Third Quarter 2008 Revenue Increased 7 Percent to $3.9 Billion
Third Quarter 2008 GAAP Earnings Per Share were $1.09, an Increase from
Third Quarter 2007 GAAP Earnings Per Share of $0.18
Full Year Revenue Guidance Raised from $14.6 Billion - $14.9 Billion to
$14.9 Billion - $15.2 Billion
Full Year Adjusted EPS Guidance Raised from $4.25 - $4.45 to $4.45 - $4.55
THOUSAND OAKS, Calif., Oct. 22 /PRNewswire-FirstCall/ -- Amgen (Nasdaq:
AMGN) reported adjusted earnings per share (EPS), excluding stock option
expense and certain other expenses, of $1.23 for the third quarter of 2008,
an increase of 14 percent compared to $1.08 for the third quarter of 2007.
Adjusted net income, excluding stock option expense and certain other
expenses, increased 11 percent to $1,308 million in the third quarter of
2008 compared to $1,181 million in the third quarter of 2007. Stock option
expense on a per share basis totaled 2 cents for both the third quarter of
2008 and the third quarter of 2007.
Total revenue increased 7 percent during the third quarter of 2008 to
$3,875 million versus $3,611 million in the third quarter of 2007.
Adjusted EPS and adjusted net income for the third quarter 2008 and
2007 exclude, for the applicable periods, stock option expense, certain
expenses related to acquisitions, restructuring charges and certain other
items. These expenses and other items are itemized on the attached
reconciliation tables. Adjusted EPS including the impact of stock option
expense are also itemized in the notes to the attached reconciliation
tables.
Calculated in accordance with United States (U.S.) Generally Accepted
Accounting Principles (GAAP), Amgen's GAAP EPS were $1.09 in the third
quarter of 2008 compared to $0.18 in the same quarter last year. GAAP net
income was $1,158 million in the third quarter of 2008 compared to $201
million in the third quarter of 2007. GAAP reported results for the third
quarter of 2007 were negatively impacted by the write-offs of $590 million
of acquired in-process research and development related to the acquisitions
of Alantos Pharmaceutical Holdings, Inc. and Ilypsa, Inc. as well as $293
million of charges related to the previously announced restructuring plan.
"Our financial results for the third quarter demonstrate strong
operating performance and we are increasing our 2008 annual guidance," said
Kevin Sharer, chairman and chief executive officer. "We are now focused on
plans to commercialize denosumab in post-menopausal osteoporosis. We're
excited about the opportunity to bring this novel treatment option to
patients with this serious disease," concluded Sharer.
Product Sales Performance
During the third quarter, total product sales increased 7 percent to
$3,784 million from $3,524 million in the third quarter of 2007. Sales in
the U.S. totaled $2,929 million, an increase of 4 percent versus $2,809
million in the third quarter of 2007. International sales increased 20
percent to $855 million versus $715 million for the third quarter of 2007.
Changes in foreign exchange positively impacted third quarter 2008 sales by
$78 million. Excluding the impact of foreign exchange, total product sales
increased 5 percent and international product sales increased 9 percent.
Worldwide sales of Aranesp(R) (darbepoetin alfa) increased 3 percent to
$845 million in the third quarter of 2008 versus $818 million during the
third quarter of 2007. In the U.S., third quarter 2008 Aranesp sales were
relatively unchanged at $458 million in the third quarter of 2008 versus
$460 million in the third quarter of 2007. U.S. sales of Aranesp in the
third quarter of 2008 benefited from a $54 million change in the accounting
estimate related to product sales return reserves. Excluding the positive
impact of this change in the accounting estimate, U.S. sales of Aranesp
decreased 12 percent in the third quarter of 2008 versus the prior year.
The decline in U.S. Aranesp sales reflects the negative impact on demand,
primarily in the supportive cancer care setting, from regulatory and
reimbursement changes which principally occurred in the second half of
2007, and additional product label changes which occurred in the third
quarter of 2008. The decline in demand in the third quarter of 2008 was
slightly offset by an increase in the average net sales price.
International Aranesp sales increased 8 percent to $387 million versus $358
million in the third quarter of 2007 due to changes in foreign exchange
which positively impacted third quarter 2008 sales by approximately $35
million, partially offset by pricing pressure and ESA (erythropoiesis
stimulating agent) dosing conservatism versus the prior year. Excluding the
impact of foreign exchange, international product sales decreased 2
percent. Excluding the positive change in the accounting estimate related
to product sales return reserves and foreign exchange gains, worldwide
product sales decreased 8 percent in the third quarter of 2008 versus the
prior year.
Sales of EPOGEN(R) (Epoetin alfa) increased 5 percent to $634 million
in the third quarter of 2008 versus $602 million in the third quarter of
2007, primarily due to an increase in the average net sales price,
favorable changes in wholesaler inventory levels and revised estimates of
dialysis demand (primarily spillover) for prior quarters. Increased demand
due to patient population growth was offset by a decline in dose /
utilization within certain settings. Spillover is a result of the Company's
contractual relationship with Johnson & Johnson. (Please refer to the
Company's Form 10-K for a more detailed discussion of this relationship and
a description of spillover).
Combined worldwide sales of Neulasta(R) (pegfilgrastim) and NEUPOGEN(R)
(Filgrastim) increased 8 percent to $1,192 million in the third quarter of
2008 versus $1,100 million for the third quarter of 2007, driven primarily
by increased demand for Neulasta. Combined sales of Neulasta and NEUPOGEN
in the U.S. were $856 million in the third quarter of 2008 versus $830
million in the third quarter of 2007, an increase of 3 percent primarily
reflecting an increase in demand for Neulasta. This increase in demand was
driven by an increase in the average net sales price, partially offset by a
decline in units sold, which we believe was primarily due to customer
stocking which occurred in the second quarter of 2008. Combined
international sales increased 24 percent to $336 million in the third
quarter of 2008 versus $270 million for the same quarter in the prior year.
This growth reflects changes in foreign exchange which positively impacted
third quarter 2008 combined international sales by approximately $33
million, as well as increased demand driven by the continued conversion
from NEUPOGEN to Neulasta. Excluding the impact of foreign exchange,
combined worldwide product sales increased 5 percent and international
product sales increased 12 percent.
Sales of Enbrel(R) (etanercept) increased 9 percent in the third
quarter to $893 million versus $821 million during the same period in 2007.
Sales growth was driven by higher demand due to increases in both average
net sales price and patients. ENBREL sales growth in the third quarter was
affected by share declines in the U.S. versus the third quarter of 2007 due
to increased competitive activity. However, sales growth continued in both
rheumatology and dermatology, and ENBREL continues to maintain a leading
position in both segments.
Worldwide sales of Sensipar(R) (cinacalcet) increased 32 percent to
$161 million in the third quarter of 2008 versus $122 million during the
third quarter of 2007. This growth was principally driven by demand,
primarily due to segment penetration.
Vectibix(R) (panitumumab) sales for the third quarter were unchanged
year over year at $41 million.
Operating Expense Analysis on an Adjusted Basis:
Cost of sales increased 1 percent to $590 million in the third quarter of
2008 versus $585 million in the third quarter of 2007. This increase was
due to higher sales volume offset by lower excess inventory write-offs,
lower excess capacity charges and lower cost ENBREL. The Company now
expects full year 2008 adjusted Cost of Sales expense as a percent of
sales to be approximately 15 percent.
Research & Development (R&D) expenses were relatively unchanged at $700
million in the third quarter of 2008 versus $699 million in the third
quarter of 2007. Higher staff-related costs as well as clinical trial
spend for our emerging pipeline were offset by lower clinical trial costs
for our denosumab registrational studies due to completion of enrollment
and the benefit derived from our licensing transaction with Takeda in
Japan. The Company now expects full year 2008 adjusted R&D expense
dollars to be slightly lower than 2007. Consistent with historical
spending patterns, the Company expects an increase in the fourth quarter
versus the third quarter that should be similar in magnitude to the
increase in 2007, though actual results may vary depending on licensing
activities and pipeline progress.
Selling, General & Administrative (SG&A) expenses increased 11 percent to
$890 million in the third quarter of 2008 versus $804 million in the
third quarter of 2007 reflecting higher Wyeth profit share expenses and
staff-related costs offset by lower litigation expense. Wyeth profit
share expenses increased 22 percent to $298 million in the third quarter
of 2008 versus $245 million in the third quarter of 2007. The Company
still expects Wyeth profit share to be one third of adjusted SG&A
expenses for the full year 2008. Excluding Wyeth profit share, adjusted
SG&A expenses in the third quarter of 2008 increased 6 percent versus the
same quarter last year. As in the past, adjusted SG&A expenses are
expected to increase in the fourth quarter versus the third quarter. The
Company still expects 2008 adjusted SG&A expense dollars excluding Wyeth
profit share expenses to be slightly higher versus 2007.
The Company still expects the full year 2008 adjusted tax rate to be
similar to 2007 as the federal R&D credit has been retroactively extended
in the fourth quarter of 2008.
Average diluted shares for adjusted EPS in the third quarter of 2008
were 1,063 million versus 1,089 million in the third quarter of 2007. The
Company currently has $4.9 billion remaining under its authorized stock
repurchase program.
Capital expenditures for the third quarter of 2008 were approximately
$159 million versus $306 million in the third quarter of 2007. The Company
now expects full year 2008 capital expenditures to be approximately $750
million. Worldwide cash and marketable securities were $9.8 billion and
debt was $11.2 billion at the end of the third quarter of 2008.
2008 Revenue and EPS Guidance Raised
The Company is raising its revenue guidance range from the previously
provided range of $14.6 billion to $14.9 billion to an increased range of
$14.9 billion to $15.2 billion. The Company is also raising its 2008
adjusted EPS guidance range from the prior range of $4.25 to $4.45 to an
increased range of $4.45 to $4.55, excluding stock option expense and
certain other expenses, based upon sales momentum and lower operating
expense due to continuing efficiencies.
Third Quarter Product and Pipeline Update
The Company provided updates on selected products and late-stage
clinical programs.
Denosumab: The Company presented full data results from its pivotal
Phase 3 fracture study (FREEDOM) at the 2008 American Society of Bone and
Mineral Research (ASBMR) Annual Meeting in Montreal. The study met the
primary and all secondary end points.
Nplate (TM) (romiplostim): The Company noted that the U.S. Food and
Drug Administration (FDA) has approved Nplate, the first and only agent
that acts directly to increase platelet production for the treatment of
thrombocytopenia in splenectomized (spleen removed) and non-splenectomized
adults with chronic immune thrombocytopenic purpura (ITP). Nplate, the
first FDA-approved peptibody protein, works by raising and sustaining
platelet counts, representing a novel approach for the treatment of this
chronic disease.
Nplate was also approved for ITP by Australia's Therapeutic Goods
Administration (TGA) in July 2008. Amgen has filed for regulatory approval
of Nplate in the European Union (EU), Canada, and Switzerland and these
applications are currently under review.
AMG 317: The Company announced that it has reviewed interim results
from a phase 2 study of AMG 317 in patients with moderate to severe asthma.
The data showed evidence of biological activity; however, the clinical
efficacy from the interim analysis did not meet expectations. The phase 2
study will be completed this year and results will be submitted to an
appropriate peer-reviewed forum.
For more product information or the full prescribing information,
please refer to the Amgen Website at http://www.amgen.com.
As previously announced, the Company has posted in the Investors
section of the Company's website (http://www.amgen.com/investors) a slide
presentation related to its second quarter financial results conference
call, scheduled for 1:30 p.m. Pacific Time today. The conference call will
be broadcast over the Internet and can also be found on Amgen's Website at
the above web address.
Non-GAAP Financial Measures
Management has presented its operating results in accordance with GAAP
and on an "adjusted" (or non-GAAP basis) for the three and nine months
ended Sept. 30, 2008 and 2007. 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 U.S. 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 and
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 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. To learn more about our
pioneering science and our vital medicines, visit http://www.amgen.com.
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, 2007,
and in our 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 health care 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. 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.
Amgen Inc.
Condensed Consolidated Statements of Income and
Reconciliation of GAAP Earnings to "Adjusted" Earnings
(In millions, except per share data)
(Unaudited)
Three Months Ended Three Months Ended
September 30, 2008 September 30, 2007
----------------------------- ------------------------------
GAAP Adjustments "Adjusted" GAAP Adjustments "Adjusted"
----------------------------- ------------------------------
Revenues:
Product
sales $3,784 $- $3,784 $3,524 $- $3,524
Other
revenues 91 - 91 87 - 87
------- ------- ------- ------- ------- -------
Total
revenues 3,875 - 3,875 3,611 - 3,611
------- ------- ------- ------- ------- -------
Operating
expenses:
Cost of sales
(excludes
amortization
of acquired
intangible
assets
presented
below) 677 (3) (a) 590 792 (4) (a) 585
(84) (b) (113) (e)
(90) (h)
Research and
development 729 (12) (a) 700 776 (20) (a) 699
(17) (c) (18) (e)
(17) (c)
(22) (i)
Selling,
general and
administr-
ative 900 (10) (a) 890 730 (18) (a) 804
92 (e)
Write-off of
acquired
in-process
R&D - - 590 (590) (j) -
Amortization of
intangible
assets 74 (74) (d) - 76 (73) (d) -
(3) (k)
Other
charges 12 (8) (e) - 254 (254) (e) -
(4) (f)
------- ------- ------- ------- ------- -------
Total
operating
expenses 2,392 (212) 2,180 3,218 (1,130) 2,088
------- ------- ------- ------- ------- -------
Operating
income 1,483 212 1,695 393 1,130 1,523
Interest and
other income
and (expense),
net (12) 9 (g) (3) (21) - (21)
------- ------- ------- ------- ------- -------
Income before
income taxes 1,471 221 1,692 372 1,130 1,502
Provision for
income taxes 313 71 (o) 384 171 150 (q) 321
------- ------- ------- ------- ------- -------
Net income $1,158 $150 $1,308 $201 $980 $1,181
======= ======= ======= ======= ======= =======
Earnings per
share:
Basic $1.09 $1.24 $0.19 $1.09
Diluted (r) $1.09 $1.23 (a) $0.18 $1.08 (a)
Average shares
used in
calculation
of earnings
per share:
Basic 1,058 1,058 1,086 1,086
Diluted (r) 1,064 1,063 (a) 1,090 1,089 (a)
(a) - (r) See explanatory notes on the following pages.
Amgen Inc.
Condensed Consolidated Statements of Income and
Reconciliation of GAAP Earnings to "Adjusted" Earnings
(In millions, except per share data)
(Unaudited)
Nine months ended Nine months ended
September 30, 2008 September 30, 2007
----------------------------- ------------------------------
GAAP Adjustments "Adjusted" GAAP Adjustments "Adjusted"
----------------------------- ------------------------------
Revenues:
Product
sales $11,013 $- $11,013 $10,693 $- $10,693
Other
revenues 239 - 239 333 - 333
------- ------- ------- ------- ------- -------
Total
revenues 11,252 - 11,252 11,026 - 11,026
Operating
expenses:
Cost of
sales
(excludes
amortization
of acquired
intangible
assets
presented
below) 1,738 (9) (a) 1,644 1,942 (12) (a) 1,690
(84) (b) (113) (e)
(1) (e) (90) (h)
(30) (l)
(7) (m)
Research and
development 2,232 (35) (a) 2,140 2,444 (68) (a) 2,279
(53) (c) (54) (c)
(3) (e) (25) (i)
(1) (i) (18) (e)
Selling,
general and
administr-
ative 2,678 (33) (a) 2,646 2,360 (60) (a) 2,392
1 (e) 92 (e)
Write-off of
acquired
in-process
R&D - - 590 (590) (j) -
Amortization of
intangible
assets 221 (221) (d) - 224 (221) (d) -
(3) (k)
Other
charges 306 (39) (e) - 543 (543) (e) -
(267) (f)
------- ------- ------- ------- ------- -------
Total
operating
expenses 7,175 (745) 6,430 8,103 (1,742) 6,361
Operating
income 4,077 745 4,822 2,923 1,742 4,665
Interest and
other income
and (expense),
net 19 9 (g) 28 (20) 51 (n) 31
------- ------- ------- ------- ------- -------
Income before
income taxes 4,096 754 4,850 2,903 1,793 4,696
Provision for
income taxes 861 228 (o) 1,089 572 92 (p) 980
316 (q)
------- ------- ------- ------- ------- -------
Net income $3,235 $526 $3,761 $2,331 $1,385 $3,716
======= ======= ======= ======= ======= =======
Earnings per
share:
Basic $3.01 $3.50 $2.07 $3.30
Diluted (r) $3.00 $3.49 (a) $2.06 $3.29 (a)
Average shares
used in
calculation
of earnings
per share:
Basic 1,075 1,075 1,127 1,127
Diluted (r) 1,079 1,078 (a) 1,133 1,131 (a)
(a) - (r) See explanatory notes on the following pages.
Amgen Inc.
Notes to Reconciliation of GAAP Earnings to "Adjusted" Earnings
(In millions, except per share data)
(Unaudited)
(a) To exclude the impact of stock option expense recorded in accordance
with Statement of Financial Accounting Standards ("SFAS") No. 123R.
For the three and nine months ended September 30, 2008 and 2007, the
total pre-tax expense for employee stock options in accordance with
SFAS No. 123R was $25 million and $42 million, respectively, and $77
million and $140 million, respectively.
"Adjusted" diluted EPS including the impact of stock option expense
for the three and nine months ended September 30, 2008 and 2007 was
as follows:
Three months ended Nine months ended
September 30, September 30,
------------------ -----------------
2008 2007 2008 2007
------------------ -----------------
"Adjusted" diluted EPS,
excluding stock option
expense $1.23 $1.08 $3.49 $3.29
Impact of stock option
expense (net of tax) (0.02) (0.02) (0.05) (0.09)
------- ------- ------- -------
"Adjusted" diluted EPS,
including stock option
expense $1.21 $1.06 $3.44 $3.20
======= ======= ======= =======
(b) To exclude the write-off of inventory resulting from a strategic
decision to change manufacturing processes.
(c) To exclude the ongoing, non-cash amortization of the R&D technology
intangible assets acquired with the acquisitions of Abgenix, Inc.
("Abgenix") and Avidia, Inc. ("Avidia").
(d) To exclude the ongoing, non-cash amortization of acquired product
technology rights, primarily ENBREL, related to the Immunex
Corporation ("Immunex") acquisition.
(e) To exclude the following restructuring (expenses)/recoveries
associated with our restructuring plan announced in August 2007, as
follows (in millions):
Accel-
Separ- Asset erated
ation impair- deprec-
costs ment iation
(1) (2) (3) Other(4) Total
------- -------- ------- -------- ------
Three months ended
September 30, 2008
-------------------------
Other charges $- $(1) $- $(7) $(8)
------- -------- ------- -------- ------
$- $(1) $- $(7) $(8)
======= ======== ======= ======== ======
Three months ended
September 30, 2007
-------------------------
Cost of sales (excluding
amortization of
intangible assets) $1 $(4) $(110) $- $(113)
Research and development
(R&D) 17 (35) - - (18)
Selling, general and
administrative (SG&A) 9 - - 83 92
Other charges (104) (71) - (79) (254)
------- -------- ------- -------- ------
$(77) $(110) $(110) $4 $(293)
======= ======== ======= ======== ======
Nine months ended
September 30, 2008
-------------------------
Cost of sales (excluding
amortization of intangible
assets) $- $(1) $- $- $(1)
R&D (3) - - - (3)
SG&A - - - 1 1
Other charges (4) (15) - (20) (39)
------- -------- ------- -------- ------
$(7) $(16) $- $(19) $(42)
======= ======== ======= ======== ======
Nine months ended
September 30, 2007
-------------------------
Cost of sales (excluding
amortization of intangible
assets) $1 $(4) $(110) $- $(113)
R&D 17 (35) - - (18)
SG&A 9 - - 83 92
Other charges (107) (357) - (79) (543)
------- -------- ------- -------- ------
$(80) $(396) $(110) $4 $(582)
======= ======== ======= ======== ======
(1) Severance and other separation costs, partially offset in 2007 by
the reversal of previously accrued expenses for bonuses and
stock-based compensation awards, which were forfeited as a result of
the employees' termination.
(2) Asset impairment charges incurred in connection with the
rationalization of our worldwide manufacturing operations in order
to gain cost efficiencies and, to a lesser degree, the moderation of
the expansion of our R&D facilities.
(3) Accelerated depreciation resulting from our decision to accelerate
the closure of one of our ENBREL commercial bulk production
operations in connection with the rationalization of our worldwide
network of manufacturing facilities. The amount included above
represents the excess of accelerated depreciation expense over the
depreciation that would otherwise have been recorded if there were
no plans to accelerate the closure of this manufacturing operation.
(4) To exclude, from Other charges, loss accruals for leases
principally related to certain facilities that will not be used in
our business. Also, to exclude from SG&A in 2007, the cost
recoveries for certain restructuring expenses, principally with
respect to accelerated depreciation in connection with our
co-promotion agreement with Wyeth.
(f) To exclude loss accruals for settlements of certain commercial legal
proceedings.
(g) To exclude the loss accrual on the sale of certain less
significant marketed products and related assets.
(h) To exclude the write-off of inventory principally due to changing
regulatory and reimbursement environments.
(i) To exclude, for the applicable periods, merger related expenses
incurred due to the Alantos Pharmaceutical Holding, Inc. ("Alantos"),
Ilypsa, Inc. ("Ilypsa"), and Tularik Inc. acquisitions, primarily
related to incremental costs associated with retention. Substantially
all related amounts have been incurred.
(j) To exclude the non-cash expense associated with writing-off the
acquired in-process research and development ("IPR&D") related to the
acquisitions of Alantos and Ilypsa in 2007.
(k) To exclude the impairment of a non-ENBREL related intangible asset
previously acquired in the Immunex acquisition.
(l) To exclude the impact of writing-off the cost of a semi-completed
manufacturing asset that will not be used due to a change in
manufacturing strategy.
(m) To exclude merger related expenses incurred due to the Abgenix
acquisition, primarily related to incremental costs associated with
recording inventory acquired at fair value which is in excess of our
manufacturing cost.
(n) To exclude the pro rata portion of the deferred financing and related
costs that were immediately charged to interest expense as a result of
certain holders of our convertible notes due in 2032 exercising their
March 1, 2007 put option and the related convertible notes being
repaid in cash.
(o) To reflect the tax effect of the above adjustments for 2008, excluding
(1) certain components of the write-off of inventory (see (b) above),
(2) certain of the restructuring charges (see (e) above), (3) certain
of the loss accruals for settlements of commercial legal proceedings
(see (f) above) and (4) certain components of the loss accrual on the
sale of certain less significant marketed products and related assets
(see (g) above).
(p) To exclude the income tax benefit recognized as the result of
resolving certain non-routine transfer pricing issues with the
Internal Revenue Service ("IRS") for prior periods.
(q) To reflect the tax effect of the above adjustments for 2007, excluding
(1) certain of the restructuring charges (see(e) above), (2) certain
components of the write-off of inventory (see (h) above), (3) the
write-off of the acquired IPR&D related to the Alantos and Ilypsa
acquisitions (see (j) above), (4) the write-off of the cost of a
semi-completed manufacturing asset (see (l) above), and (5) the tax
benefit recognized as a result of resolving certain non-routine
transfer pricing issues with the IRS (see (p) above).
(r) The following table presents the computations for GAAP and "Adjusted"
diluted earnings per share, computed under the treasury stock method.
"Adjusted" earnings per share presented below excludes stock option
expense:
Three months ended Three months ended
September 30, 2008 September 30, 2007
------------------- -------------------
GAAP "Adjusted" GAAP "Adjusted"
------------------- -------------------
Income (Numerator):
Net income for basic and
diluted EPS $1,158 $1,308 $201 $1,181
======= ======= ======= =======
Shares (Denominator):
Weighted-average shares
for basic EPS 1,058 1,058 1,086 1,086
Effect of dilutive
securities 6 5(*) 4 3(*)
------- ------- ------- -------
Weighted-average shares
for diluted EPS 1,064 1,063 1,090 1,089
======= ======= ======= =======
Diluted earnings per share $1.09 $1.23 $0.18 $1.08
======= ======= ======= =======
Nine months ended Nine months ended
September 30, 2008 September 30, 2007
------------------- -------------------
GAAP "Adjusted" GAAP "Adjusted"
------------------- -------------------
Income (Numerator):
Net income for basic and
diluted EPS $3,235 $3,761 $2,331 $3,716
======= ======= ======= =======
Shares (Denominator):
Weighted-average shares
for basic EPS 1,075 1,075 1,127 1,127
Effect of dilutive
securities 4 3(*) 6 4(*)
------- ------- ------- -------
Weighted-average shares
for diluted EPS 1,079 1,078 1,133 1,131
======= ======= ======= =======
Diluted earnings per share $3.00 $3.49 $2.06 $3.29
======= ======= ======= =======
(*) Dilutive securities used to compute "Adjusted" diluted earnings per
share for the three and nine months ended September 30, 2008 and 2007
were computed exclusive of the methodology used to determine dilutive
securities under SFAS No. 123R.
Amgen Inc.
Product Sales Detail by Product and Geographic Region
(In millions)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------ -----------------
2008 2007 2008 2007
------------------ -----------------
Aranesp(R) - U.S. $458 $460 $1,290 $1,692
Aranesp(R) - International 387 358 1,141 1,095
EPOGEN(R) - U.S. 634 602 1,810 1,851
Neulasta(R) - U.S. 633 598 1,850 1,744
NEUPOGEN(R) - U.S. 223 232 667 636
Neulasta(R) - International 219 165 620 472
NEUPOGEN(R) - International 117 105 342 307
Enbrel(R) - U.S. 838 777 2,531 2,247
Enbrel(R) - International 55 44 154 127
Sensipar(R) - U.S. 111 88 306 241
Sensipar(R) - International 50 34 138 94
Vectibix(R) - U.S. 26 41 83 137
Vectibix(R) - International 15 - 24 -
Other product sales - U.S. 6 11 23 24
Other product sales - International 12 9 34 26
------- ------- ------- -------
Total product sales $3,784 $3,524 $11,013 $10,693
======= ======= ======= =======
U.S. $2,929 $2,809 $8,560 $8,572
International 855 715 2,453 2,121
------- ------- ------- -------
Total product sales $3,784 $3,524 $11,013 $10,693
======= ======= ======= =======
Amgen Inc.
Condensed Consolidated Balance Sheets - GAAP
(In millions)
(Unaudited)
September 30, December 31,
2008 2007
------------- -------------
Assets
Current assets:
Cash, cash equivalents and
marketable securities $9,757 $7,151
Trade receivables, net 2,114 2,101
Inventories 2,004 2,091
Other current assets 1,745 1,698
------------- -------------
Total current assets 15,620 13,041
Property, plant and equipment, net 5,972 5,941
Intangible assets, net 3,095 3,332
Goodwill 11,340 11,240
Other assets 971 1,085
------------- -------------
Total assets $36,998 $34,639
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued
liabilities $3,951 $4,179
Current portion of other long-term
debt 1,000 2,000
------------- -------------
Total current liabilities 4,951 6,179
Deferred tax liabilities 346 480
Convertible notes 5,081 5,080
Other long-term debt 5,095 4,097
Other non-current liabilities 1,693 934
Stockholders' equity 19,832 17,869
------------- -------------
Total liabilities and
stockholders' equity $36,998 $34,639
============= =============
Shares outstanding 1,059 1,087
Amgen Inc.
Reconciliation of "Adjusted" Earnings Per Share Guidance to GAAP
Earnings Per Share Guidance for the Year Ending December 31, 2008
2008
-------------------
"Adjusted" earnings per share guidance $4.45 - $4.55
Known adjustments to arrive at GAAP earnings:
Legal settlements (a) (0.19)
Amortization of acquired intangible assets,
product technology rights (b) (0.17)
Stock option expense (c) (0.06) - (0.08)
Write-off of inventory (d) (0.06)
Restructuring costs (e) (0.03) -
- (0.05)
Amortization of acquired intangible assets,
R&D technology rights (f) (0.04)
Loss on sale of less significant marketed
products (g) (0.01)
-------------------
GAAP earnings per share guidance $3.85 - $3.99
===================
(a) To exclude loss accruals for settlements of certain commercial legal
proceedings.
(b) To exclude the ongoing, non-cash amortization of acquired product
technology rights, primarily ENBREL, related to the Immunex
acquisition.
(c) To exclude stock option expense associated with SFAS No. 123R.
(d) To exclude the write-off of inventory resulting from a strategic
decision to change manufacturing processes.
(e) To exclude restructuring related costs.
(f) To exclude the ongoing, non-cash amortization of the R&D technology
intangible assets acquired with the Abgenix and Avidia acquisitions.
(g) To exclude the loss accrual on the sale of certain less significant
marketed products and related assets.
CONTACT: Amgen, Thousand Oaks
David Polk, 805-447-4613 (media)
Arvind Sood, 805-447-1060 (investors)
(Logo: http://www.newscom.com/cgi-bin/prnh/20081015/AMGENLOGO)
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