Press Release Details

THOUSAND OAKS, Calif., April 21, 2015 /PRNewswire/ -- Amgen (NASDAQ: AMGN) today announced financial results for the first quarter of 2015. Key results include:

• Total revenues increased 11 percent versus the first quarter of 2014 to $5,033 million, with 12 percent product sales growth driven primarily by Enbrel^® (etanercept), Prolia^® (denosumab), EPOGEN^® (epoetin alfa), Sensipar^® (cinacalcet) and XGEVA^® (denosumab). Unfavorable changes in foreign exchange rates impacted total revenue and product sales growth by 2 percentage points.
• Adjusted EPS grew 33 percent versus the first quarter of 2014 to $2.48 driven by higher revenues and lower operating expenses. Adjusted operating income increased 32 percent to $2,449 million.
• GAAP EPS were $2.11 compared to $1.40 and GAAP operating income was $2,022 million compared to $1,364 million.
• The Company generated $1.2 billion of free cash flow compared to $1.0 billion in the first quarter of 2014.

"With solid execution in the first quarter, Amgen achieved strong sales and earnings growth and demonstrated substantial progress in achieving our long-term objectives," said Robert A. Bradway, chairman and chief executive officer. "Our continuing success in delivering results gives us the confidence to increase our full year outlook for earnings." 

First Quarter 2015 Product Sales Performance

• Total product sales increased 12 percent for the first quarter of 2015 versus the first quarter of 2014. The increase was driven primarily by ENBREL, Prolia, EPOGEN, Sensipar and XGEVA. Growth for the quarter was due to price and higher unit demand.
• Neulasta^® (pegfilgrastim) sales increased 4 percent year-over-year driven primarily by price. NEUPOGEN^® (filgrastim) sales decreased 15 percent year-over-year driven primarily by the impact of competition in the United States (U.S.).
• ENBREL sales increased 13 percent year-over-year driven by price.
• XGEVA sales increased 22 percent year-over-year driven by higher unit demand.
• Prolia sales increased 39 percent year-over-year driven by higher unit demand.
• EPOGEN sales increased 16 percent year-over-year due primarily to price and, to a lesser extent, higher unit demand.
• Aranesp^® (darbepoetin alfa) sales increased 4 percent year-over-year driven by higher unit demand in international markets.
• Sensipar/Mimpara sales increased 24 percent year-over-year driven by higher unit demand, favorable changes in inventory levels, and price.
• Nplate^®(romiplostim) sales increased 12 percent year-over-year driven by higher unit demand.
• Vectibix^® (panitumumab) sales increased 18 percent year-over-year driven by higher unit demand.
• Kyprolis^® (carfilzomib) sales increased 59 percent year-over-year driven by higher unit demand.

Product Sales Detail by Product and Geographic Region

Operating Expense and Tax Rate Analysis, on an Adjusted Basis

• Cost of Sales margin improved 0.6 points.
• Research & Development (R&D) expenses decreased 14 percent in the first quarter of 2015 driven by savings from transformation and process improvement efforts.
• Selling, General & Administrative (SG&A) expenses increased 1 percent in the first quarter of 2015 as increased commercial expenses for new product launches were enabled by savings from transformation and process improvement efforts.
• Tax Rate for the first quarter of 2015 increased due to changes in the geographic mix of earnings, offset partially by the favorable impact of a state tax audit settlement.

Cash Flow and Balance Sheet Discussion

• The Company generated $1.2 billion of free cash flow in the first quarter of 2015 versus $1.0 billion in the first quarter of 2014.
• The Company's second quarter 2015 dividend of $0.79 per share declared on March 4, 2015, will be paid on June 5, 2015, to all stockholders of record as of the close of business on May 14, 2015.
• During the first quarter, the Company repurchased 2.9 million shares of common stock at a total cost of $0.5 billion. The Company has $3.4 billion remaining under its stock repurchase authorization.

2015 Guidance

For the full year 2015, the Company now expects:

• Total revenues in the range of $20.9 billion to $21.3 billion and adjusted EPS in the range of $9.35 to $9.65. Previously, the Company expected total revenues in the range of $20.8 billion to $21.3 billion and adjusted EPS in the range of $9.05 to $9.40.
• Adjusted tax rate to be in the range of 18 percent to 19 percent.  This excludes the benefit of the federal R&D tax credit, which has not yet been extended for 2015.
• Capital expenditures to be approximately $800 million.

First Quarter Product and Pipeline Update

Key 2015 milestones:

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

Corlanor

• The Company discussed the U.S. Food and Drug Administration (FDA) approval to reduce the risk of hospitalization for worsening heart failure in patients with chronic heart failure.

Repatha

• The Company discussed the recent submission of an application seeking marketing approval for the treatment of high cholesterol to the Ministry of Health, Labour and Welfare in Japan.

Omecamtiv mecarbil

• The Company announced that results from its oral Phase 2 study in patients with heart failure are expected in the second half of 2015.

Kyprolis

• The Company discussed the priority review designation granted by the FDA for the relapsed multiple myeloma indication in the U.S.  The Company also discussed the upcoming presentation of the Phase 3 ENDEAVOR study results at a meeting of the American Society of Clinical Oncology (ASCO) and the initiation of a Phase 3 study with weekly dosing.

Talimogene laherparepvec

• The Company discussed the upcoming FDA Advisory Committee meeting on April 29 to discuss a Biologics License Application (BLA) for treatment of metastatic melanoma.  The Company also announced the completion of enrollment in a Phase 1b study in combination with pembrolizumab in metastatic melanoma.

Vectibix

• The Company discussed the recent approval for use in combination with FOLFIRI in RAS wild type first-line metastatic colorectal cancer in the European Union (EU).

Brodalumab

• The Company announced that it plans to submit a BLA in the U.S. and a Marketing Authorization Application (MAA) in the EU for moderate-to-severe plaque psoriasis mid-year in 2015.  The Company also announced the termination of a Phase 2 asthma study due to futility.

AMG 416

• The Company announced that it plans to submit a BLA in the U.S. and a MAA in the EU for secondary hyperparathyroidism in the second half of 2015.

Non-GAAP Financial Measures

In this news release, management has presented its operating results for the first quarters 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 2015 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 first quarters 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 press 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 recently announced 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
Kristen Davis, 805-447-3008 (media)
Trish Hawkins, 805-447-5631 (media)
Arvind Sood, 805-447-1060 (investors)  

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SOURCE Amgen