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Amgen's (AMGN) Q4 Earnings Top Estimates, Product Sales Fall
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Amgen (AMGN - Free Report) reported fourth-quarter 2021 earnings of $4.36 per share, which beat the Zacks Consensus Estimate of $4.14. Earnings rose 26% year over year driven by higher revenues and lower share count
Total revenues of $6.85 billion missed the Zacks Consensus Estimate of $6.91 billion. Total revenues rose 3% year over year, driven by higher Other Revenue from the Eli Lilly (LLY - Free Report) collaboration, which offset the decline in product sales.
Total product revenues declined 1% from the year-ago quarter to $6.27 billion (U.S.: $4.45 billion; ex-U.S.: $1.82 billion). Higher volumes were offset by lower selling prices of several drugs and lower inventory levels. Volumes rose 7% in the quarter.
Other revenues of $575 million rose 92% year over year, aided by shipments to Eli Lilly. Amgen had signed a collaboration with Eli Lilly in 2020 for the manufacture of COVID-19 antibodies that the latter is currently developing.
Performance of Key Drugs
Prolia revenues came in at $873 million, up 17% from the year-ago quarter, driven by double-digit volume growth as new and repeat patient volumes continued to recover from the impact of the pandemic. However, the surge in Omicron-related infections rates toward the end of the fourth quarter resulted in volatility in recovery rates, which Amgen said may hurt sales in 2022.
Evenity recorded sales of $143 million in the quarter, up 59% year over year.
Xgeva delivered revenues of $545 million, up 9% from the year-ago quarter driven by volume growth, which offset the impact of lower prices.
Kyprolis recorded sales of $284 million, up 4% year over year.
Repatha generated revenues of $273 million, up 8% year over year, as higher volume was partially offset by lower prices due to an increase in Medicare Part D patients receiving Repatha and entering the coverage gap (donut hole).
Vectibix revenues came in at $243 million, up 10% year over year. Nplate sales rose 24% to $282 million. Blincyto sales increased 28% from the year-ago period to $132 million.
Aimovig recorded sales of $90 million in the quarter, down 13% year over year due to lower net selling price.
Sales of Otezla were $630 million in the quarter, up 2% due to volume growth, which offset the impact of lower selling prices and lower inventory. In December, the FDA approved Otezla for the treatment of adults with plaque psoriasis who are candidates for phototherapy or systemic therapy. The expanded approval increases the eligible patient population for Otezla, which can benefit sales in 2022.
Amgen’s newly approved drug, Lumakras (sotorasib), recorded sales of $45 million in the quarter versus $36 million in the previous quarter. The KRAS inhibitor was approved for the treatment of patients with KRAS G12C-mutated locally advanced or metastatic non-small cell lung cancer (NSCLC) in the United States in May 2021 and EU in January 2022
In biosimilars, sales of Kanjinti (Amgen’s biosimilar of Roche’s [(RHHBY - Free Report) ] Herceptin) was $139 million, down 12% year over year due to lower volumes and pricing as a result of increased competition, which was partially offset by favorable changes to estimated sales deductions.
Sales of Mvasi (biosimilar of Roche’s Avastin) were $304 million in the quarter, up 9% year over year driven by volume growth. Amjevita (biosimilar of Humira) sales were $115 million in the quarter, up 12% year over year driven by volume growth.
However, total sales of mature drugs like Enbrel, Parsabiv, Neupogen, Aranesp, Epogen and Neulasta declined 27% in the quarter due to an array of branded and generic competitors. Enbrel revenues of $1.08 billion declined 13% year over year due to lower volumes, inventory and price.
Operating Margins Rise
The adjusted operating margin rose 470 basis points (bps) to 47.8%. Adjusted operating expenses declined 1% to $3.85 billion. SG&A spend declined 19% to $1.43 billion. R&D expenses rose 11% year over year to $1.32 billion due to higher spend related to Amgen’s recent research collaborations with Generate Biomedicines and Arrakis Therapeutics.
2021 Results
Full-year 2021 sales rose 2% to $26.0 billion, slightly missing the Zacks Consensus Estimate of $26.05 billion. Sales were within the guided range of $25.8 billion-$26.2 billion. Sales rose 2% year over year.
Adjusted earnings for 2021 were $17.10 per share, which beat the Zacks Consensus Estimate of $16.85 and came at the higher end of the guided range of $16.50 to $17.10. Earnings rose 6% year over year.
Our Take
Amgen’s fourth-quarter results were mixed as it beat estimates for earnings while missing the same for sales. Volume-driven growth of Repatha, Prolia, and Evenity and some biosimilar drugs and higher revenues from Eli Lilly drove the top line in the quarter. However, pricing pressure and increased competition continue to hurt the sales of some drugs.
The recovery seen in patient visits and diagnoses rates in the previous quarters, continued in the fourth. However, the Omicron-related surge in infection rates toward the end of the year led to some delay in healthcare procedures and variability in demand patterns, which may hurt sales in 2022.
Amgen’s stock has declined 0.7% this year so far compared with a decrease of 13.6% for the industry.
Image Source: Zacks Investment Research
Amgen did not announce its financial expectations for 2022. It will hold a virtual Business Review on Feb 8 wherein it plans to provide financial guidance for 2022 and the longer-term financial guidance through 2030.
A better-ranked large drugmaker is Pfizer (PFE - Free Report) , which has a Zacks Rank of 1.
Pfizer’s stock has risen 57.7% in the past year. Estimates for Pfizer’s 2022 earnings have gone up from $4.59 to $6.41 over the past 60 days.
Pfizer’s earnings performance has been mixed, with the company exceeding earnings expectations in three of the last four quarters while missing in one. PFE has a four-quarter earnings surprise of 10.85%, on average.
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Amgen's (AMGN) Q4 Earnings Top Estimates, Product Sales Fall
Amgen (AMGN - Free Report) reported fourth-quarter 2021 earnings of $4.36 per share, which beat the Zacks Consensus Estimate of $4.14. Earnings rose 26% year over year driven by higher revenues and lower share count
Total revenues of $6.85 billion missed the Zacks Consensus Estimate of $6.91 billion. Total revenues rose 3% year over year, driven by higher Other Revenue from the Eli Lilly (LLY - Free Report) collaboration, which offset the decline in product sales.
Total product revenues declined 1% from the year-ago quarter to $6.27 billion (U.S.: $4.45 billion; ex-U.S.: $1.82 billion). Higher volumes were offset by lower selling prices of several drugs and lower inventory levels. Volumes rose 7% in the quarter.
Other revenues of $575 million rose 92% year over year, aided by shipments to Eli Lilly. Amgen had signed a collaboration with Eli Lilly in 2020 for the manufacture of COVID-19 antibodies that the latter is currently developing.
Performance of Key Drugs
Prolia revenues came in at $873 million, up 17% from the year-ago quarter, driven by double-digit volume growth as new and repeat patient volumes continued to recover from the impact of the pandemic. However, the surge in Omicron-related infections rates toward the end of the fourth quarter resulted in volatility in recovery rates, which Amgen said may hurt sales in 2022.
Evenity recorded sales of $143 million in the quarter, up 59% year over year.
Xgeva delivered revenues of $545 million, up 9% from the year-ago quarter driven by volume growth, which offset the impact of lower prices.
Kyprolis recorded sales of $284 million, up 4% year over year.
Repatha generated revenues of $273 million, up 8% year over year, as higher volume was partially offset by lower prices due to an increase in Medicare Part D patients receiving Repatha and entering the coverage gap (donut hole).
Vectibix revenues came in at $243 million, up 10% year over year. Nplate sales rose 24% to $282 million. Blincyto sales increased 28% from the year-ago period to $132 million.
Aimovig recorded sales of $90 million in the quarter, down 13% year over year due to lower net selling price.
Sales of Otezla were $630 million in the quarter, up 2% due to volume growth, which offset the impact of lower selling prices and lower inventory. In December, the FDA approved Otezla for the treatment of adults with plaque psoriasis who are candidates for phototherapy or systemic therapy. The expanded approval increases the eligible patient population for Otezla, which can benefit sales in 2022.
Amgen’s newly approved drug, Lumakras (sotorasib), recorded sales of $45 million in the quarter versus $36 million in the previous quarter. The KRAS inhibitor was approved for the treatment of patients with KRAS G12C-mutated locally advanced or metastatic non-small cell lung cancer (NSCLC) in the United States in May 2021 and EU in January 2022
In biosimilars, sales of Kanjinti (Amgen’s biosimilar of Roche’s [(RHHBY - Free Report) ] Herceptin) was $139 million, down 12% year over year due to lower volumes and pricing as a result of increased competition, which was partially offset by favorable changes to estimated sales deductions.
Sales of Mvasi (biosimilar of Roche’s Avastin) were $304 million in the quarter, up 9% year over year driven by volume growth. Amjevita (biosimilar of Humira) sales were $115 million in the quarter, up 12% year over year driven by volume growth.
However, total sales of mature drugs like Enbrel, Parsabiv, Neupogen, Aranesp, Epogen and Neulasta declined 27% in the quarter due to an array of branded and generic competitors. Enbrel revenues of $1.08 billion declined 13% year over year due to lower volumes, inventory and price.
Operating Margins Rise
The adjusted operating margin rose 470 basis points (bps) to 47.8%. Adjusted operating expenses declined 1% to $3.85 billion. SG&A spend declined 19% to $1.43 billion. R&D expenses rose 11% year over year to $1.32 billion due to higher spend related to Amgen’s recent research collaborations with Generate Biomedicines and Arrakis Therapeutics.
2021 Results
Full-year 2021 sales rose 2% to $26.0 billion, slightly missing the Zacks Consensus Estimate of $26.05 billion. Sales were within the guided range of $25.8 billion-$26.2 billion. Sales rose 2% year over year.
Adjusted earnings for 2021 were $17.10 per share, which beat the Zacks Consensus Estimate of $16.85 and came at the higher end of the guided range of $16.50 to $17.10. Earnings rose 6% year over year.
Our Take
Amgen’s fourth-quarter results were mixed as it beat estimates for earnings while missing the same for sales. Volume-driven growth of Repatha, Prolia, and Evenity and some biosimilar drugs and higher revenues from Eli Lilly drove the top line in the quarter. However, pricing pressure and increased competition continue to hurt the sales of some drugs.
The recovery seen in patient visits and diagnoses rates in the previous quarters, continued in the fourth. However, the Omicron-related surge in infection rates toward the end of the year led to some delay in healthcare procedures and variability in demand patterns, which may hurt sales in 2022.
Amgen’s stock has declined 0.7% this year so far compared with a decrease of 13.6% for the industry.
Amgen did not announce its financial expectations for 2022. It will hold a virtual Business Review on Feb 8 wherein it plans to provide financial guidance for 2022 and the longer-term financial guidance through 2030.
Zacks Rank and Stock to Consider
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
A better-ranked large drugmaker is Pfizer (PFE - Free Report) , which has a Zacks Rank of 1.
Pfizer’s stock has risen 57.7% in the past year. Estimates for Pfizer’s 2022 earnings have gone up from $4.59 to $6.41 over the past 60 days.
Pfizer’s earnings performance has been mixed, with the company exceeding earnings expectations in three of the last four quarters while missing in one. PFE has a four-quarter earnings surprise of 10.85%, on average.