THOUSAND OAKS, Calif.,
Oct. 27, 2016 /PRNewswire/ -- Amgen
(NASDAQ:AMGN) today announced financial results for the third
quarter of 2016. Key results include:
- Revenues increased 2 percent versus the third quarter of 2015
to $5.8 billion.
- Strong unit volume growth from Sensipar®
(cinacalcet), Prolia® (denosumab), Vectibix®
(panitumumab), XGEVA® (denosumab) and Nplate®
(romiplostim).
- GAAP earnings per share (EPS) increased 10 percent to
$2.68 driven by higher revenues and
higher operating margins.
- GAAP operating income increased 8 percent to $2,527 million and GAAP operating margin improved
by 3.4 percentage points to 45.8 percent.
- Non-GAAP EPS increased 11 percent to $3.02 driven by higher revenues and higher
operating margins.
- Non-GAAP operating income increased 9 percent to $2,916 million and non-GAAP operating margin
improved by 4.2 percentage points to 52.9 percent.
- 2016 total revenues guidance increased to $22.6-$22.8 billion; EPS guidance increased to
$9.94-$10.11 on a GAAP basis and
$11.40-$11.55 on a non-GAAP
basis.
- The Company generated $2.5
billion of free cash flow.
"Our business is performing well and our
double-digit earnings per share growth reflects the progress we
have made through our transformation efforts," said Robert A. Bradway, chairman and chief executive
officer. "We are focused on growing several newly launched products
and advancing the pipeline globally."
$Millions, except EPS
and percentages
|
|
Q3'16
|
|
Q3'15
|
|
YOY
Δ
|
|
|
|
|
|
|
|
Total
Revenues
|
|
$ 5,811
|
|
$ 5,723
|
|
2%
|
GAAP Operating
Income
|
|
$ 2,527
|
|
$ 2,339
|
|
8%
|
GAAP Net
Income
|
|
$ 2,017
|
|
$ 1,863
|
|
8%
|
GAAP EPS
|
|
$
2.68
|
|
$
2.44
|
|
10%
|
Non-GAAP Operating
Income
|
|
$ 2,916
|
|
$ 2,686
|
|
9%
|
Non-GAAP Net
Income
|
|
$ 2,276
|
|
$ 2,081
|
|
9%
|
Non-GAAP
EPS
|
|
$
3.02
|
|
$
2.72
|
|
11%
|
|
References in this
release to "non-GAAP" measures, measures presented "on a non-GAAP
basis" and to "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.
|
Product Sales Performance
- Total product sales were flat for the third quarter of
2016 versus the third quarter of 2015.
- Enbrel® (etanercept) sales were flat
as higher net selling price was offset by the impact of competition
and unfavorable changes in inventory levels.
- Neulasta® (pegfilgrastim) sales
decreased 5 percent driven by lower unit demand.
- Aranesp® (darbepoetin alfa) sales
increased 8 percent driven mainly by higher unit demand due to a
shift by some U.S. dialysis customers from
EPOGEN® (epoetin alfa) to Aranesp.
- Sensipar/Mimpara® sales increased 18
percent driven by net selling price and higher unit demand.
- XGEVA sales increased 4 percent driven by higher unit
demand.
- Prolia sales increased 18 percent driven by higher unit
demand.
- EPOGEN sales decreased 31 percent driven by the impact
of competition, abnormally high purchases by a large end customer
in the year ago period and a shift by some U.S. dialysis customers
to Aranesp.
- KYPROLIS® (carfilzomib) sales increased 34
percent driven by higher unit demand.
- NEUPOGEN® (filgrastim) sales decreased 36
percent driven mainly by the impact of competition in the U.S.
- Vectibix sales increased 24 percent driven by higher
unit demand.
- Nplate sales increased 10 percent driven by higher unit
demand and net selling price.
- Repatha® (evolocumab) sales growth was driven
by higher unit demand.
- BLINCYTO® (blinatumomab) sales increased 26
percent driven by higher unit demand.
Product Sales
Detail by Product and Geographic Region
|
|
$Millions, except
percentages
|
|
Q3'16
|
|
Q3'15
|
|
YOY
Δ
|
|
|
US
|
ROW
|
TOTAL
|
|
TOTAL
|
|
TOTAL
|
|
|
|
|
|
|
|
|
|
Enbrel®
|
|
$1,388
|
$64
|
$1,452
|
|
$1,459
|
|
0%
|
Neulasta®
|
|
1,024
|
176
|
1,200
|
|
1,267
|
|
(5%)
|
Aranesp®
|
|
275
|
256
|
531
|
|
493
|
|
8%
|
Sensipar®
/ Mimpara®
|
|
329
|
86
|
415
|
|
353
|
|
18%
|
XGEVA®
|
|
296
|
98
|
394
|
|
378
|
|
4%
|
Prolia®
|
|
249
|
130
|
379
|
|
320
|
|
18%
|
EPOGEN®
|
|
335
|
0
|
335
|
|
489
|
|
(31%)
|
KYPROLIS®
|
|
140
|
43
|
183
|
|
137
|
|
34%
|
NEUPOGEN®
|
|
127
|
56
|
183
|
|
284
|
|
(36%)
|
Vectibix®
|
|
64
|
100
|
164
|
|
132
|
|
24%
|
Nplate®
|
|
92
|
59
|
151
|
|
137
|
|
10%
|
Repatha®
|
31
|
9
|
40
|
|
3
|
|
*
|
BLINCYTO®
|
19
|
10
|
29
|
|
23
|
|
26%
|
Other**
|
|
14
|
46
|
60
|
|
41
|
|
46%
|
|
|
|
|
|
|
|
|
|
Total product
sales
|
|
$4,383
|
$1,133
|
$5,516
|
|
$5,516
|
|
0%
|
|
|
|
|
|
|
|
|
|
* Change in excess of
100%
|
** Other includes
Bergamo, MN Pharma, IMLYGIC® and
Corlanor®
|
Operating Expense, Operating Margin and Tax Rate
Analysis
On a GAAP basis:
- Cost of Sales margin improved by 0.1 percentage points
driven primarily by manufacturing efficiencies and higher net
selling price, offset partially by product mix. Research &
Development (R&D) expenses decreased 12 percent driven
primarily by lower spending required to support certain later-stage
clinical programs and transformation and process improvement
efforts. Selling, General & Administrative (SG&A)
expenses were flat. Total Operating Expenses decreased 3
percent, with all expense categories reflecting savings from our
transformation and process improvement efforts.
- Operating Margin improved by 3.4 percentage points to
45.8 percent.
- Tax Rate increased by 1.6 percentage points due
primarily to changes in the geographic mix of earnings.
On a non-GAAP basis:
- Cost of Sales margin improved by 0.5 percentage points
driven primarily by manufacturing efficiencies and higher net
selling price, offset partially by product mix. R&D
expenses decreased 11 percent driven primarily by lower spending
required to support certain later-stage clinical programs and
transformation and process improvement efforts. SG&A
expenses increased 1 percent. Total Operating Expenses
decreased 5 percent, with all expense categories reflecting savings
from our transformation and process improvement efforts.
- Operating Margin improved by 4.2 percentage points to
52.9 percent.
- Tax Rate increased by 0.9 percentage points due
primarily to changes in the geographic mix of earnings.
$Millions, except
percentages
|
|
|
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
Q3'16
|
|
Q3'15
|
|
YOY
Δ
|
|
Q3'16
|
|
Q3'15
|
|
YOY
Δ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Sales
|
$1,027
|
|
$1,034
|
|
(1%)
|
|
$715
|
|
$745
|
|
(4%)
|
|
% of product
sales
|
18.6%
|
|
18.7%
|
|
(0.1) pts.
|
|
13.0%
|
|
13.5%
|
|
(0.5) pts.
|
Research &
Development
|
$990
|
|
$1,119
|
|
(12%)
|
|
$963
|
|
$1,086
|
|
(11%)
|
|
% of product
sales
|
17.9%
|
|
20.3%
|
|
(2.4) pts.
|
|
17.5%
|
|
19.7%
|
|
(2.2) pts.
|
Selling, General
& Administrative
|
$1,244
|
|
$1,244
|
|
0%
|
|
$1,217
|
|
$1,206
|
|
1%
|
|
% of product
sales
|
22.6%
|
|
22.6%
|
|
0 pts.
|
|
22.1%
|
|
21.9%
|
|
0.2 pts.
|
Other
|
$23
|
|
($13)
|
|
*
|
|
$0
|
|
$0
|
|
0%
|
TOTAL Operating
Expenses
|
$3,284
|
|
$3,384
|
|
(3%)
|
|
$2,895
|
|
$3,037
|
|
(5%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
operating income as a
% of product sales
|
45.8%
|
|
42.4%
|
|
3.4 pts.
|
|
52.9%
|
|
48.7%
|
|
4.2 pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
Rate
|
16.6%
|
|
15.0%
|
|
1.6
pts.
|
|
18.9%
|
|
18.0%
|
|
0.9
pts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Change in excess of
100%
|
|
|
|
|
|
pts: percentage
points
|
|
|
|
|
|
Cash Flow and Balance Sheet
- The Company generated $2.5
billion of free cash flow in the third quarter of 2016
versus $2.8 billion in the third
quarter of 2015.
- The Company's fourth quarter 2016 dividend of $1.00 per share declared on Oct. 14, 2016, will be paid on Dec. 8, 2016, to all stockholders of record as of
Nov. 16, 2016.
- During the third quarter, the Company repurchased 4.4 million
shares of common stock at a total cost of $747 million. In October
2016, the Company's Board of Directors approved an increase
in the remaining share repurchase authorization for an aggregate
authorization of $5 billion.
$Billions, except
shares
|
|
Q3'16
|
|
Q3'15
|
|
YOY
Δ
|
|
|
|
|
|
|
|
|
|
Operating Cash
Flow
|
$2.7
|
|
$2.9
|
|
($0.2)
|
Capital
Expenditures
|
0.2
|
|
0.1
|
|
0.0
|
Free Cash
Flow
|
2.5
|
|
2.8
|
|
(0.3)
|
Dividends
Paid
|
0.7
|
|
0.6
|
|
0.1
|
Share
Repurchase
|
0.7
|
|
0.7
|
|
0.0
|
Avg. Diluted Shares
(millions)
|
753
|
|
764
|
|
(11)
|
|
|
|
|
|
|
|
|
|
Cash and
Investments
|
38.0
|
|
31.1
|
|
6.9
|
Debt
Outstanding
|
35.3
|
|
31.6
|
|
3.7
|
Stockholders'
Equity
|
30.8
|
|
28.0
|
|
2.8
|
|
|
|
|
|
|
|
|
|
|
|
Note: Numbers may not
add due to rounding
|
|
|
|
|
|
|
2016 Guidance
For the full year 2016, the Company now expects:
- Total revenues in the range of $22.6 billion to $22.8 billion.
- Previously, the Company expected total revenues in the range of
$22.5 billion to $22.8 billion.
- On a GAAP basis, EPS in the range of $9.94 to $10.11 and a tax rate in the
range of 16.5 percent to 17.5 percent.
- Previously, the Company expected GAAP EPS in the range of
$9.55 to $9.90. Tax rate guidance is
unchanged.
- On a non-GAAP basis, EPS in the range of $11.40 to $11.55 and a tax rate in the
range of 19.0 percent to 20.0 percent.
- Previously, the Company expected non-GAAP EPS in the range of
$11.10 to $11.40. Tax rate guidance
is unchanged.
- Capital expenditures to be approximately $700 million.
Third Quarter
Product and Pipeline Update
Key development milestones:
|
|
Clinical
Program
|
Indication
|
Projected
Milestone
|
Repatha
|
Hyperlipidemia
|
Phase 3 CV outcomes
data Q1 2017*
|
Omecamtiv
mecarbil
|
Chronic heart
failure
|
Phase 3 CV outcomes
study initiation*
|
KYPROLIS
|
Relapsed and
refractory multiple
myeloma
|
Phase 3 weekly
administration data 2017
|
Romosozumab
|
Postmenopausal
osteoporosis
|
U.S. regulatory
review
Active controlled
Phase 3 fracture data H1 2017*
|
Erenumab (AMG
334)
|
Migraine
prophylaxis
|
Phase 3 episodic
migraine data Q4 2016
|
Parsabiv™
(etelcalcetide)†
|
Secondary
hyperparathyroidism
|
Global regulatory
reviews
|
ABP 215
(biosimilar
bevacizumab)
|
Oncology
|
Global regulatory
submissions
|
ABP 501
(biosimilar
adalimumab)
|
Inflammatory
diseases
|
Ex-U.S. regulatory
reviews
|
ABP 980
(biosimilar
trastuzumab)
|
Breast
cancer
|
Global regulatory
submissions
|
|
*Event driven study;
†Trade name provisionally approved by FDA; CV =
cardiovascular
|
The Company provided the following updates on selected product
and pipeline programs:
Repatha
- In September, the Phase 3 GLAGOV study evaluating the effect of
Repatha on coronary artery disease met its primary and secondary
endpoints. The results will be presented Nov. 15, 2016, at the American Heart Association
Scientific Sessions 2016.
- Data from an event driven Phase 3 study evaluating the effects
of Repatha on cardiovascular outcomes are expected in Q1 2017.
Omecamtiv mecarbil
- Agreement was reached with the U.S. Food and Drug
Administration (FDA) on key elements of an omecamtiv mecarbil Phase
3 cardiovascular outcomes study in chronic heart failure through a
Special Protocol Assessment. Details of the protocol are being
finalized with regulators and enrollment in the study is
anticipated to begin in Q1 2017.
KYPROLIS
- In September, a Phase 3 study evaluating an investigational
regimen of KYPROLIS, melphalan and prednisone versus
Velcade® (bortezomib), melphalan and prednisone for 54
weeks in newly diagnosed, transplant ineligible multiple myeloma
patients did not meet the primary endpoint of superiority in
progression-free survival.
- A Phase 3 study of once weekly KYPROLIS administration in
relapsed and refractory multiple myeloma patients has completed
enrollment. The results are expected in 2017.
XGEVA
- In October, a Phase 3 study evaluating XGEVA for the prevention
of skeletal-related events in multiple myeloma patients met the
primary endpoint of non-inferiority to zoledronic acid in delaying
the time to first on-study skeletal-related event.
BLINCYTO
- In August, FDA approved BLINCYTO for the treatment of pediatric
patients with Philadelphia
chromosome‑negative relapsed or refractory B-cell precursor acute
lymphoblastic leukemia.
Prolia
- In August, a Phase 3 study evaluating Prolia compared with
risedronate in patients receiving glucocorticoid treatment met
primary and secondary endpoints at 12 months.
Romosozumab
- In September, a Biologics License Application for the treatment
of osteoporosis in postmenopausal women at increased risk for
fracture was accepted for review by FDA, with a Prescription Drug
User Fee target action date of July 19,
2017.
- Results from an event driven active controlled Phase 3 fracture
study in postmenopausal women with osteoporosis are expected in H1
2017.
Erenumab
- In September, a Phase 3 study in episodic migraine prevention
met its primary endpoint. Results from a second Phase 3 study
in this population are expected in Q4 2016.
Parsabiv
- In August, FDA issued a Complete Response Letter for the New
Drug Application for the treatment of secondary hyperparathyroidism
(sHPT) in adult patients with chronic kidney disease (CKD) on
hemodialysis.
- In September, the Committee for Medicinal Products for Human
Use of the European Medicines Agency adopted a positive opinion for
the Marketing Authorization of Parsabiv, recommending approval for
the treatment of sHPT in adult patients with CKD on
hemodialysis.
AMJEVITA™ (adalimumab-atto)*
- In September, FDA approved AMJEVITA across all eligible
indications of the reference product, HUMIRA®
(adalimumab), including treatment of psoriatic arthritis,
ankylosing spondylitis and moderate-to-severe rheumatoid arthritis,
polyarticular juvenile idiopathic arthritis (patients 4 years of
age or older), chronic plaque psoriasis, adult Crohn's disease and
ulcerative colitis. AMJEVITA is the Company's first biosimilar to
receive regulatory approval in the U.S.
ABP 798 (biosimilar rituximab)
- Phase 3 studies in Non-Hodgkin lymphoma and rheumatoid
arthritis are currently enrolling patients.
ABP 710 (biosimilar infliximab)
- A Phase 3 study in rheumatoid arthritis is currently enrolling
patients.
Erenumab is developed in collaboration with
Novartis
Omecamtiv mecarbil is developed in collaboration
with Cytokinetics and Servier
Romosozumab is developed in
collaboration with UCB globally, as well as Astellas in
Japan
Velcade®
is a registered trademark of Millennium Pharmaceuticals,
Inc.
Humira® is a registered trademark of
AbbVie Inc.
*Formerly ABP 501
Non-GAAP Financial Measures
In this news release,
management has presented its operating results for the third
quarters of 2016 and 2015 in accordance with U.S. Generally
Accepted Accounting Principles (GAAP) and on a non-GAAP basis. In
addition, management has presented its full year 2016 EPS and tax
rate 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 third quarters of 2016 and
2015. 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.
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 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 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 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 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 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 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 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. 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 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. 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 acquire
other companies or products and to integrate the operations of
companies we have acquired may not be successful. We may not be
able to access the capital and credit markets on terms that are
favorable to us, or at all. We are increasingly dependent on
information technology systems, infrastructure and data security.
Our stock price is volatile and may be affected by a number of
events. 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.
Amgen
Inc.
|
Consolidated
Statements of Income - GAAP
|
(In millions,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Product
sales
|
|
$
5,516
|
|
$
5,516
|
|
$
16,229
|
|
$
15,615
|
|
Other
revenues
|
|
295
|
|
207
|
|
797
|
|
511
|
|
|
Total
revenues
|
|
5,811
|
|
5,723
|
|
17,026
|
|
16,126
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
1,027
|
|
1,034
|
|
3,095
|
|
3,156
|
|
Research and
development
|
|
990
|
|
1,119
|
|
2,762
|
|
2,977
|
|
Selling, general and
administrative
|
|
1,244
|
|
1,244
|
|
3,739
|
|
3,430
|
|
Other
|
|
23
|
|
(13)
|
|
121
|
|
126
|
|
|
Total operating
expenses
|
|
3,284
|
|
3,384
|
|
9,717
|
|
9,689
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
2,527
|
|
2,339
|
|
7,309
|
|
6,437
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
325
|
|
282
|
|
932
|
|
811
|
Interest and other
income, net
|
|
216
|
|
135
|
|
503
|
|
439
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
2,418
|
|
2,192
|
|
6,880
|
|
6,065
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
401
|
|
329
|
|
1,093
|
|
926
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
2,017
|
|
$
1,863
|
|
$
5,787
|
|
$
5,139
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
2.70
|
|
$
2.46
|
|
$
7.70
|
|
$
6.76
|
|
Diluted
|
|
$
2.68
|
|
$
2.44
|
|
$
7.63
|
|
$
6.70
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used in calculation of earnings per share:
|
|
|
|
|
|
|
|
Basic
|
|
747
|
|
757
|
|
752
|
|
760
|
|
Diluted
|
|
753
|
|
764
|
|
758
|
|
767
|
Amgen
Inc.
|
Consolidated
Balance Sheets - GAAP
|
(In
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
|
|
2016
|
|
2015
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash, cash
equivalents and marketable securities
|
|
$
37,980
|
|
$
31,382
|
|
Trade receivables,
net
|
|
3,186
|
|
2,995
|
|
Inventories
|
|
2,681
|
|
2,435
|
|
Other current
assets
|
|
1,997
|
|
1,703
|
|
|
Total current
assets
|
|
45,844
|
|
38,515
|
Property, plant and
equipment, net
|
|
4,912
|
|
4,907
|
Intangible assets,
net
|
|
10,690
|
|
11,641
|
Goodwill
|
|
14,802
|
|
14,787
|
Other
assets
|
|
1,902
|
|
1,599
|
Total
assets
|
|
$
78,150
|
|
$
71,449
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
5,745
|
|
$
6,417
|
|
Current portion of
long-term debt
|
|
4,797
|
|
2,247
|
|
|
Total current
liabilities
|
|
10,542
|
|
8,664
|
Long-term
debt
|
|
30,526
|
|
29,182
|
Long-term deferred
tax liability
|
|
2,412
|
|
2,239
|
Other noncurrent
liabilities
|
|
3,897
|
|
3,281
|
Stockholders'
equity
|
|
30,773
|
|
28,083
|
Total liabilities and
stockholders' equity
|
|
$
78,150
|
|
$
71,449
|
|
|
|
|
|
|
|
|
|
|
Shares
outstanding
|
|
745
|
|
754
|
Amgen
Inc.
|
GAAP to Non-GAAP
Reconciliations
|
(In
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of
sales
|
$
1,027
|
|
$
1,034
|
|
$
3,095
|
|
$
3,156
|
|
Adjustments to
cost of sales:
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses (a)
|
(311)
|
|
(276)
|
|
(934)
|
|
(845)
|
|
Certain net charges
pursuant to our restructuring initiative
|
(1)
|
|
(13)
|
|
(1)
|
|
(42)
|
|
Total adjustments
to cost of sales
|
(312)
|
|
(289)
|
|
(935)
|
|
(887)
|
|
Non-GAAP cost of
sales
|
$
715
|
|
$
745
|
|
$
2,160
|
|
$
2,269
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of sales
as a percentage of product sales
|
18.6%
|
|
18.7%
|
|
19.1%
|
|
20.2%
|
|
Acquisition-related
expenses (a)
|
-5.6
|
|
-5.0
|
|
-5.8
|
|
-5.4
|
|
Certain net charges
pursuant to our restructuring initiative
|
0.0
|
|
-0.2
|
|
0.0
|
|
-0.3
|
|
Non-GAAP cost of
sales as a percentage of product sales
|
13.0%
|
|
13.5%
|
|
13.3%
|
|
14.5%
|
|
|
|
|
|
|
|
|
|
|
GAAP research and
development expenses
|
$
990
|
|
$
1,119
|
|
$
2,762
|
|
$
2,977
|
|
Adjustments to
research and development expenses:
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses (a)
|
(20)
|
|
(20)
|
|
(58)
|
|
(69)
|
|
Certain net charges
pursuant to our restructuring initiative
|
(7)
|
|
(13)
|
|
(5)
|
|
(48)
|
|
Total adjustments
to research and development expenses
|
(27)
|
|
(33)
|
|
(63)
|
|
(117)
|
|
Non-GAAP research
and development expenses
|
$
963
|
|
$
1,086
|
|
$
2,699
|
|
$
2,860
|
|
|
|
|
|
|
|
|
|
|
GAAP research and
development expenses as a percentage of product
sales
|
17.9%
|
|
20.3%
|
|
17.0%
|
|
19.1%
|
|
Acquisition-related
expenses (a)
|
-0.4
|
|
-0.4
|
|
-0.4
|
|
-0.4
|
|
Certain net charges
pursuant to our restructuring initiative
|
0.0
|
|
-0.2
|
|
0.0
|
|
-0.4
|
|
Non-GAAP research
and development expenses as a percentage of product
sales
|
17.5%
|
|
19.7%
|
|
16.6%
|
|
18.3%
|
|
|
|
|
|
|
|
|
|
|
GAAP selling,
general and administrative expenses
|
$
1,244
|
|
$
1,244
|
|
$
3,739
|
|
$
3,430
|
|
Adjustments to
selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses (b)
|
(26)
|
|
(27)
|
|
(154)
|
|
(84)
|
|
Certain net charges
pursuant to our restructuring initiative
|
(1)
|
|
(11)
|
|
(5)
|
|
(35)
|
|
Total adjustments
to selling, general and administrative expenses
|
(27)
|
|
(38)
|
|
(159)
|
|
(119)
|
|
Non-GAAP selling,
general and administrative expenses
|
$
1,217
|
|
$
1,206
|
|
$
3,580
|
|
$
3,311
|
|
|
|
|
|
|
|
|
|
|
GAAP selling,
general and administrative expenses as a percentage of product
sales
|
22.6%
|
|
22.6%
|
|
23.0%
|
|
22.0%
|
|
Acquisition-related
expenses (b)
|
-0.5
|
|
-0.5
|
|
-0.9
|
|
-0.5
|
|
Certain net charges
pursuant to our restructuring initiative
|
0.0
|
|
-0.2
|
|
0.0
|
|
-0.3
|
|
Non-GAAP selling,
general and administrative expenses as a percentage of product
sales
|
22.1%
|
|
21.9%
|
|
22.1%
|
|
21.2%
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
expenses
|
$
3,284
|
|
$
3,384
|
|
$
9,717
|
|
$
9,689
|
|
Adjustments to
operating expenses:
|
|
|
|
|
|
|
|
|
Adjustments to cost
of sales
|
(312)
|
|
(289)
|
|
(935)
|
|
(887)
|
|
Adjustments to
research and development expenses
|
(27)
|
|
(33)
|
|
(63)
|
|
(117)
|
|
Adjustments to
selling, general and administrative expenses
|
(27)
|
|
(38)
|
|
(159)
|
|
(119)
|
|
Certain net charges
pursuant to our restructuring initiative (c)
|
(5)
|
|
26
|
|
(15)
|
|
(41)
|
|
Expense related to
various legal proceedings
|
-
|
|
(2)
|
|
(105)
|
|
(73)
|
|
Acquisition-related
adjustments (d)
|
(18)
|
|
(11)
|
|
(1)
|
|
(12)
|
|
Total adjustments
to operating expenses
|
(389)
|
|
(347)
|
|
(1,278)
|
|
(1,249)
|
|
Non-GAAP operating
expenses
|
$
2,895
|
|
$
3,037
|
|
$
8,439
|
|
$
8,440
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
$
2,527
|
|
$
2,339
|
|
$
7,309
|
|
$
6,437
|
|
Adjustments to
operating expenses
|
389
|
|
347
|
|
1,278
|
|
1,249
|
|
Non-GAAP operating
income
|
$
2,916
|
|
$
2,686
|
|
$
8,587
|
|
$
7,686
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
income as a percentage of product sales
|
45.8%
|
|
42.4%
|
|
45.0%
|
|
41.2%
|
|
Adjustments to cost
of sales
|
5.6
|
|
5.2
|
|
5.8
|
|
5.7
|
|
Adjustments to
research and development expenses
|
0.4
|
|
0.6
|
|
0.4
|
|
0.8
|
|
Adjustments to
selling, general and administrative expenses
|
0.5
|
|
0.7
|
|
0.9
|
|
0.8
|
|
Certain net charges
pursuant to our restructuring initiative (c)
|
0.2
|
|
-0.5
|
|
0.1
|
|
0.2
|
|
Expense related to
various legal proceedings
|
0.0
|
|
0.1
|
|
0.6
|
|
0.5
|
|
Acquisition-related
adjustments (d)
|
0.4
|
|
0.2
|
|
0.1
|
|
0.0
|
|
Non-GAAP operating
income as a percentage of product sales
|
52.9%
|
|
48.7%
|
|
52.9%
|
|
49.2%
|
|
|
|
|
|
|
|
|
|
|
GAAP income before
income taxes
|
$
2,418
|
|
$
2,192
|
|
$
6,880
|
|
$
6,065
|
|
Adjustments to
operating expenses
|
389
|
|
347
|
|
1,278
|
|
1,249
|
|
Non-GAAP income
before income taxes
|
$
2,807
|
|
$
2,539
|
|
$
8,158
|
|
$
7,314
|
|
|
|
|
|
|
|
|
|
|
GAAP provision for
income taxes
|
$
401
|
|
$
329
|
|
$
1,093
|
|
$
926
|
|
Adjustments to
provision for income taxes:
|
|
|
|
|
|
|
|
|
Income tax effect of
the above adjustments to operating expenses (e)
|
127
|
|
114
|
|
412
|
|
404
|
|
Other income tax
adjustments (f)
|
3
|
|
15
|
|
28
|
|
15
|
|
Total adjustments
to provision for income taxes
|
130
|
|
129
|
|
440
|
|
419
|
|
Non-GAAP provision
for income taxes
|
$
531
|
|
$
458
|
|
$
1,533
|
|
$
1,345
|
|
|
|
|
|
|
|
|
|
|
GAAP tax rate as a
percentage of income before taxes
|
16.6%
|
|
15.0%
|
|
15.9%
|
|
15.3%
|
|
Adjustments to
provision for income taxes:
|
|
|
|
|
|
|
|
|
Income tax effect of
the above adjustments to operating expenses
(e)
|
2.2
|
|
2.4
|
|
2.6
|
|
2.9
|
|
Other income tax
adjustments (f)
|
0.1
|
|
0.6
|
|
0.3
|
|
0.2
|
|
Total adjustments
to provision for income taxes
|
2.3
|
|
3.0
|
|
2.9
|
|
3.1
|
|
Non-GAAP tax rate
as a percentage of income before taxes
|
18.9%
|
|
18.0%
|
|
18.8%
|
|
18.4%
|
|
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$
2,017
|
|
$
1,863
|
|
$
5,787
|
|
$
5,139
|
|
Adjustments to net
income:
|
|
|
|
|
|
|
|
|
Adjustments to income
before income taxes, net of the income tax effect
|
262
|
|
233
|
|
866
|
|
845
|
|
Other income tax
adjustments (f)
|
(3)
|
|
(15)
|
|
(28)
|
|
(15)
|
|
Total adjustments
to net income
|
259
|
|
218
|
|
838
|
|
830
|
|
Non-GAAP net
income
|
$
2,276
|
|
$
2,081
|
|
$
6,625
|
|
$
5,969
|
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
EPS.
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
|
September 30,
2016
|
|
September 30,
2015
|
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
2,017
|
|
$
2,276
|
|
$
1,863
|
|
$
2,081
|
|
Weighted-average
shares for diluted EPS
|
753
|
|
753
|
|
764
|
|
764
|
|
Diluted
EPS
|
$
2.68
|
|
$
3.02
|
|
$
2.44
|
|
$
2.72
|
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended
|
|
Nine months
ended
|
|
|
September 30,
2016
|
|
September 30,
2015
|
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
5,787
|
|
$
6,625
|
|
$
5,139
|
|
$
5,969
|
|
Weighted-average
shares for diluted EPS
|
758
|
|
758
|
|
767
|
|
767
|
|
Diluted
EPS
|
$
7.63
|
|
$
8.74
|
|
$
6.70
|
|
$
7.78
|
|
|
(a)
|
The adjustments
related primarily to non-cash amortization of intangible assets
acquired in business combinations.
|
|
|
(b)
|
For the three and
nine months ended September 30, 2016 and 2015, the adjustments
related primarily to non-cash amortization of intangible assets
acquired in business combinations. For the nine months ended
September 30, 2016, the adjustments also included a $73-million
charge resulting from the reacquisition of Prolia®,
XGEVA® and Vectibix® license agreements in
certain markets from Glaxo Group Limited.
|
|
|
(c)
|
For the three and
nine months ended September 30, 2016, the adjustments related
primarily to asset impairments from our site closures. For the
three months ended September 30, 2015, the adjustments related
primarily to the recognition of a gain from the sale of assets
related to our site closures. For the nine months ended September
30, 2015, the adjustments related primarily to severance expenses
offset by the gain from the sale of assets related to our site
closures.
|
|
|
(d)
|
The adjustments
related primarily to the impairment of non-key contract assets
acquired as part of a business combination and the change in fair
values of contingent consideration.
|
|
|
(e)
|
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, whereas the tax impact of other adjustments,
including restructuring expense, 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 rates for the adjustments to our GAAP income before
income taxes, for the three and nine months ended September 30,
2016, were 32.6% and 32.2%, respectively, compared with 32.9% and
32.3% for the corresponding periods of the prior year.
|
|
|
(f)
|
The adjustments
related to certain prior period items excluded from non-GAAP
earnings. The 2016 adjustments related primarily to the impact from
the adoption of Accounting Standards Update 2016-09,
Improvements to Employee Share-Based Payment Accounting,
related to stock options that were previously excluded from
non-GAAP measures. The 2015 adjustments related primarily to the
impact from a change in interpretation of tax law.
|
Amgen
Inc.
|
Reconciliations of
Cash Flows
|
(In
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
Net cash provided by
operating activities
|
$ 2,662
|
|
$ 2,892
|
(a)
|
$ 7,254
|
|
$ 7,658
|
(a)
|
|
Net cash used in
investing activities
|
(2,389)
|
|
(2,003)
|
|
(7,436)
|
|
(5,314)
|
|
|
Net cash provided by
(used in) financing activities
|
582
|
|
(1,458)
|
|
(477)
|
|
(2,849)
|
|
|
Increase (Decrease)
in cash and cash equivalents
|
855
|
|
(569)
|
|
(659)
|
|
(505)
|
|
|
Cash and cash
equivalents at beginning of period
|
2,630
|
|
3,795
|
|
4,144
|
|
3,731
|
|
|
Cash and cash
equivalents at end of period
|
$ 3,485
|
|
$ 3,226
|
|
$ 3,485
|
|
$ 3,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
Net cash provided by
operating activities
|
$ 2,662
|
|
$ 2,892
|
(a)
|
$ 7,254
|
|
$ 7,658
|
(a)
|
|
Capital
expenditures
|
(167)
|
|
(138)
|
|
(511)
|
|
(389)
|
|
|
Free cash
flow
|
$ 2,495
|
|
$ 2,754
|
|
$ 6,743
|
|
$ 7,269
|
|
|
(a) Restated
to include $18 million and $641 million for the three and nine
months ended September 30, 2015, respectively, which was previously
included in Net cash provided by (used in) financing activities, as
a result of the adoption of Accounting Standards Update 2016-09,
Improvements to Employee Share-Based Payment Accounting,
related to stock options that were previously excluded from
non-GAAP measures.
|
Reconciliation of
GAAP EPS Guidance to Non-GAAP
|
EPS Guidance for
the Year Ending December 31, 2016
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted EPS
guidance
|
|
$
9.94
|
-
|
$ 10.11
|
|
|
|
|
|
|
|
Known adjustments
to arrive at non-GAAP*:
|
|
|
|
|
|
|
Acquisition-related
expenses
|
(a)
|
1.34
|
|
|
Restructuring
charges
|
|
0.05
|
-
|
0.07
|
|
|
Legal proceeding
charge
|
|
|
0.09
|
|
|
|
Tax
adjustments
|
(b)
|
|
(0.04)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted
EPS guidance
|
|
$ 11.40
|
-
|
$ 11.55
|
|
|
*
|
The known adjustments
are presented net of their related tax impact which amount to
approximately $0.72 to $0.73 per
share, in the aggregate.
|
|
|
(a)
|
The adjustments
relate primarily to non-cash amortization of intangible assets
acquired in prior year business combinations.
|
|
|
(b)
|
The adjustments
relate to certain prior period items excluded from non-GAAP
earnings.
|
Reconciliation of
GAAP Tax Rate Guidance to Non-GAAP
|
Tax Rate Guidance
for the Year Ending December 31, 2016
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
GAAP tax rate
guidance
|
|
16.5%
|
-
|
17.5%
|
|
|
|
|
|
|
|
|
Tax rate effect of
known adjustments discussed above
|
|
|
2.5%
|
|
|
|
|
|
|
|
|
Non-GAAP tax rate
guidance
|
|
19.0%
|
-
|
20.0%
|
CONTACT: Amgen, Thousand
Oaks
Trish Hawkins, 805-447-5631
(media)
Arvind Sood, 805-447-1060
(investors)
Logo - http://photos.prnewswire.com/prnh/20081015/AMGENLOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/amgen-reports-third-quarter-2016-financial-results-300352912.html
SOURCE Amgen