Amgen (AMGN) Up 2.9% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Amgen (AMGN). Shares have added about 2.9% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Amgen due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. Q4 Earnings & Revenues BeatAmgen reported fourth-quarter 2024 adjusted earnings of $5.31 per share, which beat the Zacks Consensus Estimate of $5.03 per share. Earnings rose 13% year over year as higher revenues were partially offset by higher operating costs.Total revenues of $9.1 billion also beat the Zacks Consensus Estimate of $8.9 billion. Total revenues rose 11% year over year.Total product revenues increased 11% from the year-ago quarter to $8.72 billion as volume growth was partially offset by continued price declines. Volumes rose 14% in the quarter.Other revenues were $370 million in the quarter, up around 2% year over year.Ten products, including Repatha, Blincyto, Tezspire, Tavneos and Evenity, achieved double-digit volume growth in the quarter. Rare disease drugs, mostly Horizon’s products, also boosted sales growth in the quarter, contributing $1.2 billion to sales. Excluding the contribution from Horizon, sales grew 10% while volumes rose 15%. However, sales of some key drugs like Prolia and Xgeva missed estimates.Performance of Key DrugsGeneral MedicineProlia revenues came in at $1.17 billion, up 5% from the year-ago quarter as volume growth was partially offset by lower inventory levels. Prolia sales missed the Zacks Consensus Estimate of $1.18 billion. Evenity recorded sales of $431 million in the quarter, up 36% year over year, driven by solid volume growth in the United States. Evenity sales beat the Zacks Consensus Estimate of $413.0 million as well as our model estimate of $418.3 million.Repatha generated revenues of $606 million, up 45% year over year, driven by higher volume growth due to broad reimbursement and removal of prior authorization requirements by several payers in the United States. The volume growth was partially offset by lower prices due to higher rebates to support expanded access. Repatha sales beat the Zacks Consensus Estimate of $555.0 million and our model estimate of $542.9 million. While 2024 sales were impacted by price erosion, in 2025, Amgen expects less price erosion for Repatha, with net price expected to decline by mid-single digits or less. Hematology-OncologyXgeva delivered revenues of $561 million, up 6% year over year, driven by volume growth. Xgeva sales missed the Zacks Consensus Estimate of $565.0 million but beat our model estimate of $556.3 million.Kyprolis recorded sales of $372 million, up 6% year over year, driven by volume growth in outside U.S. markets.  Vectibix revenues came in at $246 million, down 2% year over year due to lower volumes and currency headwinds.Nplate sales declined 13% to $337 million. The year-ago quarter’s sales included a U.S. government order. Excluding this order, Nplate sales grew 4% year over year.Blincyto sales increased 58% from the year-ago period to $381 million, driven by volume growth. Blincyto’s volume growth benefited from broad prescribing across academic and community segments which is expected to continue to drive sales growth of the drug in 2025. Lumakras/Lumykras recorded sales of $85 million in the quarter, up 10% from the year-ago period. Imdelltra (tarlatamab), approved for pre-treated advanced small cell lung cancer (ES-SCLC) in May 2024, recorded sales of $67 million in the fourth quarter compared with $36 million in the third quarter. The drug’s 86% sequential growth was driven by volume growth and favorable inventory levels. In oncology biosimilars, sales of Mvasi were $173 million in the quarter, down 8% year over year due to increased competitive pressure.InflammationSales of Otezla were $624 million in the quarter, down 1% due to lower selling price, which offset the benefit from volume growth of 5%. Otezla sales beat the Zacks Consensus Estimate of $611.0 million as well as our estimate of $605.4 million. Enbrel revenues of $1 billion were flat year over year as favorable changes to estimated sales deductions were offset by lower selling prices. Enbrel sales beat the Zacks Consensus Estimate of $864.0 million as well as our estimate of $874.5 million. Going forward, Amgen expects volumes to be flat for Enbrel, while net selling price is expected to continue to decline, including the impact from the IRA Medicare Part D price set by CMS.Sales of Otezla and Enbrel are expected to be lower in the first quarter of 2025 compared to the other quarters per historical trends due to the impact of benefit plan changes, insurance reverification and increased co-pay expenses as U.S. patients work through deductibles.Tezspire (tezepelumab) recorded sales of $296 million in the quarter, up 67% year over year, driven by volume growth. Tezspire sales beat the Zacks Consensus Estimate of $293.0 million and our estimate of $274.4 million.Amjevita/Amgevita sales were $294 million in the quarter, up 84% year over year.Rare DiseaseAmgen’s acquisition of Horizon Therapeutics in 2023 added several rare disease drugs, such as Tepezza, Krystexxa and Uplizna, to AMGN’s portfolio. Tepezza sales rose 3% year over year to $460 million. Krystexxa rose 27% year over year to $346 million and Uplizna rose 55% year over year to $101 millionAmgen recently got approval for Tepezza in Japan and expects to launch it in the country in the first half of 2025 and seven additional countries in 2025.Ultra-rare products acquired from Horizon generated revenues of $214 million in the quarter, up 30% year over year.New drug Tavneos generated $81 million in sales in the quarter, up 84% year over year, driven by new patient volume growth. Established ProductsTotal sales of established products, which include Epogen, Aranesp, Parsabiv and Neulasta, decreased 29% year over year in the quarter to $500 million.Operating Margins DeclineAdjusted operating margin declined 0.4 percentage points to 46.3% in the quarter. Adjusted operating expenses increased 11% to $5.05 billion. R&D expenses rose 14% year over year to $1.7 billion due to higher spending on later-stage clinical programs, most notably MariTide and olpasiran. SG&A spending rose 3% to $1.82 billion.The adjusted tax rate was 14.8% in the quarter, a 1.1-point decrease from the year-ago quarter.2024 ResultsFull-year 2024 sales rose 19% to $33.4 billion, which slightly beat the Zacks Consensus Estimate of $33.2 billion. Sales were within the guided range of $33.0 billion to $33.8 billion.Adjusted earnings for 2024 were $19.84 per share, up 6% year over year. Earnings beat the Zacks Consensus Estimate of $19.56 per share and were within the guided range of $19.20 to $20.00. 2025 GuidanceAmgen issued a fresh guidance for 2025. Total revenues are expected in the range of $34.3 billion to $35.7 billion. Amgen expects key drugs like Repatha, Evenity Tezspire and oncology and rare disease drugs as well as biosimilars to drive top-line growth in 2025. However, the biosimilar erosion of Prolia/Xgeva and continued price declines across its portfolio of drugs will partially offset the growth.Other revenue is expected to be $1.4 billion in 2025.Adjusted earnings are expected in the range of $20.00 to $21.20 per share. Adjusted operating margin is expected to be roughly 46%, which implies a decline from 46.9% in 2024 due to higher R&D costs. In the first quarter of 2025, Amgen expects its operating margin to be the lowest of the year at around 42%. Operating margin is expected to accelerate in future quarters. R&D costs are expected to increase year over year in the mid-teens range in 2025. Adjusted SG&A costs, as a percentage of product sales, are expected to decline approximately 1 to 2 percentage points year over year. The adjusted tax rate is expected to be in the range of 15.0% to 16.0%. Capital expenditures are expected to be approximately $2.3 billion. Amgen expects to buy back shares worth not more than $500 million in 2025.Pipeline UpdatesAmgen plans to conduct a broad phase III program on MariTide across obesity, obesity-related conditions and type-II diabetes. The first studies will begin in the first half of 2025. Amgen expects data readouts from the ongoing phase II study in type II diabetes and part II of the ongoing phase II study in obesity in the second half of 2025. How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in fresh estimates.The consensus estimate has shifted -10.31% due to these changes.VGM ScoresAt this time, Amgen has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Amgen has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amgen Inc. (AMGN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks