AMGN's Q4 Earnings Beat, Obesity Candidate Under FDA Clinical Hold

Amgen AMGN 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.AMGN’s General Medicine DrugsProlia revenues came in at $1.17 billion, up 5% from the year-ago quarter. 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. Repatha volume growth was driven by broad reimbursement and removal of prior authorization requirements by several payers in the United States. 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.AMGN’s Hematology-Oncology DrugsXgeva 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. Blincyto sales increased 58% from the year-ago period to $381 million, driven by volume growth.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.AMGN’s Inflammation DrugsSales 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.Asthma drug 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.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’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 2% year over year to $346 million and Uplizna rose 55% year over year to $101 million.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 thequarter, up 84% year over year, driven by new patient volume growth.AMGN’s Established ProductsTotal sales of established products, which include Epogen, Aranesp, Parsabiv and Neulasta, decreased 29% year over year in the quarter to $500 million.AMGN’s Cost and Margin DiscussionAdjusted 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. SG&A spending rose 3% to $1.82 billion.AMGN's 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.AMGN Issues 2025 GuidanceAmgen issued a fresh guidance for 2025. Total revenues are expected in the range of $34.3 billion to $35.7 billion. The Zacks Consensus Estimate stands at $34.48 billion.Adjusted earnings are expected in the range of $20.00 to $21.20 per share. The Zacks Consensus Estimate is pegged at $20.53 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.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.FDA Places Clinical Hold on AMGN Obesity Drug StudyAlong with the earnings release, Amgen announced that the FDA has put a clinical hold on a phase I study on its obesity candidate, AMG 513. The phase I study on AMG 513 began in the third quarter. Amgen has not disclosed the obesity candidate’s mechanism of action. Amgen also did not reveal why the FDA placed the study on AMG 513 on clinical hold. Amgen believes the clinical hold is not drug-related. Chief executive officer Robert Bradway mentioned on the call that the company still expects to have the candidate in development.This is the second setback for Amgen in its obesity pipeline in less than six months. In November 2024, Amgen announced the much-awaited 52-week top-line data from a phase II study on MariTide, a GIPR/GLP-1 receptor being developed for treating obesity. The data from the double-blind dose-ranging study showed that in people who were obese or overweight but without type II diabetes, MariTide resulted in up to approximately 20% average weight loss over 52 weeks without reaching a weight loss plateau. However, the weight loss reduction was at the lower end of investor expectations of 20-25%. More data from part 2 of the phase II study are expected in the second half of 2025.Amgen plans to conduct a broad phase III program on MariTide across obesity, obesity-related conditions and type-II diabetes. Amgen expects data readouts from the ongoing phase II study in type II diabetes in the second half of 2025.Our Take on AMGN’s Q4 ResultsAmgen’s fourth-quarter results were decent as it beat estimates for earnings as well as sales. 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. Also, higher operating expenses continued to put pressure on margins in the quarter.However, despite the better-than-expected fourth-quarter results and a decent outlook for 2025, Amgen’s stock was down 1.4% in after-market hours on Tuesday due to the setback for its obesity drug. Investors are paying close attention to Amgen’s development plans for obesity candidates.In the past year, Amgen’s stock has declined 8.6% compared with the industry‘s 11.0% decline.Image Source: Zacks Investment ResearchAmgen’s key medicines like Evenity and Repatha 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 2024. However, weakness in some key brands like Otezla is a headwind.Also, sales of Amgen’s best-selling drugs, Prolia and Xgeva, are expected to decline in 2025 due to biosimilar competition. The FDA approved Novartis’ NVS generic arm Sandoz’s Wyost/Jubbonti, biosimilar versions of Xgeva/Prolia, last year in March.  Novartis can launch Wyost/Jubbonti sometime in mid-2025 per the terms of a settlement between Sandoz and Amgen.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.5 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 Novartis AG (NVS): 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