Analyst Conference Summary

biotechnology

conference date: February 4, 2025 @ 1:30 PM Pacific Time
for quarter ending: December 31, 2024 (fourth quarter, Q4)

Forward-looking statements

Overview: Strong revenue growth, but GAAP earnings down on other expenses. Non-GAAP earnings up y/y.

Basic data (GAAP):

Revenue was $9.09 billion, up 7% sequentially from $8.50 billion and up 11% from $8.20 billion in the year-earlier quarter.

Net income was $627 million, down 76% sequentially from $2.83 billion, and down 18% from $767 million year-earlier.

Earnings Per Share (diluted EPS) were $1.16, down 78% sequentially from $5.22 and down 18% from $1.42 year-earlier.

Guidance:

Expects 2025 revenue between $34.3 and $35.7 billion. GAAP EPS $10.89 to $12.14. Non-GAAP EPS $20.00 to $21.20. Cap ex $2.3 billion. Will limit share repurchases to $500 million.

Conference Highlights:

Robert A. Bradway, CEO said "Robust growth in sales and earnings throughout 2024 reflects the momentum of our business. With strong performance globally, we are investing heavily in our rapidly advancing pipeline to deliver innovative therapies across our four therapeutic areas" Excluding sales from the Horizon acquisition, product sales grew 10%, with volume growth of 15%.

The Phase 1 trial of the obesity drug AMG-513, has been placed on hold by the FDA. But MariTide (AMG 133) rolls ahead. Nov. 2024 data from Part 1 of Phase 2 showed robust weight loss. Only requires 1 dose per month. Enrolling a Phase 2 to treat Type 2 diabetes.

Retired $4.5 billion of debt in 2024. Expects to continue to grow the dividend.

As of Q1 2025, a Phase 3, open-label study of Tavneos in combination with rituximab or a cyclophosphamide-containing regimen is enrolling patients 6 to 18 years of age with active ANCA-associated vasculitis.

Krystexxa for uncontrolled gout study data was presented in November 2024. A regulatory filing is underway.

Lumakras, combined with Vectibix, for CRC patients with KRAS G12C mutations was approved by the FDA in January 2025. Other combination trials are underway.

On June 5, 2024 Amgen announced positive Phase 3 results for Uplinza for IgG4-RD (immunoglobulin G4-related disease). PDUFA April 3, 2025. In January 2025 the FDA granted Orphan Drug designation for Myasthenia Gravis, with filing expected in 1H 2025.

Rocatinlimab is a first-in-class T-cell rebalancing monoclonal antibody targeting the OX40 receptor to treat atopic dermatitis. Seven of eight Phase 3 studies have completed enrollment. Data readouts are expected in 2025.

Xaluritamig (AMG 509) was in two Phase 1 studies for mCRPC (metastatic castrate resistant prostate cancer). Results in September 2024 were positive. A Phase 3 study in post-taxane metastatic castrate resistant prostate cancer should initiate in Q4 2024.

In 2024, Imdelltra was granted accelerated approval in the U.S. for the treatment of adult patients with extensive-stage small cell lung cancer (ES-SCLC) with disease progression after platinum-based chemotherapy. Several other Phase 3 and earlier trials are underway.

Tezspire Phase 3 data for chronic rhinosinusitis with nasal polyps data in Q4 2024 was positive. Preparing to submit to FDA. In severe asthma, the WAYFINDER Phase 3b study is complete. Also a Phase 3 study of eosinophilic esophagitis is enrolling.

Many other studies are ongoing.

Non-GAAP numbers: net income was $2.88 billion, down 5% sequentially from $3.02 billion, and up 13% from $2.54 billion year-earlier. EPS was $5.31, down 5% sequentially from $5.58 and up 13% from $4.71 year-earlier.

Product sales were $ billion, up % sequentially from $ billion, and up % y/y from $8.15 billion. Non-product revenue was $ million, up % sequentially from $ million, and down % from $ million year-earlier.

Cash and equivalents balance ended at $12.0 billion, up sequentially from $9.0 billion. Operating cash flow $4.77 billion. Capital expenditures $371 million. Free cash flow was $4.4 billion. Long-term debt was $56.5 billion. $0.2 billion in shares were repurchased in the quarter. Dividend payments were $1.2 billion.

See also the Amgen pipeline.

GAAP cost of sales was $3.11 billion. Research and development expense was $1.72 billion; selling general and administrative expense $1.88 billion; and other operating expense $61 million, for total operating expenses of $6.78 billion. Operating income was $2.31 billion. Interest expense was $747 million, other expense $782 million, income taxes $155 million.

Q&A selective summary:

Clinical hold? AMG-513, mechanism of action is not disclosed.

Amgevita sales sustainable? Biosimilar portfolio can continue growth going forward.

Repatha? Good growth in 2024. Expects that to continue, with millions more patients who could benefit. New competition is up against Repatha's secondary heart endpoints. We need to wait to see their data.

Part D redesign impact on sales guidance? It is relatively neutral for us. We believe it is helpful that out-of-pocket costs will be capped.

Evenity has only low-single digit penetration, so plenty of room to grow.

Horizon product prospects? All up significantly, all very early in life cycle, all expecting more data. Also getting ready for international launches.

Obesity program? There is a high bar to go forward. The next one after MariTide did not meet that bar. But 513 is still in development. But we believe we can be a major player in obesity, we have been studying this for over a decade. We are also open to external opportunities.

Business development? Actively searching for molecules we can add value to.

Tepeza growth may see a pause in Q1 due to buying patterns, but we expect strong growth overall.

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