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    AMGN
    Earnings call· Dec 2024(Q4 FY24)

    AMGEN INC AMGN

    Feb 4, 2025 Source

    Executive summary

    Amgen Q4 FY24 — Strong Product Sales Growth and Pipeline Advancement

    Amgen concluded 2024 with robust product sales growth and significant pipeline advancements, driven by key brands like Repatha, EVENITY, and TEZSPIRE, alongside a growing biosimilar portfolio. The company is strategically investing in its late-stage pipeline, particularly MariTide and olpasiran, while navigating pricing pressures and upcoming patent expirations. Management remains focused on global expansion and operational efficiency to sustain long-term growth and innovation.

    Highlights

    5

    • Product sales grew 11% year-over-year in Q4, capping a year of 19% growth.

    • 14 medicines annualizing over $1 billion, with 21 products delivering record sales in 2024.

    • Repatha and EVENITY sales grew 35% year-over-year, contributing nearly $1 billion in sales growth.

    • TEZSPIRE sales increased 71% year-over-year to nearly $1 billion.

    • Biosimilar sales grew 16% year-over-year to $2.2 billion in 2024, with successful launch of PAVBLU.

    Concerns

    4

    • Repatha net price expected to decline by mid-single digits or less in 2025.

    • Denosumab patent expiration and continued price declines across the portfolio in 2025.

    • Non-GAAP operating margin projected to be roughly 46% in 2025, with Q1 at 42% (lowest of the year).

    • Free cash flow in 2025 expected to be similar to 2023, impacted by 2024 working capital favorability, shift in 2024 tax payments, and final $1.8 billion repatriation tax payment.

    Guidance & targets

    14
    CategoryTargetConfidence
    Total revenues
    $34.3 billion to $35.7 billion
    high materiality
    High
    Non-GAAP earnings per share
    $20 to $21.20
    high materiality
    High
    Non-GAAP operating margin as a percentage of product sales
    roughly 46%
    medium materiality
    High
    Non-GAAP operating margin
    roughly 42%
    medium materiality
    High
    Non-GAAP cost of sales as a percentage of product sales
    18% to 19%
    medium materiality
    High
    Non-GAAP R&D expense growth
    mid-teens
    medium materiality
    High
    Non-GAAP SG&A spend as a percentage of product sales
    decline by approximately 1 to 2 percentage points
    medium materiality
    High
    Non-GAAP OI&E
    approximately $2.4 billion
    medium materiality
    High
    Non-GAAP tax rate
    15% to 16%
    medium materiality
    High
    Share repurchases
    not to exceed $500 million
    medium materiality
    High
    Capital expenditures
    approximately $2.3 billion
    medium materiality
    High
    Repatha net price erosion
    mid-single digits or less
    medium materiality
    High
    Horizon cost synergies
    $500 million
    medium materiality
    High
    Return to pre-Horizon capital structure
    by the end of 2025
    medium materiality
    High

    Segment performance

    13
    SegmentRevenueYoYQoQMargin
    Repatha
    Multibillion-dollar product, expanding as access improves worldwide. Less price erosion expected in 2025 (mid-single digits or less).
    Volume growth: 54% (US, 2024)US prescribers: increased by 50% (2024)Direct-to-patient education: doubled patients asking doctors
    		$2.2 billion36%——
    EVENITY
    Segment leader in bone-builder market. Significant opportunity to grow in 2025 and beyond.
    New customers ordering: 14% quarter-over-quarter increasePatients treated in US: 210,000 to dateHigh-risk patients untreated: >90%
    		almost $1.6 billion35%——
    Rare Disease Portfolio
    Early life cycle products with significant growth potential.
    		over $4.5 billion———
    TEPEZZA
    Largest product in rare disease portfolio. Successfully launched in Japan. Expect to launch in 7 additional countries in 2025. Q1 2025 sales expected to be lower due to insurance reverification.
    Patients suffering from thyroid eye disease in US: ~100,000Patients identified in Japan: >550
    		$1.9 billion5%——
    TEZSPIRE
    Strong trajectory, increased adoption by pulmonologists. Strong future growth potential.
    Patients worldwide with severe uncontrolled asthma: 2.5 million
    		nearly $1 billion71%——
    Innovative Oncology Portfolio
    Includes BLINCYTO, LUMAKRAS, Vectibix, KYPROLIS, Nplate, XGEVA, and IMDELLTRA. Driven by volume growth and higher net selling price. Significant opportunities for future growth.
    		almost $8 billion11%——
    BLINCYTO
    Strong growth expected in 2025 driven by broad prescribing and new clinical data.
    		over $1.2 billion41%——
    IMDELLTRA
    Strong start to U.S. launch for extensive-stage small cell lung cancer in 7 months since launch.
    Patients treated since launch: ~2,000Patients progressing to second-line extensive-stage small cell lung cancer annually: 8,000 to 10,000
    		$115 million———
    Biosimilar Products
    Anticipate robust growth and attractive returns from the portfolio. Includes PAVBLU, WEZLANA, BEKEMV.
    		$2.2 billion16%——
    PAVBLU (EYLEA biosimilar)
    Successful launch in 9 weeks of sales. Positive response from retina specialists. Only biosimilar available in the market currently.
    		$31 million———
    KRYSTEXXA
    Strong growth, significant unmet need in severe uncontrolled gout.
    		—23%——
    UPLIZNA
    Strong growth, potential to serve more patients.
    		—40%——
    TAVNEOS
    Strong growth.
    		—111%——

    Operational metrics

    28
    Total revenues
    $33.4 billion19% year-over-year
    FY24

    Full-year total revenues

    Product sales
    $33.4 billion19% year-over-year
    FY24

    Full-year product sales

    Non-GAAP operating margin
    47%
    FY24

    Full-year non-GAAP operating margin

    Non-GAAP R&D spend
    $5.9 billion25% year-over-year
    FY24

    Full-year non-GAAP R&D spend, due to investments in late-stage pipeline

    Horizon cost synergies
    $500 million
    by year 3 post acquisition

    Expected pretax cost synergies from Horizon acquisition

    Horizon acquisition accretion
    accretive
    FY24

    Accretive to non-GAAP EPS for the full year 2024

    Non-GAAP other income and expense
    up $1.1 billionyear-over-year
    FY24

    Almost entirely due to increased interest expense from the Horizon acquisition

    Debt retired
    $4.5 billion
    2024

    Amount of debt retired in 2024

    Non-GAAP tax rate
    14.5%decreased 2 percentage points year-over-year
    FY24

    Primarily due to change in earnings mix, including Horizon business and net favorable items

    Capital expenditures
    $1.3 billion
    2024

    Capital expenditures in 2024, with cash outflow and remainder to be paid in 2025

    Dividend per share
    $2.256% increase compared to 2023
    Q4 FY24

    Dividend paid in the fourth quarter

    Biosimilar cumulative sales
    $10 billion
    through 2024

    Cumulative biosimilar sales through 2024

    Biosimilar sales target
    over $4 billion
    by end of decade

    On track to double 2021 sales by the end of the decade

    Repatha US volume growth
    54%
    2024

    Volume growth for Repatha in the United States

    Repatha US prescriber increase
    50%
    2024

    Increase in number of Repatha prescribers in the US

    EVENITY US patients treated
    210,000
    to date

    Number of patients treated with EVENITY in the US to date

    EVENITY US high-risk untreated patients
    >90%
    current

    Percentage of very high-risk patients not currently receiving appropriate treatment for osteoporosis

    TEPEZZA Japan epidemiology
    25,000
    current

    Estimated number of patients suffering from thyroid eye disease in Japan

    TEPEZZA Japan patients identified
    >550
    since launch

    Number of patients already identified by prescribers in Japan for TEPEZZA

    TEZSPIRE severe uncontrolled asthma patients worldwide
    2.5 million
    current

    Estimated number of patients worldwide with severe uncontrolled asthma

    BLINCYTO sales growth
    41%
    FY24

    Full-year sales growth for BLINCYTO

    IMDELLTRA sales
    $115 million
    7 months since launch

    Sales generated by IMDELLTRA since its launch

    IMDELLTRA patients treated
    ~2,000
    since launch

    Approximate number of patients treated with IMDELLTRA since launch

    IMDELLTRA annual second-line SCLC patients
    8,000 to 10,000
    annually

    Estimated number of patients who progress to second-line treatment for extensive-stage small cell lung cancer each year

    PAVBLU sales
    $31 million
    9 weeks of sales

    Sales for PAVBLU (EYLEA biosimilar) in its first 9 weeks post-launch

    KRYSTEXXA growth
    23%year-over-year
    prior period

    Growth for KRYSTEXXA from the prior period

    UPLIZNA growth
    40%year-over-year
    prior period

    Growth for UPLIZNA from the prior period

    TAVNEOS growth
    111%year-over-year
    prior period

    Growth for TAVNEOS from the prior period

    Product announcements

    3
    ProductTypeDetails
    PAVBLU (EYLEA biosimilar)launch
    WEZLANA (STELARA biosimilar)launch
    BEKEMV (SOLIRIS biosimilar)launch

    Deals & partnerships

    2
    HorizonAcquisition of Horizon Therapeutics

    The Horizon integration is progressing well. The acquisition was accretive to non-GAAP EPS for the full year 2024.

    BeiGene (now BeOne)Collaboration for commercialization of oncology medicines in China and R&D projects

    The partnership has exceeded expectations in China, with strong execution across KYPROLIS, BLINCYTO, and XGEVA. Amgen continues to work closely with them on R&D projects.

    Risks & headwinds

    5
    Declining net prices2025

    Repatha 2025 net price expected to decline by mid-single digits or less.

    Mitigation: Improved access and reimbursement for Repatha, with payers easing or removing prior authorization barriers.

    Denosumab patent expiration and biosimilar competitionMore back-half loaded in 2025.

    Expected declines in revenue.

    Mitigation: Leveraging bone market leadership, strong account executive team, and lessons learned from participation in the biosimilar market to defend against competition.

    Regulatory and political change (Part D redesign)Ongoing

    Relatively neutral impact on total portfolio.

    Mitigation: Part D redesign is expected to be relatively neutral for the total portfolio, with chronic care cardiovascular products like Repatha benefiting from capped and smoothed patient out-of-pocket costs.

    Increased interest expenseFY24, continuing into FY25 (OI&E ~$2.4B).

    Non-GAAP other income and expense up $1.1 billion year-over-year in FY24.

    Mitigation: Strengthening balance sheet, $4.5 billion debt retired in 2024, and on track to return to pre-Horizon capital structure by end of 2025.

    Free cash flow impact in H1 2025H1 2025

    FCF performance similar to 2023 (decline from 2024).

    Mitigation: Impacted by 2024 working capital favorability, shift in 2024 tax payments to Q2 2025, and final $1.8 billion repatriation tax payment in Q2 2025.

    What to watch in Q1 FY25

    5

    MariTide Phase II Part 1 data presentation

    June (ADA meeting)
    CurrentOngoing Phase II study
    TargetPresentation of full data set

    Why it matters

    Provides key efficacy and safety insights for a major obesity pipeline asset.

    I can confirm that we look forward to presenting the Phase II Part 1 data at the ADA meeting in June this year in Chicago.

    Q&A highlights

    5

    Inquired about the mechanism of action for AMG 513, which is on clinical hold, and the sustainability of AMGEVITA's strong Q4 performance.

    Jay Bradner stated AMG 513 is a novel investigational medicine for obesity, mechanism undisclosed due to competitive space. Murdo Gordon confirmed confidence in continued biosimilar portfolio growth, including AMGEVITA.

    “AMG 513 is a novel investigational medicine for patients with obesity. It's currently in Phase I investigation. We have not disclosed the mechanism of action. This remains a competitive space, as you know.”

    asked by Yaron Werber · answered by James Bradner

    2 min read6 chapters

    Detailed Narrative

    01

    2024 Performance Highlights

    Amgen achieved strong execution in 2024, with total revenues growing 19% to $33.4 billion, driven by 23% volume growth. The company exited the year with 14 products annualizing over $1 billion and 21 products delivering record sales, demonstrating broad portfolio strength and commercial success across therapeutic areas and geographies. Non-GAAP operating margin was 47% for the full year, and the company generated $10.4 billion in free cash flow.

    02

    Strategic Pipeline Investments

    The company is making significant R&D investments, increasing non-GAAP R&D spend by 25% to $5.9 billion in 2024, primarily in late-stage assets like MariTide, rocatinlimab, bemarituzumab, and IMDELLTRA. This strategic focus aims to unlock future growth opportunities and leverage innovation, including artificial intelligence, across the value chain, from molecule design to commercial operations. Non-GAAP R&D expense is projected to grow mid-teens in 2025.

    03

    MariTide Development

    MariTide, a novel obesity therapy, is advancing with Phase III studies expected to initiate in H1 2025. Key Phase II data readouts are anticipated in H2 2025 for type 2 diabetes and chronic weight management, with full Phase II Part 1 data to be presented at the ADA meeting in June. The therapy is highlighted for its ability to deliver consistent, predictable, and sustained weight loss through 52 weeks without a plateau, convenient monthly dosing, and clinically meaningful improvements in cardiometabolic parameters.

    04

    Cardiovascular Portfolio Expansion

    Repatha continues strong growth, with sales up 36% to over $2.2 billion in 2024, driven by volume and improved access, particularly in the U.S. primary care setting. The VESALIUS Phase III primary prevention study for Repatha is expected to read out in H2 2025, aiming to demonstrate reduced risk of a first cardiovascular event. Olpasiran, an Lp(a)-targeting siRNA, is progressing with the fully enrolled OCEAN(a) Phase III trial and plans for an additional Phase III study in primary prevention in late 2025/H1 2026.

    05

    Oncology and Rare Disease Advancements

    The innovative oncology portfolio contributed almost $8 billion in sales, with BLINCYTO growing 41% to over $1.2 billion and IMDELLTRA generating $115 million in 7 months post-launch for small cell lung cancer. In rare diseases, UPLIZNA has a PDUFA date of April 3, 2025, for IgG4-related disease and anticipates 52-week data for generalized Myasthenia Gravis later this year. TEPEZZA is expanding internationally with a Japan launch and 7 additional countries expected in 2025, despite a projected lower Q1 2025 due to seasonal patterns.

    06

    Biosimilar Strategy and Performance

    Amgen's biosimilar portfolio grew 16% to $2.2 billion in 2024, with a 100% success rate of FDA approval once entering the clinic. The successful launch of PAVBLU (EYLEA biosimilar) in Q4 2024, generating $31 million in 9 weeks, highlights the company's strategy to be an early entrant with high-quality, easy-to-use products like the prefilled syringe. Upcoming launches include WEZLANA (STELARA biosimilar) in Q1 2025 and BEKEMV (SOLIRIS biosimilar) in Q2 2025, anticipating robust growth and attractive returns.

    AI-generated summary of the company’s earnings call. Not investment advice.