Analyst Conference Summary

conference date: January 24, 2008 @ 2:00 PM Pacific Time
for quarter ending: December 31, 2007 (4th quarter)

Forward-looking statements

Overview: Revenue slightly down year-over-year as troubles with Aranesp continue.

Basic data:

Revenues were $3.75 billion, up 4% sequentially from $3.6 billion, but down 2% from $3.84 billion year-earlier (Q4 2006).

Net income was $835 million, up over four times Q3's $201 million, but almost flat compared to $833 million year-earlier.

EPS (earnings per share, diluted) were $0.76, way up sequentially from $0.18, and up 7% from $0.71 year-earlier, mainly due to decreased share count.

See also non-GAAP data below.

Guidance:

2008 full year revenues expected between $14.2 and $14.6 billion. Adjusted (non-GAAP) EPS between $4.00 and $4.30. Full year capital expenditures expected around $1 billion.

Cost of sales and R&D are expected to increase slightly, with SG&A and tax rate to be similar to 2007.

Conference Highlights:

Amgen prefers to promote its non-GAAP, or adjusted, numbers. Adjusted net income for the quarter was $1.09 billion, up 3% from $1.06 billion year-earlier. Adjusted EPS was $1.00, up 11% from $0.90 year-earlier. The difference between GAAP and non-GAAP measures is due to: Enbrel acquisition charges, stock-compensation expense, restructuring charges ($157 million), amortization of R&D from Abgenix and Avidia acquisitions, and Dompe acquisition. Excess capacity charges are likely to continue through 2008.

Cash and marketable securities ended at $7.15 billion. Debt was $11.2 billion.

"2007 was Amgen's most challenging year," according to Kevin Sharer, CEO. The most encouraging development at this point are denosumab trial results. Arenesp sales declined 25% from year-earlier, and Epogen sales also declined, but Neulasta, Neupogen, Enbrel, and Sensipar sales all increased over year-earlier.

Reduced costs but maintained funding of research pipeline.

In 2008 we will see a full year impact on ESA changes. Will face competition to Enbrel in Europe. We are doing the right thing for patients. We expect to have important pipeline data reports in 2008. "We have more good products in our pipeline than we can handle ourselves," so they will be deciding on which to develop internally and which to seek partners for based on Phase II results.

Product sales were $3.618 billion, down 3% from year-earlier. U.S. sales were $2.871 billion, down 7% from year-earlier. International sales were $747 million, up 17% from year-earlier. Foreign currency exchange rates has a positive $64 million impact on sales. But ESA franchise drug revenues flattened out around September.

Cost of sales was $606 million, R&D $822 million, selling, general and administrative $1.00 billion, amortization $74 million, other operating items $185 million. Leaving operating income of $1.06 billion. Interest income was $1 million. Income tax provision was $223 million.

Operating expenses have been reduced, in particular R&D expense, driven by licensing deals. Capital expenditures were $234 million, down from $384 million year-earlier. 22.6% tax rate.

Aranesp labeling revision discussions with regulatory agencies are ongoing. Enbrel may have some new issues too, but so far maintains market leadership despite increasing competition. Sensipar is growing revenues quickly.

Denosumab head-to-head study versus alendronate results were discussed, with good results (safety and effectiveness), so we are optimistic about Denosumab prospects. Phase 3 breast SRE study, prostate cancer study, and post-menopausal fracture studies underway.

A regulatory decision on Nplate for thrombocytopenia is expected in the first half of 2008 following a review in March by the Oncologic Drugs Advisory Committee. Filings have also been mae in Europe, Canada, and Australia.

Vectibix Phase III study for colorectal cancer completed enrollment. In 2007 it received conditional approval in Europe using the KRAS biomarker.

Wholesale inventories ended at the high end of usual range.

$6 billion of stock repurchases have been authorized but not used.

First 2 quarters of 2008 will have difficult year-to-year comparisons because Aranesp issues had not been so bad then. Aranesp competition so far has had little international effect except for some price erosion. Completed enrollment in Aranesp TREAT study.

Epogen revenues increased sequentially in Q4 from Q3. But will be affected by January 1 EMP implementation.

Q&A:

Aranesp non-oncology US segment revenue decline? Doctors are using a lower hemoglobin level and so decreased dosing.

Patient use of ESAs are down about 50% from 2006, more in Medicare than in Commercial. This reflects the new reimbursement environment and the new label.

ODAC decision base for guidance? Don't want to talk about that before FDA makes its decision.

Denosumab fracture and infection rates? Very similar to alendronate, which you would expect with this many patients and compared to a known active agent.

Box warning effect on Enbrel sales? Forecast for guidance contemplated a box warning, because we will still have differentiation even with a warning.

How will you select from pipeline? We believe diversification will develop naturally with the pipeline. Other issues are size of market. We do want to be in more therapeutic areas. We would like to be stronger in the bone area. We also would like more geographic diversity.

Don't interpret our willingness to license out part of our pipeline as indicating a lack of intention to commit to R&D expense.

For ESAs is it just a matter of a management program or do you need more clinical studies? We are already agreed to a robust vigilance program, and we know more trials should be done, but we have not agreed on the design for the studies. You need large studies with homogeneous tumor types.

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