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Amgen (AMGN) Q1 Earnings, Sales Miss on Low Prices, Stock Down
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Amgen (AMGN - Free Report) reported first-quarter 2021 earnings of $3.70 per share, which missed the Zacks Consensus Estimate of $4.00. Earnings declined 12% year over year due to lower revenues.
Total revenues of $5.90 billion missed the Zacks Consensus Estimate of $6.23 billion. Total revenues declined 4% year over year as lower net selling prices hurt sales of several drugs. Meanwhile, the COVID-19 pandemic continued to hurt patient visits and new patient starts, mainly in the months of January and February as infection rates surged in the United States and Europe.
However, the company did see improved demand trends in March, which continued in April. Meanwhile, the year-over-year comparison was negatively affected by 2% as the first quarter of 2020 had benefited from roughly $150 of favorable changes to estimated sales deductions, which did not get reflected in the results of the first quarter of 2021.
Historically, the first quarter represents the lowest product sales quarter of the year as U.S. patients work through deductibles, especially for products, including Enbrel and Aimovig.
Total product revenues decreased 5% from the year-ago quarter to $5.89 billion (U.S.: $3.90 billion; ex-U.S.: $1.7 billion). Volumes rose 4% while net selling prices declined 7%.
Other revenues of $309 million declined 15.7% year over year.
Performance of Key Drugs
Prolia revenues came in at $758 million, up 16% from the year-ago quarter driven by volume growth as new and repeat patient volumes continued to recover from the impact of the pandemic.
Xgeva delivered revenues of $468 million, down 3% from the year-ago quarter hurt by COVID-19 related lower demand in United States and lower pricing in Asia.
Kyprolis recorded sales of $251 million, down 10% year over year as COVID-19 hurt new patients starting treatment for multiple myeloma.
Repatha generated revenues of $286 million, up 25% year over year, as higher volume was partially offset by unfavorable changes to estimated sales deductions and lower prices due to Amgen’s efforts to improve access and affordability for the product.
Vectibix revenues came in at $191 million, down 5% year over year. Nplate sales rose 4% to $227 million. Blincyto sales increased 14% from the year-ago period to $107 million.
Parsabiv recorded sales of $79 million, down 55% due to changes in reimbursement rules for the drug.
Aimovig recorded sales of $66 million in the quarter, down 7% year over year as volume growth was offset by lower net selling price, which was due to increased rebates to maintain patient access.
New osteoporosis drug, Evenity recorded sales of $107 million in the quarter compared with $90 million in the previous quarter driven by volume growth.
Sales of Otezla were $476 million in the quarter, down 1% due to lower pricing and inventory. Please note that Otezla was purchased by Amgen from Celgene in November 2019 as the latter had to divest the drug in order to complete its merger with Bristol-Myers (BMY - Free Report) .
Biosimilar generated revenues of $570 million in the quarter driven by volume growth, which offset the impact of declines in net selling price. Sales of Kanjinti (Amgen’s biosimilar of Roche’s [(RHHBY - Free Report) ] Herceptin) and Mvasi (biosimilar of Roche’s Avastin) were $161 million and $294 million in the quarter, compared with $158 million and $280 million, respectively, in the previous quarter. Sales of Kanjinti improved sequentially as favorable changes to estimated sales deductions were offset by price declines due to increased competition.
Amjevita (biosimilar of AbbVie’s [(ABBV - Free Report) ] Humira) sales were $106 million in the quarter, up 23% year over year.
However, all the mature drugs like Enbrel, Aranesp, Epogen, Neupogen and Neulasta declined due to an array of branded and generic competitors. Enbrel revenues of $924 million declined 20% year over year due to unfavorable changes in estimated sales deductions, lower volumes and price.
Aranesp revenues declined 16% from the prior-year quarter to $355 million. Revenues of the other ESA, Epogen, declined 19% to $125 million. Neulasta revenues declined 21% from the year-ago period to $482 million. Neupogen recorded 48% decrease in sales to $34 million in the quarter. Sensipar/Mimpara revenues declined 81% to $23 million.
Operating Margins Decrease
Adjusted operating margin declined 270 basis points (bps) to 51.2%. Adjusted operating expenses rose 2% year over year in the quarter to $3.04 billion. SG&A spend decreased 5% to $1.23. R&D expenses rose 2% year over year to $944 million.
2021 Guidance
Amgen maintained its revenue guidance for 2021 in the range of $25.8 billion-$26.6 billion and adjusted earnings per share guidance in the range of $16.00 to $17.00 per share.
In the second quarter, Amgen expects revenues to grow between 7% and 10% sequentially from the first quarter.
Adjusted operating costs are expected to grow at a rate similar of 7% recorded in 2020 as the company invests in innovation, launch of new products and digitization efforts. Operating margin is expected to be roughly 50% in 2021. Adjusted tax rate is expected in the range of 13.5% to 14.5% compared to the previous expectation of 13%-14%.
Amgen plans to spend approximately $900 million for capital expenditures in 2021. The company expects to buy back shares in the range of $3 billion to $5 billion through the year (previously $3-$4 billion).
Our Take
Amgen’s first-quarter results were weak as it missed estimates for both earnings and sales. Lower prices of several drugs and business disruption due to the pandemic hurt sales.
Amgen’s stock was down 3.4% in after-hours trading on Tuesday. Amgen’s stock has risen 11% this year so far compared with an increase of 0.5% for the industry.
The company expects continued business disruption from COVID-19 in the second quarter with a steady recovery in the second half.
Nonetheless, the company expressed confidence in its full-year outlook.
Meanwhile, Amgen is rapidly advancing its innovative pipeline, most notably sotorasib (KRAS inhibitor for cancer) and tezepelumab (severe asthma).Amgen expects several important clinical data readouts in 2021, which could be catalysts for the stock.
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Amgen (AMGN) Q1 Earnings, Sales Miss on Low Prices, Stock Down
Amgen (AMGN - Free Report) reported first-quarter 2021 earnings of $3.70 per share, which missed the Zacks Consensus Estimate of $4.00. Earnings declined 12% year over year due to lower revenues.
Total revenues of $5.90 billion missed the Zacks Consensus Estimate of $6.23 billion. Total revenues declined 4% year over year as lower net selling prices hurt sales of several drugs. Meanwhile, the COVID-19 pandemic continued to hurt patient visits and new patient starts, mainly in the months of January and February as infection rates surged in the United States and Europe.
However, the company did see improved demand trends in March, which continued in April. Meanwhile, the year-over-year comparison was negatively affected by 2% as the first quarter of 2020 had benefited from roughly $150 of favorable changes to estimated sales deductions, which did not get reflected in the results of the first quarter of 2021.
Historically, the first quarter represents the lowest product sales quarter of the year as U.S. patients work through deductibles, especially for products, including Enbrel and Aimovig.
Total product revenues decreased 5% from the year-ago quarter to $5.89 billion (U.S.: $3.90 billion; ex-U.S.: $1.7 billion). Volumes rose 4% while net selling prices declined 7%.
Other revenues of $309 million declined 15.7% year over year.
Performance of Key Drugs
Prolia revenues came in at $758 million, up 16% from the year-ago quarter driven by volume growth as new and repeat patient volumes continued to recover from the impact of the pandemic.
Xgeva delivered revenues of $468 million, down 3% from the year-ago quarter hurt by COVID-19 related lower demand in United States and lower pricing in Asia.
Kyprolis recorded sales of $251 million, down 10% year over year as COVID-19 hurt new patients starting treatment for multiple myeloma.
Repatha generated revenues of $286 million, up 25% year over year, as higher volume was partially offset by unfavorable changes to estimated sales deductions and lower prices due to Amgen’s efforts to improve access and affordability for the product.
Vectibix revenues came in at $191 million, down 5% year over year. Nplate sales rose 4% to $227 million. Blincyto sales increased 14% from the year-ago period to $107 million.
Parsabiv recorded sales of $79 million, down 55% due to changes in reimbursement rules for the drug.
Aimovig recorded sales of $66 million in the quarter, down 7% year over year as volume growth was offset by lower net selling price, which was due to increased rebates to maintain patient access.
New osteoporosis drug, Evenity recorded sales of $107 million in the quarter compared with $90 million in the previous quarter driven by volume growth.
Sales of Otezla were $476 million in the quarter, down 1% due to lower pricing and inventory. Please note that Otezla was purchased by Amgen from Celgene in November 2019 as the latter had to divest the drug in order to complete its merger with Bristol-Myers (BMY - Free Report) .
Biosimilar generated revenues of $570 million in the quarter driven by volume growth, which offset the impact of declines in net selling price. Sales of Kanjinti (Amgen’s biosimilar of Roche’s [(RHHBY - Free Report) ] Herceptin) and Mvasi (biosimilar of Roche’s Avastin) were $161 million and $294 million in the quarter, compared with $158 million and $280 million, respectively, in the previous quarter. Sales of Kanjinti improved sequentially as favorable changes to estimated sales deductions were offset by price declines due to increased competition.
Amjevita (biosimilar of AbbVie’s [(ABBV - Free Report) ] Humira) sales were $106 million in the quarter, up 23% year over year.
However, all the mature drugs like Enbrel, Aranesp, Epogen, Neupogen and Neulasta declined due to an array of branded and generic competitors. Enbrel revenues of $924 million declined 20% year over year due to unfavorable changes in estimated sales deductions, lower volumes and price.
Aranesp revenues declined 16% from the prior-year quarter to $355 million. Revenues of the other ESA, Epogen, declined 19% to $125 million. Neulasta revenues declined 21% from the year-ago period to $482 million. Neupogen recorded 48% decrease in sales to $34 million in the quarter. Sensipar/Mimpara revenues declined 81% to $23 million.
Operating Margins Decrease
Adjusted operating margin declined 270 basis points (bps) to 51.2%. Adjusted operating expenses rose 2% year over year in the quarter to $3.04 billion. SG&A spend decreased 5% to $1.23. R&D expenses rose 2% year over year to $944 million.
2021 Guidance
Amgen maintained its revenue guidance for 2021 in the range of $25.8 billion-$26.6 billion and adjusted earnings per share guidance in the range of $16.00 to $17.00 per share.
In the second quarter, Amgen expects revenues to grow between 7% and 10% sequentially from the first quarter.
Adjusted operating costs are expected to grow at a rate similar of 7% recorded in 2020 as the company invests in innovation, launch of new products and digitization efforts. Operating margin is expected to be roughly 50% in 2021. Adjusted tax rate is expected in the range of 13.5% to 14.5% compared to the previous expectation of 13%-14%.
Amgen plans to spend approximately $900 million for capital expenditures in 2021. The company expects to buy back shares in the range of $3 billion to $5 billion through the year (previously $3-$4 billion).
Our Take
Amgen’s first-quarter results were weak as it missed estimates for both earnings and sales. Lower prices of several drugs and business disruption due to the pandemic hurt sales.
Amgen’s stock was down 3.4% in after-hours trading on Tuesday. Amgen’s stock has risen 11% this year so far compared with an increase of 0.5% for the industry.
The company expects continued business disruption from COVID-19 in the second quarter with a steady recovery in the second half.
Nonetheless, the company expressed confidence in its full-year outlook.
Meanwhile, Amgen is rapidly advancing its innovative pipeline, most notably sotorasib (KRAS inhibitor for cancer) and tezepelumab (severe asthma).Amgen expects several important clinical data readouts in 2021, which could be catalysts for the stock.
Amgen currently has a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amgen Inc. Price, Consensus and EPS Surprise
Amgen Inc. price-consensus-eps-surprise-chart | Amgen Inc. Quote
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>