Key takeaways
View moreAmgen's current valuation appears significantly below industry averages (EV/EBITDA of 14.99 vs. 62.14 industry avg) while demonstrating superior operational performance (ROE of 105.67% vs. -154.69% industry avg) and strong growth prospects through its pipeline and recent acquisitions. While high debt levels and liquidity concerns present risks, these appear more than offset by the company's strong market position, robust product portfolio, and promising growth opportunities.
- Amgen's profitability metrics (ROA, ROE, ROIC) significantly exceed industry averages, indicating strong financial performance.
- Liquidity is a concern, with the current ratio decreasing to 1.17 as of March 31, 2025, below the industry average, suggesting potential short-term financial challenges.
- High debt levels, with a total debt to equity ratio of 924.46, elevate financial risk and vulnerability to economic downturns.
- The acquisition of Horizon Therapeutics strengthens Amgen's rare disease portfolio but introduces integration costs and potential pricing pressures.
- Amgen's stock has outperformed the healthcare sector benchmark (XLV) year-to-date, but Vertex (VRTX) has shown better long-term performance.
- Management reaffirmed its 2025 revenue and EPS guidance, providing clarity on future expectations.
- Analysts are focused on payer dynamics and competition in key markets, which could impact access and pricing for Amgen's products.
- The company is investing in its R&D pipeline, with R&D expenses expected to grow approximately 20% in 2025, indicating a commitment to future growth.
- Valuation metrics (EV/EBITDA, EV/Sales) suggest that Amgen is undervalued compared to its industry peers.
- Pricing and reimbursement pressures, cybersecurity risks, and manufacturing challenges pose significant risks to Amgen's business.
Evaluation summary
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Company Overview:
- Amgen, Inc. is a global biotechnology company focused on discovering, developing, manufacturing, and delivering innovative human therapeutics. Key products include Prolia, ENBREL, XGEVA, Repatha, Otezla, TEPEZZA, KYPROLIS, EVENITY, Aranesp, Nplate, KRYSTEXXA, Vectibix, BLINCYTO, and TEZSPIRE. The company operates in one business segment: human therapeutics.
- The company's revenue is generated from sales of its diverse portfolio of therapeutics. While specific revenue contributions for each product are not detailed in the provided data, the SEC filings mention that total product sales increased by 24% and 22% for the three and nine months ended September 30, 2024, driven by volume growth.
- The benchmarks used for comparative analysis include the Health Care Select Sector SPDR Fund (XLV). The peers used for comparative analysis include Regeneron Pharmaceuticals, Inc. (REGN) and Vertex Pharmaceuticals, Inc. (VRTX).
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Financial Performance:
- Amgen's financial performance shows a mixed trend. For the quarter ending March 31, 2025, sales revenue was $8.093 billion, compared to $9.045 billion for the quarter ending December 31, 2024. Net income for the same periods was $1.730 billion and $0.627 billion, respectively.
- Revenue decreased from $9.045 billion in Q4 2024 to $8.093 billion in Q1 2025, a decrease of approximately 10.5%. Net income increased significantly from $0.627 billion to $1.730 billion, an increase of approximately 176%. This increase in net income was primarily due to a significant increase in non-operating income.
- Return on Average Assets for the quarter ending March 31, 2025, was 6.51%, while the industry average is -64.57%. Return on Average Total Equity was 105.67%, compared to an industry average of -154.69%. Return on Average Total Capital was 13.43%, compared to an industry average of -162.15%. These figures indicate that Amgen is significantly more profitable than its industry peers.
- Amgen's profitability metrics, such as ROA, ROE, and ROIC, are significantly above the industry average, indicating strong financial health. However, the recent news and SEC filings highlight pricing pressures and cost containment measures, which could affect future profitability.
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Operational Efficiency:
- Total current assets decreased from $29.030 billion as of December 31, 2024, to $26.929 billion as of March 31, 2025. Total current liabilities decreased from $23.099 billion to $23.008 billion during the same period.
- Working capital decreased from $5.931 billion as of December 31, 2024, to $3.921 billion as of March 31, 2025. This decrease indicates a potential reduction in short-term operational efficiency.
- Net operating cash flow decreased from $4.771 billion in Q4 2024 to $1.391 billion in Q1 2025. Free cash flow to equity also decreased from $4.400 billion to $0.980 billion during the same period.
- Capital expenditure increased from $371 million in Q4 2024 to $411 million in Q1 2025. Depreciation, Depletion & Amortization was $1.387 billion in Q1 2025, slightly lower than the $1.397 billion in Q4 2024.
- Cash dividends paid were $1.279 billion in Q1 2025, slightly higher than the $1.205 billion in Q4 2024, indicating a continued commitment to returning value to shareholders.
- The current ratio decreased from 1.26 as of December 31, 2024, to 1.17 as of March 31, 2025, and the quick ratio decreased from 0.95 to 0.88 during the same period. Both ratios are below the industry average, indicating potential liquidity concerns.
- The total debt to total equity ratio was 924.46 as of March 31, 2025, lower than the 1035.89 as of December 31, 2024, but still significantly above the industry average of 113.27. This indicates high financial leverage.
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Growth Opportunities:
- Amgen's market expansion plans include leveraging the acquisition of Horizon Therapeutics to strengthen its rare disease portfolio. The company is also focused on expanding the indications for existing products like UPLIZNA, as highlighted in the earnings call.
- Amgen continues to invest in its R&D pipeline, with R&D expenses expected to grow approximately 20% in 2025. Key pipeline programs include MariTide for obesity and rocatinlimab for atopic dermatitis.
- Geographic expansion plans are not explicitly detailed in the provided data, but the company's global presence suggests ongoing efforts to expand its market reach.
- Amgen's current strategic focus areas include general medicine, rare disease, inflammation, oncology, and biosimilars. The company is also investing in manufacturing capacity in the U.S. and deploying AI across the value chain.
- The earnings call highlighted the advancement of several Phase III programs and the launch of new products and indications, demonstrating progress on previously announced initiatives.
- Amgen's capital allocation strategy includes investing in the business, reducing debt, and returning capital to shareholders, as mentioned in the SEC filings.
- The recent earnings call and SEC filings highlight the company's focus on expanding its biosimilars portfolio with recent launches of PAVBLU, WEZLANA, and BEKEMV.
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Recent Developments and Market Sentiment:
- Amgen's recent acquisition of Horizon Therapeutics strengthens its rare disease portfolio but also introduces integration costs and potential pricing pressures.
- The company received regulatory approvals for IMDELLTRA, BLINCYTO, and UPLIZNA, expanding its product offerings.
- Positive results from the UPLIZNA Phase 3 trial in generalized myasthenia gravis and the rocatinlimab Phase 3 trial in atopic dermatitis indicate potential for future growth.
- The earnings call highlighted analysts' focus on payer dynamics, particularly in the obesity and incretin markets, which could impact access and pricing for Amgen's products.
- Management reaffirmed its 2025 total revenue and non-GAAP earnings per share guidance, while updating the outlook for R&D expense, OI&E, and tax rate, providing clarity on future expectations.
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Risks and Threats:
- Pricing and reimbursement pressures from government and commercial payers, including the impact of the IRA, could materially affect profitability.
- Breakdown or cyberattacks on Amgen's information technology systems could significantly disrupt operations and expose sensitive data.
- Manufacturing difficulties or disruptions could limit product supply and sales.
- Ongoing tax disputes with the IRS could result in substantial additional tax liabilities.
- Ongoing patent litigation related to Repatha, Prolia, and XGEVA, antitrust class actions related to Sensipar and Regeneron Pharmaceuticals, and securities class action litigation and shareholder derivative litigation pose legal and financial risks.
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Valuation Analysis:
- The Enterprise Value to EBITDA ratio was 14.99 as of March 31, 2025, and 13.23 as of September 30, 2024, both significantly below the industry average of 62.14. The Enterprise Value to Sales ratio was 6.40 as of March 31, 2025, and 5.72 as of December 31, 2024, also significantly below the industry average of 171.69.
- These valuation metrics suggest that Amgen is undervalued compared to its industry peers.
- Potential catalysts include positive clinical trial results, regulatory approvals for new products, and successful integration of the Horizon Therapeutics acquisition.
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Price Performance:
- Amgen's stock price has shown volatility in recent months. The price ranged from $292.71 on April 15, 2025, to $259.98 on May 14, 2025, before recovering to $297.29 on June 12, 2025.
- Amgen has generally outperformed the Health Care Select Sector SPDR Fund (XLV) across most time periods. As of the most recent data, AMGN's Year-To-Date (YTD) return is 16.61%, while XLV's is -0.2%.
- Amgen has shown mixed performance compared to its peers. Year-to-date, Amgen has outperformed Regeneron Pharmaceuticals (REGN) significantly and Vertex Pharmaceuticals (VRTX) slightly. Over a longer three-year period, Amgen has outperformed Regeneron but underperformed Vertex.
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Future Outlook:
- Management reaffirmed its 2025 total revenue guidance of $34.3 billion to $35.7 billion and non-GAAP EPS guidance of $20 to $21.20.
- Non-GAAP R&D expense is now expected to grow approximately 20% in 2025, up from the previous guidance of mid-teens growth.
- Non-GAAP OI&E is anticipated to be approximately $2.3 billion in 2025. The non-GAAP tax rate is projected to be between 14.5% and 16%.
- Recent news and developments, such as positive clinical trial results and regulatory approvals, are expected to positively influence the company's future performance.
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Summary:
- Amgen demonstrates strong profitability and operational efficiency, with key metrics such as return on assets, return on equity, gross profit margin, and net profit margin exceeding industry averages. However, the company's liquidity position is a concern, as indicated by the decreasing cash balance and current ratio. High debt levels elevate financial risk, making Amgen more vulnerable to economic downturns and interest rate changes.
- Amgen's strengths include a diverse product portfolio, a strong R&D pipeline, and a proven track record of innovation. Weaknesses include high debt levels and liquidity concerns. Opportunities include expanding the indications for existing products, leveraging the acquisition of Horizon Therapeutics, and expanding the biosimilars portfolio. Threats include pricing pressures, competition, and regulatory risks.
- Amgen's overall financial health is mixed, with strong profitability but concerning liquidity and high debt levels.
- Critical factors for future performance include sustaining revenue growth, managing expenses, improving liquidity, and successfully integrating the Horizon Therapeutics acquisition.
- Areas requiring further monitoring include liquidity, debt levels, and the impact of pricing pressures on profitability.
- Amgen presents a mixed investment profile. The company is undervalued compared to its peers, with strong growth potential driven by its pipeline and strategic initiatives. However, the high debt levels and liquidity concerns pose significant risks. Amgen's position relative to industry trends and recent developments is favorable, with the company actively investing in innovation and expanding its product offerings. Potential catalysts include positive clinical trial results and regulatory approvals, while headwinds include pricing pressures and competition. Overall, Amgen offers a potentially attractive investment opportunity, but investors should carefully consider the risks and monitor the company's financial performance.
Price history
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Fundamentals
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Insights
- Amgen demonstrates strong profitability and operational efficiency, with key metrics such as return on assets, return on equity, gross profit margin, and net profit margin exceeding industry averages.
- The company's liquidity position is a concern, as indicated by the decreasing cash balance and current ratio, which may require management to focus on improving cash flow and working capital management.
- High debt levels elevate financial risk, making Amgen more vulnerable to economic downturns and interest rate changes, necessitating a strategic approach to debt management and capital allocation.
- Amgen's future performance will depend on its ability to sustain revenue growth, manage expenses, and improve its liquidity position, with strategic initiatives and effective expense management playing crucial roles.
Analysis
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Revenue - Sales revenue is showing a positive trend, indicating increasing demand for Amgen's products. - The company's revenue growth is outpacing the industry average, suggesting effective market strategies. - The sustainability of revenue growth should be assessed, considering factors such as market conditions, competition, and product pipeline.
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Profitability
- Amgen demonstrates strong profitability, with return on average assets, return on average total equity, return on average total capital, and return on average invested capital all exceeding the industry average.
- The increasing trend in profitability ratios suggests improving efficiency in generating profits from assets and equity.
- Gross profit margin and net profit margin are also above the industry average, indicating effective cost management and pricing strategies.
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Liquidity
- Amgen's liquidity position is a concern, as indicated by the current ratio and quick ratio being below the industry average and showing a decreasing trend.
- The company may face challenges in meeting its short-term obligations, requiring close monitoring of its cash flow and working capital management.
- Decreasing cash balance and current ratio warrant attention.
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Solvency
- Amgen's solvency is a concern due to its high debt levels, as indicated by the total debt to total equity ratio being significantly above the industry average.
- The company's financial leverage increases its sensitivity to interest rate changes and economic downturns.
- However, the decreasing trend in the debt/EBITDA ratio suggests that the company is improving its ability to cover its debt with its earnings.
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Operational Efficiency
- Amgen demonstrates strong operational efficiency, as indicated by its enterprise value to EBITDA and enterprise value to sales being below the industry average.
- The company is generating more earnings and sales relative to its valuation, suggesting effective asset utilization.
- Increasing accounts receivable suggest potential inefficiencies in credit and collection processes.
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Cash Flow Analysis - Amgen's cash flow from operations has been inconsistent, with fluctuations in net income and working capital impacting its ability to generate cash. - The company's free cash flow margin is relatively low, indicating potential issues with cash generation. - Capital expenditures are generally consistent with depreciation, suggesting maintenance of existing assets.
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Risk Factors
- High debt levels elevate financial risk, making the company more vulnerable to economic downturns and interest rate changes.
- Decreasing cash balance and current ratio raise concerns about the company's ability to meet its short-term obligations.
- Fluctuations in net income and working capital can impact the company's ability to generate cash from operations.
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Future Outlook
- Amgen's future performance will depend on its ability to sustain revenue growth, manage expenses, and improve its liquidity position.
- The company's strategic initiatives, such as new product launches and market expansion, will play a crucial role in driving revenue growth.
- Effective expense management and working capital management will be essential for improving profitability and cash flow.
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Financial statements
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Public filings
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- Amgen's acquisition of Horizon Therapeutics has strengthened its rare disease portfolio, but the company faces significant pricing and reimbursement pressures that could impact profitability
- Cybersecurity risks and manufacturing challenges pose operational risks that could disrupt Amgen's business and supply
- Ongoing tax disputes with the IRS represent a major legal and financial risk that could result in substantial additional liabilities
- Despite macroeconomic headwinds, Amgen has delivered strong revenue growth driven by volume increases, though net selling prices have declined
- Amgen continues to invest in its pipeline and commercial activities, while also reducing debt and returning capital to shareholders
Core Business and Operations:
- Amgen is a global biotechnology pioneer that discovers, develops, manufactures, and delivers innovative human therapeutics
- Key products include Prolia, ENBREL, XGEVA, Repatha, Otezla, TEPEZZA, KYPROLIS, EVENITY, Aranesp, Nplate, KRYSTEXXA, Vectibix, BLINCYTO, and TEZSPIRE
- Operates in one business segment: human therapeutics
Industry and Market Trends:
- Uncertain macroeconomic conditions, including inflation, higher interest rates, and instability in the financial system, continue to pose challenges
- Ongoing geopolitical conflicts create additional uncertainty in global macroeconomic conditions
- Industry faces significant pricing pressures and cost containment measures, resulting in net price declines
- Provisions of the Inflation Reduction Act (IRA) have affected and are likely to continue affecting Amgen's business
- Wholesale and end-user buying patterns can cause fluctuations in quarterly product sales
Recent Events:
- Completed the acquisition of Horizon Therapeutics plc in October 2023, strengthening Amgen's rare disease portfolio
- Received regulatory approvals for IMDELLTRA, BLINCYTO, and UPLIZNA
- Announced positive results for the UPLIZNA Phase 3 trial in generalized myasthenia gravis and the rocatinlimab Phase 3 trial in atopic dermatitis
Risk Factors:
- Pricing and reimbursement pressures from government and commercial payers, including the impact of the IRA, could materially affect profitability
- Breakdown or cyberattacks on Amgen's information technology systems could significantly disrupt operations and expose sensitive data
- Manufacturing difficulties or disruptions could limit product supply and sales
- Ongoing tax disputes with the IRS could result in substantial additional tax liabilities
Legal Matters:
- Ongoing patent litigation related to Repatha, Prolia, and XGEVA
- Antitrust class actions related to Sensipar and Regeneron Pharmaceuticals
- Securities class action litigation and shareholder derivative litigation
- Continued disputes with the IRS over allocation of profits between U.S. and Puerto Rico entities
Management's Discussion and Analysis:
- Total product sales increased 24% and 22% for the three and nine months ended September 30, 2024, driven by volume growth
- Cost of sales increased due to higher amortization of Horizon acquisition-related assets and royalty/profit share expenses
- R&D and SG&A expenses increased, reflecting investments in the pipeline and commercial activities
- Effective tax rates declined due to the inclusion of Horizon's business and earnings mix
- Strong cash flow from operations, with plans to continue investing in the business, reducing debt, and returning capital to shareholders
Earnings calls
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Earnings Report 2025Q1 (2025-05-01)
Key takeaways
- Volume Growth is Key: Amgen's strong Q1 performance was primarily driven by volume growth, indicating successful market penetration and patient demand for its key products.
- Biosimilars are a Significant Contributor: The biosimilars portfolio is a substantial and growing revenue stream, highlighting Amgen's expertise and strategic positioning in this market.
- Pipeline Progress is Promising: The advancement of several Phase III programs, particularly MariTide and UPLIZNA, suggests potential for future growth and market expansion.
- Payer Dynamics are a Concern: Analysts are focused on the evolving payer landscape, particularly in the obesity and incretin markets, which could impact access and pricing for Amgen's products.
- Manufacturing Investments Signal Confidence: Amgen's continued investment in U.S. manufacturing capacity demonstrates a commitment to long-term growth and innovation within the country.
Focus of management’s prepared remarks
- Strong Financial Start to 2025: Amgen reported a strong first quarter with 9% revenue growth driven by 14% volume growth, highlighting growing patient demand for innovative medicines.
- Double-Digit Growth Across Portfolio: Fourteen medicines delivered double-digit sales growth across various therapeutic areas, including general medicine, rare disease, inflammation, and oncology.
- Biosimilars Portfolio Performance: The biosimilars portfolio contributed significantly, generating over $700 million in revenue, a 35% year-over-year increase, driven by successful launches and a proven approach to market entry.
- Advancement of Clinical Programs: Multiple positive Phase III readouts were delivered, four new Phase III studies were initiated, and three new products or indications were launched, demonstrating strong pipeline progress.
- General Medicine Growth Drivers: Repatha continues to grow with improved patient access, and the company is advancing the Olpasiran clinical program. EVENITY is expected to drive long-term growth in bone health, and MariTide is rapidly advancing in Phase 3 studies for obesity.
- Rare Disease Portfolio Expansion: TEPEZZA, KRYSTEXXA, UPLIZNA, and TAVNEOS are key growth drivers in rare disease, with UPLIZNA recently launched as the first FDA-approved treatment for IgG4-related disease.
- Inflammation Focus on Difficult-to-Treat Diseases: TEZSPIRE continues to build momentum in severe asthma, with positive Phase III data in chronic rhinosinusitis with nasal polyps and initiation of Phase III studies in COPD.
- Oncology Bispecific T Cell Engager Platform: The bispecific T cell engager platform continues to develop new standards of care, with BLINCYTO moving into frontline treatment and IMDELLTRA demonstrating overwhelming survival benefit in small cell lung cancer.
- Biosimilars Strategy and Launches: The company's biosimilars strategy focuses on being in the first wave of launches and ensuring a safe and reliable supply, with recent U.S. launches of PAVBLU, WEZLANA, and BEKEMV.
- Manufacturing Investments in the U.S.: Following the 2017 tax reform, Amgen invested nearly $5 billion in U.S. capital projects through 2024 and announced nearly $2 billion in additional expansions in Ohio and North Carolina.
- Reaffirming 2025 Guidance: Amgen reaffirmed its 2025 total revenue and non-GAAP earnings per share guidance, while updating the outlook for R&D expense, OI&E, and tax rate.
Focus of the analyst Q&A
- MariTide Clinical Data and Development:
- Specifics on what to expect from the ADA presentation of Phase II data.
- Details on the design of the potential cardiovascular outcomes trial (CVOT) for MariTide, including the control arm.
- Confidence in competitive tolerability and efficacy of MariTide.
- UPLIZNA Commercial Strategy:
- Commercial strategy for UPLIZNA in IgG4-related disease and myasthenia gravis, including target prescribers and patient identification efforts.
- How UPLIZNA fits into the standard of care for IgG4-related disease and myasthenia gravis.
- Obesity Market and Competition:
- Impact of oral obesity treatments on Amgen's strategy.
- Competitive landscape in the obesity market, including the potential for oral medications to gain significant market share.
- Repatha Market Dynamics:
- Increasing competition from Novartis' Leqvio and its buy-and-bill program.
- Potential impact of late-stage data on oral PCSK9 inhibitors.
- PAVBLU Uptake and Market Shift:
- Near-term uptake of PAVBLU following the implementation of the Q code.
- Potential shift to biosimilars due to defunding at patient assistance charities.
- Incretin Payer Environment:
- Concerns about more aggressive payer behavior in the incretin market, particularly following the CVS announcement.
- Myasthenia Gravis Market Dynamics:
- Awareness of payers regarding the potential need for twice the dosing for FcRn inhibitors due to the required dosing holiday.
- Realistic market share aspiration for UPLIZNA in myasthenia gravis, considering the potential pricing dynamics of competitors.
- TEPEZZA Growth and Future Prospects:
- What it will take to see an inflection in TEPEZZA growth.
- The potential impact of a subcutaneous formulation on TEPEZZA's market performance.
- Bemarituzumab Phase III Study and Market Opportunity:
- Expectations for the Bemarituzumab Phase III study readout in the second quarter.
- Market opportunity for Bemarituzumab in gastric cancer.
- KRAS Franchise Strategy:
- Confidence in the potential for AMG 410 to be best-in-class in the competitive KRAS inhibitor landscape.
- Elaboration on the KRAS franchise strategy, particularly with the AMG 410 asset.
- TEZSPIRE in CRS with Nasal Polyps:
- Market opportunity for TEZSPIRE in chronic rhinosinusitis with nasal polyps.
- Overlap between asthma patients and CRS with nasal polyps patients.
- Potential for biologics to move ahead of surgery longer term.
- Rocatinlimab Market Split:
- Expectations for the future market split between Rocatinlimab and Dupixent in the atopic dermatitis market.
Summary
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Financial Performance
Amgen reported a strong start to 2025 with revenue of $8.1 billion, a 9% increase year-over-year. Volume growth was a significant driver, increasing by 14%. The company reaffirmed its 2025 total revenue guidance of $34.3 billion to $35.7 billion and non-GAAP EPS guidance of $20 to $21.20. Free cash flow for the quarter was $1.0 billion. Non-GAAP operating margin was 45.7%, above previous outlook due to timing of R&D spend.
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Revenue Drivers
The primary revenue driver was volume growth, with 14 products delivering double-digit sales growth. Key products contributing to growth include Repatha (up 27%), EVENITY (up 29%), BLINCYTO (up 52%), and TEZSPIRE (up 65%). Biosimilars also contributed significantly, with sales up 35% year-over-year, reaching $735 million. TEPEZZA and KRYSTEXXA sales were impacted by changes in U.S. wholesaler inventory levels, but this is not expected to continue for the remainder of the year.
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Profit Margins and Cost Management
The non-GAAP operating margin was 45.7%. Non-GAAP operating expenses rose 4%, driven by a 12% increase in R&D investment. The company expects to achieve $500 million in pretax cost synergies from the Horizon Therapeutics acquisition by the end of the year. The non-GAAP tax rate decreased by 0.8 percentage points to 14.6%.
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Guidance and Outlook
Amgen reaffirmed its 2025 revenue and EPS guidance. Non-GAAP R&D expense is now expected to grow approximately 20% in 2025, up from the previous guidance of mid-teens growth. Non-GAAP OI&E is anticipated to be approximately $2.3 billion in 2025. The non-GAAP tax rate is projected to be between 14.5% and 16%. WEZLANA sales are expected to fluctuate, with no sales anticipated in Q2 following a large Q1 order.
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Strategic Initiatives
Key strategic initiatives include advancing the MariTide clinical program, expanding UPLIZNA's indications, and developing the bispecific T cell engager platform. The company is also focused on expanding its biosimilars portfolio with recent launches of PAVBLU, WEZLANA, and BEKEMV. Amgen is investing in manufacturing capacity in the U.S., including expansions in Ohio and North Carolina. They are also deploying AI across the value chain.
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Management Commentary
Management expressed excitement about the strong start to 2025, highlighting the breadth and depth of the portfolio and the strength of execution. They emphasized the company's ability to adapt to a volatile environment and deliver long-term growth. The CEO stated, "Amgen is well-positioned to deliver innovation and growth, not just this year, but for the long term." The CFO highlighted the company's commitment to innovation and rigorous financial discipline.
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Industry and Market Conditions
Management acknowledged uncertainty related to tariffs and taxes but emphasized the company's proven ability to adapt. They highlighted the growing patient demand for Amgen's medicines and the company's focus on meeting that demand. They also noted the competitive landscape in various therapeutic areas, including PCSK9 inhibitors and obesity treatments.
Comparative analysis
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Benchmarks (as of 2025-06-12)
Health Care Select Sector SPDR Fund (XLV)
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Performance Comparison:
- Amgen, Inc. (AMGN) has generally outperformed the Health Care Select Sector SPDR Fund (XLV) across most time periods. As of the most recent data, AMGN's Year-To-Date (YTD) return is 16.61%, while XLV's is -0.2%, indicating a significant outperformance. Over longer periods, such as 2 years and 3 years, AMGN has also shown substantial outperformance, with returns of 42.37% and 38.73%, respectively, compared to XLV's 8.52% and 19.14%.
- The consistency of AMGN's performance relative to XLV has been strong, with AMGN consistently outperforming XLV in most periods. However, it's important to note that past performance is not indicative of future results.
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Risk and Return Analysis:
- The annualized returns of Amgen, Inc. (AMGN) have been higher than the Health Care Select Sector SPDR Fund (XLV) over the 1-year, 2-year, and 3-year periods. For example, the 2-year annualized return for AMGN is 19.32%, while for XLV it is 4.17%.
- The annualized volatility of Amgen, Inc. (AMGN) has fluctuated throughout the observed period. While there were times when AMGN's volatility was lower than XLV's, it has recently shown higher volatility, particularly in Q2 2024.
- The maximum drawdown for Amgen, Inc. (AMGN) was -24.86% on 06/01/2023, while the maximum drawdown for the Health Care Select Sector SPDR Fund (XLV) was -17.11% on 05/14/2025. This indicates that AMGN has experienced more significant declines from its peak value compared to XLV, suggesting a higher risk profile.
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Risk-Adjusted Performance:
- The Sharpe Ratio of Amgen, Inc. (AMGN) has varied, with periods of higher and lower risk-adjusted returns compared to the Health Care Select Sector SPDR Fund (XLV). Recently, both AMGN and XLV have shown decreasing Sharpe ratios, indicating a challenging period for risk-adjusted returns.
- The Beta value of Amgen, Inc. (AMGN) has consistently remained below 1, indicating that AMGN is less volatile than the overall market. However, there have been discrepancies in the beta values between AMGN and XLV, with AMGN generally showing lower sensitivity to market movements.
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Overall Assessment:
- Amgen, Inc. (AMGN) has demonstrated strong historical performance compared to the Health Care Select Sector SPDR Fund (XLV), with higher returns across various time periods. However, AMGN has also exhibited higher volatility and a larger maximum drawdown, indicating a higher risk profile. The Sharpe Ratio suggests that AMGN has provided better risk-adjusted returns during certain periods, but recent trends show a decline in risk-adjusted performance for both AMGN and XLV.
- A significant trend to note is the recent decrease in Sharpe ratios for both AMGN and XLV, suggesting a challenging environment for generating risk-adjusted returns. Additionally, the higher maximum drawdown for AMGN indicates that investors should be aware of the potential for significant declines in value.
Peers Price History(as of 2025-06-12)
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Performance Comparison:
- Amgen (AMGN) has shown mixed performance compared to its peers. Year-to-date, Amgen has outperformed Regeneron Pharmaceuticals (REGN) significantly (43.44% overperformance) and Vertex Pharmaceuticals (VRTX) slightly (3.23% overperformance). Over a longer three-year period, Amgen has outperformed Regeneron (43.3% overperformance) but underperformed Vertex (45.97% underperformance). This suggests that while Amgen has had recent success, Vertex has provided better returns over a longer timeframe.
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Risk and Return Analysis:
- Amgen's annualized returns over the past year were 2.77%, outperforming Regeneron (-49.52%) and Vertex (-4.3%). However, over a three-year period, Amgen's annualized return was 11.53%, lower than Vertex's 22.69%. This indicates that while Amgen has shown recent recovery, Vertex has provided more consistent long-term returns.
- Amgen generally exhibits lower annualized volatility compared to its peers. Its volatility has ranged from 12.55% to 41.29%. Regeneron and Vertex have shown higher volatility, especially during certain periods.
- Amgen's maximum drawdown was -24.86% on 06/01/2023, which is less severe than Regeneron's -59.69% on 06/05/2025 but comparable to Vertex's -23.24% on 12/19/2024. This suggests that Amgen carries a moderate level of risk compared to its peers.
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Risk-Adjusted Performance:
- Amgen's Sharpe Ratio has generally been lower than that of Vertex, indicating that Vertex has offered better risk-adjusted returns over the analyzed period. While Regeneron has shown competitive Sharpe ratios during certain periods, it has generally been lower than Vertex.
- Amgen's beta has consistently remained below 1, indicating that the stock is less sensitive to market movements compared to the overall market. This suggests that Amgen may offer more stability during market downturns compared to its peers.
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Overall Assessment:
- Amgen has demonstrated strong recent performance, outperforming both Regeneron and Vertex in the year-to-date and one-year returns. However, Vertex has provided better long-term returns over a three-year period. Amgen exhibits lower volatility compared to its peers, suggesting a more stable investment. Its Sharpe Ratio has generally been lower than Vertex, indicating that Vertex has offered better risk-adjusted returns. Amgen's lower beta suggests it is less sensitive to market movements, potentially offering more stability during market downturns.
- A key trend is the recent outperformance of Amgen, driven by a strong year-to-date performance. However, investors should consider the longer-term underperformance relative to Vertex and the lower Sharpe Ratio when making investment decisions.
Peers Fundamentals(as of 2025-03-31)
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Market Position and Size:
- Amgen (AMGN) is the largest company in its peer group, with a market capitalization of $159,854.62 million, significantly exceeding Regeneron Pharmaceuticals (REGN) at $56,340.53 million and Vertex Pharmaceuticals (VRTX) at $118,142.03 million.
- AMGN's substantial market cap is supported by its higher revenue ($33,929 million) compared to REGN ($14,085.7 million) and VRTX ($11,043.3 million). Similarly, AMGN's EBITDA ($14,489 million) and Net Income ($5,933 million) are considerably higher than REGN's EBITDA ($4,455.5 million) and Net Income ($4,499.3 million). VRTX has negative EBITDA (-$129.7 million) and Net Income (-$988.9 million).
- AMGN holds a dominant position in the peer group due to its significantly larger market capitalization and superior financial metrics. It demonstrates a stronger market presence and potentially greater influence within the biotechnology industry.
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Profitability and Efficiency:
- AMGN's Gross Profit Margin is 67.43%, which is lower than REGN (82.28%) and VRTX (85.96%). All three companies have Gross Profit Margins significantly above the industry average of -1103.49%.
- AMGN's EBITDA Margin is 42.7%, higher than REGN's 31.63% and significantly higher than VRTX's -1.17%. All three companies have EBITDA Margins significantly above the industry average of -27705.24%.
- AMGN's Net Profit Margin is 17.49%, lower than REGN's 31.94% but significantly higher than VRTX's -8.95%. All three companies have Net Profit Margins significantly above the industry average of -28897.85%.
- AMGN's profitability, while strong, is mixed compared to its peers. Its EBITDA margin is the highest, but its gross and net profit margins are lower than REGN and VRTX. Given its larger size and revenue base, AMGN's profitability metrics indicate efficient operations but potentially higher operating costs or different pricing strategies.
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Financial Health and Stability:
- AMGN's Current Ratio is 1.17, lower than REGN (4.93) and VRTX (2.65), and significantly lower than the industry average of 7.8.
- AMGN's Quick Ratio is 0.88, lower than REGN (4.03) and VRTX (2.29), and significantly lower than the industry average of 7.7.
- AMGN's Total Debt to Total Equity Ratio is 924.46, significantly higher than REGN (9.2) and VRTX (10.0), and also significantly higher than the industry average of 113.27.
- AMGN's Debt / EBITDA is 3.96, higher than REGN (0.61) but lower than the industry average of 9.12.
- AMGN's liquidity ratios are significantly lower than its peers and the industry average, indicating potential short-term financial risk. Its high debt-to-equity ratio suggests a reliance on debt financing, which could pose solvency challenges if not managed carefully.
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Valuation and Market Perception:
- AMGN's Enterprise Value To Sales is 6.4, higher than REGN (4.61) but lower than VRTX (10.98) and significantly lower than the industry average of 171.69.
- AMGN's Enterprise Value To EBITDA is 14.99, slightly higher than REGN (14.56) but significantly lower than the industry average of 62.14.
- AMGN's Price To Earnings is 27.14, higher than REGN (13.28) but lower than the industry average of 77.87.
- AMGN's Price to Book Ratio is 25.75, significantly higher than REGN (1.92) and VRTX (7.17), and also significantly higher than the industry average of 7.19.
- AMGN's Price To Sales Ratio is 4.74, slightly higher than REGN (4.12) but lower than VRTX (10.81) and significantly lower than the industry average of 277.46.
- AMGN's valuation metrics present a mixed picture. Its Price to Book Ratio is notably high, suggesting the market values its assets highly. However, its Enterprise Value to Sales and EBITDA, as well as Price to Sales and Earnings, are lower than the industry average, indicating it may be undervalued relative to its earnings and sales.
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Cash Flow and Capital Management:
- AMGN's Net Operating Cash Flow is $12,192 million, significantly higher than REGN ($3,953.1 million) and VRTX (-$980.3 million).
- AMGN's Total Capital Expenditure is $1,277 million, higher than REGN ($991.3 million) and VRTX ($277.7 million).
- AMGN's Free Cash Flow is $10,915 million, significantly higher than REGN ($2,961.8 million) and VRTX (-$1,258 million).
- AMGN's strong cash flow generation capabilities are evident, with significantly higher net operating cash flow and free cash flow compared to its peers. This indicates a robust ability to fund operations, investments, and potential shareholder returns.
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Growth and Future Prospect:
- AMGN demonstrates superior growth in Net Income, Basic Earnings per Share, and Free Cash Flow compared to its peers, particularly in the most recent year.
- AMGN's revenue growth has generally underperformed its peers over the past five years.
- AMGN's growth rates have been highly variable over the past five years, with significant fluctuations in Net Income, Basic Earnings per Share, and Free Cash Flow.
- AMGN's most recent year-over-year growth rates are significantly higher than its 5-year CAGRs, indicating an acceleration trend.
- AMGN's growth is concentrated in profitability and cash flow metrics, with revenue growth lagging behind.
- A potential red flag is the high variability in growth rates, particularly for Net Income and Basic Earnings per Share, which could indicate unsustainable growth patterns.
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Potential for Investment:
- From an investment perspective, AMGN presents a compelling but complex opportunity. Its size, market dominance, and strong cash flow generation make it an attractive investment. However, its high debt levels and lower liquidity ratios warrant caution. While its valuation metrics are mixed, its high return on equity and recent growth acceleration in profitability and cash flow metrics suggest potential for future value creation. Investors should carefully weigh the risks associated with its debt and liquidity against its growth potential and market position.
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Key Risks and Considerations:
- High Debt Levels: AMGN's high debt-to-equity ratio could pose solvency challenges if not managed carefully.
- Lower Liquidity Ratios: AMGN's lower liquidity ratios indicate potential short-term financial risk.
- Lower Profit Margins: AMGN's lower profit margins compared to peers suggest potential inefficiencies in cost management or pricing strategies.
- Variable Growth Rates: The high variability in growth rates, particularly for Net Income and Basic Earnings per Share, could indicate unsustainable growth patterns.
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Overall Assessment:
- AMGN's overall financial health is a mixed picture. It boasts a dominant market position with the largest market capitalization and strong cash flow generation. However, its high debt levels and lower liquidity ratios raise concerns about its financial stability. While its return on equity is impressive, its lower profit margins compared to peers suggest potential inefficiencies. Overall, AMGN's financial health is robust but requires careful management of its debt and liquidity.
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