Press Release Details

THOUSAND OAKS, Calif., Jan. 28, 2016 /PRNewswire/ -- Amgen (NASDAQ:AMGN) today announced financial results for the fourth quarter and full year of 2015. Key results include:

• For the fourth quarter, total revenues increased 4 percent to $5,536 million, with 3 percent product sales growth driven by Enbrel^® (etanercept), Sensipar^® (cinacalcet), Prolia^® (denosumab), Kyprolis^® (carfilzomib) and XGEVA^® (denosumab). Adjusted operating income grew 16 percent to $2,366 million and adjusted EPS grew 21 percent to $2.61.
• For the full year, total revenues increased 8 percent to $21,662 million, with 8 percent product sales growth. Adjusted operating income grew 19 percent to $10,052 million and adjusted EPS grew 19 percent to $10.38.
• 2015 adjusted operating margin improved by 4 percentage points to 48 percent.
• GAAP EPS were $2.37 in the fourth quarter compared to $1.68 a year ago and $9.06 for the full year compared to $6.70 in 2014. GAAP operating income was $2,033 million in the fourth quarter compared to $1,459 million a year ago and $8,470 million for the full year compared to $6,191 million in 2014. 2014 was negatively impacted by charges for the restructuring plan announced in the third quarter of 2014.
• Free cash flow for the full year was $8.5 billion compared to $7.8 billion in 2014 driven by higher revenues and higher operating income.

"2015 was an exceptional year for Amgen with six innovative new launches, strong financial performance, continued pipeline advances and improved operating margins driven by our transformation efforts," said Robert A. Bradway, chairman and chief executive officer. "We remain on track to meet or exceed our 2018 commitments and deliver value for patients and shareholders."

Product Sales Performance

• Total product sales increased 3 percent for the fourth quarter of 2015 versus the fourth quarter of 2014. The increase was driven primarily by ENBREL, Sensipar, Prolia, Kyprolis and XGEVA. Product sales increased 8 percent for the full year.
• ENBREL sales increased 8 percent year-over-year for the fourth quarter driven by net selling price, offset partially by the impact from inventory changes and competition. Sales increased 14 percent for the full year driven by net selling price, offset partially by the impact from competition.
• Neulasta^® (pegfilgrastim) sales decreased 2 percent year-over-year for the fourth quarter driven by lower unit demand and unfavorable changes in foreign exchange rates, offset partially by net selling price. Sales increased 3 percent for the full year driven by net selling price, offset partially by unfavorable changes in foreign exchange rates.
• Aranesp^® (darbepoetin alfa) sales increased 4 percent year-over-year for the fourth quarter and 1 percent for the full year. Unit demand grew in the United States (U.S.) as dialysis customers shifted some purchases from EPOGEN^® (epoetin alfa) to Aranesp. Unit demand growth was offset partially by unfavorable changes in foreign exchange rates and net selling price.
• Sensipar/Mimpara^® sales increased 21 percent year-over-year for the fourth quarter and 22 percent for the full year driven by net selling price and higher unit demand.
• Prolia sales increased 21 percent year-over-year for the fourth quarter and 27 percent for the full year driven by higher unit demand.
• XGEVA sales increased 10 percent year-over-year for the fourth quarter and 15 percent for the full year driven primarily by higher unit demand.
• EPOGEN sales decreased 37 percent year-over-year for the fourth quarter and 9 percent for the full year driven by the impact of competition and, to a lesser extent, the shift in U.S. dialysis customer purchases to Aranesp.
• NEUPOGEN^® (filgrastim) sales decreased 4 percent year-over-year for the fourth quarter driven by the impact of competition in the U.S. and unfavorable changes in foreign exchange rates, offset partially by favorable changes in accounting estimates. Sales decreased 9 percent for the full year driven by the impact of competition in the U.S.
• Kyprolis sales increased 63 percent year-over-year for the fourth quarter and 55 percent for the full year driven by higher unit demand.
• Nplate^® (romiplostim) sales increased 15 percent year-over-year for the fourth quarter and 12 percent for the full year driven by higher unit demand.
• Vectibix^® (panitumumab) sales increased 2 percent year-over-year for the fourth quarter and 9 percent for the full year driven by higher unit demand, offset partially by unfavorable changes in foreign exchange rates.

Operating Expense, Operating Margin and Tax Rate Analysis, on an Adjusted Basis

• Operating Expenses decreased 4 percent year-over-year in the fourth quarter of 2015 and remained flat for the full year. Changes in foreign exchange rates reduced operating expenses by 2 percent in the fourth quarter and 3 percent for the full year.
• Cost of Sales margin improved by 1.6 percentage points year-over-year in the fourth quarter of 2015 and 1.3 percentage points for the full year driven primarily by manufacturing efficiencies, higher net selling price and lower royalties.
• Research & Development (R&D) expenses decreased 10 percent year-over-year in the fourth quarter of 2015 driven by savings from transformation and process improvement efforts, as well as a $60 million upfront payment in the fourth quarter of 2014 related to the Company's cancer immunotherapy collaboration with Kite Pharma. For the full year, R&D expenses decreased 5 percent driven primarily by savings from transformation and process improvement efforts, offset partially by increased support for launch products.
• Selling, General & Administrative (SG&A) expenses increased 3 percent year-over-year in the fourth quarter of 2015 and 6 percent for the full year driven primarily by investments in new product launches, offset partially by savings from transformation and process improvement efforts.
• Operating Margin improved by 5 percentage points year-over-year in the fourth quarter of 2015 and 4 percentage points for the full year.
• Adjusted Tax Rate for the fourth quarter of 2015 increased 1.4 percentage points year-over-year driven primarily by a lower benefit from the federal R&D tax credit. The full year adjusted tax rate increased 1.9 percentage points driven primarily by changes in the geographic mix of earnings.

Cash Flow and Balance Sheet

• The Company generated $1.9 billion of free cash flow in the fourth quarter of 2015 versus $2.2 billion in the fourth quarter of 2014. For the full year, free cash flow was $8.5 billion compared to $7.8 billion in 2014 driven by higher revenues and higher operating income.
• The Company's first quarter 2016 dividend of $1.00 per share declared on Dec. 15, 2015, will be paid on March 8, 2016, to all stockholders of record as of Feb. 16, 2016.
• During the fourth quarter, the Company repurchased 1.2 million shares of common stock at a total cost of $184 million. For the full year, the Company repurchased 12 million shares of common stock at a total cost of $1.85 billion. At the end of 2015, the Company had $4.9 billion remaining under its stock repurchase authorization.

2016 Guidance

For the full year 2016, the Company now expects:

• Total revenues in the range of $22.0 billion to $22.5 billion and adjusted EPS in the range of $10.60 to $11.00. Previously, the Company expected total revenues in the range of $21.7 billion to $22.3 billion and adjusted EPS in the range of $10.35 to $10.75.
• Adjusted tax rate to be in the range of 19.5 percent to 20.5 percent, which includes the benefit of the federal R&D tax credit.
• Capital expenditures to be approximately $700 million.

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

Repatha 

• In January 2016, Repatha was approved in Japan for the treatment of patients with familial hypercholesterolemia (FH) or hypercholesterolemia who have high risk of cardiovascular events and do not adequately respond to HMG-CoA reductase inhibitors (statins).

Kyprolis 

• In November, the European Medicines Agency (EMA) approved the Marketing Authorization Application (MAA) for Kyprolis in combination for the treatment of relapsed multiple myeloma based on data from the Phase 3 ASPIRE study.
• In December, a Variation to the MAA was submitted to the EMA to expand the indication for Kyprolis in relapsed multiple myeloma based on data from the Phase 3 ENDEAVOR study.
• In January 2016, the U.S. Food and Drug Administration (FDA) approved the supplemental New Drug Application for Kyprolis in combination with dexamethasone or with lenalidomide plus dexamethasone for the treatment of patients with relapsed or refractory multiple myeloma who have received one to three lines of therapy. The FDA also approved Kyprolis as a single agent for the treatment of patients with relapsed or refractory multiple myeloma who have received one or more lines of therapy. This FDA decision converts to full approval the initial accelerated approval Kyprolis received in July 2012 as a single agent.

BLINCYTO^® (blinatumomab)

• In November, the EMA approved the MAA for BLINCYTO for the treatment of Philadelphia chromosome-negative relapsed or refractory B-precursor acute lymphoblastic leukemia.

IMLYGIC

• In December, the EMA approved the MAA for IMLYGIC for the treatment of adults with unresectable melanoma that is regionally or distantly metastatic (Stage IIIB, IIIC and IVM1a) with no bone, brain, lung or other visceral disease.

XGEVA

• Data from the event driven Phase 3 study for the prevention of skeletal-related events in patients with multiple myeloma is expected in Q4 2016.

Romosozumab

• Data from the Phase 3 registrational study in women with postmenopausal osteoporosis is expected in Q1 2016.

AMG 334

• Data from the Phase 2b study in patients with chronic migraine is expected in H2 2016.

Biosimilars

• In January 2016, the FDA accepted for review Amgen's Biologics License Application for ABP 501, a biosimilar candidate to Humira^® (adalimumab), and set a Biosimilar User Fee Act target action date of Sept. 25, 2016.
• In December, a MAA was submitted to the EMA for ABP 501.

Non-GAAP Financial Measures
In this news release, management has presented its operating results for the fourth quarters and full years of 2015 and 2014 in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and on an adjusted (or non-GAAP) basis. In addition, management has presented its full year 2016 EPS and tax rate guidance in accordance with GAAP and on an adjusted (or 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. Management has also presented Free Cash Flow (FCF), which is a non-GAAP financial measure, for the fourth quarters and full years of 2015 and 2014. FCF is computed by subtracting capital expenditures from operating cash flow, each as determined in accordance with GAAP. Reconciliations for these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the news release.

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 core business activities by facilitating comparisons of results of core business operations among current, past and future periods. In addition, the Company believes that excluding the non-cash amortization of intangible assets, including developed product technology rights, acquired in business combinations treats those assets as if the Company had developed them internally in the past, and thus provides a supplemental measure of profitability in which the Company's acquired intellectual property is treated in a comparable manner to its internally developed intellectual property. 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. 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.

About Amgen
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 biologics manufacturing 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. 

For more information, visit www.amgen.com and follow us on www.twitter.com/amgen.

Forward-Looking Statements
This news release contains forward-looking statements that involve significant risks and uncertainties, including those discussed below and others that can be found in our Form 10-K for the year ended Dec. 31, 2014, and in any subsequent periodic reports on Form 10-Q and Form 8-K. 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. The Company's results may be affected by our ability to successfully market both new and existing products domestically and internationally, clinical and regulatory developments (domestic or foreign) involving current and future products, sales growth of recently launched products, competition from other products (domestic or foreign), and difficulties or delays in manufacturing our products. In addition, sales of our products are affected by reimbursement policies imposed by third-party payors, 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 as well as U.S. legislation affecting pharmaceutical pricing and reimbursement. Government and others' regulations and reimbursement policies may affect the development, usage and pricing of our products. 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 after they are on the market. Our business may be impacted by government investigations, litigation and product liability claims. 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.  We depend on third parties for a significant portion of our manufacturing capacity for the supply of certain of our current and future products and limits on supply may constrain sales of certain of our current products and product candidate development. In addition, we compete with other companies with respect to some of our marketed products as well as for the discovery and development of new products. Discovery or identification of new product candidates cannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no guarantee that any particular product candidate 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. Our efforts to integrate the operations of companies we have acquired may not be successful. We may experience difficulties, delays or unexpected costs and not achieve anticipated benefits and savings from our ongoing restructuring plan. 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.  

CONTACT:  Amgen, Thousand Oaks
Trish Hawkins, 805-447-5631 (media)
Arvind Sood, 805-447-1060 (investors)

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SOURCE Amgen