) | (0.2) | (0.1) | (0.3) | |||
| Certain net charges pursuant to our restructuring and cost savings initiatives | 0.0 | 0.0 | (0.1) | 0.0 | |||
| Non-GAAP research and development expenses as a percentage of product sales | 16.3 % | 17.6 % | 16.8 % | 16.7 % | |||
| GAAP selling, general and administrative expenses | $ 1,353 | $ 1,287 | $ 3,905 | $ 3,842 | |||
| Adjustments to selling, general and administrative expenses: | |||||||
| Acquisition-related expenses (a) | (47) | (11) | (138) | (40) | |||
| Certain net charges pursuant to our restructuring and cost savings initiatives | (13) | — | (13) | — | |||
| Total adjustments to selling, general and administrative expenses | (60) | (11) | (151) | (40) | |||
| Non-GAAP selling, general and administrative expenses | $ 1,293 | $ 1,276 | $ 3,754 | $ 3,802 | |||
| GAAP selling, general and administrative expenses as a percentage of product sales | 20.7 % | 20.6 % | 20.5 % | 21.1 % | |||
| Acquisition-related expenses (a) | (0.8) | (0.1) | (0.7) | (0.3) | |||
| Certain net charges pursuant to our restructuring and cost savings initiatives | (0.2) | 0.0 | (0.1) | 0.0 | |||
| Non-GAAP selling, general and administrative expenses as a percentage of product sales | 19.7 % | 20.5 % | 19.7 % | 20.8 % | |||
| GAAP operating expenses | $ 4,882 | $ 3,992 | $ 13,368 | $ 12,148 | |||
| Adjustments to operating expenses: | |||||||
| Adjustments to cost of sales | (669) | (585) | (2,044) | (1,779) | |||
| Adjustments to research and development expenses | (9) | (16) | (44) | (60) | |||
| Adjustments to selling, general and administrative expenses | (60) | (11) | (151) | (40) | |||
| Certain net charges pursuant to our restructuring and cost savings initiatives (b) | (16) | 8 | (183) | 7 | |||
| Certain other expenses (c) | (628) | (13) | (691) | (544) | |||
| Total adjustments to operating expenses | (1,382) | (617) | (3,113) | (2,416) | |||
| Non-GAAP operating expenses | $ 3,500 | $ 3,375 | $ 10,255 | $ 9,732 | |||
| Three months ended September 30, | Nine months ended September 30, | ||||||
| 2023 | 2022 | 2023 | 2022 | ||||
| GAAP operating income | $ 2,021 | $ 2,660 | $ 6,626 | $ 7,336 | |||
| Adjustments to operating expenses | 1,382 | 617 | 3,113 | 2,416 | |||
| Non-GAAP operating income | $ 3,403 | $ 3,277 | $ 9,739 | $ 9,752 | |||
| GAAP operating income as a percentage of product sales | 30.9 % | 42.6 % | 34.7 % | 40.2 % | |||
| Adjustments to cost of sales | 10.2 | 9.4 | 10.7 | 9.7 | |||
| Adjustments to research and development expenses | 0.2 | 0.2 | 0.2 | 0.3 | |||
| Adjustments to selling, general and administrative expenses | 1.0 | 0.1 | 0.8 | 0.3 | |||
| Certain net charges pursuant to our restructuring and cost savings initiatives (b) | 0.2 | 0.0 | 1.0 | 0.0 | |||
| Certain other expenses (c) | 9.5 | 0.2 | 3.7 | 2.9 | |||
| Non-GAAP operating income as a percentage of product sales | 52.0 % | 52.5 % | 51.1 % | 53.4 % | |||
| GAAP interest expense, net | $ (759) | $ (368) | $ (2,054) | $ (991) | |||
| Adjustments to interest expense, net: | |||||||
| Interest expense on acquisition-related debt (d) | 332 | — | 788 | — | |||
| Non-GAAP interest expense, net | $ (427) | $ (368) | $ (1,266) | $ (991) | |||
| GAAP other income (expense), net | $ 685 | $ 100 | $ 2,431 | $ (747) | |||
| Adjustments to other income (expense), net | |||||||
| Interest income and other expenses on acquisition-related debt (d) | (313) | — | (607) | — | |||
| Equity method investment basis difference amortization | — | 47 | — | 143 | |||
| Net (gains)/losses from equity investments (e) | (170) | (150) | (1,305) | 401 | |||
| Total adjustments to other income (expense), net | (483) | (103) | (1,912) | 544 | |||
| Non-GAAP other income (expense), net | $ 202 | $ (3) | $ 519 | $ (203) | |||
| GAAP income before income taxes | $ 1,947 | $ 2,392 | $ 7,003 | $ 5,598 | |||
| Adjustments to income before income taxes: | |||||||
| Adjustments to operating expenses | 1,382 | 617 | 3,113 | 2,416 | |||
| Adjustments to interest expense, net | 332 | — | 788 | — | |||
| Adjustments to other income (expense), net | (483) | (103) | (1,912) | 544 | |||
| Total adjustments to income before income taxes | 1,231 | 514 | 1,989 | 2,960 | |||
| Non-GAAP income before income taxes | $ 3,178 | $ 2,906 | $ 8,992 | $ 8,558 | |||
| GAAP provision for income taxes | $ 217 | $ 249 | $ 1,053 | $ 662 | |||
| Adjustments to provision for income taxes: | |||||||
| Income tax effect of the above adjustments (f) | 271 | 122 | 442 | 527 | |||
| Other income tax adjustments (g) | 23 | 5 | 6 | 1 | |||
| Total adjustments to provision for income taxes | 294 | 127 | 448 | 528 | |||
| Non-GAAP provision for income taxes | $ 511 | $ 376 | $ 1,501 | $ 1,190 | |||
| GAAP tax as a percentage of income before taxes | 11.1 % | 10.4 % | 15.0 % | 11.8 % | |||
| Adjustments to provision for income taxes: | |||||||
| Income tax effect of the above adjustments (f) | 4.2 | 2.3 | 1.6 | 2.1 | |||
| Other income tax adjustments (g) | 0.8 | 0.2 | 0.1 | 0.0 | |||
| Total adjustments to provision for income taxes | 5.0 | 2.5 | 1.7 | 2.1 | |||
| Non-GAAP tax as a percentage of income before taxes | 16.1 % | 12.9 % | 16.7 % | 13.9 % | |||
| GAAP net income | $ 1,730 | $ 2,143 | $ 5,950 | $ 4,936 | |||
| Adjustments to net income: | |||||||
| Adjustments to income before income taxes, net of the income tax effect | 960 | 392 | 1,547 | 2,433 | |||
| Other income tax adjustments (g) | (23) | (5) | (6) | (1) | |||
| Total adjustments to net income | 937 | 387 | 1,541 | 2,432 | |||
| Non-GAAP net income | $ 2,667 | $ 2,530 | $ 7,491 | $ 7,368 | |||
| Note: Numbers may not add due to rounding |
| Amgen Inc. GAAP to Non-GAAP Reconciliations (In millions, except per-share data) (Unaudited) | |||||||
| The following table presents the computations for GAAP and non-GAAP diluted earnings per share: | |||||||
| Three months ended September 30, 2023 | Three months ended September 30, 2022 | ||||||
| GAAP | Non-GAAP | GAAP | Non-GAAP | ||||
| Net income | $ 1,730 | $ 2,667 | $ 2,143 | $ 2,530 | |||
| Weighted-average shares for diluted EPS | 538 | 538 | 538 | 538 | |||
| Diluted EPS | $ 3.22 | $ 4.96 | $ 3.98 | $ 4.70 | |||
| Nine months ended September 30, 2023 | Nine months ended September 30, 2022 | ||||||
| GAAP | Non-GAAP | GAAP | Non-GAAP | ||||
| Net income | $ 5,950 | $ 7,491 | $ 4,936 | $ 7,368 | |||
| Weighted-average shares for diluted EPS | 538 | 538 | 542 | 542 | |||
| Diluted EPS | $ 11.06 | $ 13.92 | $ 9.11 | $ 13.59 |
| (a) | The adjustments related primarily to noncash amortization of intangible assets from business acquisitions. |
| (b) | For the three and nine months ended September 30, 2023, the adjustments related primarily to separation costs associated with our restructuring plan initiated in early 2023. |
| (c) | For the three and nine months ended September 30, 2023, the adjustments related primarily to a net impairment charge for AMG 340. For the three months ended September 30, 2022, the adjustments related primarily to an impairment charge associated with an in-process research and development asset. For the nine months ended September 30, 2022, the adjustments related primarily to cumulative foreign currency translation adjustments from the divestiture of Gensenta. |
| (d) | For the three and nine months ended September 30, 2023, the adjustments included (i) interest expense and income on senior notes issued in March 2023 and (ii) debt issuance costs and other fees related to our bridge credit and term loan credit agreements, incurred prior to the closing of our acquisition of Horizon Therapeutics plc. |
| (e) | For the nine months ended September 30, 2023, the adjustments related primarily to our BeiGene, Ltd. equity fair value adjustment. |
| (f) | The tax effect of the adjustments between our GAAP and non-GAAP results takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). Generally, this results in a tax impact at the U.S. marginal tax rate for certain adjustments, including the majority of amortization of intangible assets and certain gains and losses on our investments in equity securities, whereas the tax impact of other adjustments, including expenses related to restructuring and cost savings initiatives, depends on whether the amounts are deductible in the respective tax jurisdictions and the applicable tax rate(s) in those jurisdictions. Due to these factors, the effective tax rate for the adjustments to our GAAP income before income taxes for the three and nine months ended September 30, 2023, were 22.0% and 22.2%, respectively, compared to 23.7% and 17.8% for the corresponding periods of the prior year. |
| (g) | The adjustments related to certain acquisition items, prior period and other items excluded from GAAP earnings. |
| Amgen Inc. Reconciliations of Cash Flows (In millions) (Unaudited) | |||||||
| Three months ended September 30, | Nine months ended September 30, | ||||||
| 2023 | 2022 | 2023 | 2022 | ||||
| Net cash provided by operating activities | $ 2,760 | $ 2,978 | $ 7,933 | $ 7,072 | |||
| Net cash (used in) provided by investing activities | (262) | (267) | 885 | (2,571) | |||
| Net cash (used in) provided by financing activities | (2,005) | 1,588 | 18,294 | (2,988) | |||
| Increase in cash and cash equivalents | 493 | 4,299 | 27,112 | 1,513 | |||
| Cash and cash equivalents at beginning of period | 34,248 | 5,203 | 7,629 | 7,989 | |||
| Cash and cash equivalents at end of period | $ 34,741 | $ 9,502 | $ 34,741 | $ 9,502 | |||
| Three months ended September 30, | Nine months ended September 30, | ||||||
| 2023 | 2022 | 2023 | 2022 | ||||
| Net cash provided by operating activities | $ 2,760 | $ 2,978 | $ 7,933 | $ 7,072 | |||
| Capital expenditures | (248) | (160) | (863) | (596) | |||
| Free cash flow | $ 2,512 | $ 2,818 | $ 7,070 | $ 6,476 |
| Amgen Inc. Reconciliation of GAAP EPS Guidance to Non-GAAP EPS Guidance for the Year Ending December 31, 2023 (Unaudited) | ||||
| GAAP diluted EPS guidance | $ 11.23 | — | $ 12.73 | |
| Known adjustments to arrive at non-GAAP*: | ||||
| Acquisition-related expenses (a) | 7.60 | — | 8.35 | |
| Net charges related to restructuring and cost savings initiatives | 0.38 | — | 0.53 | |
| Net (gains)/losses from equity investments | (1.90) | |||
| Other | (0.01) | |||
| Non-GAAP diluted EPS guidance | $ 18.20 | — | $ 18.80 |
| * The known adjustments are presented net of their related tax impact, which amount to approximately $1.50 - $1.69 per share. | |
| (a) | The adjustments include noncash amortization of intangible assets and fair value step-up of inventory acquired in business combinations and the net impairment charge for AMG 340, as well as transaction, integration and employee-related costs. Adjustments above include a preliminary range for the projected impact from the October 6, 2023 Horizon Therapeutics plc (Horizon) acquisition to be recognized in the fourth quarter of 2023. The initial accounting for the Horizon acquisition is incomplete, pending identification and measurement of assets acquired and liabilities assumed, and as a result this preliminary projected range of adjustments related to this acquisition is subject to change. |
Our GAAP diluted EPS guidance does not include the effect of GAAP adjustments triggered by events that may occur subsequent to this press release such as acquisitions, asset impairments, litigation, changes in fair value of our contingent consideration obligations and changes in fair value of our equity investments.
| Reconciliation of GAAP Tax Rate Guidance to Non-GAAP Tax Rate Guidance for the Year Ending December 31, 2023 (Unaudited) | |||||
| GAAP tax rate guidance | 14.0 % | — | 15.5 % | ||
| Tax rate of known adjustments discussed above | 1.5 % | — | 2.5 % | ||
| Non-GAAP tax rate guidance | 16.5 % | — | 17.0 % |