THOUSAND OAKS, Calif., July 30, 2013 /PRNewswire/ -- Amgen (NASDAQ:AMGN) today announced financial results for the second quarter of 2013.  Key results for the quarter include:

• Total revenues increased 5 percent to $4,679 million, with 9 percent product sales growth driven by Enbrel^® (etanercept), Neulasta^® (pegfilgrastim), XGEVA^® (denosumab), and Prolia^® (denosumab).  Product sales included a positive adjustment of $185 million to previous estimates for managed Medicaid rebates based on recent claims experience.  Other revenues were lower by $193 million as a result of a payment from Takeda recognized in the second quarter of 2012.
• Adjusted EPS grew 3 percent to $1.89, with higher revenues and a lower tax rate partially offset by increased Research & Development (R&D) investment.  Adjusted net income increased 1 percent to $1,444 million.
• GAAP EPS were $1.65 compared to $1.61 and GAAP net income was $1,258 million compared to $1,266 million.
• The Company generated approximately $1.4 billion of free cash flow.

"We saw solid product trends during the second quarter and are carrying good momentum into the second half," said Robert A. Bradway, chairman and chief executive officer at Amgen. "We continue to make excellent progress with our pipeline of innovative molecules and look forward to multiple data readouts in 2014, including pivotal Phase 3 data for our cholesterol-lowering agent, AMG 145, in the first quarter."

Product Sales Performance

• Total product sales increased 9 percent year-over-year.
• Combined Neulasta and NEUPOGEN (filgrastim) sales increased 7 percent year-over-year.
  • Global Neulasta sales increased 10 percent driven by price increases, increases in wholesaler inventory and the Medicaid rebate adjustment, partially offset by unit declines.
  • Global NEUPOGEN sales declined 2 percent driven by lower units, partially offset by price increases and the Medicaid rebate adjustment. 
• ENBREL sales increased 9 percent mainly driven by price increases.
• Aranesp^® (darbepoetin alfa) sales decreased 2 percent year-over-year.  Sequentially, sales were flat excluding the Medicaid rebate adjustment.
• EPOGEN^® (epoetin alfa) sales decreased 4 percent year-over-year.  Sequentially, sales increased 15 percent driven by an increase in units due to the peginesatide recall and the Medicaid rebate adjustment.
• Sensipar^®/Mimpara^® (cinacalcet) sales increased 12 percent year-over-year driven by increases in unit demand.
• Combined sales of Vectibix^® (panitumumab) and Nplate^® (romiplostim) increased 13 percent, mainly due to unit growth. 
• XGEVA sales increased 39 percent year-over-year and 12 percent on a sequential basis, reflecting increased segment share.
• Prolia sales increased 57 percent year-over-year and increased 32 percent on a sequential basis due to increased segment share, partially driven by seasonality.   

Product Sales Detail by Product and Geographic Region 

Operating Expense and Tax Rate Analysis, on an Adjusted Basis

• Cost of Sales margin, excluding the impact of the Puerto Rico excise tax, was flat year-over-year.
• R&D expenses increased 17 percent primarily in support of our later-stage clinical programs, including AMG 145.
• Selling, General & Administrative (SG&A) expenses increased 3 percent driven primarily by higher ENBREL profit share expenses. ENBREL profit share expenses increased 15 percent to $425 million. 

• Adjusted Tax Rate for the second quarter of 2013 reflects the favorable tax impacts of the federal R&D credit and changes in the jurisdictional mix of income and expenses.

Cash Flow and Balance Sheet Discussion

• The Company generated $1.4 billion of free cash flow in the second quarter of 2013 versus $2.2 billion in the second quarter of 2012. The decrease was primarily driven by cash received in the second quarter of 2012 from the termination of fixed to floating interest rate swap agreements and the collection of outstanding trade receivables in Spain.
• The Company did not repurchase shares in the quarter and has $1.6 billion remaining under its stock repurchase authorization.
• The Company previously announced that its Board of Directors declared a $0.47 per share dividend for the third quarter of 2013. The dividend will be paid on Sept. 6, 2013, to all stockholders of record as of the close of business on Aug. 16, 2013.

2013 Guidance

For the full year 2013, the Company expects:

• Total revenues to be at the upper end of $17.8 billion to $18.2 billion
• Adjusted EPS to be in the range of $7.30 to $7.45
• Adjusted tax rate to be in the range of 9 percent to 10 percent.  This reflects the favorable tax impact of changes in the jurisdictional mix of income and expenses.  Excluding the Puerto Rico excise tax, Amgen expects the adjusted tax rate for 2013 to be in the range of 13 percent to 14 percent.
• Capital expenditures to be approximately $700 million, unchanged from previous guidance.

Second Quarter Product and Pipeline Update

The Company provided the following information on selected products and clinical programs:

• Talimogene laherparepvec:  The Company announced that primary analysis of the event-driven overall survival secondary endpoint from a Phase 3 study in melanoma is projected to occur in the first half of 2014.
• Trebananib:  The Company announced that primary analysis of the event-driven overall survival secondary endpoint from a Phase 3 study in recurrent ovarian cancer is projected to occur in the second half of 2014.
• XGEVA:  The Company discussed the FDA approval of XGEVA for the treatment of giant cell tumor of bone.
• AMG 145: The Company announced that pivotal data from AMG 145 Phase 3 studies in subjects with elevated LDL cholesterol is expected in the first quarter of 2014.

Non-GAAP Financial Measures

The Adjusted non-GAAP (U.S. Generally Accepted Accounting Principles) financial measures included above for the second quarters of 2013 and 2012 exclude, for the applicable periods, certain expenses related to acquisitions, cost-savings initiatives, various legal proceedings, non-cash interest expense associated with our convertible notes and certain other adjustments, as applicable. These adjustments and other items are presented on the attached reconciliations.

Management has presented its operating results in accordance with GAAP and on an "adjusted" (or non-GAAP) basis and Free Cash Flow which is a non-GAAP financial measure for the second quarters of 2013 and 2012.  In addition, management has presented its full year 2013 EPS and tax rate guidance in accordance with GAAP and on an "adjusted" (or non-GAAP) basis.  The Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors.  The Company uses these non-GAAP financial measures in connection with its own budgeting and financial planning.  These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in conformity with GAAP.

About Amgen
Amgen discovers, develops, manufactures and delivers innovative human therapeutics. A biotechnology pioneer since 1980, Amgen was one of the first companies to realize the new science's promise by bringing safe, effective medicines from lab to manufacturing plant to patient. Amgen therapeutics have changed the practice of medicine, helping millions of people around the world in the fight against cancer, kidney disease, rheumatoid arthritis, bone disease and other serious illnesses. With a deep and broad pipeline of potential new medicines, Amgen remains committed to advancing science to dramatically improve people's lives. For more information, visit www.amgen.com and follow us on www.twitter.com/amgen.

Forward-Looking Statements
This news release contains forward-looking statements that involve significant risks and uncertainties, including those discussed below and others that can be found in our Form 10-K for the year ended Dec. 31, 2012, and in any subsequent periodic reports on Form 10-Q and Form 8-K.  Amgen is providing this information as of the date of this news release and does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.

No forward-looking statement can be guaranteed and actual results may differ materially from those we project.  The Company's results may be affected by our ability to successfully market both new and existing products domestically and internationally, clinical and regulatory developments (domestic or foreign) involving current and future products, sales growth of recently launched products, competition from other products (domestic or foreign), and difficulties or delays in manufacturing our products.  In addition, sales of our products are affected by reimbursement policies imposed by third-party payors, including governments, private insurance plans and managed care providers and may be affected by regulatory, clinical and guideline developments and domestic and international trends toward managed care and healthcare cost containment as well as U.S. legislation affecting pharmaceutical pricing and reimbursement.  Government and others' regulations and reimbursement policies may affect the development, usage and pricing of our products.  Furthermore, our research, testing, pricing, marketing and other operations are subject to extensive regulation by domestic and foreign government regulatory authorities.  We or others could identify safety, side effects or manufacturing problems with our products after they are on the market.  Our business may be impacted by government investigations, litigation and product liability claims.  If we fail to meet the compliance obligations in the corporate integrity agreement between us and the U.S. government, we could become subject to significant sanctions.  Further, while we routinely obtain patents for our products and technology, the protection offered by our patents and patent applications may be challenged, invalidated or circumvented by our competitors.  We depend on third parties for a significant portion of our manufacturing capacity for the supply of certain of our current and future products and limits on supply may constrain sales of certain of our current products and product candidate development.  In addition, we compete with other companies with respect to some of our marketed products as well as for the discovery and development of new products.  Discovery or identification of new product candidates cannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no guarantee that any particular product candidate will be successful and become a commercial product.  Further, some raw materials, medical devices and component parts for our products are supplied by sole third-party suppliers.  Our business performance could affect or limit the ability of our Board of Directors to declare a dividend or our ability to pay a dividend or repurchase our common stock.

CONTACT: Amgen, Thousand Oaks
Christine Regan, 805-447-5476 (media)
Arvind Sood, 805-447-1060 (investors)

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SOURCE Amgen