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Amgen (AMGN) Q1 Earnings Top, Stock Up on Obesity Drug Update
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Amgen (AMGN - Free Report) reported first-quarter 2024 adjusted earnings of $3.96 per share, which beat the Zacks Consensus Estimate of $3.76. Earnings declined 1% year over year due to higher operating costs and interest expenses.
Total revenues of $7.45 billion beat the Zacks Consensus Estimate of $7.38 billion. Total revenues rose 22% year over year, which was slightly better than management’s expectation of growing roughly 20% in the quarter.
Total product revenues increased 22% from the year-ago quarter to $7.11 billion. Higher volumes were partially offset by lower selling prices of several drugs. Volumes rose 25% in the quarter.
Performance of Key Drugs
General Medicine
Prolia revenues came in at $999 million, up 8% from the year-ago quarter, driven by volume growth. Prolia sales beat the Zacks Consensus Estimate of $997 million but slightly missed our model estimate of $1.0 billion.
Evenity recorded sales of $342 million in the quarter, up 35% year over year, driven by solid volume growth in and outside the United States. Evenity sales beat the Zacks Consensus Estimate of $334.0 million as well as our model estimate of $330.8 million.
Repatha generated revenues of $517 million, up 33% year over year. Repatha volumes rose 44% due to expanded formulary coverage in the United States. The volume growth was partially offset by lower prices due to higher rebates to support expanded access. Repatha sales beat the Zacks Consensus Estimate of $448.0 million and our model estimate of $452.3 million.
Hematology-Oncology
Xgeva delivered revenues of $561 million, up 5% year over year, driven by higher net selling prices and volume growth in outside U.S. markets, which made up for softer volumes in the United States. Xgeva sales beat the Zacks Consensus Estimate of $545.0 million as well as our model estimate of $555.8 million.
Kyprolis recorded sales of $376 million, up 5% year over year, driven by volume growth in outside U.S. markets. Vectibix revenues came in at $247 million, up 6% year over year, driven by higher net selling price and volume growth.
Nplate sales declined 12% to $317 million. Blincyto sales increased 26% from the year-ago period to $244 million, driven by volume growth as the drug benefited from broad prescribing for patients with B-cell precursor acute lymphoblastic leukemia (ALL).
Lumakras/ Lumykras recorded sales of $82 million in the quarter, up 11% from the year-ago period.
Inflammation
Sales of Otezla were $394 million in the quarter, up 1%. Otezla sales missed the Zacks Consensus Estimate of $434.0 million as well as our estimate is $403.8 million.
Enbrel revenues of $567 million declined 2% year over year due to volume declines. Enbrel sales missed the Zacks Consensus Estimate of $591.0 million.
Sales of Otezla and Enbrel are generally lower in the first quarter compared to subsequent quarters due to the impact of benefit plan changes, insurance re-verification and increased co-pay expenses as U.S. patients work through deductibles.
Asthma drug Tezspire (tezepelumab) recorded sales of $173 million in the quarter, up 80% year over year, driven by volume growth. Tezspire volumes benefited from the uptake of the new self-administered, pre-filled, single-use pen formulation of the drug.
Amgen has a partnership with AstraZeneca (AZN - Free Report) for Tezspire. Amgen and AstraZeneca share costs and profits equally after AstraZeneca pays a mid-single-digit inventor royalty to Amgen. While AstraZeneca leads development, Amgen leads manufacturing. Amgen and AstraZeneca are planning for a phase III study of Tezspire in chronic obstructive pulmonary disease or COPD.
Rare Disease
Amgen closed the acquisition of Horizon Therapeutics for $27.8 billion on Oct 6, 2023, which added several rare disease drugs like Tepezza, Krystexxa and Uplizna to AMGN’s portfolio.
Tepezza, Krystexxa and Uplizna generated sales of $424 million, $235 million and $80 million, respectively, in the first quarter of 2024.
New drug Tavneos generated $51 million in sales in the first quarter compared with $44 million in the previous quarter. The drug’s 16% sequential growth was driven by new patient volume growth. Tavneos, approved for the treatment of patients with ANCA-associated vasculitis, a severe systemic autoimmune disease, was added to Amgen’s portfolio with the 2022 acquisition of ChemoCentryx.
Established Products
Total sales of established products, which include Epogen, Aranesp, Parsabiv and Neulasta, decreased 19% year over year in the quarter to $613 million.
Cost and Margin Discussion
Adjusted operating margin declined 5.1 percentage points to 43.2% in the quarter. The adjusted operating margin was in line with the company’s guidance of roughly 43% in the first quarter.
Adjusted operating expenses increased 33% to $4.37 billion. R&D expenses rose 26% year over year to $1.32 billion. SG&A spending rose 40% to $1.71 billion.
2024 Guidance
Amgen tightened its revenues guidance from a range of $32.4 billion to $33.8 billion to $32.5 billion to $33.8 billion.
Adjusted earnings guidance was tightened from a range of $18.90 to $20.30 to $19.00 to $20.20 per share.
Pipeline Update
Along with the earnings release, the company announced that an interim analysis of data from a phase II study on its GLP-1 receptor candidate, MariTide (maridebart cafraglutide), for obesity is complete. Though the company did not discuss any numbers, chief executive officer Robert Bradway said the company was “very encouraged” with the interim data. Top-line 52-week data from the phase II study is expected in late 2024. Amgen is planning to conduct a comprehensive phase III program on the candidate across obesity, obesity-related conditions and diabetes.
The GLP-1 segment is an important class of drugs for multiple cardiometabolic diseases and is gaining significant popularity.
Some popular GLP-1 receptor drugs available in the market are Eli Lilly’s (LLY - Free Report) Zepbound and Novo Nordisk’s (NVO - Free Report) Wegovy. Both Zepbound and Wegovy generated strong sales in the first quarter of 2024, becoming key drivers of the top line for Eli Lilly and Novo Nordisk, respectively.
Eli Lilly’s Zepbound, which was launched in December 2023, recorded sales of $517.4 million in the first quarter. Lilly raised its sales forecast earlier this week, backed by strong demand for Zepbound and another GLP-1 drug, Mounjaro, for diabetes.
Sales of Novo Nordisk’s Wegovy rose 107% at a constant exchange rate in the first quarter to DKK 9.3 billion.
Amgen also said that it has now completed a phase I study on AMG 786, its small molecule obesity candidate. AMG 786 is not an incretin-based therapy and has a different target than maridebart cafraglutide. Amgen, however, said it would not pursue further development of AMG 786 and would rather focus on MariTide and some preclinical obesity candidates.
Our Take
Amgen’s first-quarter results were strong as it beat estimates for earnings as well as for sales. Products like Repatha, Blincyto and Evenity achieved double-digit volume growth in the quarter. Horizon’s products added $914 million in sales in the quarter. Excluding the contribution from Horizon, product sales grew 6% while volumes rose 9%.
Shares jumped 15% in after-market hours on Thursday, driven by the earnings and sales beat and the positive update on MariTide.
In the past year, Amgen’s stock has gained 20.0% against the industry‘s 13.4% decline.
Image Source: Zacks Investment Research
Amgen’s old medicines like Evenity, Repatha and Prolia, as well as newer medicines like Tavneos and Tezspire, are driving sales, more than offsetting the declining revenues from oncology biosimilars and legacy established products such as Enbrel. The addition of Horizon products will further revenue growth in 2024, which is likely to be accretive to earnings.
In 2024, the company expects five phase III pipeline readouts as well as an FDA decision in June on a key pipeline candidate, tarlatamab, in small cell lung cancer. All these pipeline events could prove to be important catalysts for the stock.
Image: Shutterstock
Amgen (AMGN) Q1 Earnings Top, Stock Up on Obesity Drug Update
Amgen (AMGN - Free Report) reported first-quarter 2024 adjusted earnings of $3.96 per share, which beat the Zacks Consensus Estimate of $3.76. Earnings declined 1% year over year due to higher operating costs and interest expenses.
Total revenues of $7.45 billion beat the Zacks Consensus Estimate of $7.38 billion. Total revenues rose 22% year over year, which was slightly better than management’s expectation of growing roughly 20% in the quarter.
Total product revenues increased 22% from the year-ago quarter to $7.11 billion. Higher volumes were partially offset by lower selling prices of several drugs. Volumes rose 25% in the quarter.
Performance of Key Drugs
General Medicine
Prolia revenues came in at $999 million, up 8% from the year-ago quarter, driven by volume growth. Prolia sales beat the Zacks Consensus Estimate of $997 million but slightly missed our model estimate of $1.0 billion.
Evenity recorded sales of $342 million in the quarter, up 35% year over year, driven by solid volume growth in and outside the United States. Evenity sales beat the Zacks Consensus Estimate of $334.0 million as well as our model estimate of $330.8 million.
Repatha generated revenues of $517 million, up 33% year over year. Repatha volumes rose 44% due to expanded formulary coverage in the United States. The volume growth was partially offset by lower prices due to higher rebates to support expanded access. Repatha sales beat the Zacks Consensus Estimate of $448.0 million and our model estimate of $452.3 million.
Hematology-Oncology
Xgeva delivered revenues of $561 million, up 5% year over year, driven by higher net selling prices and volume growth in outside U.S. markets, which made up for softer volumes in the United States. Xgeva sales beat the Zacks Consensus Estimate of $545.0 million as well as our model estimate of $555.8 million.
Kyprolis recorded sales of $376 million, up 5% year over year, driven by volume growth in outside U.S. markets. Vectibix revenues came in at $247 million, up 6% year over year, driven by higher net selling price and volume growth.
Nplate sales declined 12% to $317 million. Blincyto sales increased 26% from the year-ago period to $244 million, driven by volume growth as the drug benefited from broad prescribing for patients with B-cell precursor acute lymphoblastic leukemia (ALL).
Lumakras/ Lumykras recorded sales of $82 million in the quarter, up 11% from the year-ago period.
Inflammation
Sales of Otezla were $394 million in the quarter, up 1%. Otezla sales missed the Zacks Consensus Estimate of $434.0 million as well as our estimate is $403.8 million.
Enbrel revenues of $567 million declined 2% year over year due to volume declines. Enbrel sales missed the Zacks Consensus Estimate of $591.0 million.
Sales of Otezla and Enbrel are generally lower in the first quarter compared to subsequent quarters due to the impact of benefit plan changes, insurance re-verification and increased co-pay expenses as U.S. patients work through deductibles.
Asthma drug Tezspire (tezepelumab) recorded sales of $173 million in the quarter, up 80% year over year, driven by volume growth. Tezspire volumes benefited from the uptake of the new self-administered, pre-filled, single-use pen formulation of the drug.
Amgen has a partnership with AstraZeneca (AZN - Free Report) for Tezspire. Amgen and AstraZeneca share costs and profits equally after AstraZeneca pays a mid-single-digit inventor royalty to Amgen. While AstraZeneca leads development, Amgen leads manufacturing. Amgen and AstraZeneca are planning for a phase III study of Tezspire in chronic obstructive pulmonary disease or COPD.
Rare Disease
Amgen closed the acquisition of Horizon Therapeutics for $27.8 billion on Oct 6, 2023, which added several rare disease drugs like Tepezza, Krystexxa and Uplizna to AMGN’s portfolio.
Tepezza, Krystexxa and Uplizna generated sales of $424 million, $235 million and $80 million, respectively, in the first quarter of 2024.
New drug Tavneos generated $51 million in sales in the first quarter compared with $44 million in the previous quarter. The drug’s 16% sequential growth was driven by new patient volume growth. Tavneos, approved for the treatment of patients with ANCA-associated vasculitis, a severe systemic autoimmune disease, was added to Amgen’s portfolio with the 2022 acquisition of ChemoCentryx.
Established Products
Total sales of established products, which include Epogen, Aranesp, Parsabiv and Neulasta, decreased 19% year over year in the quarter to $613 million.
Cost and Margin Discussion
Adjusted operating margin declined 5.1 percentage points to 43.2% in the quarter. The adjusted operating margin was in line with the company’s guidance of roughly 43% in the first quarter.
Adjusted operating expenses increased 33% to $4.37 billion. R&D expenses rose 26% year over year to $1.32 billion. SG&A spending rose 40% to $1.71 billion.
2024 Guidance
Amgen tightened its revenues guidance from a range of $32.4 billion to $33.8 billion to $32.5 billion to $33.8 billion.
Adjusted earnings guidance was tightened from a range of $18.90 to $20.30 to $19.00 to $20.20 per share.
Pipeline Update
Along with the earnings release, the company announced that an interim analysis of data from a phase II study on its GLP-1 receptor candidate, MariTide (maridebart cafraglutide), for obesity is complete. Though the company did not discuss any numbers, chief executive officer Robert Bradway said the company was “very encouraged” with the interim data. Top-line 52-week data from the phase II study is expected in late 2024. Amgen is planning to conduct a comprehensive phase III program on the candidate across obesity, obesity-related conditions and diabetes.
The GLP-1 segment is an important class of drugs for multiple cardiometabolic diseases and is gaining significant popularity.
Some popular GLP-1 receptor drugs available in the market are Eli Lilly’s (LLY - Free Report) Zepbound and Novo Nordisk’s (NVO - Free Report) Wegovy. Both Zepbound and Wegovy generated strong sales in the first quarter of 2024, becoming key drivers of the top line for Eli Lilly and Novo Nordisk, respectively.
Eli Lilly’s Zepbound, which was launched in December 2023, recorded sales of $517.4 million in the first quarter. Lilly raised its sales forecast earlier this week, backed by strong demand for Zepbound and another GLP-1 drug, Mounjaro, for diabetes.
Sales of Novo Nordisk’s Wegovy rose 107% at a constant exchange rate in the first quarter to DKK 9.3 billion.
Amgen also said that it has now completed a phase I study on AMG 786, its small molecule obesity candidate. AMG 786 is not an incretin-based therapy and has a different target than maridebart cafraglutide. Amgen, however, said it would not pursue further development of AMG 786 and would rather focus on MariTide and some preclinical obesity candidates.
Our Take
Amgen’s first-quarter results were strong as it beat estimates for earnings as well as for sales. Products like Repatha, Blincyto and Evenity achieved double-digit volume growth in the quarter. Horizon’s products added $914 million in sales in the quarter. Excluding the contribution from Horizon, product sales grew 6% while volumes rose 9%.
Shares jumped 15% in after-market hours on Thursday, driven by the earnings and sales beat and the positive update on MariTide.
In the past year, Amgen’s stock has gained 20.0% against the industry‘s 13.4% decline.
Image Source: Zacks Investment Research
Amgen’s old medicines like Evenity, Repatha and Prolia, as well as newer medicines like Tavneos and Tezspire, are driving sales, more than offsetting the declining revenues from oncology biosimilars and legacy established products such as Enbrel. The addition of Horizon products will further revenue growth in 2024, which is likely to be accretive to earnings.
In 2024, the company expects five phase III pipeline readouts as well as an FDA decision in June on a key pipeline candidate, tarlatamab, in small cell lung cancer. All these pipeline events could prove to be important catalysts for the stock.
Zacks Rank
Amgen currently carries 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