THOUSAND OAKS, Calif., April 24, 2012 /PRNewswire/ -- Amgen (NASDAQ:AMGN) reported total revenue increased 9 percent during the first quarter of 2012 to $4,048 million versus $3,706 million in the first quarter of 2011.
Adjusted earnings per share (EPS) were $1.61 for the first quarter of 2012, an increase of 20 percent compared to $1.34 for the first quarter of 2011. Adjusted net income increased 2 percent to $1,287 million in the first quarter of 2012 compared to $1,258 million in the first quarter of 2011.
"We delivered strong sales and earnings during the first quarter, reflecting broad strength across the portfolio," said Kevin Sharer, chairman & CEO. "The pipeline is developing well and the business is in good shape to address the opportunities and challenges ahead," concluded Sharer.
Adjusted EPS and adjusted net income for the first quarter of 2012 and 2011 exclude, for the applicable periods, certain expenses related to acquisitions and cost-savings initiatives, non-cash interest expense associated with our convertible notes and certain other items. These adjustments and other items are presented on the attached reconciliations.
On a reported basis in accordance with United States (U.S.) Generally Accepted Accounting Principles (GAAP), Amgen's GAAP diluted EPS were $1.48 for the first quarter of 2012, an increase of 23 percent compared to $1.20 for the first quarter of 2011. GAAP net income increased 5 percent to $1,184 million in the first quarter of 2012 compared to $1,125 million for the first quarter of 2011.
Product Sales Performance
Total product sales increased 8 percent to $3,901 million in the first quarter of 2012 versus $3,618 million in the first quarter of 2011. U.S. product sales increased 8 percent to $2,997 million in the first quarter of 2012 versus $2,778 million in the first quarter of 2011. International product sales increased 8 percent to $904 million in the first quarter of 2012 versus $840 million in the first quarter of 2011. The impact of foreign exchange on international product sales for the first quarter of 2012 was not material.
XGEVA® (denosumab) sales were $153 million in the first quarter of 2012, an increase of 14 percent over the fourth quarter of 2011, reflecting increased segment share as well as overall segment growth.
Prolia® (denosumab) sales were $88 million in the first quarter of 2012, an increase of 9 percent over the fourth quarter of 2011, reflecting continued global growth.
Combined Neulasta® (pegfilgrastim) and NEUPOGEN® (Filgrastim) sales increased 9 percent to $1,344 million in the first quarter of 2012 versus $1,232 million in the first quarter of 2011. Combined U.S. Neulasta and NEUPOGEN sales increased 13 percent to $1,053 million in the first quarter of 2012 versus $930 million in the first quarter of 2011, driven primarily by an increase in the average net sales price and, to a lesser extent, an increase in Neulasta unit demand. Combined Neulasta and NEUPOGEN international sales decreased 4 percent to $291 million in the first quarter of 2012 versus $302 million in the first quarter of 2011, due primarily to a decrease in the average net sales price. A mid single-digit percentage point increase in Neulasta unit demand was offset by a decline in NEUPOGEN units due primarily to biosimilar competition.
Enbrel® (etanercept) sales increased 7 percent to $938 million in the first quarter of 2012 versus $875 million in the first quarter 2011, driven primarily by an increase in the average net sales price. ENBREL remains the segment share leader in both the rheumatology and dermatology segments.
Aranesp® (darbepoetin alfa) sales decreased 11 percent to $518 million in the first quarter of 2012 versus $580 million in the first quarter of 2011. U.S. Aranesp sales decreased 19 percent to $202 million in the first quarter of 2012 versus $250 million in the first quarter of 2011, due primarily to a decline in unit demand, offset partially by a mid single-digit percentage point increase in the average net sales price. The unit decline reflects segment contraction resulting from changes to the product label and reimbursement environment that occurredduring 2011. International Aranesp sales decreased 4 percent to $316 million in the first quarter of 2012 versus $330 million in the first quarter of 2011, due primarily to a decrease in the average net sales price.
EPOGEN® (epoetin alfa) sales decreased 17 percent to $446 million in the first quarter of 2012 versus $535 million in the first quarter of 2011, reflecting the impact of changes to the label and reimbursement. The decline was comprised of an approximately 30 percent decrease in unit demand driven by a reduction in dose utilization, offset partially by reductions in customer discounts as part of new provider contracts that became effective Jan. 1, 2012.
On a sequential basis, EPOGEN sales decreased 8 percent, comprised of an approximately 20 percent decrease in unit demand driven by the timing of end-user purchases at the end of 2011 and a reduction in dose utilization. These decreases were offset partially by reductions in customer discounts as part of new provider contracts.
Sales of our other, growth-phase products increased 22 percent to $399 million in the first quarter 2012 versus $327 million in the first quarter of 2011. Sales of Sensipar®/Mimpara® (cinacalcet) increased 17 percent to $219 million in the first quarter of 2012 versus $187 million in the first quarter of 2011. Sales of Vectibix® (panitumumab) increased 20 percent to $90 million in the first quarter of 2012 versus $75 million in the first quarter of 2011. Sales of Nplate® (romiplostim) increased 38 percent to $90 million in the first quarter of 2012 versus $65 million in the first quarter of 2011. These increases were driven primarily by global unit growth.
Operating Expense Analysis on an Adjusted Basis:
Cost of sales increased to 17.1 percent of sales in the first quarter of 2012 versus 14.9 percent of sales in the first quarter of 2011. Excluding the impact of the Puerto Rico excise tax, cost of sales would have been 15.0 percent of sales for the first quarter of 2012 versus 14.6 percent of sales for the first quarter of 2011 driven primarily by higher inventory write-offs.
Research & Development (R&D) expenses increased 3 percent to $723 million in the first quarter of 2012 versus $703 million in the first quarter of 2011. The increase was due to higher costs associated with supporting our later stage clinical programs including AMG 145, AMG 785 and talimogene laherparepvec. This increase was offset partially by reduced expenses in Discovery Research and Translational Sciences.
Selling, General & Administrative (SG&A) expenses increased 5 percent to $1,057 million in the first quarter of 2012 versus $1,011 million in the first quarter of 2011. This increase was driven principally by higher spending on marketed products, related primarily to the launch of ENBREL and Prolia direct-to-consumer advertising campaigns as well as international expansion, and by increased ENBREL profit share expenses. These increases were offset partially by a favorable change to the estimated 2011 U.S. healthcare reform federal excise fee.
The adjusted tax rate for the first quarter of 2012 was 15.6 percent compared with 16.6 percent for the first quarter of 2011. The decrease was due primarily to changes in revenue and expense mix, the aforementioned adjustment to the non-deductible healthcare reform federal excise fee, and additional foreign tax credits associated with the Puerto Rico excise tax. This decrease was offset partially by the federal R&D credit benefit in the first quarter of 2011. As of March 31, 2012, the U.S. Congress had not extended the R&D tax credit that expired at the end of 2011. Excluding the impact of the Puerto Rico excise tax, the adjusted tax rate for the first quarter of 2012 would have been 20.2 percent versus 20.9 percent in the first quarter of 2011.
During the first quarter of 2012, Amgen repurchased approximately 21 million shares of common stock at a total cost of $1.4 billion. The Company currently has $3.6 billion remaining under its authorized stock repurchase program.
The Company previously announced that its Board of Directors declared a $0.36 per share dividend for the second quarter of 2012. The dividend will be paid on June 7, 2012, to all stockholders of record as of the close of business on May 16, 2012.
Average diluted shares for adjusted EPS for the first quarter of 2012 were 799 million versus 940 million for the first quarter of 2011.
Capital expenditures for the first quarter of 2012 were $129 million versus $100 million in the first quarter of 2011. Operating cash flow for the first quarter of 2012 was $1.0 billion, approximately the same as the first quarter of 2011. Worldwide cash and marketable securities were $19.4 billion and adjusted outstanding debt was $21.5 billion as of March 31, 2012.
2012 Guidance
The Company continues to expect 2012 total revenue to be in the range of $16.1 billion to $16.5 billion, and 2012 adjusted EPS to be in the range of $5.90 to $6.15, excluding certain expenses related to acquisitions and cost-savings initiatives, non-cash interest expense associated with our convertible notes and certain other items.
With respect to other guidance, Amgen continues to expect the adjusted tax rate for 2012 to be in the range of 14 percent to 15 percent. Excluding the Puerto Rico excise tax, Amgen still expects the adjusted tax rate for 2012 to be in the range of 19 percent to 20 percent.
The Company still expects 2012 capital expenditures to be approximately $700 million.
First Quarter Product and Pipeline Update
The Company provided the following information on selected products and clinical programs:
AMG 145: The Company discussed recently presented positive results from a Phase 1b clinical study in patients with high cholesterol who were taking statins. The Company also announced that four Phase 2 studies in subjects with high cholesterol had completed enrollment.
AMG 785: The Company discussed the recent initiation of a Phase 3 clinical study for the treatment of postmenopausal osteoporosis.
Brodalumab (AMG 827): The Company discussed the recent publication of positive results from a Phase 2 clinical study in patients with psoriasis and plans to commence Phase 3 clinical studies in 2012.
The Company discussed the collaboration with AstraZeneca Plc announced on April 2 to jointly develop and commercialize five monoclonal antibodies from Amgen's clinical inflammation portfolio.
The Company discussed the agreement announced on April 10 under which Amgen will acquire KAI, a privately held pharmaceutical company based in South San Francisco. The acquisition is subject to customary closing conditions.
Non-GAAP Financial Measures
Management has presented its operating results in accordance with GAAP and on an "adjusted" (or non-GAAP) basis for the three months ended March 31, 2012 and 2011. In addition, management has presented its outstanding debt in accordance with GAAP and on an "adjusted" (or non-GAAP) basis as of March 31, 2012. The Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. The Company uses these non-GAAP financial measures in connection with its own budgeting and financial planning. These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in conformity with GAAP. Further, our reconciliations of GAAP to "adjusted" operating results, which are included on the attached tables, are presented in the format of condensed consolidated statements of income solely to facilitate a reader's understanding of the impact of the various adjustments to our GAAP operating results, individually and in the aggregate, and are not intended to place any undue prominence on our adjusted operating results.
About Amgen
Amgen discovers, develops, manufactures and delivers innovative human therapeutics. A biotechnology pioneer since 1980, Amgen was one of the first companies to realize the new science's promise by bringing safe, effective medicines from lab to manufacturing plant to patient. Amgen therapeutics have changed the practice of medicine, helping millions of people around the world in the fight against cancer, kidney disease, rheumatoid arthritis, bone disease and other serious illnesses. With a deep and broad pipeline of potential new medicines, Amgen remains committed to advancing science to dramatically improve people's lives. To learn more about our pioneering science and vital medicines, visit www.amgen.com. Follow us on http://twitter.com/amgen.
