THOUSAND OAKS, Calif., Jan. 26, 2012 /PRNewswire/ -- Amgen (NASDAQ: AMGN) reported total revenue increased 3 percent during the fourth quarter of 2011 to $3,973 million versus $3,841 million in the fourth quarter of 2010. For the full year 2011, total revenue increased 4 percent to $15,582 million from $15,053 million in 2010.
Adjusted earnings per share (EPS) were $1.21 for the fourth quarter of 2011, an increase of 3 percent compared to $1.17 for the fourth quarter of 2010. Adjusted net income decreased 6 percent to $1,039 million in the fourth quarter of 2011 compared to $1,103 million in the fourth quarter of 2010.
Full year 2011 adjusted EPS were $5.33 versus $5.21 in 2010, a 2 percent increase. Full year 2011 adjusted net income decreased 3 percent to $4,858 million versus $5,024 million in 2010.
We exited 2011 with good momentum and the outlook for 2012 is even stronger, said Kevin Sharer, chairman & CEO at Amgen. Our acquisition of Micromet, announced today, further builds our innovative oncology therapeutics pipeline and capabilities.
Adjusted EPS and adjusted net income for the fourth quarter and full year 2011 and 2010 exclude, for the applicable periods, a charge for a legal settlement; certain expenses related to acquisitions, impairments and cost-savings initiatives; non-cash interest expense associated with our convertible notes; the income tax benefit as a result of resolving certain non-routine transfer pricing issues with tax authorities and certain other items. These adjustments and other items are presented on the attached reconciliation tables.
On a reported basis in accordance with United States (U.S.) Generally Accepted Accounting Principles (GAAP), Amgens GAAP diluted EPS were $1.08 for the fourth quarter of 2011, unchanged from the same quarter last year. GAAP net income of $934 million in the fourth quarter of 2011 decreased 9 percent from $1,022 million in the same quarter last year. For the full year 2011, Amgens reported GAAP diluted EPS were $4.04, a decrease of 16 percent compared to $4.79 for the full year 2010. For the full year 2011, GAAP net income decreased 20 percent to $3,683 million versus $4,627 million for the full year 2010. GAAP diluted EPS and net income for the full year 2011 were negatively impacted by a previously disclosed charge for a legal settlement.
Product Sales Performance
Total product sales increased 4 percent to $3,907 million in the fourth quarter of 2011 versus $3,760 million in the fourth quarter of 2010. U.S. product sales increased 5 percent to $3,007 million in the fourth quarter of 2011 versus $2,869 million in the fourth quarter of 2010. International product sales increased 1 percent to $900 million in the fourth quarter of 2011 versus $891 million in the fourth quarter of 2010. Excluding the $28 million unfavorable impact of foreign exchange in the fourth quarter of 2011, total product sales increased 5 percent and international product sales increased 4 percent. For the year, total product sales increased 4 percent to $15,295 million in 2011 versus $14,660 million in 2010. U.S. product sales increased 4 percent to $11,725 million in 2011 versus $11,254 million in 2010. International product sales increased 5 percent to $3,570 million in 2011 versus $3,406 million in 2010. Excluding the $33 million favorable impact of foreign exchange for the year 2011, total product sales and international product sales both increased 4 percent.
XGEVA® (denosumab) sales were $134 million in the fourth quarter of 2011, an increase of 31 percent over the third quarter, and $351 million for the full year 2011, reflecting increased segment share as well as overall segment growth.
Prolia® (denosumab) sales were $81 million in the fourth quarter of 2011, an increase of 59 percent over the third quarter, and $203 million for the full year 2011, reflecting significant growth globally.
Combined Neulasta® (pegfilgrastim) and NEUPOGEN® (Filgrastim) sales increased 7 percent to $1,319 million in the fourth quarter of 2011 versus $1,237 million in the fourth quarter of 2010. Combined U.S. Neulasta and NEUPOGEN sales increased 12 percent to $1,021 million in the fourth quarter of 2011 versus $914 million in the fourth quarter of 2010, primarily driven by an increase in the average net sales price, and to a lesser extent, favorable changes in wholesaler inventories. Combined Neulasta and NEUPOGEN international sales decreased 8 percent to $298 million in the fourth quarter of 2011 versus $323 million in the fourth quarter of 2010. Excluding the $10 million unfavorable impact of foreign exchange, international Neulasta and NEUPOGEN product sales decreased 5 percent primarily driven by a NEUPOGEN unit decline. For the year, combined Neulasta and NEUPOGEN sales increased 8 percent to $5,212 million in 2011 versus $4,844 million in 2010, principally driven by an increase in the U.S. average net sales price and Neulasta unit growth.
Enbrel® (etanercept) sales increased 1 percent to $945 million in the fourth quarter of 2011 versus $939 million in the fourth quarter 2010, primarily driven by low single-digit percentage point unit growth, offset partially by unfavorable changes in wholesaler inventories. For the year, ENBREL sales increased 5 percent to $3,701 million in 2011 versus $3,534 million in 2010, primarily driven 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 15 percent to $538 million in the fourth quarter of 2011 versus $633 million in the fourth quarter of 2010. U.S. Aranesp sales decreased 22 percent to $223 million in the fourth quarter of 2011 versus $285 million in the fourth quarter of 2010, due principally to a unit decline, offset partially by an 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 9 percent to $315 million in the fourth quarter of 2011 versus $348 million in the fourth quarter of 2010. Excluding the $12 million unfavorable impact of foreign exchange in the fourth quarter of 2011, international Aranesp sales decreased 6 percent primarily due to a unit decline reflecting segment contraction, while share remained stable. For the year, worldwide Aranesp sales decreased 7 percent to $2,303 million in 2011 versus $2,486 million in 2010, due principally to a high-teens percentage point unit decline in the U.S.
EPOGEN® (epoetin alfa) sales decreased 18 percent to $486 million in the fourth quarter of 2011 versus $591 million in the fourth quarter of 2010. For the year, EPOGEN sales decreased 19 percent to $2,040 million in 2011 versus $2,524 million in 2010. This was due to a decrease in dose utilization related to changes in reimbursement and the product label, offset partially by an increase in the average net sales price and patient population growth. Relative to the third quarter of 2011, fourth quarter EPOGEN sales increased 2 percent reflecting signs of dose stabilization.
Sales of our other, growth-phase products increased 16 percent to $1,427 million for the full year 2011 as compared to 2010. Sales of Sensipar®/Mimpara® (cinacalcet) increased 15 percent to $216 million in the fourth quarter of 2011 versus $188 million in the fourth quarter of 2010. Sales of Vectibix® (panitumumab) increased 10 percent to $87 million in the fourth quarter of 2011 versus $79 million in the fourth quarter of 2010. Sales of Nplate® (romiplostim) increased 23 percent to $80 million in the fourth quarter of 2011 versus $65 million in the fourth quarter of 2010. For the year, Sensipar/Mimpara sales increased 13 percent to $808 million in 2011 versus $714 million in 2010, Vectibix sales increased 12 percent to $322 million versus $288 million in 2010, and Nplate sales increased 30 percent to $297 million versus $229 million in 2010. These increases were driven primarily by global unit growth for both the fourth quarter and the full year.
Operating Expense Analysis on an Adjusted Basis:
Cost of sales increased to 16.5 percent of sales in the fourth quarter of 2011 versus 15.1 percent of sales in the fourth quarter of 2010. Excluding the $79 million impact of the Puerto Rico excise tax, cost of sales would have been 14.4 percent of sales for the quarter, down 0.7 percentage points versus the fourth quarter of 2010. For 2011, cost of sales increased to 15.3 percent of sales versus 15.0 percent of sales in 2010. Excluding the $211 million impact of the Puerto Rico excise tax, cost of sales would have been 14.0 percent of sales for the year, down 1.0 percentage point versus 2010. These decreases were driven primarily by improved productivity, offset partially by less favorable product mix.
Research & Development (R&D) expenses increased 2 percent to $842 million in the fourth quarter of 2011 versus $825 million in the fourth quarter of 2010. The increase was due to costs associated with supporting our later stage clinical programs including AMG 145, talimogene laherparepvec, AMG 386 and ganitumab (AMG 479). This increase was largely offset by reduced expenses related to Discovery Research, Translational Sciences and marketed product support. For 2011, R&D expenses were $3,116 million in 2011 versus $2,773 million in 2010, an increase of 12 percent. This change was primarily due to increased later stage clinical program support including AMG 386, ganitumab, talimogene laherparepvec and AMG 145.
Selling, General & Administrative (SG&A) expenses increased 5 percent to $1,199 million in the fourth quarter of 2011 versus $1,142 million in the fourth quarter of 2010. This increase was driven primarily by the U.S. healthcare reform federal excise fee. For 2011, SG&A expenses increased 13 percent to $4,434 million versus $3,925 million in 2010. This increase was driven primarily by the U.S. healthcare reform federal excise fee, higher ENBREL profit share expenses, the unfavorable impact of foreign exchange, as well as increased expenses related to the launches of Prolia and XGEVA and expansion of our international operations.
The adjusted tax rate for the fourth quarter of 2011 was 14.3 percent compared with 15.5 percent for the fourth quarter of 2010. The decrease was due primarily to the recognition of foreign tax credits associated with the Puerto Rico excise tax. This decrease was offset partially by the non-deductible U.S. healthcare reform federal excise fee and the full-year benefit in the fourth quarter of 2010 from the enactment of the federal R&D credit. Excluding the impact of the Puerto Rico excise tax, the adjusted tax rate for the fourth quarter of 2011 would have been 18.1 percent.
For 2011, the adjusted tax rate was 14.3 percent compared to 18.8 percent for 2010. The decrease in the full year adjusted tax rate was due primarily to the aforementioned foreign tax credits associated with the Puerto Rico excise tax offset partially by the non-deductible U.S. healthcare reform federal excise fee; excluding the impact of the Puerto Rico excise tax, the adjusted tax rate for 2011 would have been 19.2 percent.
During the fourth quarter of 2011, Amgen repurchased approximately 86 million shares of common stock at a total cost of $5.2 billion. During the fourth quarter of 2010, Amgen repurchased approximately 20 million shares of common stock at a total cost of $1.1 billion.
During 2011, Amgen repurchased approximately 144 million shares of common stock at a total cost of $8.3 billion and an average price of $57.55. During 2010, Amgen repurchased approximately 66 million shares of common stock at a total cost of $3.8 billion and an average price of $57.14. The Company currently has $5.0 billion remaining under its authorized stock repurchase program.
Average diluted shares for adjusted EPS for the fourth quarter of 2011 were 860 million versus 946 million for the fourth quarter of 2010 and 912 million for the full year 2011 versus 965 million for the full year 2010.
Capital expenditures for the fourth quarter of 2011 were approximately $241 million versus $182 million in the fourth quarter of 2010. For 2011, capital expenditures were $584 million versus $580 million in 2010. Operating cash flow for 2011 decreased 12 percent to approximately $5.1 billion versus approximately $5.8 billion in 2010 due primarily to increased interest expense and working capital increases related to the launches of Prolia and XGEVA. Worldwide cash and marketable securities were $20.6 billion and adjusted outstanding debt was $21.6 billion as of Dec. 31, 2011.
2012 Guidance
The Company expects total revenue for 2012 to be in the range of $16.1 billion to$16.5 billion. Amgen expects 2012 adjusted EPS to be in the range of $5.90 to $6.15, excluding certain expenses related to acquisitions, the non-cash interest expense associated with our convertible notes, stock option expense and certain expenses related to a cost-saving initiative.
With respect to other guidance, Amgen expects the adjusted tax rate for 2012 to be in the range of 14 percent to 15 percent. This reflects the impact of the foreign tax credit associated with the Puerto Rico excise tax. Excluding the Puerto Rico excise tax, Amgen expects the adjusted tax rate for 2012 to be in the range of 19 percent to 20 percent.
The Company expects 2012 capital expenditures to be approximately $700 million.
Fourth Quarter Product and Pipeline Update
The Company provided the following information on selected products and clinical programs:
XGEVA: The Company discussed the Oncologic Drugs Advisory Committee (ODAC) meeting scheduled on Feb. 8, 2012 to review the Supplemental Biologics License Application (sBLA) to treat men with castration-resistant prostate cancer (CRPC) at high risk of developing bone metastases.
Vectibix: The Company discussed the previously announced European Union (EU) marketing authorization for the treatment of first- and second-line metastatic colorectal cancer (mCRC).
Prolia: The Company announced that on Nov. 21, 2011, the sBLA was filed with the U.S. Food and Drug Administration (FDA) to increase bone mass in men with osteoporosis at high risk for fracture. The FDA will target a Prescription Drug User Fee Act (PDUFA) action date of Sept. 20, 2012.
Nplate: The Company discussed the FDA modification of the requirements of the Risk Evaluation and Mitigation Strategy (REMS) Program. Prescribing physicians, patients and institutions are no longer required to enroll in the safety monitoring program in order to prescribe or receive Nplate.
AMG 386: The Company announced that enrollment has been suspended in the Phase 3 study in second-line ovarian cancer due to DOXIL® (doxorubicin HCl liposome injection) supply issues. Another larger pivotal study in the same indication continues to enroll.
The Company expects the following clinical data in 2012:
- Sensipar/Mimpara Phase 3 Evaluation of Cinacalcet Therapy to Lower Cardiovascular Events (EVOLVE) study
- Talimogene laherparepvec Phase 3 melanoma study - interim data for the primary endpoint (durable response)
- AMG 785 - Phase 2 fracture healing studies
- AMG 145 - Phase 2 studies
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 and twelve months ended Dec. 31, 2011 and 2010. In addition, management has presented its outstanding debt in accordance with GAAP and on an adjusted (or non-GAAP) basis as of Dec. 31, 2011. 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 sciences 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 peoples lives. To learn more about our pioneering science and vital medicines, visit www.amgen.com. Follow us on www.twitter.com/amgen.
