With its recent Q3 earnings surpassing expectations, Amgen (NASDAQ:AMGN) is one name that’s been creating ripples in the investment arena.
Earnings That Speak Volumes
Amgen has posted an adjusted third-quarter earnings of $4.96 per share. Now, if we’re comparing notes with Wall Street, their estimate was at $4.78. That’s not all – this number is a marked increase from last year’s $4.70 per share during the same period.
Shares of AMGN dropped during market hours, despite guidance.
A Closer Look at Revenue
When it comes to revenue, Amgen reported a hefty $6.9 billion. While this might seem a tad bit less than the anticipated $6.92 billion, it’s still a substantial figure that cannot be ignored.
Spotlight on Drugs
A couple of drugs from Amgen’s portfolio experienced commendable sales growth. The inflammation drug Amjevita/Amgevita, for example, saw a 30% year-over-year increase. This growth was attributed to a whopping 53% volume growth. However, it’s worth noting that the pricing was a tad bit lower.
Another drug, Prolia, which falls under the company’s general medicine category, enjoyed a 14% growth from the previous year. Factors contributing to this rise include a 7% volume increase and higher pricing.
However, it wasn’t all sunshine and rainbows. Sales of Otezla dipped by 10% compared to the previous year. Amgen’s management is of the opinion that demand for this inflammation drug might face challenges due to free drug programs throughout the year.
Furthermore, Enbrel’s sales saw a decline of 6%. On the bright side, the volume went up, with more new patients beginning their treatment journey owing to improved payer coverage.
What’s Ahead for Amgen in 2023?
Amgen is optimistic about the future. The company has elevated its revenue guidance for 2023 to a range between $28 billion and $28.4 billion. To put things into perspective, the previous projection was between $26.6 billion and $27.4 billion.
In addition, they’ve given a clearer earnings forecast, narrowing down the expected earnings per share to fall between $18.20 and $18.80. Previously, the prediction ranged from $17.80 to $18.80.
The Horizon Acquisition
Earlier this month, Amgen finalized its acquisition of Horizon Therapeutics. This deal was valued at an impressive $27.8 billion. Robert Bradway, Chairman and CEO of Amgen, commented on this strategic move. He highlighted the addition of rare disease medicines to Amgen’s portfolio, which aligns perfectly with the company’s innovative direction.
Stock Performance
Despite the encouraging earnings report, Amgen’s stock took a bit of a tumble. It went down by 3.57%, settling at $255.74 in Tuesday’s trading session.
William Blair analyst Matt Phipps offered some insight. He believes the guidance uplift was primarily due to the closure of the Horizon deal, rather than an indication of organic growth.
AMGN raised their dividend in 2023 to a quarterly payment of $2.13 per share, up 10% YoY.
The 2023 Guidance in a Nutshell
From Amgen’s official press release, here’s a quick snapshot of what to expect for the full year of 2023:
- Total revenues will be between $28.0 billion and $28.4 billion.
- GAAP-based EPS will range from $11.23 to $12.73 with a tax rate between 14.0% and 15.5%.
- Non-GAAP-based EPS is projected to be between $18.20 and $18.80, with a tax rate spanning from 16.5% to 17.0%.
- Capital expenditures are set at approximately $950 million.
- Share repurchases will not surpass the $500 million mark.
In conclusion, Amgen’s recent earnings report showcases its robust position in the biotech industry and its potential for growth in 2023. It will be interesting to observe how the company maneuvers through challenges and capitalizes on opportunities in the coming months.
