Amgen Q2 2020 Earnings Report
Key Takeaways
Amgen reported a 6% increase in total revenues to $6.2 billion for Q2 2020, driven by higher unit demand, although partially offset by lower net selling prices. GAAP EPS decreased by 15% to $3.05, primarily due to amortization costs from the Otezla acquisition, while non-GAAP EPS increased by 7% to $4.25. The company reaffirmed its 2020 total revenue guidance at $25.0-$25.6 billion and revised its EPS guidance to $10.73-$11.43 on a GAAP basis and $15.10-$15.75 on a non-GAAP basis.
Total revenues increased by 6% to $6.2 billion, driven by higher unit demand.
GAAP EPS decreased by 15% to $3.05, impacted by Otezla acquisition costs.
Non-GAAP EPS increased by 7% to $4.25, driven by increased revenues and fewer weighted-average shares outstanding.
Free cash flow increased to $2.7 billion, driven primarily by the timing of tax payments.
Amgen
Amgen
Amgen Revenue by Segment
Forward Guidance
Amgen reaffirmed its 2020 total revenue guidance at $25.0 billion to $25.6 billion, and revised its EPS guidance to $10.73-$11.43 on a GAAP basis and $15.10-$15.75 on a non-GAAP basis.
Positive Outlook
- Total revenues are expected to be in the range of $25.0 billion to $25.6 billion.
- Capital expenditures are projected to be approximately $600 million.
- The quarterly dividend is maintained at $1.60 per share.
- Share repurchases will be executed opportunistically.
- AMG 510 (sotorasib) is expected to have initial data from a potentially pivotal Phase 2 monotherapy study in patients with advanced non-small cell lung cancer (NSCLC) in H2 2020.
Challenges Ahead
- Share repurchases will be at the lower end of the previous guidance of $3 billion to $5 billion.
- Sales of negatively affected products fell most early in the second quarter with sales beginning to recover in the latter weeks of the quarter.
- Prolia sales decreased 6% year-over-year driven by lower unit demand as a result of fewer office visits by osteoporosis patients.
- We anticipate a slowdown in reported sales in the third quarter as the first half of 2020 benefited from larger shipments to Astellas, our partner in Japan, to ensure they had appropriate inventory.
- Neulasta sales decreased 28% year-over-year driven by the impact of biosimilar competition on net selling price and unit demand.
Revenue & Expenses
Visualization of income flow from segment revenue to net income