AMGEN INC Q3 FY2024 earnings call

Management Statement and Operational Highlights

• In-market Performance: Q3 revenues were $8.5 billion, up 23% year-over-year, with 10 products delivering double-digit growth.
• Pipeline Progress: MariTide Phase II study in type 2 diabetes is ongoing, with plans to launch broad Phase III program for obesity, obesity-related conditions, and type 2 diabetes; UPLIZNA had positive Phase III data in generalized myasthenia gravis; oncology pipelines advanced with IMDELLTRA, xaluritamig, and other programs.
• Segment Updates: General Medicine saw strong growth in Repatha, EVENITY, and Prolia; Inflammation had TEZSPIRE continuing strong growth; Oncology had BLINCYTO and other innovative products growing; Rare Disease had robust growth in TEPEZZA, KRYSTEXXA, UPLIZNA, and TAVNEOS.

Segment Performance

• General Medicine: Repatha sales were $567 million in Q3, up 40% year-over-year, annualizing to over $2 billion; EVENITY sales were almost $400 million, up 30% year-over-year, annualizing to ~$1.5 billion; Prolia sales were $1 billion, up 6% year-over-year.
• Inflammation: TEZSPIRE had $269 million in sales, up 67% year-over-year; Otezla sales decreased 1% year-over-year with 5% volume growth offset by lower net selling price; Enbrel sales decreased 20% year-over-year, primarily due to unfavorable sales deductions and lower net selling price.
• Oncology: Innovative oncology portfolio had 17% sales growth; BLINCYTO sales grew 49% to $327 million; IMDELLTRA launch progressing with three Phase III studies underway.
• Rare Disease: Delivered $1.2 billion in sales, up 21% year-over-year; TEPEZZA sales were $488 million, up 8%; KRYSTEXXA sales $310 million, up 23%; UPLIZNA sales $106 million, up 58%; TAVNEOS sales $80 million, up 116%.

Guidance

• 2024 total revenues expected in the range of $33.0 billion to $33.8 billion, with non-GAAP EPS between $19.20 to $20.
• Q4 non-GAAP EPS expected to be lower due to planned investments in the pipeline.
• Horizon integration progressing, with expected $500 million in pretax cost synergies by year three post-acquisition.
• CapEx guidance remains at $1.3 billion for 2024, with R&D spend expected to grow over 25% year-over-year.

Risks

• Supply Chain: Potential disruptions in manufacturing and supply chain could impact product availability.
• Competition: Increased competition may lead to lower net selling prices, affecting products like Enbrel and Otezla.
• Clinical Trials: Outcomes of clinical trials for pipelines such as MariTide and TEZSPIRE may not meet expectations, impacting future growth.

Question and Answer

• Q: About Phase II MariTide data and Phase III plans. A: Robert Bradway and James Bradner discussed ongoing Phase II study in type 2 diabetes and plans to initiate broad Phase III program for obesity, obesity-related conditions, and type 2 diabetes.
• Q: On TEPEZZA sales growth and Salesforce expansion. A: Vikram Karnani talked about expanding field force to reach low CAS disease patients and TEPEZZA's international expansion, including Japan launch.
• Q: On PAVBLU biosimilar launch. A: Murdo Gordon discussed PAVBLU's launch and Amgen's biosimilar franchise, emphasizing strong receptivity and reliable supply chain.