Amgen Inc. (NASDAQ: $AMGN) is a biopharmaceutical company based in Thousand Oaks, CA, that researches, develops, and manufactures innovative medication that helps millions of patients. Established over four decades ago, Amgen helped to pioneer the modern biotech industry.
On Thursday, May 2, after markets closed, Amgen released its Q1 fiscal 2024 results to a positive market reception.
Amgen Releases Positive Q1 Results
The company reported a 22% increase in revenue to $7.4 billion for the first quarter compared to last year. Product sales in the quarter increased 22% YoY, driven by a 25% volume growth.
The company reported double-digit growth in at least ten products, including BLINCYTO® (blinatumomab) and Repatha® (evolocumab).
Its performance in the first quarter was boosted by $914 million in sales from its Horizon acquisition. Excluding Horizon Therapeutics, their sales grew 6% while volume increased 9%. Broken down by region, US sales volume increased 29% while volume outside the US grew 17%.
It reported a GAAP loss per share of $0.21 in Q124 compared to a GAAP EPS of $5.28 in Q123, driven by its loss on BeiGene Ltd equity investment and increased operating expenses.
GAAP operating income came in at $1 billion from $1.9 billion the previous year, for a GAAP operating margin of 13.9% compared to 32.9% the previous year.
On a non-GAAP basis, the EPS declined 1% to $3.96, driven by higher operating expenses due to the Horizon acquisition. Meanwhile, the non-GAAP operating income increased to $3.1 billion from $2.8 billion the previous year for a non-GAAP operating margin of 43.2% compared to 48.3% the previous year.
Amgen ended the first quarter with $0.5 billion in free cash flow compared to $0.7 billion the previous year, driven by an $800 million tax deposit, partially offset by the timing of working capital items. Its cash and investments totalled $9.7 billion, while the debt totalled $64 billion at the end of the quarter.
Capital Returns
Amgen declared a dividend of $2.25 per share for the first quarter to shareholders of record as of February 16, 2024, a 6% increase from last year.
Amgen’s Q1 Product Pipeline
One of the most exciting developments in the first quarter results was Amgen’s announcement of progress on its weight loss drug.
The company announced that MariTide (maridebart cafraglutide, AMG 133) had progressed to phase 2 for overweight or obese adults, whether they have type 2 diabetes or not, with data expected in late 2024.
During the earnings call, Amgen chief science officer Jay Bradner, M.D., revealed they were axing their obesity pill and going all in on MariTide. He stated that they would no longer pursue further work on the pill. “Instead, in obesity, we’re differentially investing in MariTide and a number of preclinical assets.”
Commenting on MariTide, CEO Robert Bradway stated, “We are confident in MariTide’s differentiated profile and believe it will address important unmet medical needs.”
Amgen Issues 2024 Guidance
For FY24, Amgen forecast revenue of $32.5 billion to $33.8 billion. It expects a GAAP EPS of $7.15 to $8.40 and a 9.5% to 11% tax rate. On a non-GAAP basis, Amgen forecasts an EPS of $19 to $20.20 and a 15% to 16% tax rate.
The non-GAAP ESP forecast is a change from the previous estimates of $18.90 to $20.30, while the revenue forecast has been slightly upgraded at the lower end from the previous $32.4 billion to $33.8 billion forecast. Amgen’s forecasts are close to analysts’ estimates of a non-GAAP EPS of $19.50 and revenue of $33 billion.
Capital expenditure is expected to be around $1.1 billion, and share repurchases are expected to be a maximum of $500 million.
Amgen Stock Performance
Following the promising update on its obesity drug, Amgen shares soared 12.52% to $313.24 on Friday at 01:42 PM EDT.
Over the past 52 weeks, the stock has gained 17.70%, compared to the 22.43% gain of the SPX. However, it lags behind major competitor Eli Lilly, whose shares are up 76.69% in the past 52 weeks.
Short sellers hold 10.11 million AMGN shares, 1.89% of the floating shares, and 1.88% of the shares outstanding as of April 15, 2024.
Analysts’ Outlook on AMGN
Analysts are optimistic about the future of AMGN stock, giving it an overall moderate buy rating. They forecast a wide range for the stock, with a high of $380 and a low of $215 in the next 12 months. Their average target price of $312 is a 0.42% upside based on the most recent price.
Should You Buy AMGN Stock?
Amgen has a great product pipeline and a growing revenue stream. While expenditures remain high, drugs currently in the pipeline could provide an important boost for the company in 2024.
For instance, the company expects to hear from the FDA in June regarding one of its products. If it gets approval, AMGN could be pushed to new highs. Consequently, AMGN stock is an excellent option for someone seeking exposure to the biotech industry.
Click Here for Updates on Amgen – It’s 100% FREE to Sign Up for our Email Newsletter!
Disclaimer: This website provides information about cryptocurrency and stock market investments. This website does not provide investment advice and should not be used as a replacement for investment advice from a qualified professional. This website is for educational and informational purposes only. The owner of this website is not a registered investment advisor and does not offer investment advice. You, the reader / viewer, bear responsibility for your own investment decisions and should seek the advice of a qualified securities professional before making any investment.