Amgen Q3 Earnings Beat, Sales In Line, Obesity Candidate in Focus

Amgen AMGN reported third-quarter 2024 adjusted earnings of $5.58 per share, which beat the Zacks Consensus Estimate of $5.11. Earnings rose 13% year over year as higher revenues offset the impact of higher operating costs and interest expenses.Total revenues of $8.51 billion came in line with the Zacks Consensus Estimate. Total revenues rose 23% year over year.Total product revenues increased 24% from the year-ago quarter to $8.15 billion. Higher volumes were partially offset by lower selling prices of several drugs. Volumes rose 29% in the quarter while prices declined 2%.Other revenues were $352 million in the quarter, down around 1% year over year.AMGN’s General Medicine DrugsProlia revenues came in at $1.05 billion, up 6% from the year-ago quarter as volume growth was partially offset by lower inventory levels. Prolia sales missed the Zacks Consensus Estimate of $1.11 billion as well as our model estimate of $1.09 billion.Evenity recorded sales of $399 million in the quarter, up 30% year over year, driven by solid volume growth in the United States. Evenity sales missed the Zacks Consensus Estimate of $406.0 million but beat our model estimate of $381.9 million.Repatha generated revenues of $567 million, up 40% year over year. Repatha volumes rose 41% due to expanded formulary coverage in the United States. The volume growth was partially offset by lower prices due to higher rebates to support expanded access. Favorable changes to estimated sales deductions also benefited sales growth. Repatha sales beat the Zacks Consensus Estimate of $524 million and our model estimate of $502.0 million.AMGN’s Hematology-Oncology DrugsXgeva delivered revenues of $541 million, up 4% year over year, driven by higher net selling prices. Xgeva sales missed the Zacks Consensus Estimate of $552.0 million and our model estimate of $542.9 million.Kyprolis recorded sales of $378 million, up 8% year over year, driven by volume growth in outside U.S. markets.  Vectibix revenues came in at $282 million, up 12% year over year, driven by volume growth.Nplate sales rose 9% to $456 million. Blincyto sales increased 49% from the year-ago period to $327 million, driven by volume growth. Blincyto’s volume growth benefited from recent label expansion for use in patients with Philadelphia chromosome-negative B-cell ALL in the consolidation phase regardless of measurable residual disease status.Lumakras/Lumykras recorded sales of $98 million in the quarter, up 88% from the year-ago period.Imdelltra (tarlatamab), approved for pre-treated advanced small cell lung cancer (ES-SCLC) in May 2024, recorded sales of $36 million in the third quarter compared with $12 million in the previous quarter. The drug’s 200% sequential growth was driven by volume growth.AMGN’s Inflammation DrugsSales of Otezla were $564 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 $559.0 million but missed our estimate of $588.0 million.Enbrel revenues of $825 million declined 20% year over year due to lower selling price and unfavorable changes to estimated sales deductions. Volumes rose 4% in the quarter. Enbrel sales missed the Zacks Consensus Estimate of $921.0 million as well as our estimate of $920.1 million.Asthma drug Tezspire (tezepelumab) recorded sales of $269 million in the quarter, up 67% year over year, driven by volume growth.Amgen has a partnership with AstraZeneca AZN for Tezspire. Amgen and AstraZeneca share costs and profits equally after AstraZeneca pays a mid-single-digit inventor royalty to Amgen. While AstraZeneca leads development, Amgen leads manufacturing.AMGN’s Rare Disease DrugsAmgen closed the acquisition of Horizon Therapeutics for $27.8 billion in October 2023, which added several rare disease drugs like Tepezza, Krystexxa and Uplizna to AMGN’s portfolio.Tepezza, Krystexxa and Uplizna generated sales of $488 million, $310 million and $106 million, respectively, in the third quarter. Ultra-rare products acquired from Horizon generated revenues of $188 million in the quarter.New drug Tavneos generated $80 million in sales in the thirdquarter, up 116% year over year, driven by new patient volume growth. Tavneos, approved for the treatment of patients with ANCA-associated vasculitis, a severe systemic autoimmune disease, was added to Amgen’s portfolio with the 2022 acquisition of ChemoCentryx.AMGN’s Established ProductsTotal sales of established products, which include Epogen, Aranesp, Parsabiv and Neulasta, decreased 7% year over year in the quarter to $550 million.AMGN’s Cost and Margin DiscussionAdjusted operating margin declined 2.4 percentage points to 49.6% in the quarter.Adjusted operating expenses increased 27% to $4.46 billion. R&D expenses rose 35% year over year to $1.44 billion. SG&A spending rose 21% to $1.57 billion.AMGN’s 2024 GuidanceAmgen slightly raised the lower end of its previously issued revenue guidance for 2024. Total revenues are expected in the range of $33.0 billion to $33.8 billion compared with the prior expectation of $32.8 billion to $33.8 billion.Adjusted earnings guidance was tightened from a range of $19.10 to $20.10 per share to $19.20 to $20.00 per share.  Adjusted EPS in the fourth quarter is expected to be lower than the third quarter, consistent with historical trends. This is because R&D costs are expected to be highest for the year in the fourth quarter.Adjusted operating expenses are expected to grow approximately 25% year over year in 2024. R&D costs are expected to increase more than 25% in 2024. The adjusted tax rate is expected to be in the range of 14.0%-15.0% versus the prior expectation of 15.0% to 16.0%. Capital expenditures are expected to be approximately $1.3 billion.Our Take on AMGN’s Q3 ResultsAmgen’s third-quarter results were decent as it beat estimates for earnings and matched the same for sales. Ten products, including Repatha, Blincyto, Tezspire and Evenity, achieved double-digit volume growth in the quarter. Rare disease drugs, mostly Horizon’s products, also boosted sales growth in the quarter. Excluding the contribution from Horizon, sales grew 8% while volumes rose 10%. However, sales of some key drugs like Prolia and Xgeva missed estimates. Also, higher operating expenses continued to put pressure on margins in the quarter.Angen’s stock was up more than 1% in after-market hours on Wednesday.So far this year, Amgen’s stock has gained 9.5% against the industry‘s 3.3% decline.Image Source: Zacks Investment ResearchAmgen’s old medicines like Evenity, Repatha and Prolia, as well as newer medicines like Tavneos and Tezspire, are driving sales, more than offsetting declining revenues from oncology biosimilars and legacy established products such as Enbrel. The addition of Horizon products boosted revenue growth in the first three quarters of the year. However, weakness in some key brands like Otezla is a headwind.Amgen has some key pipeline assets in obesity and inflammation, which have a large market opportunity.Investors are particularly interested in the progress of Amgen’s GLP-1 receptor candidate, MariTide (maridebart cafraglutide), for obesity. Top-line 52-week data from the phase II study on GLP-1 receptor candidate, MariTide, in overweight or obese adults is expected in late 2024, which will be a key catalyst for the stock. Amgen is planning to conduct a comprehensive phase III program on the candidate across obesity, obesity-related conditions and type-II diabetes. Amgen began a phase II study on candidate in type II diabetes in the third quarter.Amgen has some preclinical obesity candidates in its pipeline, including oral and injectable approaches comprising both incretin and non-incretin mechanisms. Amgen began a phase I study on one of these candidates, AMG 513 for obesity, in the third quarter.LLY & NVO — Key Players in the Diabetes and Obesity MarketThe GLP-1 segment is an important class of drugs for multiple cardiometabolic diseases and is gaining significant popularity.Some popular GLP-1 receptor drugs available in the market are Eli Lilly’s LLY tirzepatide medicines, diabetes drug Mounjaro and weight loss medicine, Zepbound and Novo Nordisk’s NVO semaglutide, approved as Ozempic pre-filled pen and Rybelsus oral tablet for type II diabetes and as Wegovy injection for weight management. Eli Lilly reported disappointing third-quarter sales of Mounjaro and Zepbound on Wednesday. Novo Nordisk will report its third-quarter results on Nov. 6.AMGN’s Zacks RankAmgen currently carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Amgen Inc. Price and Consensus Amgen Inc. price-consensus-chart | Amgen Inc. Quote5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>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 AstraZeneca PLC (AZN): Free Stock Analysis Report Novo Nordisk A/S (NVO): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis Report Amgen Inc. (AMGN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks