THOUSAND OAKS - Amgen (NASDAQ: AMGN) today announced financial results for the first quarter of 2023.
'We delivered 14% volume growth driven by the breadth of our portfolio and strong demand for our products globally,' said Robert A. Bradway, chairman and chief executive officer. 'We look forward to closing the acquisition of Horizon Therapeutics and joining forces to reach more patients around the world with their innovative medicines.'
Key results include: Total revenues decreased 2% to $6.1 billion in comparison to the first quarter of 2022, resulting from lower Other Revenue from our COVID-19 manufacturing collaboration, partially offset by a 2% increase in product sales. Product sales growth was driven by 14% volume growth, partially offset by 5% lower net selling price, 3% unfavorable changes to estimated sales deductions, 2% lower inventory levels and 2% negative impact from foreign exchange. Excluding the 2% negative impact of foreign exchange on product sales, total revenues were largely unchanged from Q1 2022.
Volume growth of 14% included double-digit volume growth from EVENITY (romosozumab-aqqg), BLINCYTO (blinatumomab), Nplate (romiplostim), LUMAKRAS/LUMYKRAS (sotorasib), AMJEVITA/AMGEVITA (adalimumab), Repatha (evolocumab), KYPROLIS (carfilzomib) and Vectibix (panitumumab).
Ex-U.S. volume grew 22%, including 47% volume growth in the Asia Pacific region.
GAAP earnings per share (EPS) increased 97% from $2.68 to $5.28, driven by other income due to a mark-to-market gain on our investment in BeiGene, Ltd. and lower weighted-average shares outstanding in Q1 2023.
GAAP operating income decreased from $2.5 billion to $1.9 billion, and GAAP operating margin decreased 10.7 percentage points to 32.9%.
Non-GAAP EPS decreased 6% from $4.25 to $3.98, driven by decreased revenues and higher operating expenses, primarily related to research & development, in Q1 2023.
Non-GAAP operating income decreased from $3.1 billion to $2.8 billion, and non-GAAP operating margin decreased 6.5 percentage points to 48.3%.
The Company generated $0.7 billion of free cash flow for the first quarter of 2023 versus $2.0 billion in the first quarter of 2022, driven by the timing of payments for sales incentives, rebates and discounts, lower operating income, and higher capital expenditures from the build-out of our new North Carolina and Ohio facilities.
References in this release to 'non-GAAP' measures, measures presented 'on a non-GAAP basis,' 'free cash flow' (computed by subtracting capital expenditures from operating cash flow) and 'total revenues and product sales adjusted for foreign exchange impact' (computed by converting our current period local currency product sales using the prior period foreign exchange rates and comparing that to our current period product sales) refer to non-GAAP financial measures. Adjustments to the most directly comparable GAAP financial measures and other items are presented on the attached reconciliations. Refer to Non-GAAP Financial Measures below for further discussion.
Product Sales Performance
Total product sales increased 2% for the first quarter of 2023 versus the first quarter of 2022. Unit volumes grew 14%, partially offset by 5% lower net selling price, 3% unfavorable changes to estimated sales deductions, 2% lower inventory levels and 2% negative impact from foreign exchange.
General Medicine
Repatha sales increased 18% year-over-year to a record $388 million for the first quarter. Volume growth of 33% for the quarter was partially offset by lower net selling price. In the U.S., sales grew 19%, driven by 32% volume growth, partially offset by lower net selling price and inventory levels. Outside the U.S., sales grew 16%, driven by 34% volume growth, partially offset by lower net selling price and unfavorable foreign exchange impact. Repatha remains the global proprotein convertase subtilisin/kexin type 9 (PCSK9) segment leader, with over 1.7 million patients treated since launch.
Prolia (denosumab) sales increased 9% year-over-year for the first quarter, driven by 8% volume growth.
EVENITY sales increased 49% year-over-year to a record $254 million for the first quarter, primarily driven by strong volume growth across our markets. U.S. volumes grew 43% year-over-year and volumes outside the U.S. grew 77%.
Aimovig (erenumab-aooe) sales decreased 32% year-over-year for the first quarter, driven by unfavorable changes to estimated sales deductions and lower net selling price. For 2023, we expect continued year-over-year net selling price declines in order to maintain broad formulary access for patients in response to competitive dynamics.
Inflammation
TEZSPIRE (tezepelumab-ekko) generated $96 million of sales in the first quarter, driven by strong adoption in the U.S. by both allergists and pulmonologists. Quarter-over-quarter sales increased 22%, driven by volume growth. Healthcare providers appreciate TEZSPIRE's unique, differentiated profile and its broad potential to treat the 2.5 million patients worldwide with severe asthma who are uncontrolled, without any phenotypic or biomarker limitation. During the first quarter, the U.S. Food and Drug Administration (FDA) approved TEZSPIRE for self-administration in a pre-filled, single-use pen, which improves accessibility and provides more flexibility in treatment options for patients in the U.S.
TAVNEOS (avacopan) generated $23 million of sales in the first quarter. Quarter-over-quarter sales increased 10%, driven by higher net selling price and inventory levels, partially offset by lower ex-U.S. volume driven by the timing of shipments to our ex-U.S. partner in the fourth quarter of 2022. U.S volume grew 27% quarter-over-quarter, driven by an increase in new patients starting treatment.
Otezla (apremilast) sales decreased 13% year-over-year for the first quarter, driven by lower inventory levels and net selling price, partially offset by 5% volume growth. Otezla followed the historical pattern of lower first quarter sales relative to the remainder of the year due to the impact of benefit plan changes, insurance reverifications and increased co-pay expenses as U.S. patients worked through deductibles. U.S. sales in the first quarter were also impacted by lower specialty pharmacy inventory levels compared to previous years, and price declines resulting from patient mix and additional rebates to improve the quality of coverage. In the U.S., Otezla new patient demand was impacted by free drug programs for newly launched topical and systemic competitors. We expect new patient demand to continue to be impacted by free drug programs from newly launched competition throughout 2023.
We continue to see strong growth potential for Otezla given its established efficacy and safety profile, strong payor coverage with limited prior authorization requirements and ease of administration. Otezla remains the only approved oral systemic therapy with a broad indication and is well-positioned to help the 1.5 million U.S. patients with mild-to-moderate psoriasis that cannot be optimally addressed by a topical and can benefit from a systemic treatment like Otezla.
Enbrel (etanercept) sales decreased 33% year-over-year for the first quarter, driven by decline in net selling price, lower inventory levels in the distribution channel compared to previous years and a 9% unfavorable impact of changes to estimated sales deductions related to prior periods. Consistent with Otezla, sales in the first quarter were also impacted by typical patterns of benefit plan changes and higher co-pay expenses. Year-over-year volume was flat in the first quarter, with U.S. volume growing 1%, supported by improved payor coverage. For the remainder of 2023, we expect low single-digit volume growth, reduced year-over-year decline in net selling price and a gradual recovery in inventory levels.
AMJEVITA/AMGEVITA sales increased 52% year-over-year to a record $164 million for the first quarter, driven by higher inventory levels and 35% volume growth, partially offset by unfavorable foreign exchange impact. AMJEVITA launched in the U.S. early in the first quarter, and a majority of U.S. sales in the quarter were related to inventory build.
Non-GAAP Financial Measures
In this news release, management has presented its operating results for the first quarters of 2023 and 2022, in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and on a non-GAAP basis. In addition, management has presented its full year 2023 EPS and tax 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, divestitures, restructuring and certain other items from the related GAAP financial measures. Beginning January 1, 2022, following industry guidance from the U.S. Securities and Exchange Commission, the Company no longer excludes adjustments for upfront license fees, development milestones and in-process research and development (IPR&D) expenses of pre-approval programs related to licensing, collaboration and asset acquisition transactions from its non-GAAP financial measures. GAAP financial measures are included in the news release. Management has presented Free Cash Flow (FCF), which is a non-GAAP financial measure, for the first quarter of 2023 and 2022. FCF is computed by subtracting capital expenditures from operating cash flow, each as determined in accordance with GAAP. Management has also presented Total Revenues and Product Sales Adjusted for Foreign Exchange Impact, which is a non-GAAP financial measure, for the first quarter of 2023. Total Revenues and Product Sales Adjusted for Foreign Exchange Impact is computed by converting our current period local currency product sales using the prior period foreign exchange rates and comparing that to our current period product sales.
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 believes Total Revenues and Product Sales Adjusted for Foreign Exchange Impact provides supplementary information on the Company's product sales performance by excluding changes in foreign exchange rates between comparative periods.
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.
Amgen is one of the 30 companies that comprise the Dow Jones Industrial Average and is also part of the Nasdaq-100 index. In 2022, Amgen was named one of the 'World's Best Employers' by Forbes and one of 'America's 100 Most Sustainable Companies' by Barron's.
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 BeiGene, Ltd., Kyowa-Kirin Co., Ltd., or any collaboration to manufacture therapeutic antibodies against COVID-19), the performance of Otezla (apremilast) (including anticipated Otezla sales growth and the timing of non-GAAP EPS accretion), the Five Prime Therapeutics, Inc. acquisition, the Teneobio, Inc. acquisition, the ChemoCentryx, Inc. acquisition, or the proposed acquisition of Horizon Therapeutics plc, 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, 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 of our information technology systems 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 and operations may be negatively affected by the failure, or perceived failure, of achieving our environmental, social and governance objectives. The effects of global climate change and related natural disasters could negatively affect our business and operations. Global economic conditions may magnify certain risks that affect our business. 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:
Jessica Akopyan
Tel: 805-440-5721
AMGEN INC. 
