THOUSAND OAKS, Calif.,
July 28, 2020 /PRNewswire/
-- Amgen (NASDAQ:AMGN) today announced financial results for
the second quarter of 2020.
Key results include:
- Despite the impact of the COVID-19 pandemic, total revenues
increased 6% to $6.2 billion in
comparison to the second quarter of 2019, driven by higher unit
demand, offset partially by lower net selling prices.
-
- Product sales increased 6% globally, driven by 13% volume
growth across a number of our newer products, including
Otezla® (apremilast), MVASI®
(bevacizumab-awwb), KANJINTI® (trastuzumab-anns),
EVENITY® (romosozumab-aqqg) and Repatha®
(evolocumab), offset partially by declines in select products from
the impact of COVID-19 and biosimilar and generic competition.
- GAAP earnings per share (EPS) decreased 15% to $3.05 driven primarily by the amortization of
costs associated with our November
2019 acquisition of Otezla, offset partially by increased
revenues. Of note, this is the first period to include our share of
BeiGene's net loss under the equity method of accounting.
-
- GAAP operating income decreased 13% to $2.3 billion and GAAP operating margin decreased
8.7 percentage points to 39.3%, driven primarily by the
amortization of intangible assets from our Otezla acquisition.
- Non-GAAP EPS increased 7% to $4.25 driven by increased revenues and fewer
weighted-average shares outstanding while also taking into account
our share of BeiGene's net loss for the previous quarter as noted
above.
-
- Non-GAAP operating income increased 9% to $3.2 billion and non-GAAP operating margin
increased 1.7 percentage points to 55.0%.
- The Company generated $2.7
billion of free cash flow in the second quarter versus
$1.3 billion in the second quarter of
2019, an increase driven primarily by the timing of tax
payments.
- 2020 total revenues guidance reaffirmed at $25.0-$25.6
billion; EPS guidance revised to $10.73-$11.43 on a
GAAP basis and revised to $15.10-$15.75 on a
non-GAAP basis.
"As our strong results demonstrate, we
continue to reliably supply patients as we navigate the COVID-19
pandemic," said Robert A. Bradway,
chairman and chief executive officer. "We look forward to several
significant pipeline updates in the second half of the
year."
$Millions, except
EPS, dividends paid per share and percentages
|
|
Q2'20
|
|
Q2'19
|
|
YOY
Δ
|
Total
Revenues
|
|
$
|
6,206
|
|
|
$
|
5,871
|
|
|
6%
|
GAAP Operating
Income
|
|
$
|
2,323
|
|
|
$
|
2,678
|
|
|
(13%)
|
GAAP Net
Income
|
|
$
|
1,803
|
|
|
$
|
2,179
|
|
|
(17%)
|
GAAP EPS
|
|
$
|
3.05
|
|
|
$
|
3.57
|
|
|
(15%)
|
Non-GAAP Operating
Income
|
|
$
|
3,247
|
|
|
$
|
2,973
|
|
|
9%
|
Non-GAAP Net
Income
|
|
$
|
2,518
|
|
|
$
|
2,423
|
|
|
4%
|
Non-GAAP
EPS
|
|
$
|
4.25
|
|
|
$
|
3.97
|
|
|
7%
|
Dividends Paid Per
Share
|
|
$
|
1.60
|
|
|
$
|
1.45
|
|
|
10%
|
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
- Notwithstanding the effects of the pandemic, total product
sales increased 6% for the second quarter of 2020 versus the
second quarter of 2019 driven by 13% volume growth.
- COVID-19 impacts: The pandemic interrupted many
physician-patient interactions, which led to delays in diagnosis
and treatment with varying degrees of impact across our portfolio.
Sales of negatively affected products fell most early in the second
quarter with sales beginning to recover in the latter weeks of the
quarter. As the quarter progressed, our teams increasingly
responded to customer needs via remote interactions and also
identified innovative solutions to support the delivery of patient
care. Our medicines were reliably supplied to patients throughout
the quarter.
- Prolia® (denosumab) sales decreased 6%
year-over-year driven by lower unit demand as a result of fewer
office visits by osteoporosis patients, a population that is
generally older and more vulnerable to COVID-19. Our historical
pattern of higher sales in the second quarter was accordingly
disrupted, resulting in relatively flat quarter-over-quarter sales.
During the month of April, 60% fewer patients in the U.S. were
diagnosed with osteoporosis compared to a pre-COVID-19 baseline. In
response to the concerns of patients and providers, we worked to
identify alternate sites for Prolia administration and have since
seen improved sales with many patients returning for therapy as
well as increased new patient diagnoses.
- EVENITY generated $101 million of sales in the second quarter of
2020. Although COVID-19 impacted new patient starts in the U.S.
this quarter, we saw a continuous increase in new prescribers. We
remain focused on increasing the number of patients and ensuring
they receive their full 12 months of therapy. While patient uptake
remains strong, we anticipate a slowdown in reported sales in the
third quarter as the first half of 2020 benefited from larger
shipments to Astellas, our partner in Japan, to ensure they had appropriate
inventory.
- Repatha sales increased 32% year-over-year driven by 69%
volume growth, offset partially by lower net selling price. Sales
declined 13% quarter-over-quarter driven by unfavorable changes to
estimated sales deductions. Although new-to-brand prescriptions
(NBRx) in the U.S. for the proprotein convertase subtilisin/kexin
type 9 (PCSK9) segment were negatively impacted by COVID-19,
Repatha maintained share leadership among new patients, exiting the
quarter with approximately 80% share. Repatha's year-over-year net
selling price declined as a result of additional contracting to
improve Medicare Part D patient access and patient affordability.
We expect net selling price to be relatively stable for the
remainder of the year.
- Aimovig® (erenumab-aooe) sales
increased 18% year-over-year driven by 45% volume growth, offset
partially by lower net selling price as a result of additional
contracting to expand patient access. Aimovig remains the segment
leader within the preventative calcitonin gene-related peptide
(CGRP) class with 48% share of total prescriptions (TRx) in the
quarter. Although NBRx for the total CGRP segment were negatively
impacted by COVID-19, Aimovig regained NBRx share leadership
exiting the quarter with 41% share. We continue to see improvement
in our conversion from free to paid prescriptions and expect net
selling price to be relatively stable for the remainder of the
year.
- Parsabiv® (etelcalcetide) sales
increased 11% year-over-year driven by higher unit demand, offset
partially by lower net selling price. As expected, on July 6, 2020, the Centers for Medicare &
Medicaid Services (CMS) proposed a methodology to modify the
end-stage renal disease (ESRD) Prospective Payment System (PPS)
base rate to include calcimimetics in the ESRD PPS bundled payment
in 2021. This proposal is subject to a public comment period and
the Final Rule is expected in November
2020.
- Otezla was acquired in November
2019 and generated $561
million of sales in the second quarter of 2020, reflecting
14% growth year-over-year driven primarily by volume. U.S. Otezla
TRx growth remained strong in the quarter. Although NBRx volumes
were negatively impacted by COVID-19 early in the quarter, trends
have improved since then. From a competitive standpoint, Otezla's
NBRx share of the psoriasis segment grew slightly in the quarter.
Otezla provides a convenient oral option with an established safety
profile and does not require lab monitoring, making it an
attractive option during this COVID-19 period and for physicians
practicing telemedicine.
- Enbrel® (etanercept) sales
decreased 9% year-over-year driven by lower unit demand. Consistent
with prior periods, Enbrel continued to lose share and the effects
of such share loss were compounded by lower growth of the
rheumatology segment due to COVID-19. Consistent with other agents
within the class, Enbrel experienced a decline in new patients. Of
note, earlier this month, the U.S. Court of Appeals for the Federal
Circuit affirmed the judgment of the New
Jersey District Court upholding the validity of the two
patents that describe and claim Enbrel and methods for making
it.
- AMGEVITA™ (adalimumab) generated $62 million of sales in the second quarter of
2020 and is the most prescribed adalimumab biosimilar in
Europe for the fourth consecutive
quarter. AMGEVITA sales declined 28% quarter-over-quarter driven by
lower net selling prices and reductions in customer inventories
following COVID-19-related stocking in the first quarter.
- KYPROLIS® (carfilzomib) sales
decreased 5% year-over-year driven by lower unit demand. This
decline was driven by reduced multiple myeloma patient visits to
providers due to COVID-19.
- XGEVA® (denosumab) sales decreased 13%
year-over-year driven by lower unit demand. This decline was driven
by the impact of COVID-19, including a decrease in patient visits
and recently revised treatment recommendations from the National
Comprehensive Cancer Network (NCCN) in response to COVID-19 to
prioritize primary cancer treatments over bone targeting
agents.
- Vectibix® (panitumumab) sales were
relatively flat year-over-year.
- Nplate® (romiplostim) sales decreased
4% year-over-year driven by unfavorable changes to estimated sales
deductions. Volume growth slowed primarily as a result of fewer
physician office visits due to COVID-19, and a loss of new patient
starts to oral alternatives.
- BLINCYTO® (blinatumomab) sales
increased 19% year-over-year driven by higher unit demand as we
continue to see broader adoption in the community hospital
setting.
- MVASI generated $172
million of sales in the second quarter of 2020, with a 39%
exit share of the bevacizumab segment in the U.S. Going forward, we
expect increased competition in the U.S. given the launch of a
competing biosimilar earlier this year.
- KANJINTI generated $123
million of sales in the second quarter of 2020, with a 32%
exit share of the trastuzumab segment in the U.S. The trastuzumab
market has become increasingly competitive with the launches of
four additional biosimilar products in the U.S. earlier this
year.
- Neulasta® (pegfilgrastim) sales
decreased 28% year-over-year driven by the impact of biosimilar
competition on net selling price and unit demand. Unit volumes for
the overall long-acting granulocyte colony-stimulating factors
(G-CSFs) segment grew, supported by the NCCN guidelines, recently
revised in response to COVID-19 recommending increased use of
long-acting G-CSFs in intermediate risk febrile neutropenia cancer
patients. Within the long-acting G-CSF segment, Neulasta
Onpro® continues to be the preferred choice for
physicians and patients and share increased to 58% this quarter.
Onpro provides a unique value proposition during the pandemic as it
allows patients to receive their G-CSF treatment without
having to return to their doctor's office or other site of care for
administration.
- NEUPOGEN® (filgrastim) sales
decreased 35% year-over-year driven by the impact of competition on
unit demand and unfavorable changes to estimated sales
deductions.
- EPOGEN® (epoetin alfa) sales decreased
28% year-over-year driven by lower unit demand and lower net
selling price from our existing contractual commitment with
DaVita.
- Aranesp® (darbepoetin alfa) sales
decreased 11% year-over-year driven by lower net selling price and
the impact of competition on unit demand.
- Sensipar/Mimpara® (cinacalcet) sales
decreased 34% year-over-year driven by the impact of generic
competition on unit demand. Supplemental patent protection
certificates for cinacalcet have now expired in major European
markets and generic launches have begun. We expect ex-U.S. sales to
continue to decline in the second half of 2020.
Product Sales Detail by Product and Geographic Region
$Millions, except
percentages
|
|
Q2'20
|
|
Q2'19
|
|
YOY
Δ
|
|
|
US
|
|
ROW
|
|
TOTAL
|
|
TOTAL
|
|
TOTAL
|
Prolia®
|
|
$
|
441
|
|
|
$
|
218
|
|
|
$
|
659
|
|
|
$
|
698
|
|
|
(6%)
|
EVENITY®
|
|
40
|
|
|
61
|
|
|
101
|
|
|
28
|
|
|
*
|
Repatha®
|
|
115
|
|
|
85
|
|
|
200
|
|
|
152
|
|
|
32%
|
Aimovig®
|
|
98
|
|
|
—
|
|
|
98
|
|
|
83
|
|
|
18%
|
Parsabiv®
|
|
160
|
|
|
26
|
|
|
186
|
|
|
168
|
|
|
11%
|
Otezla®
|
|
464
|
|
|
97
|
|
|
561
|
|
|
—
|
|
|
*
|
Enbrel®
|
|
1,213
|
|
|
33
|
|
|
1,246
|
|
|
1,363
|
|
|
(9%)
|
AMGEVITA™
|
|
—
|
|
|
62
|
|
|
62
|
|
|
52
|
|
|
19%
|
KYPROLIS®
|
|
167
|
|
|
86
|
|
|
253
|
|
|
267
|
|
|
(5%)
|
XGEVA®
|
|
318
|
|
|
117
|
|
|
435
|
|
|
499
|
|
|
(13%)
|
Vectibix®
|
|
79
|
|
|
116
|
|
|
195
|
|
|
196
|
|
|
(1%)
|
Nplate®
|
|
107
|
|
|
86
|
|
|
193
|
|
|
201
|
|
|
(4%)
|
BLINCYTO®
|
|
56
|
|
|
37
|
|
|
93
|
|
|
78
|
|
|
19%
|
KANJINTI®
|
|
101
|
|
|
22
|
|
|
123
|
|
|
30
|
|
|
*
|
MVASI®
|
|
149
|
|
|
23
|
|
|
172
|
|
|
—
|
|
|
*
|
Neulasta®
|
|
520
|
|
|
73
|
|
|
593
|
|
|
824
|
|
|
(28%)
|
NEUPOGEN®
|
|
28
|
|
|
21
|
|
|
49
|
|
|
75
|
|
|
(35%)
|
EPOGEN®
|
|
161
|
|
|
—
|
|
|
161
|
|
|
223
|
|
|
(28%)
|
Aranesp®
|
|
156
|
|
|
231
|
|
|
387
|
|
|
436
|
|
|
(11%)
|
Sensipar®/Mimpara®
|
|
32
|
|
|
49
|
|
|
81
|
|
|
122
|
|
|
(34%)
|
Other**
|
|
23
|
|
|
37
|
|
|
60
|
|
|
79
|
|
|
(24%)
|
Total product
sales
|
|
$
|
4,428
|
|
|
$
|
1,480
|
|
|
$
|
5,908
|
|
|
$
|
5,574
|
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
* Change in excess of
100%
|
|
|
|
|
|
|
|
|
** Other includes
GENSENTA, IMLYGIC®, Corlanor® and
Bergamo
|
Operating Expense, Operating Margin and Tax Rate
Analysis
On a GAAP basis:
- Total Operating Expenses increased 22% primarily driven
by Otezla-related expenses, including the amortization of
intangible assets, offset partially by the reduction in certain
expenses as a result of COVID-19. Cost of Sales margin
increased 7 percentage points driven by amortization expense
related to the Otezla acquisition and the benefit of Hurricane
Maria insurance proceeds in 2019, offset partially by lower
manufacturing costs. Research & Development (R&D)
expenses increased 4% driven by higher spend in support of our
late-stage development programs, primarily AMG 510 (sotorasib) and
our biosimilar programs, along with Otezla, offset partially by
recoveries from our collaboration with BeiGene. Selling, General
& Administrative (SG&A) expenses increased 3% primarily
due to Otezla commercial and acquisition-related expenses, offset
partially by COVID-19-related deceleration of certain expenses.
Other expenses increased due to a legal settlement.
- Operating Margin decreased 8.7 percentage points to
39.3% driven primarily by the amortization of intangible assets
from our Otezla acquisition.
- Tax Rate decreased 3.8 percentage points due primarily
to net favorable items in the quarter, amortization related to the
Otezla acquisition and changes in jurisdictional mix of
earnings.
On a non-GAAP basis:
- Total Operating Expenses increased 2% driven by
Otezla-related expenses, offset partially by the reduction in
certain expenses as a result of COVID-19. Cost of Sales
margin decreased 0.4 percentage points driven primarily by lower
manufacturing costs, offset partially by an increase in royalties
and the benefit of Hurricane Maria insurance proceeds in 2019.
R&D expenses increased 3% driven by higher spend in
support of our late-stage development programs, primarily AMG 510
(sotorasib) and our biosimilar programs, along with Otezla, offset
partially by recoveries from our collaboration with BeiGene.
SG&A expenses increased 1% due primarily to Otezla
commercial related expenses, offset partially by COVID-19-related
deceleration of certain expenses.
- Operating Margin increased 1.7 percentage points to
55.0%.
- Tax Rate decreased 1.6 percentage points due primarily
to net favorable items in the quarter.
$Millions, except
percentages
|
|
GAAP
|
|
Non-GAAP
|
|
|
Q2'20
|
|
Q2'19
|
|
YOY
Δ
|
|
Q2'20
|
|
Q2'19
|
|
YOY
Δ
|
Cost of
Sales
|
|
$
|
1,488
|
|
|
$
|
1,012
|
|
|
47%
|
|
$
|
758
|
|
|
$
|
736
|
|
|
3%
|
% of product
sales
|
|
25.2
|
%
|
|
18.2
|
%
|
|
7 pts
|
|
12.8
|
%
|
|
13.2
|
%
|
|
(0.4) pts
|
Research &
Development
|
|
$
|
964
|
|
|
$
|
924
|
|
|
4%
|
|
$
|
936
|
|
|
$
|
906
|
|
|
3%
|
% of product
sales
|
|
16.3
|
%
|
|
16.6
|
%
|
|
(0.3) pts
|
|
15.8
|
%
|
|
16.3
|
%
|
|
(0.5) pts
|
Selling, General
& Administrative
|
|
$
|
1,295
|
|
|
$
|
1,260
|
|
|
3%
|
|
$
|
1,265
|
|
|
$
|
1,256
|
|
|
1%
|
% of product
sales
|
|
21.9
|
%
|
|
22.6
|
%
|
|
(0.7) pts
|
|
21.4
|
%
|
|
22.5
|
%
|
|
(1.1) pts
|
Other
|
|
$
|
136
|
|
|
$
|
(3)
|
|
|
*
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—%
|
Total Operating
Expenses
|
|
$
|
3,883
|
|
|
$
|
3,193
|
|
|
22%
|
|
$
|
2,959
|
|
|
$
|
2,898
|
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
operating income as %
of product sales
|
|
39.3
|
%
|
|
48.0
|
%
|
|
(8.7) pts
|
|
55.0
|
%
|
|
53.3
|
%
|
|
1.7 pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
Rate
|
|
11.2
|
%
|
|
15.0
|
%
|
|
(3.8)
pts
|
|
13.7
|
%
|
|
15.3
|
%
|
|
(1.6)
pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Change in excess of
100%
|
|
|
|
|
|
|
|
|
|
|
pts: percentage
points
|
|
|
|
|
|
|
|
|
|
|
Cash Flow and Balance Sheet
- The Company generated $2.7
billion of free cash flow in the second quarter of 2020
versus $1.3 billion in the second
quarter of 2019, driven primarily by the timing of tax
payments.
- The Company's second quarter 2020 dividend of $1.60 per share was declared on March 4, 2020, and was paid on June 8, 2020, to all stockholders of record as of
May 18, 2020, representing a 10%
increase from 2019.
- During the second quarter, the Company repurchased 2.6 million
shares of common stock at a total cost of $591 million. At the end of the second quarter,
the Company had $4.9 billion
remaining under its stock repurchase authorization.
- Cash and investments totaled $11.4
billion as of June 30, 2020, a
decrease of $10.3 billion from the
quarter ended June 30, 2019. This
decrease was primarily due to the Otezla and BeiGene transactions,
as well as cash returned to shareholders in the form of share
repurchases and dividends, offset partially by free cash flow
generated during the period and net proceeds from debt
issuances.
- Additionally, the Company issued $4
billion of long-term debt in May for general corporate
purposes, including enhancing our working capital position, given
favorable market conditions. Debt outstanding at the end of the
quarter totaled $34.2 billion with a
weighted-average interest rate of 3.5% and an average maturity of
14 years.
$Billions, except
shares
|
|
Q2'20
|
|
Q2'19
|
|
YOY
Δ
|
Operating Cash
Flow
|
|
$
|
2.8
|
|
|
$
|
1.4
|
|
|
$
|
1.4
|
|
Capital
Expenditures
|
|
0.2
|
|
|
0.1
|
|
|
0.0
|
|
Free Cash
Flow
|
|
2.7
|
|
|
1.3
|
|
|
1.4
|
|
Dividends
Paid
|
|
0.9
|
|
|
0.9
|
|
|
0.0
|
|
Share
Repurchases
|
|
0.6
|
|
|
2.3
|
|
|
(1.8)
|
|
Average Diluted
Shares (millions)
|
|
592
|
|
|
610
|
|
|
(18)
|
|
|
|
|
|
|
|
|
Cash and
Investments
|
|
11.4
|
|
|
21.8
|
|
|
(10.3)
|
|
Debt
Outstanding
|
|
34.2
|
|
|
30.6
|
|
|
3.6
|
|
Stockholders'
Equity
|
|
10.7
|
|
|
10.8
|
|
|
(0.1)
|
|
|
|
|
|
|
|
|
Note: Numbers may not
add due to rounding
|
|
|
2020 Guidance
For the full year 2020, the Company now expects:
- Total revenues in the range of $25.0 billion to $25.6
billion, unchanged from previous guidance.
- On a GAAP basis, EPS in the range of $10.73 to $11.43
and a tax rate in the range of 10.5% to 11.5%.
-
- Previously, the Company expected GAAP EPS in the range of
$10.65 to $11.45 and a tax rate in the range of 10.5% to
11.5%.
- On a non-GAAP basis, EPS in the range of $15.10 to $15.75
and a tax rate in the range of 13.5% to 14.5%.
-
- Previously, the Company expected non-GAAP EPS in the range of
$14.85 to $15.60 and a tax rate in the range of 13.5% to
14.5%.
- Capital expenditures to be approximately $600 million.
- Quarterly dividend maintained at $1.60 per share.
- Share repurchases will be executed opportunistically
resulting in an amount at the lower end of our previous guidance of
$3 billion to $5 billion.
Second Quarter Product and Pipeline Update
The Company provided the following updates on selected product
and pipeline programs:
AMG 510 (sotorasib)
- The Company continues to expect initial data from a potentially
pivotal Phase 2 monotherapy study in patients with advanced
non-small cell lung cancer (NSCLC) in H2 2020.
- The Phase 3 CodeBreaK 200 study comparing sotorasib to
docetaxel is enrolling patients with advanced NSCLC.
- 6 Phase 1 combination cohorts are enrolling patients.
Bispecific Programs
- The Company expects initial data from Phase 1 dose escalation
studies of the following half-life extended BiTE®
constructs in H2 2020:
-
- AMG 160 targeting PSMA (prostate specific membrane antigen) for
prostate cancer
- AMG 701 targeting BCMA (B-cell maturation antigen) for multiple
myeloma
- AMG 757 targeting DLL3 (delta-like ligand 3) for small cell
lung cancer
- Phase 1 development of AMG 424, a CD38-CD3 XmAb®
antibody has been stopped, with rights reverting to Xencor.
Otezla
- In May, the Phase 3 ADVANCE study in patients with mild to
moderate psoriasis met its primary endpoint and all secondary
endpoints at week 16.
- Otezla is being investigated as a potential immunomodulatory
treatment in patients hospitalized with SARS-CoV-2 infections in
multiple COVID-19 platform trials.
Tezepelumab
- The Company continues to expect data from the Phase 3 NAVIGATOR
study in patients with severe uncontrolled asthma in late
2020.
- A Phase 2 atopic dermatitis study was stopped based on efficacy
data that did not support continuation of the study. No new safety
findings were observed and there is no impact to the ongoing
studies in chronic obstructive pulmonary disease and asthma.
AMG 592
- Phase 1b/2 clinical studies in
systemic lupus erythematosus and chronic graft versus host disease
are enrolling patients.
- A Phase 1b study in rheumatoid
arthritis (RA) was stopped due to insufficient benefit-risk for the
use with standard of care therapy in active RA patients.
Omecamtiv mecarbil
- The Company continues to expect data from the Phase 3
GALACTIC-HF study in Q4 2020.
- In May, the U.S. Food and Drug Administration granted Fast
Track designation for omecamtiv mecarbil for the treatment of
chronic heart failure with reduced ejection fraction.
AMG 890
- A Phase 2 study in patients with cardiovascular disease has
commenced for AMG 890, a small interfering RNA molecule that lowers
lipoprotein(a).
COVID-19 Therapeutics
- The Company is pursuing the development of therapeutic
antibodies that may be complementary with antibodies directed
against the receptor binding domain of the SARS-CoV-2 spike
protein. In addition, the Company has the option to review and
potentially pursue antibody candidates identified by Adaptive
Biotechnologies.
Tezepelumab is being developed in collaboration with
AstraZeneca
Omecamtiv mecarbil is being developed under a
collaboration between Amgen and Cytokinetics, with funding and
strategic support from Servier
Non-GAAP Financial Measures
In this news release, management has presented its operating
results for the second quarters of 2020 and 2019, in accordance
with U.S. Generally Accepted Accounting Principles (GAAP) and on a
non-GAAP basis. In addition, management has presented its full year
2020 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 second quarters of
2020 and 2019. 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 any statements on the outcome, benefits and synergies of
collaborations, or potential collaborations, with any other
company, including Adaptive Biotechnologies (including statements
regarding such collaboration's, or our own, ability to
discover and develop fully-human neutralizing antibodies targeting
SARS-CoV-2 to potentially prevent or treat COVID-19), BeiGene,
Ltd., or the Otezla acquisition, including anticipated Otezla sales
growth and the timing of non-GAAP EPS accretion, 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
such as the ongoing COVID-19 pandemic on our business, outcomes,
progress, or effects relating to studies of Otezla as a potential
treatment for COVID-19, 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. A breakdown, cyberattack or information security breach
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 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
Trish Hawkins, 805-447-5631
(media)
Arvind Sood, 805-447-1060
(investors)
Amgen
Inc.
|
Consolidated
Statements of Income - GAAP
|
(In millions,
except per-share data)
|
(Unaudited)
|
|
|
Three months
ended June 30,
|
|
Six months
ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues:
|
|
|
|
|
|
|
|
Product
sales
|
$
|
5,908
|
|
|
$
|
5,574
|
|
|
$
|
11,802
|
|
|
$
|
10,860
|
|
Other
revenues
|
298
|
|
|
297
|
|
|
565
|
|
|
568
|
|
Total
revenues
|
6,206
|
|
|
5,871
|
|
|
12,367
|
|
|
11,428
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of
sales
|
1,488
|
|
|
1,012
|
|
|
3,001
|
|
|
2,067
|
|
Research and
development
|
964
|
|
|
924
|
|
|
1,916
|
|
|
1,803
|
|
Selling, general and
administrative
|
1,295
|
|
|
1,260
|
|
|
2,611
|
|
|
2,414
|
|
Other
|
136
|
|
|
(3)
|
|
|
161
|
|
|
(6)
|
|
Total operating
expenses
|
3,883
|
|
|
3,193
|
|
|
7,689
|
|
|
6,278
|
|
|
|
|
|
|
|
|
|
Operating
income
|
2,323
|
|
|
2,678
|
|
|
4,678
|
|
|
5,150
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
296
|
|
|
332
|
|
|
642
|
|
|
675
|
|
Interest and other
income, net
|
3
|
|
|
218
|
|
|
14
|
|
|
403
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
2,030
|
|
|
2,564
|
|
|
4,050
|
|
|
4,878
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
227
|
|
|
385
|
|
|
422
|
|
|
707
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
1,803
|
|
|
$
|
2,179
|
|
|
$
|
3,628
|
|
|
$
|
4,171
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
3.07
|
|
|
$
|
3.59
|
|
|
$
|
6.16
|
|
|
$
|
6.78
|
|
Diluted
|
$
|
3.05
|
|
|
$
|
3.57
|
|
|
$
|
6.12
|
|
|
$
|
6.75
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares used in calculation of earnings per share:
|
|
|
|
|
|
|
|
Basic
|
588
|
|
607
|
|
|
589
|
|
|
615
|
|
Diluted
|
592
|
|
610
|
|
|
593
|
|
|
618
|
|
Amgen
Inc.
|
Consolidated
Balance Sheets - GAAP
|
(In
millions)
|
|
|
June
30,
|
|
December
31,
|
|
2020
|
|
2019
|
|
(Unaudited)
|
|
|
Assets
|
Current
assets:
|
|
|
|
Cash, cash equivalents
and marketable securities
|
$
|
11,421
|
|
|
$
|
8,911
|
|
Trade receivables,
net
|
5,366
|
|
|
4,057
|
|
Inventories
|
3,840
|
|
|
3,584
|
|
Other current
assets
|
2,268
|
|
|
1,888
|
|
Total current
assets
|
22,895
|
|
|
18,440
|
|
|
|
|
|
Property, plant and
equipment, net
|
4,843
|
|
|
4,928
|
|
Intangible assets,
net
|
17,948
|
|
|
19,413
|
|
Goodwill
|
14,678
|
|
|
14,703
|
|
Other
assets
|
4,647
|
|
|
2,223
|
|
Total
assets
|
$
|
65,011
|
|
|
$
|
59,707
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
10,432
|
|
|
$
|
9,882
|
|
Current portion of
long-term debt
|
91
|
|
|
2,953
|
|
Total current
liabilities
|
10,523
|
|
|
12,835
|
|
|
|
|
|
Long-term
debt
|
34,133
|
|
|
26,950
|
|
Long-term deferred
tax liabilities
|
259
|
|
|
606
|
|
Long-term tax
liabilities
|
7,556
|
|
|
8,037
|
|
Other noncurrent
liabilities
|
1,881
|
|
|
1,606
|
|
Total stockholders'
equity
|
10,659
|
|
|
9,673
|
|
Total liabilities and
stockholders' equity
|
$
|
65,011
|
|
|
$
|
59,707
|
|
|
|
|
|
Shares
outstanding
|
586
|
|
|
591
|
|
Amgen
Inc.
|
GAAP to Non-GAAP
Reconciliations
|
(Dollars in
millions)
|
(Unaudited)
|
|
|
Three months
ended June 30,
|
|
Six months
ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
GAAP cost of
sales
|
$
|
1,488
|
|
|
$
|
1,012
|
|
|
$
|
3,001
|
|
|
$
|
2,067
|
|
Adjustments to cost
of sales:
|
|
|
|
|
|
|
|
Acquisition-related
expenses (a)
|
(730)
|
|
|
(276)
|
|
|
(1,472)
|
|
|
(552)
|
|
Total adjustments
to cost of sales
|
(730)
|
|
|
(276)
|
|
|
(1,472)
|
|
|
(552)
|
|
Non-GAAP cost of
sales
|
$
|
758
|
|
|
$
|
736
|
|
|
$
|
1,529
|
|
|
$
|
1,515
|
|
|
|
|
|
|
|
|
|
GAAP cost of sales
as a percentage of product sales
|
25.2
|
%
|
|
18.2
|
%
|
|
25.4
|
%
|
|
19.0
|
%
|
Acquisition-related
expenses (a)
|
-12.4
|
|
|
-5.0
|
|
|
-12.4
|
|
|
-5.0
|
|
Non-GAAP cost of
sales as a percentage of product sales
|
12.8
|
%
|
|
13.2
|
%
|
|
13.0
|
%
|
|
14.0
|
%
|
|
|
|
|
|
|
|
|
GAAP research and
development expenses
|
$
|
964
|
|
|
$
|
924
|
|
|
$
|
1,916
|
|
|
$
|
1,803
|
|
Adjustments to
research and development expenses:
|
|
|
|
|
|
|
|
Acquisition-related
expenses (a)
|
(28)
|
|
|
(18)
|
|
|
(53)
|
|
|
(38)
|
|
Total adjustments
to research and development expenses
|
(28)
|
|
|
(18)
|
|
|
(53)
|
|
|
(38)
|
|
Non-GAAP research
and development expenses
|
$
|
936
|
|
|
$
|
906
|
|
|
$
|
1,863
|
|
|
$
|
1,765
|
|
|
|
|
|
|
|
|
|
GAAP research and
development expenses as a percentage of product
sales
|
16.3
|
%
|
|
16.6
|
%
|
|
16.2
|
%
|
|
16.6
|
%
|
Acquisition-related
expenses (a)
|
-0.5
|
|
|
-0.3
|
|
|
-0.4
|
|
|
-0.3
|
|
Non-GAAP research
and development expenses as a percentage of product
sales
|
15.8
|
%
|
|
16.3
|
%
|
|
15.8
|
%
|
|
16.3
|
%
|
|
|
|
|
|
|
|
|
GAAP selling,
general and administrative expenses
|
$
|
1,295
|
|
|
$
|
1,260
|
|
|
$
|
2,611
|
|
|
$
|
2,414
|
|
Adjustments to
selling, general and administrative expenses:
|
|
|
|
|
|
|
|
Acquisition-related
expenses (a)
|
(30)
|
|
|
(5)
|
|
|
(59)
|
|
|
(9)
|
|
Certain net charges
pursuant to our restructuring initiatives
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
Total adjustments
to selling, general and administrative expenses
|
(30)
|
|
|
(4)
|
|
|
(59)
|
|
|
(9)
|
|
Non-GAAP selling,
general and administrative expenses
|
$
|
1,265
|
|
|
$
|
1,256
|
|
|
$
|
2,552
|
|
|
$
|
2,405
|
|
|
|
|
|
|
|
|
|
GAAP selling,
general and administrative expenses as a percentage of product
sales
|
21.9
|
%
|
|
22.6
|
%
|
|
22.1
|
%
|
|
22.2
|
%
|
Acquisition-related
expenses (a)
|
-0.5
|
|
|
-0.1
|
|
|
-0.5
|
|
|
-0.1
|
|
Certain net charges
pursuant to our restructuring initiatives
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
Non-GAAP selling,
general and administrative expenses as a percentage of product
sales
|
21.4
|
%
|
|
22.5
|
%
|
|
21.6
|
%
|
|
22.1
|
%
|
|
|
|
|
|
|
|
|
GAAP operating
expenses
|
$
|
3,883
|
|
|
$
|
3,193
|
|
|
$
|
7,689
|
|
|
$
|
6,278
|
|
Adjustments to
operating expenses:
|
|
|
|
|
|
|
|
Adjustments to cost of
sales
|
(730)
|
|
|
(276)
|
|
|
(1,472)
|
|
|
(552)
|
|
Adjustments to
research and development expenses
|
(28)
|
|
|
(18)
|
|
|
(53)
|
|
|
(38)
|
|
Adjustments to
selling, general and administrative expenses
|
(30)
|
|
|
(4)
|
|
|
(59)
|
|
|
(9)
|
|
Certain net charges
pursuant to our restructuring initiatives
|
2
|
|
|
1
|
|
|
4
|
|
|
2
|
|
Certain other expenses
(b)
|
(138)
|
|
|
2
|
|
|
(165)
|
|
|
4
|
|
Total adjustments
to operating expenses
|
(924)
|
|
|
(295)
|
|
|
(1,745)
|
|
|
(593)
|
|
Non-GAAP operating
expenses
|
$
|
2,959
|
|
|
$
|
2,898
|
|
|
$
|
5,944
|
|
|
$
|
5,685
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
$
|
2,323
|
|
|
$
|
2,678
|
|
|
$
|
4,678
|
|
|
$
|
5,150
|
|
Adjustments to
operating expenses
|
924
|
|
|
295
|
|
|
1,745
|
|
|
593
|
|
Non-GAAP operating
income
|
$
|
3,247
|
|
|
$
|
2,973
|
|
|
$
|
6,423
|
|
|
$
|
5,743
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended June 30,
|
|
Six months
ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
GAAP operating
income as a percentage of product sales
|
39.3
|
%
|
|
48.0
|
%
|
|
39.6
|
%
|
|
47.4
|
%
|
Adjustments to cost of
sales
|
12.4
|
|
|
5.0
|
|
|
12.5
|
|
|
5.0
|
|
Adjustments to
research and development expenses
|
0.5
|
|
|
0.3
|
|
|
0.4
|
|
|
0.3
|
|
Adjustments to
selling, general and administrative expenses
|
0.5
|
|
|
0.1
|
|
|
0.5
|
|
|
0.1
|
|
Certain net charges
pursuant to our restructuring initiatives
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
Certain other expenses
(b)
|
2.3
|
|
|
-0.1
|
|
|
1.4
|
|
|
0.1
|
|
Non-GAAP operating
income as a percentage of product sales
|
55.0
|
%
|
|
53.3
|
%
|
|
54.4
|
%
|
|
52.9
|
%
|
|
|
|
|
|
|
|
|
GAAP interest and
other income, net
|
$
|
3
|
|
|
$
|
218
|
|
|
$
|
14
|
|
|
$
|
403
|
|
Adjustments to
interest and other income, net (c)
|
(36)
|
|
|
—
|
|
|
(36)
|
|
|
—
|
|
Non-GAAP interest
and other income, net
|
$
|
(33)
|
|
|
$
|
218
|
|
|
$
|
(22)
|
|
|
$
|
403
|
|
|
|
|
|
|
|
|
|
GAAP income before
income taxes
|
$
|
2,030
|
|
|
$
|
2,564
|
|
|
$
|
4,050
|
|
|
$
|
4,878
|
|
Adjustments to
operating expenses
|
924
|
|
|
295
|
|
|
1,745
|
|
|
593
|
|
Adjustments to other
income
|
(36)
|
|
|
—
|
|
|
(36)
|
|
|
—
|
|
Non-GAAP income
before income taxes
|
$
|
2,918
|
|
|
$
|
2,859
|
|
|
$
|
5,759
|
|
|
$
|
5,471
|
|
|
|
|
|
|
|
|
|
GAAP provision for
income taxes
|
$
|
227
|
|
|
$
|
385
|
|
|
$
|
422
|
|
|
$
|
707
|
|
Adjustments to
provision for income taxes:
|
|
|
|
|
|
|
|
Income tax effect of
the above adjustments (d)
|
164
|
|
|
70
|
|
|
335
|
|
|
138
|
|
Other income tax
adjustments (e)
|
9
|
|
|
(19)
|
|
|
8
|
|
|
(27)
|
|
Total adjustments
to provision for income taxes
|
173
|
|
|
51
|
|
|
343
|
|
|
111
|
|
Non-GAAP provision
for income taxes
|
$
|
400
|
|
|
$
|
436
|
|
|
$
|
765
|
|
|
$
|
818
|
|
|
|
|
|
|
|
|
|
GAAP tax as a
percentage of income before taxes
|
11.2
|
%
|
|
15.0
|
%
|
|
10.4
|
%
|
|
14.5
|
%
|
Adjustments to
provision for income taxes:
|
|
|
|
|
|
|
|
Income tax effect of
the above adjustments (d)
|
2.2
|
|
|
0.9
|
|
|
2.7
|
|
|
1.0
|
|
Other income tax
adjustments (e)
|
0.3
|
|
|
-0.6
|
|
|
0.2
|
|
|
-0.5
|
|
Total adjustments
to provision for income taxes
|
2.5
|
|
|
0.3
|
|
|
2.9
|
|
|
0.5
|
|
Non-GAAP tax as a
percentage of income before taxes
|
13.7
|
%
|
|
15.3
|
%
|
|
13.3
|
%
|
|
15.0
|
%
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$
|
1,803
|
|
|
$
|
2,179
|
|
|
$
|
3,628
|
|
|
$
|
4,171
|
|
Adjustments to net
income:
|
|
|
|
|
|
|
|
Adjustments to income
before income taxes, net of the income tax effect
|
724
|
|
|
225
|
|
|
1,374
|
|
|
455
|
|
Other income tax
adjustments (e)
|
(9)
|
|
|
19
|
|
|
(8)
|
|
|
27
|
|
Total adjustments
to net income
|
715
|
|
|
244
|
|
|
1,366
|
|
|
482
|
|
Non-GAAP net
income
|
$
|
2,518
|
|
|
$
|
2,423
|
|
|
$
|
4,994
|
|
|
$
|
4,653
|
|
|
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 June 30, 2020
|
|
Three months
ended June 30, 2019
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
Net income
|
$
|
1,803
|
|
|
$
|
2,518
|
|
|
$
|
2,179
|
|
|
$
|
2,423
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares for diluted EPS
|
592
|
|
|
592
|
|
|
610
|
|
|
610
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
$
|
3.05
|
|
|
$
|
4.25
|
|
|
$
|
3.57
|
|
|
$
|
3.97
|
|
|
|
|
|
|
|
|
|
|
Six months
ended June 30, 2020
|
|
Six months
ended June 30, 2019
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
Net income
|
$
|
3,628
|
|
|
$
|
4,994
|
|
|
$
|
4,171
|
|
|
$
|
4,653
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares for diluted EPS
|
593
|
|
|
593
|
|
|
618
|
|
|
618
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
$
|
6.12
|
|
|
$
|
8.42
|
|
|
$
|
6.75
|
|
|
$
|
7.53
|
|
|
|
(a)
|
The adjustments
related primarily to noncash amortization of intangible assets from
business acquisitions.
|
|
|
(b)
|
For the three months
ended June 30, 2020 the adjustment related primarily to legal
settlement expenses. For the six months ended June 30, 2020 the
adjustment related primarily to legal settlement expenses and an
impairment charge associated with an in-process research and
development asset.
|
|
|
(c)
|
For the six months
ended June 30, 2020 the adjustment related primarily to a gain from
legal judgment proceeds offset partially by amortization of the
basis difference from our BeiGene equity method
investment.
|
|
|
(d)
|
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 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 rates for the adjustments to our GAAP
income before income taxes, for the three and six months ended June
30, 2020, were 18.5% and 19.6%, compared with 23.7% and 23.3% for
the corresponding periods of the prior year.
|
|
|
(e)
|
The adjustments
related to certain acquisition items and prior period items
excluded from GAAP earnings.
|
Amgen
Inc.
|
Reconciliations of
Cash Flows
|
(In
millions)
|
(Unaudited)
|
|
|
Three months
ended June 30,
|
|
Six months
ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net cash provided by
operating activities
|
$
|
2,842
|
|
|
$
|
1,414
|
|
|
$
|
4,976
|
|
|
$
|
3,259
|
|
Net cash (used in)
provided by investing activities
|
(2,159)
|
|
|
2,745
|
|
|
(2,389)
|
|
|
6,300
|
|
Net cash provided by
(used in) financing activities
|
775
|
|
|
(5,992)
|
|
|
521
|
|
|
(10,979)
|
|
Increase (decrease)
in cash and cash equivalents
|
1,458
|
|
|
(1,833)
|
|
|
3,108
|
|
|
(1,420)
|
|
Cash and cash
equivalents at beginning of period
|
7,687
|
|
|
7,358
|
|
|
6,037
|
|
|
6,945
|
|
Cash and cash
equivalents at end of period
|
$
|
9,145
|
|
|
$
|
5,525
|
|
|
$
|
9,145
|
|
|
$
|
5,525
|
|
|
|
|
|
|
Three months
ended June 30,
|
|
Six months
ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net cash provided by
operating activities
|
$
|
2,842
|
|
|
$
|
1,414
|
|
|
$
|
4,976
|
|
|
$
|
3,259
|
|
Capital
expenditures
|
(158)
|
|
|
(144)
|
|
|
(300)
|
|
|
(260)
|
|
Free cash
flow
|
$
|
2,684
|
|
|
$
|
1,270
|
|
|
$
|
4,676
|
|
|
$
|
2,999
|
|
Amgen
Inc.
|
Reconciliation of
GAAP EPS Guidance to Non-GAAP
|
EPS Guidance for
the Year Ending December 31, 2020
|
(Unaudited)
|
|
GAAP diluted EPS
guidance
|
|
$
|
10.73
|
|
—
|
$
|
11.43
|
|
Known adjustments
to arrive at non-GAAP*:
|
|
|
|
|
Acquisition-related
expenses (a)
|
|
4.24
|
|
—
|
4.29
|
|
Net legal
proceedings
|
|
|
0.08
|
|
Non-GAAP diluted
EPS guidance
|
|
$
|
15.10
|
|
—
|
$
|
15.75
|
|
|
* The known
adjustments are presented net of their related tax impact, which
amount to approximately $1.07 - $1.08 per share.
|
|
(a) The adjustments
relate primarily to noncash amortization of intangible assets
acquired in business acquisitions.
|
|
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 and changes in the fair
value or our contingent consideration.
|
Reconciliation of
GAAP Tax Rate Guidance to Non-GAAP
|
Tax Rate Guidance
for the Year Ending December 31, 2020
|
(Unaudited)
|
|
GAAP tax rate
guidance
|
|
10.5
|
%
|
—
|
11.5
|
%
|
Tax rate of known
adjustments discussed above
|
|
|
3.0%
|
|
Non-GAAP diluted EPS
guidance
|
|
13.5
|
%
|
—
|
14.5
|
%
|
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SOURCE Amgen