Press Release Details

THOUSAND OAKS, Calif., April 23, 2013 /PRNewswire/ -- Amgen (NASDAQ:AMGN) today announced financial results for the first quarter of 2013.  Key results for the quarter include:

• Total revenues increased 5 percent to $4,238 million, with 6 percent product sales growth driven by Enbrel^® (etanercept), XGEVA^® (denosumab) and Prolia^® (denosumab).
• Adjusted EPS grew 22 percent to $1.96 driven by tax benefits and fewer shares outstanding in the quarter.  Adjusted net income increased 16 percent to $1,498 million.
• GAAP EPS were $1.88 compared to $1.48 and GAAP net income was $1,434 million compared to $1,184 million.
• Free cash flow was $0.9 billion compared to $0.8 billion.

"We are on track to deliver our full-year growth objectives," said Robert A. Bradway, chairman and chief executive officer at Amgen. "In addition, our key pipeline projects are progressing well and we are looking forward to clinical results from ongoing trials."

Product Sales Performance

• Total product sales increased 6 percent driven by ENBREL, XGEVA and Prolia.
• Combined Neulasta^® (pegfilgrastim) and NEUPOGEN^® (Filgrastim) sales were in line with the prior year.
  • Global Neulasta sales were in line with the prior year as price increases were offset by modest unit declines.
  • Global NEUPOGEN sales declined 2 percent driven by lower units.
• ENBREL sales increased 11 percent mainly driven by increases in the average net sales price and a favorable change in accounting estimates, partially offset by a slight decline in units and a reduction in wholesaler inventory.
• Aranesp^®(darbepoetin alfa) sales decreased 10 percent year over year and 4 percent sequentially.  Outside the U.S., sales were in line with the prior quarter.  In the U.S., segment share remained relatively stable, but overall demand declined sequentially.
• EPOGEN^® (epoetin alfa) sales decreased 2 percent year over year.  Sequentially, sales decreased 9 percent driven by a favorable change in accounting estimates in the fourth quarter and lower average net prices.
• Sensipar^®/Mimpara^®(cinacalcet) sales increased 21 percent driven by increased unit demand and a favorable change in accounting estimates.
• Combined sales of Vectibix^®(panitumumab) and Nplate^®(romiplostim) increased 2 percent.
• XGEVA sales increased 46 percent year over year and 4 percent on a sequential basis, reflecting increased segment share.
• Prolia sales increased 61 percent year over year reflecting increased segment share and declined 8 percent on a sequential basis primarily due to seasonality.

Product Sales Detail by Product and Geographic Region

Operating Expense and Tax Rate Analysis, on an Adjusted Basis

• Cost of Sales, excluding the impact of the Puerto Rico excise tax, decreased 0.9 points.
• Research & Development (R&D) expenses increased 18 percent in the first quarter of 2013 primarily in support of our later-stage clinical programs, including AMG 145.
• Selling, General & Administrative (SG&A) expenses increased 8 percent in the first quarter of 2013 driven primarily by higher ENBREL profit share expenses. ENBREL profit share expenses increased 17 percent to $378 million in the first quarter. 

• Adjusted Tax Rate for Q1 2013 reflects the federal and state tax benefits associated with the resolution of the Company's federal audit for tax years 2007-2009.  In addition, the American Taxpayer Relief Act of 2012 was enacted in the first quarter of 2013, resulting in recognition of the full 2012 federal R&D credit in the first quarter of 2013.

Cash Flow and Balance Sheet Discussion

• The Company generated $0.9 billion of free cash flow in the first quarter of 2013 versus $0.8 billion in the first quarter of 2012. The increase was driven primarily by higher revenues offset partially by higher cash taxes.
• During the quarter, the Company repurchased approximately 9 million shares of common stock at a total cost of $0.8 billion and at an average price of $85.03. The Company has $1.6 billion remaining under its stock repurchase authorization.
• During the quarter, the Company settled in cash $2.5 billion of 0.375 percent Convertible Senior Notes upon their maturity.
• The Company previously announced that its Board of Directors declared a $0.47 per share dividend for the second quarter of 2013. The dividend will be paid on June 7, 2013, to all stockholders of record as of the close of business on May 16, 2013.

2013 Guidance

For the full year 2013, the Company expects:

• Total revenue guidance range unchanged at $17.8 billion to $18.2 billion.
• Adjusted EPS to be above the midpoint of the range of $7.05–$7.35.
• Adjusted tax rate to be in the range of 11 percent to 12 percent.  This reflects the impact of a higher excise tax enacted by the Puerto Rico government, to be effective July 1 of this year. The tax, which is charged to Cost of Sales, is creditable against U.S. federal income taxes.  Excluding the Puerto Rico excise tax, Amgen expects the adjusted tax rate for 2013 to be in the range of 15 percent to 16 percent.
• Capital expenditures guidance unchanged at approximately $700 million.

First Quarter Product and Pipeline Update

The Company provided the following information on clinical programs:

• Talimogene laherparepvec:  The Company discussed that data from a Phase 3 study in melanoma will be presented at the American Society of Clinical Oncology (ASCO) 2013 Annual Meeting in June.  The Company also discussed that primary analysis of the overall survival secondary end point is expected in late 2013.
• Trebananib:  The Company stated that progression-free survival results from a Phase 3 study in recurrent ovarian cancer are expected mid-year.
• AMG 416:  The Company stated that it recently initiated Phase 3 studies for the treatment of secondary hyperparathyroidism.
• Biosimilars:  The Company discussed plans to commence a pivotal study for biosimilar Herceptin^® (trastuzumab) in the second quarter.

Note: Herceptin® is a product of Genentech, a member of the Roche group

Non-GAAP Financial Measures
The Adjusted non-GAAP (U.S. Generally Accepted Accounting Principles) financial measures included above for the first quarters of 2013 and 2012 exclude, for the applicable periods, certain expenses related to acquisitions, cost-savings initiatives, various legal proceedings, non-cash interest expense associated with our convertible notes and certain other adjustments, as applicable. These adjustments and other items are presented on the attached reconciliations.

Management has presented its operating results in accordance with GAAP and on an "adjusted" (or non-GAAP) basis and Free Cash Flow which is a non-GAAP financial measure for the first quarters of 2013 and 2012.  In addition, management has presented its full year 2013 EPS and tax rate guidance in accordance with GAAP and on an "adjusted" (or non-GAAP) basis.  The Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors.  The Company uses these non-GAAP financial measures in connection with its own budgeting and financial planning.  These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in conformity with GAAP.

About Amgen
Amgen discovers, develops, manufactures and delivers innovative human therapeutics. A biotechnology pioneer since 1980, Amgen was one of the first companies to realize the new science's promise by bringing safe, effective medicines from lab to manufacturing plant to patient. Amgen therapeutics have changed the practice of medicine, helping millions of people around the world in the fight against cancer, kidney disease, rheumatoid arthritis, bone disease and other serious illnesses. With a deep and broad pipeline of potential new medicines, Amgen remains committed to advancing science to dramatically improve people's lives. 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, 2012, 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 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
Ashleigh Koss, 805-313-6151 (media)
Arvind Sood, 805-447-1060 (investors)

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SOURCE Amgen