THOUSAND OAKS, Calif.,
Jan. 28, 2016 /PRNewswire/
-- Amgen (NASDAQ:AMGN) today announced financial results for
the fourth quarter and full year of 2015. Key results include:
- For the fourth quarter, total revenues increased 4 percent to
$5,536 million, with 3 percent
product sales growth driven by Enbrel® (etanercept),
Sensipar® (cinacalcet), Prolia® (denosumab),
Kyprolis® (carfilzomib) and XGEVA®
(denosumab). Adjusted operating income grew 16 percent to
$2,366 million and adjusted EPS grew
21 percent to $2.61.
- For the full year, total revenues increased 8 percent to
$21,662 million, with 8 percent
product sales growth. Adjusted operating income grew 19 percent to
$10,052 million and adjusted EPS grew
19 percent to $10.38.
- 2015 adjusted operating margin improved by 4 percentage points
to 48 percent.
- GAAP EPS were $2.37 in the fourth
quarter compared to $1.68 a year ago
and $9.06 for the full year compared
to $6.70 in 2014. GAAP operating
income was $2,033 million in the
fourth quarter compared to $1,459
million a year ago and $8,470
million for the full year compared to $6,191 million in 2014. 2014 was negatively
impacted by charges for the restructuring plan announced in the
third quarter of 2014.
- Free cash flow for the full year was $8.5 billion compared to $7.8 billion in 2014 driven by higher revenues
and higher operating income.
"2015 was an exceptional year for Amgen
with six innovative new launches, strong financial performance,
continued pipeline advances and improved operating margins driven
by our transformation efforts," said Robert
A. Bradway, chairman and chief executive officer. "We remain
on track to meet or exceed our 2018 commitments and deliver value
for patients and shareholders."
$Millions, except EPS
and percentages
|
|
Q4
'15
|
|
Q4
'14
|
|
YOY
Δ
|
|
FY
'15
|
|
FY
'14
|
|
YOY
Δ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
|
$ 5,536
|
|
$ 5,331
|
|
4%
|
|
$ 21,662
|
|
$ 20,063
|
|
8%
|
Adjusted Operating
Income
|
|
$ 2,366
|
|
$ 2,033
|
|
16%
|
|
$ 10,052
|
|
$ 8,475
|
|
19%
|
Adjusted Net
Income
|
|
$ 1,985
|
|
$ 1,670
|
|
19%
|
|
$ 7,954
|
|
$ 6,700
|
|
19%
|
Adjusted
EPS
|
|
$ 2.61
|
|
$ 2.16
|
|
21%
|
|
$ 10.38
|
|
$ 8.70
|
|
19%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
Income
|
|
$ 2,033
|
|
$ 1,459
|
|
39%
|
|
$ 8,470
|
|
$ 6,191
|
|
37%
|
GAAP Net
Income
|
|
$ 1,800
|
|
$ 1,294
|
|
39%
|
|
$ 6,939
|
|
$ 5,158
|
|
35%
|
GAAP EPS
|
|
$ 2.37
|
|
$ 1.68
|
|
41%
|
|
$ 9.06
|
|
$ 6.70
|
|
35%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
References in this
release to "adjusted" measures, measures presented "on an adjusted
basis" or to free cash flow refer to non-GAAP financial
measures. These adjustments and other items are presented on
the attached reconciliations.
|
Product Sales Performance
- Total product sales increased 3 percent for the fourth
quarter of 2015 versus the fourth quarter of 2014. The increase was
driven primarily by ENBREL, Sensipar, Prolia, Kyprolis and XGEVA.
Product sales increased 8 percent for the full year.
- ENBREL sales increased 8 percent year-over-year for the
fourth quarter driven by net selling price, offset partially by the
impact from inventory changes and competition. Sales increased 14
percent for the full year driven by net selling price, offset
partially by the impact from competition.
- Neulasta® (pegfilgrastim) sales decreased 2
percent year-over-year for the fourth quarter driven by lower unit
demand and unfavorable changes in foreign exchange rates, offset
partially by net selling price. Sales increased 3 percent for the
full year driven by net selling price, offset partially by
unfavorable changes in foreign exchange rates.
- Aranesp® (darbepoetin alfa) sales increased 4
percent year-over-year for the fourth quarter and 1 percent for the
full year. Unit demand grew in the United
States (U.S.) as dialysis customers shifted some purchases
from EPOGEN® (epoetin alfa) to Aranesp. Unit
demand growth was offset partially by unfavorable changes in
foreign exchange rates and net selling price.
- Sensipar/Mimpara® sales increased 21 percent
year-over-year for the fourth quarter and 22 percent for the full
year driven by net selling price and higher unit demand.
- Prolia sales increased 21 percent year-over-year for the
fourth quarter and 27 percent for the full year driven by higher
unit demand.
- XGEVA sales increased 10 percent year-over-year for the
fourth quarter and 15 percent for the full year driven primarily by
higher unit demand.
- EPOGEN sales decreased 37 percent year-over-year for the
fourth quarter and 9 percent for the full year driven by the impact
of competition and, to a lesser extent, the shift in U.S. dialysis
customer purchases to Aranesp.
- NEUPOGEN® (filgrastim) sales decreased 4
percent year-over-year for the fourth quarter driven by the impact
of competition in the U.S. and unfavorable changes in foreign
exchange rates, offset partially by favorable changes in accounting
estimates. Sales decreased 9 percent for the full year driven by
the impact of competition in the U.S.
- Kyprolis sales increased 63 percent year-over-year for
the fourth quarter and 55 percent for the full year driven by
higher unit demand.
- Nplate® (romiplostim) sales increased 15
percent year-over-year for the fourth quarter and 12 percent for
the full year driven by higher unit demand.
- Vectibix® (panitumumab) sales increased 2
percent year-over-year for the fourth quarter and 9 percent for the
full year driven by higher unit demand, offset partially by
unfavorable changes in foreign exchange rates.
Product Sales
Detail by Product and Geographic Region
|
|
$Millions, except
percentages
|
|
Q4
'15
|
|
Q4
'14
|
|
YOY
Δ
|
|
|
US
|
ROW
|
TOTAL
|
|
TOTAL
|
|
TOTAL
|
|
|
|
|
|
|
|
|
|
Enbrel®
|
|
$1,375
|
$66
|
$1,441
|
|
$1,337
|
|
8%
|
Neulasta®
|
|
960
|
196
|
1,156
|
|
1,180
|
|
(2%)
|
Aranesp®
|
|
249
|
250
|
499
|
|
479
|
|
4%
|
Sensipar®
/ Mimpara®
|
|
299
|
85
|
384
|
|
317
|
|
21%
|
Prolia®
|
|
247
|
133
|
380
|
|
315
|
|
21%
|
XGEVA®
|
|
254
|
102
|
356
|
|
325
|
|
10%
|
EPOGEN®
|
|
342
|
0
|
342
|
|
539
|
|
(37%)
|
NEUPOGEN®
|
|
203
|
60
|
263
|
|
274
|
|
(4%)
|
Kyprolis®
|
|
134
|
14
|
148
|
|
91
|
|
63%
|
Nplate®
|
|
82
|
55
|
137
|
|
119
|
|
15%
|
Vectibix®
|
|
51
|
84
|
135
|
|
132
|
|
2%
|
Other*
|
|
26
|
62
|
88
|
|
66
|
|
33%
|
|
|
|
|
|
|
|
|
|
Total product
sales
|
|
$4,222
|
$1,107
|
$5,329
|
|
$5,174
|
|
3%
|
|
|
|
|
|
|
|
|
|
* Other includes MN
Pharma, BLINCYTO®, Bergamo, Repatha®,
Corlanor®, and IMLYGICTM
|
|
|
|
|
|
|
|
|
|
$Millions, except
percentages
|
|
FY
'15
|
|
FY
'14
|
|
YOY
Δ
|
|
|
US
|
ROW
|
TOTAL
|
|
TOTAL
|
|
TOTAL
|
|
|
|
|
|
|
|
|
|
Enbrel®
|
|
$5,099
|
$265
|
$5,364
|
|
$4,688
|
|
14%
|
Neulasta®
|
|
3,891
|
824
|
4,715
|
|
4,596
|
|
3%
|
Aranesp®
|
|
900
|
1,051
|
1,951
|
|
1,930
|
|
1%
|
EPOGEN®
|
|
1,856
|
0
|
1,856
|
|
2,031
|
|
(9%)
|
Sensipar®
/ Mimpara®
|
|
1,069
|
346
|
1,415
|
|
1,158
|
|
22%
|
XGEVA®
|
|
1,006
|
399
|
1,405
|
|
1,221
|
|
15%
|
Prolia®
|
|
837
|
475
|
1,312
|
|
1,030
|
|
27%
|
NEUPOGEN®
|
|
793
|
256
|
1,049
|
|
1,159
|
|
(9%)
|
Vectibix®
|
|
204
|
345
|
549
|
|
505
|
|
9%
|
Nplate®
|
|
317
|
208
|
525
|
|
469
|
|
12%
|
Kyprolis®
|
|
467
|
45
|
512
|
|
331
|
|
55%
|
Other*
|
|
84
|
207
|
291
|
|
209
|
|
39%
|
|
|
|
|
|
|
|
|
|
Total product
sales
|
|
$16,523
|
$4,421
|
$20,944
|
|
$19,327
|
|
8%
|
|
|
|
|
|
|
|
|
|
* Other includes MN
Pharma, BLINCYTO®, Bergamo, Repatha®,
Corlanor®, and IMLYGICTM
|
|
|
|
|
|
|
|
|
|
Operating Expense, Operating Margin and Tax Rate Analysis, on
an Adjusted Basis
- Operating Expenses decreased 4 percent year-over-year in
the fourth quarter of 2015 and remained flat for the full year.
Changes in foreign exchange rates reduced operating expenses by 2
percent in the fourth quarter and 3 percent for the full year.
- Cost of Sales margin improved by 1.6 percentage points
year-over-year in the fourth quarter of 2015 and 1.3 percentage
points for the full year driven primarily by manufacturing
efficiencies, higher net selling price and lower royalties.
- Research & Development (R&D) expenses decreased
10 percent year-over-year in the fourth quarter of 2015 driven by
savings from transformation and process improvement efforts, as
well as a $60 million upfront payment
in the fourth quarter of 2014 related to the Company's cancer
immunotherapy collaboration with Kite Pharma. For the full year,
R&D expenses decreased 5 percent driven primarily by savings
from transformation and process improvement efforts, offset
partially by increased support for launch products.
- Selling, General & Administrative (SG&A)
expenses increased 3 percent year-over-year in the fourth quarter
of 2015 and 6 percent for the full year driven primarily by
investments in new product launches, offset partially by savings
from transformation and process improvement efforts.
- Operating Margin improved by 5 percentage points
year-over-year in the fourth quarter of 2015 and 4 percentage
points for the full year.
- Adjusted Tax Rate for the fourth quarter of 2015
increased 1.4 percentage points year-over-year driven primarily by
a lower benefit from the federal R&D tax credit. The full year
adjusted tax rate increased 1.9 percentage points driven primarily
by changes in the geographic mix of earnings.
$Millions, except
percentages
|
|
|
|
|
|
|
|
|
|
|
On an Adjusted
Basis
|
Q4
'15
|
|
Q4
'14
|
|
YOY
Δ
|
|
FY
'15
|
|
FY
'14
|
|
YOY
Δ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Sales*
|
$764
|
|
$825
|
|
(7%)
|
|
$3,033
|
|
$3,059
|
|
(1%)
|
|
% of sales
|
14.3%
|
|
15.9%
|
|
(1.6) pts
|
|
14.5%
|
|
15.8%
|
|
(1.3) pts
|
Research &
Development
|
$1,057
|
|
$1,168
|
|
(10%)
|
|
$3,917
|
|
$4,121
|
|
(5%)
|
|
% of sales
|
19.8%
|
|
22.6%
|
|
(2.8) pts
|
|
18.7%
|
|
21.3%
|
|
(2.6) pts
|
Selling, General
& Administrative
|
$1,349
|
|
$1,305
|
|
3%
|
|
$4,660
|
|
$4,408
|
|
6%
|
|
% of sales
|
25.3%
|
|
25.2%
|
|
0.1 pts
|
|
22.2%
|
|
22.8%
|
|
(0.6) pts
|
TOTAL Operating
Expenses
|
$3,170
|
|
$3,298
|
|
(4%)
|
|
$11,610
|
|
$11,588
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
operating income as a
% of sales
|
44.4%
|
|
39.3%
|
|
5.1 pts
|
|
48.0%
|
|
43.9%
|
|
4.1 pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
Rate*
|
11.6%
|
|
10.2%
|
|
1.4
pts
|
|
16.8%
|
|
14.9%
|
|
1.9
pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
pts: percentage
points
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Impact of Puerto Rico
excise tax is included in Cost of Sales and Tax Rate. Excluding
Puerto Rico excise tax, Cost of Sales would be 1.8 pts. and 1.9
pts. lower for full years 2015 and 2014, respectively; and the Tax
Rate would be 2.7 pts. and 3.3 pts. higher for full years 2015 and
2014.
|
Cash Flow and Balance Sheet
- The Company generated $1.9
billion of free cash flow in the fourth quarter of 2015
versus $2.2 billion in the fourth
quarter of 2014. For the full year, free cash flow was $8.5 billion compared to $7.8 billion in 2014 driven by higher revenues
and higher operating income.
- The Company's first quarter 2016 dividend of $1.00 per share declared on Dec. 15, 2015, will be paid on March 8, 2016, to all stockholders of record as
of Feb. 16, 2016.
- During the fourth quarter, the Company repurchased 1.2 million
shares of common stock at a total cost of $184 million. For the full year, the Company
repurchased 12 million shares of common stock at a total cost of
$1.85 billion. At the end of 2015,
the Company had $4.9 billion
remaining under its stock repurchase authorization.
$Billions, except
shares
|
|
Q4
'15
|
|
Q4
'14
|
|
YOY
Δ
|
|
FY
'15
|
|
FY
'14
|
|
YOY
Δ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Cash
Flow
|
$2.1
|
|
$2.4
|
|
($0.4)
|
|
$9.1
|
|
$8.6
|
|
$0.5
|
Capital
Expenditures
|
0.2
|
|
0.2
|
|
0.0
|
|
0.6
|
|
0.7
|
|
0.1
|
Free Cash
Flow
|
1.9
|
|
2.2
|
|
(0.4)
|
|
8.5
|
|
7.8
|
|
0.6
|
Dividends
Paid
|
0.6
|
|
0.5
|
|
0.1
|
|
2.4
|
|
1.9
|
|
0.5
|
Share
Repurchase
|
0.2
|
|
0.2
|
|
0.0
|
|
1.9
|
|
0.2
|
|
1.7
|
Avg. Diluted Shares
(millions)
|
761
|
|
772
|
|
(11)
|
|
766
|
|
770
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
Investments
|
31.4
|
|
27.0
|
|
4.4
|
|
31.4
|
|
27.0
|
|
4.4
|
Debt
Outstanding
|
31.6
|
|
30.7
|
|
0.9
|
|
31.6
|
|
30.7
|
|
0.9
|
Stockholders'
Equity
|
28.1
|
|
25.8
|
|
2.3
|
|
28.1
|
|
25.8
|
|
2.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Numbers may not
add due to rounding
|
|
|
|
|
|
|
2016 Guidance
For the full year 2016, the Company now expects:
- Total revenues in the range of $22.0 billion to $22.5 billion and adjusted
EPS in the range of $10.60 to
$11.00. Previously, the Company expected total revenues in
the range of $21.7 billion to $22.3
billion and adjusted EPS in the range of $10.35 to $10.75.
- Adjusted tax rate to be in the range of 19.5 percent to
20.5 percent, which includes the benefit of the federal R&D tax
credit.
- Capital expenditures to be approximately $700 million.
Fourth Quarter
Product and Pipeline Update
|
Key development
milestones:
|
|
Clinical
Program
|
Indication
|
Milestone
|
Repatha®
(evolocumab)
|
Hyperlipidemia
|
Phase 3 CV imaging
data expected H2 2016
Phase 3 CV outcomes
data expected H2 2016*
Approved in
Japan
|
Kyprolis
|
Relapsed multiple
myeloma
|
Approved in U.S.
(ENDEAVOR)
Approved in EU
(ASPIRE)
EU regulatory review
(ENDEAVOR)
|
IMLYGIC™
(talimogene laherparepvec)
|
Metastatic
melanoma
|
Approved in
EU
|
Parsabiv™
(etelcalcetide)†
|
Secondary
hyperparathyroidism
|
Global regulatory
reviews
|
XGEVA
|
Prevention of SREs in
multiple myeloma
|
Phase 3 data expected
Q4 2016*
|
Romosozumab‡
|
Postmenopausal
osteoporosis
|
Phase 3
registrational data expected Q1 2016
|
AMG
334**
|
Migraine
Prophylaxis
|
Phase 2b chronic
migraine data expected H2 2016
|
ABP 215
(biosimilar
bevacizumab)
|
Oncology
|
Global regulatory
submissions expected 2016
|
ABP 501
(biosimilar
adalimumab)
|
Inflammatory
diseases
|
Global regulatory
reviews
|
ABP 980
(biosimilar
trastuzumab)
|
Breast
Cancer
|
Phase 3 data expected
H2 2016
|
*Event driven
study; †Trade name provisionally approved by FDA;
‡Developed in world-wide collaboration with UCB, and
Astellas in Japan; **Developed in collaboration with
Novartis
|
The Company provided the following updates on selected product
and pipeline programs:
Repatha
- In January 2016, Repatha was
approved in Japan for the
treatment of patients with familial hypercholesterolemia (FH) or
hypercholesterolemia who have high risk of cardiovascular events
and do not adequately respond to HMG-CoA reductase inhibitors
(statins).
Kyprolis
- In November, the European Medicines Agency (EMA) approved the
Marketing Authorization Application (MAA) for Kyprolis in
combination for the treatment of relapsed multiple myeloma based on
data from the Phase 3 ASPIRE study.
- In December, a Variation to the MAA was submitted to the EMA to
expand the indication for Kyprolis in relapsed multiple myeloma
based on data from the Phase 3 ENDEAVOR study.
- In January 2016, the U.S. Food
and Drug Administration (FDA) approved the supplemental New Drug
Application for Kyprolis in combination with dexamethasone or with
lenalidomide plus dexamethasone for the treatment of patients with
relapsed or refractory multiple myeloma who have received one to
three lines of therapy. The FDA also approved Kyprolis as a single
agent for the treatment of patients with relapsed or refractory
multiple myeloma who have received one or more lines of therapy.
This FDA decision converts to full approval the initial accelerated
approval Kyprolis received in July
2012 as a single agent.
BLINCYTO® (blinatumomab)
- In November, the EMA approved the MAA for BLINCYTO for the
treatment of Philadelphia
chromosome-negative relapsed or refractory B-precursor acute
lymphoblastic leukemia.
IMLYGIC
- In December, the EMA approved the MAA for IMLYGIC for the
treatment of adults with unresectable melanoma that is regionally
or distantly metastatic (Stage IIIB, IIIC and IVM1a) with no bone,
brain, lung or other visceral disease.
XGEVA
- Data from the event driven Phase 3 study for the prevention of
skeletal-related events in patients with multiple myeloma is
expected in Q4 2016.
Romosozumab
- Data from the Phase 3 registrational study in women with
postmenopausal osteoporosis is expected in Q1 2016.
AMG 334
- Data from the Phase 2b study in patients with chronic migraine
is expected in H2 2016.
Biosimilars
- In January 2016, the FDA accepted
for review Amgen's Biologics License Application for ABP 501, a
biosimilar candidate to Humira® (adalimumab), and set a
Biosimilar User Fee Act target action date of Sept. 25, 2016.
- In December, a MAA was submitted to the EMA for ABP 501.
Non-GAAP Financial Measures
In this news release,
management has presented its operating results for the fourth
quarters and full years of 2015 and 2014 in accordance with U.S.
Generally Accepted Accounting Principles (GAAP) and on an adjusted
(or non-GAAP) basis. In addition, management has presented its full
year 2016 EPS and tax rate guidance in accordance with GAAP and on
an adjusted (or non-GAAP) basis. These non-GAAP financial measures
are computed by excluding certain items related to acquisitions,
restructuring and certain other items from the related GAAP
financial measures. Management has also presented Free Cash Flow
(FCF), which is a non-GAAP financial measure, for the fourth
quarters and full years of 2015 and 2014. FCF is computed by
subtracting capital expenditures from operating cash flow, each as
determined in accordance with GAAP. Reconciliations for these
non-GAAP financial measures to the most directly comparable GAAP
financial measures are included in the news release.
The Company believes that its presentation of non-GAAP financial
measures provides useful supplementary information to and
facilitates additional analysis by investors. The Company uses
certain non-GAAP financial measures to enhance an investor's
overall understanding of the financial performance and prospects
for the future of the Company's core business activities by
facilitating comparisons of results of core business operations
among current, past and future periods. In addition, the Company
believes that excluding the non-cash amortization of intangible
assets, including developed product technology rights, acquired in
business combinations treats those assets as if the Company had
developed them internally in the past, and thus provides a
supplemental measure of profitability in which the Company's
acquired intellectual property is treated in a comparable manner to
its internally developed intellectual property. The Company
believes that FCF provides a further measure of the Company's
liquidity.
The Company uses the non-GAAP financial measures set forth in
the news release in connection with its own budgeting and financial
planning. The non-GAAP financial measures are in addition to, not a
substitute for, or superior to, measures of financial performance
prepared in accordance with GAAP.
About Amgen
Amgen is committed to unlocking the
potential of biology for patients suffering from serious illnesses
by discovering, developing, manufacturing and delivering innovative
human therapeutics. This approach begins by using tools like
advanced human genetics to unravel the complexities of disease and
understand the fundamentals of human biology.
Amgen focuses on areas of high unmet medical need and leverages
its biologics manufacturing expertise to strive for solutions that
improve health outcomes and dramatically improve people's lives. A
biotechnology pioneer since 1980, Amgen has grown to be one of the
world's leading independent biotechnology companies, has reached
millions of patients around the world and is developing a pipeline
of medicines with breakaway potential.
For more information, visit www.amgen.com and follow us on
www.twitter.com/amgen.
Forward-Looking Statements
This news release contains
forward-looking statements that involve significant risks and
uncertainties, including those discussed below and others that can
be found in our Form 10-K for the year ended Dec. 31, 2014, and in any subsequent periodic
reports on Form 10-Q and Form 8-K. Amgen is providing this
information as of the date of this news release and does not
undertake any obligation to update any forward-looking statements
contained in this document as a result of new information, future
events or otherwise.
No forward-looking statement can be guaranteed and actual
results may differ materially from those we project. The Company's
results may be affected by our ability to successfully market both
new and existing products domestically and internationally,
clinical and regulatory developments (domestic or foreign)
involving current and future products, sales growth of recently
launched products, competition from other products (domestic or
foreign), and difficulties or delays in manufacturing our products.
In addition, sales of our products are affected by reimbursement
policies imposed by third-party payors, including governments,
private insurance plans and managed care providers and may be
affected by regulatory, clinical and guideline developments and
domestic and international trends toward managed care and
healthcare cost containment as well as U.S. legislation affecting
pharmaceutical pricing and reimbursement. Government and others'
regulations and reimbursement policies may affect the development,
usage and pricing of our products. Furthermore, our research,
testing, pricing, marketing and other operations are subject to
extensive regulation by domestic and foreign government regulatory
authorities. We or others could identify safety, side effects or
manufacturing problems with our products after they are on the
market. Our business may be impacted by government investigations,
litigation and product liability claims. If we fail to meet the
compliance obligations in the corporate integrity agreement between
us and the U.S. government, we could become subject to significant
sanctions. Further, while we routinely obtain patents for our
products and technology, the protection offered by our patents and
patent applications may be challenged, invalidated or circumvented
by our competitors. We depend on third parties for a
significant portion of our manufacturing capacity for the supply of
certain of our current and future products and limits on supply may
constrain sales of certain of our current products and product
candidate development. In addition, we compete with other companies
with respect to some of our marketed products as well as for the
discovery and development of new products. Discovery or
identification of new product candidates cannot be guaranteed and
movement from concept to product is uncertain; consequently, there
can be no guarantee that any particular product candidate will be
successful and become a commercial product. Further, some raw
materials, medical devices and component parts for our products are
supplied by sole third-party suppliers. Our efforts to integrate
the operations of companies we have acquired may not be successful.
We may experience difficulties, delays or unexpected costs and not
achieve anticipated benefits and savings from our ongoing
restructuring plan. Our business performance could affect or limit
the ability of our Board of Directors to declare a dividend or our
ability to pay a dividend or repurchase our common
stock.
Amgen
Inc
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Income - GAAP
|
|
|
|
|
|
|
|
(In millions,
except per share data)
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Years
ended
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Product
sales
|
|
$ 5,329
|
|
$ 5,174
|
|
$ 20,944
|
|
$ 19,327
|
|
Other
revenues
|
|
207
|
|
157
|
|
718
|
|
736
|
|
|
Total
revenues
|
|
5,536
|
|
5,331
|
|
21,662
|
|
20,063
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
1,071
|
|
1,183
|
|
4,227
|
|
4,422
|
|
Research and
development
|
|
1,093
|
|
1,234
|
|
4,070
|
|
4,297
|
|
Selling, general and
administrative
|
|
1,416
|
|
1,327
|
|
4,846
|
|
4,699
|
|
Other
|
|
(77)
|
|
128
|
|
49
|
|
454
|
|
|
Total operating
expenses
|
|
3,503
|
|
3,872
|
|
13,192
|
|
13,872
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
2,033
|
|
1,459
|
|
8,470
|
|
6,191
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
284
|
|
261
|
|
1,095
|
|
1,071
|
Interest and other
income, net
|
|
164
|
|
88
|
|
603
|
|
465
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
1,913
|
|
1,286
|
|
7,978
|
|
5,585
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
113
|
|
(8)
|
|
1,039
|
|
427
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ 1,800
|
|
$ 1,294
|
|
$ 6,939
|
|
$ 5,158
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$ 2.39
|
|
$ 1.70
|
|
$ 9.15
|
|
$ 6.80
|
|
Diluted
|
|
$ 2.37
|
|
$ 1.68
|
|
$ 9.06
|
|
$ 6.70
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used in calculation of earnings per share:
|
|
|
|
|
|
|
|
Basic
|
|
754
|
|
761
|
|
758
|
|
759
|
|
Diluted
|
|
761
|
|
772
|
|
766
|
|
770
|
Amgen
Inc
|
|
|
|
|
|
|
Consolidated
Balance Sheets - GAAP
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
|
|
|
2015
|
|
2014
|
Assets
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash, cash
equivalents and marketable securities
|
|
$
31,382
|
|
$
27,026
|
|
Trade receivables,
net
|
|
2,995
|
|
2,546
|
|
Inventories
|
|
2,435
|
|
2,647
|
|
Other current
assets
|
|
1,706
|
|
2,494
|
|
|
|
Total current
assets
|
|
38,518
|
|
34,713
|
Property, plant and
equipment, net
|
|
4,907
|
|
5,223
|
Intangible assets,
net
|
|
11,641
|
|
12,693
|
Goodwill
|
|
14,787
|
|
14,788
|
Other
assets
|
|
1,723
|
|
1,592
|
Total
assets
|
|
$
71,576
|
|
$
69,009
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
6,417
|
|
$
6,508
|
|
Current portion of
long-term debt
|
|
2,250
|
|
500
|
|
|
|
Total current
liabilities
|
|
8,667
|
|
7,008
|
Long-term
debt
|
|
29,306
|
|
30,215
|
Long-term deferred
tax liability
|
|
2,239
|
|
3,461
|
Other noncurrent
liabilities
|
|
3,281
|
|
2,547
|
Stockholders'
equity
|
|
28,083
|
|
25,778
|
Total liabilities and
stockholders' equity
|
|
$
71,576
|
|
$
69,009
|
|
|
|
|
|
|
|
|
|
|
Shares
outstanding
|
|
754
|
|
760
|
Amgen
Inc.
|
|
|
|
|
|
|
|
GAAP to Adjusted
Reconciliations
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Years
ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of
sales
|
$ 1,071
|
|
$ 1,183
|
|
$ 4,227
|
|
$ 4,422
|
|
Adjustments to
cost of sales:
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses (a)
|
(297)
|
|
(279)
|
|
(1,142)
|
|
(1,249)
|
|
Certain charges
pursuant to our restructuring initiative
|
(10)
|
|
(76)
|
|
(52)
|
|
(104)
|
|
Stock option
expense
|
-
|
|
(3)
|
|
-
|
|
(10)
|
|
Total adjustments
to cost of sales
|
(307)
|
|
(358)
|
|
(1,194)
|
|
(1,363)
|
|
Adjusted cost of
sales
|
$ 764
|
|
$ 825
|
|
$ 3,033
|
|
$ 3,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and
development expenses
|
$ 1,093
|
|
$ 1,234
|
|
$ 4,070
|
|
$ 4,297
|
|
Adjustments to
research and development expenses:
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses (b)
|
(20)
|
|
(32)
|
|
(89)
|
|
(124)
|
|
Certain charges
pursuant to our restructuring initiative
|
(16)
|
|
(34)
|
|
(64)
|
|
(49)
|
|
Stock option
expense
|
-
|
|
-
|
|
-
|
|
(3)
|
|
Total adjustments
to research and development expenses
|
(36)
|
|
(66)
|
|
(153)
|
|
(176)
|
|
Adjusted research
and development expenses
|
$ 1,057
|
|
$ 1,168
|
|
$ 3,917
|
|
$ 4,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP selling,
general and administrative expenses
|
$ 1,416
|
|
$ 1,327
|
|
$ 4,846
|
|
$ 4,699
|
|
Adjustments to
selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses (b)
|
(46)
|
|
(32)
|
|
(130)
|
|
(150)
|
|
Certain charges
pursuant to our restructuring initiative
|
(21)
|
|
(6)
|
|
(56)
|
|
(9)
|
|
Expense resulting
from clarified guidance on branded prescription drug fee
(c)
|
-
|
|
16
|
|
-
|
|
(129)
|
|
Stock option
expense
|
-
|
|
-
|
|
-
|
|
(3)
|
|
Total adjustments
to selling, general and administrative expenses
|
(67)
|
|
(22)
|
|
(186)
|
|
(291)
|
|
Adjusted selling,
general and administrative expenses
|
$ 1,349
|
|
$ 1,305
|
|
$ 4,660
|
|
$ 4,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
expenses
|
$ 3,503
|
|
$ 3,872
|
|
$ 13,192
|
|
$ 13,872
|
|
Adjustments to
operating expenses:
|
|
|
|
|
|
|
|
|
Adjustments to cost
of sales
|
(307)
|
|
(358)
|
|
(1,194)
|
|
(1,363)
|
|
Adjustments to
research and development expenses
|
(36)
|
|
(66)
|
|
(153)
|
|
(176)
|
|
Adjustments to
selling, general and administrative expenses
|
(67)
|
|
(22)
|
|
(186)
|
|
(291)
|
|
Certain net charges
pursuant to our restructuring and other cost savings initiatives
(d)
|
99
|
|
(66)
|
|
58
|
|
(434)
|
|
(Expense)/Benefit
related to various legal proceedings
|
(18)
|
|
-
|
|
(91)
|
|
3
|
|
(Expense)/Benefit
resulting from changes in the estimated fair values of the
contingent consideration
obligations related to prior year business combinations
|
(9)
|
|
(17)
|
|
8
|
|
30
|
|
Write-off of non-key
assets acquired in a prior year business combination
|
-
|
|
(46)
|
|
(28)
|
|
(46)
|
|
Other
(e)
|
5
|
|
1
|
|
4
|
|
(7)
|
|
Total adjustments
to operating expenses
|
(333)
|
|
(574)
|
|
(1,582)
|
|
(2,284)
|
|
Adjusted operating
expenses
|
$ 3,170
|
|
$ 3,298
|
|
$ 11,610
|
|
$ 11,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
$ 2,033
|
|
$ 1,459
|
|
$ 8,470
|
|
$ 6,191
|
|
Adjustments to
operating expenses
|
333
|
|
574
|
|
1,582
|
|
2,284
|
|
Adjusted operating
income
|
$ 2,366
|
|
$ 2,033
|
|
$ 10,052
|
|
$ 8,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income before
income taxes
|
$ 1,913
|
|
$ 1,286
|
|
$ 7,978
|
|
$ 5,585
|
|
Adjustments to
operating expenses
|
333
|
|
574
|
|
1,582
|
|
2,284
|
|
Adjusted income
before income taxes
|
$ 2,246
|
|
$ 1,860
|
|
$ 9,560
|
|
$ 7,869
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP provision for
income taxes
|
$ 113
|
|
$
(8)
|
|
$ 1,039
|
|
$ 427
|
|
Adjustments to
provision for income taxes:
|
|
|
|
|
|
|
|
|
Income tax effect of
the above adjustments (f)
|
92
|
|
187
|
|
496
|
|
717
|
|
Other income tax
adjustments (g)
|
56
|
|
11
|
|
71
|
|
25
|
|
Total adjustments
to provision for income taxes
|
148
|
|
198
|
|
567
|
|
742
|
|
Adjusted provision
for income taxes
|
$ 261
|
|
$ 190
|
|
$ 1,606
|
|
$ 1,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$ 1,800
|
|
$ 1,294
|
|
$ 6,939
|
|
$ 5,158
|
|
Adjustments to net
income:
|
|
|
|
|
|
|
|
|
Adjustments to income
before income taxes, net of the income tax effect of the above
adjustments
|
241
|
|
387
|
|
1,086
|
|
1,567
|
|
Other income tax
adjustments (g)
|
(56)
|
|
(11)
|
|
(71)
|
|
(25)
|
|
Total adjustments
to net income
|
185
|
|
376
|
|
1,015
|
|
1,542
|
|
Adjusted net
income
|
$ 1,985
|
|
$ 1,670
|
|
$ 7,954
|
|
$ 6,700
|
Amgen
Inc
|
|
|
|
|
|
|
|
GAAP to Adjusted
Reconciliations
|
|
|
|
|
|
|
|
(In millions,
except per share data)
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
presents the computations for GAAP and Adjusted diluted
EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
|
December 31,
2015
|
|
December 31,
2014
|
|
|
GAAP
|
|
Adjusted
|
|
GAAP
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 1,800
|
|
$ 1,985
|
|
$ 1,294
|
|
$ 1,670
|
|
Weighted-average
shares for diluted EPS
|
761
|
|
761
|
|
772
|
|
772
|
|
Diluted
EPS
|
$ 2.37
|
|
$ 2.61
|
|
$ 1.68
|
|
$ 2.16
|
|
|
|
|
|
|
|
|
|
|
|
Year
ended
|
|
Year
ended
|
|
|
December 31,
2015
|
|
December 31,
2014
|
|
|
GAAP
|
|
Adjusted
|
|
GAAP
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 6,939
|
|
$ 7,954
|
|
$ 5,158
|
|
$ 6,700
|
|
Weighted-average
shares for diluted EPS
|
766
|
|
766
|
|
770
|
|
770
|
|
Diluted
EPS
|
$ 9.06
|
|
$ 10.38
|
|
$ 6.70
|
|
$ 8.70
|
|
|
|
|
|
|
|
|
|
(a)
|
The adjustments
related primarily to non-cash amortization of intangible assets,
including developed product technology rights, acquired in business
combinations.
|
|
|
|
|
|
|
|
|
|
(b)
|
The adjustments
related primarily to non-cash amortization of intangible assets
acquired in business combinations.
|
|
|
|
|
|
|
|
|
|
(c)
|
The adjustments
related to the Internal Revenue Service issuing final regulations
that required the recognition of an additional year of the non-tax
deductible branded prescription drug
fee.
|
|
|
|
|
|
|
|
|
|
(d)
|
The adjustments for
the three months ended December 31, 2015, related primarily to a
gain recognized on the sale of assets related to our site
closures. The adjustments for the
year ended December 31, 2015, related primarily to gains recognized
on the sale of assets related to our site closures, partially
offset by severance expenses. The 2014
adjustments related primarily to severance
expenses.
|
|
|
|
|
|
|
|
|
|
(e)
|
The adjustments
related to various acquisition-related items.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(f)
|
The tax effect of the
adjustments between our GAAP and Adjusted results takes into
account the tax treatment and related tax rate(s) that apply to
each adjustment in the applicable tax
jurisdiction(s). Generally, this results in a tax impact at the
U.S. marginal tax rate for certain adjustments, including the
majority of amortization of intangible
assets, whereas the tax impact of other adjustments, including
restructuring expense, depends on whether the amounts are
deductible in the respective tax jurisdictions and the applicable tax rate(s) in those
jurisdictions. Due to these factors, the effective tax rates for
the adjustments to our GAAP income before income taxes, for the three months and year ended December
31, 2015, were 27.6% and 31.4%, respectively, compared with 32.6%
and 31.4% for the corresponding periods of the prior
year.
|
|
|
|
|
|
|
|
|
|
(g)
|
The adjustments
related primarily to certain prior period items excluded from
adjusted earnings.
|
|
|
|
|
|
|
|
|
|
Amgen
Inc
|
|
|
|
|
|
|
|
|
Reconciliations of
Free Cash Flow
|
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Years
ended
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Operating Cash
Flow
|
$ 2,060
|
|
$ 2,445
|
|
$ 9,077
|
|
$ 8,555
|
|
Capital
Expenditures
|
(205)
|
|
(203)
|
|
(594)
|
|
(718)
|
|
Free Cash
Flow
|
$ 1,855
|
|
$ 2,242
|
|
$ 8,483
|
|
$ 7,837
|
Reconciliation of
GAAP EPS Guidance to Adjusted
|
|
|
|
|
EPS Guidance for
the Year Ending December 31, 2016
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
GAAP diluted EPS
guidance
|
|
$ 9.13
|
-
|
$ 9.58
|
|
|
|
|
|
|
|
Known adjustments
to arrive at Adjusted earnings*:
|
|
|
|
|
|
|
Acquisition-related
expenses
|
(a)
|
1.33
|
|
|
Restructuring
charges
|
|
0.09
|
-
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
EPS guidance
|
|
$ 10.60
|
-
|
$ 11.00
|
|
|
|
|
|
|
|
*
|
|
The known adjustments
are presented net of their related tax impact which amount to
approximately $0.66 to $0.68 pre share,
in the aggregate.
|
|
|
|
|
|
|
|
(a)
|
|
The adjustments
relate primarily to non-cash amortization of intangible assets
acquired in prior year business combinations.
|
|
|
|
|
|
|
|
Reconciliation of
GAAP Tax Rate Guidance to Adjusted
|
|
|
|
|
Tax Rate Guidance
for the Year Ending December 31, 2016
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
GAAP tax rate
guidance
|
|
17.5%
|
-
|
18.5%
|
|
|
|
|
|
|
|
|
Tax rate effect of
known adjustments discussed above
|
|
|
2.0%
|
|
|
|
|
|
|
|
|
Adjusted tax rate
guidance
|
|
19.5%
|
-
|
20.5%
|
|
|
|
|
|
|
|
CONTACT: Amgen, Thousand
Oaks
Trish Hawkins, 805-447-5631
(media)
Arvind Sood, 805-447-1060
(investors)
Logo - http://photos.prnewswire.com/prnh/20081015/AMGENLOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/amgens-2015-revenues-increased-8-percent-to-217-billion-and-adjusted-earnings-per-share-eps-increased-19-percent-to-1038-300211677.html
SOURCE Amgen