Amgen’s Q2 Revenue Rises 20% Despite Higher Expenses
Amgen, the biotechnology powerhouse, announced a 1% decline in second-quarter profit as increased expenses offset a 20% rise in revenue. This revenue boost was largely driven by its October acquisition of rare disease drugmaker Horizon Therapeutics. The adjusted earnings came in at $4.97 per share, slightly missing the average analyst prediction of $5.00 per share, according to LSEG data. However, the quarterly revenue of $8.39 billion marginally outperformed the analyst forecast of $8.37 billion. Amgen’s stock closed up 1% at $328.95 but was down 1.5% in after-hours trading.
Performance of Key Drugs
Sales of Repatha, a cholesterol drug, surged 25% to $532 million, showcasing robust growth. On the flip side, sales of the older rheumatoid arthritis treatment, Enbrel, declined 15% to $902 million. Horizon’s thyroid eye disease drug, Tepezza, saw a 7% increase in sales, reaching $479 million, while Krystexxa, a gout medication, reported a 20% increase, totaling $294 million in sales. Excluding Horizon’s products, Amgen’s product sales grew by 5%.
Impact of Higher Expenses
Amgen experienced a 46% drop in net earnings to $1.38 per share, primarily due to increased operating expenses related to the Horizon acquisition and heightened research and development costs. Investors’ attention is now focused on the progress of Amgen’s experimental weight-loss drug, MariTide. The company expects initial data from a mid-stage trial of MariTide by the end of this year.
Future Outlook
“We are laser-focused on preparing to quickly launch a broad Phase 3 program in obesity, obesity-related conditions, and diabetes,” stated Amgen’s Chief Financial Officer, Peter Griffith. Some analysts project that the market for new weight-loss drugs could reach $130 billion annually by the early 2030s. Griffith also mentioned that Amgen has increased its capital spending target for 2024 to $1.3 billion, up from $1.1 billion, partly due to investments in MariTide and manufacturing.
Amgen has also updated its 2024 revenue outlook, raising the lower end to a range of $32.8 billion to $33.8 billion, up from the previous forecast of $32.5 billion. Additionally, the company has adjusted its 2024 earnings estimate, now expecting a profit of $19.10 to $20.10 per share, compared to the prior range of $19.00 to $20.20. Analysts project 2024 earnings per share to be around $19.51 on revenue of $33.1 billion.
