Amgen beats Q3 expectations, discusses Horizon purchase
Thousand Oaks-based Amgen has a lot on the horizon as it nears the end of fiscal year 2023, with the company yet again beating analysts’ expectations, this time in the third quarter, and beginning the onboarding process of its latest acquisition.
Amgen delivered sales worth $6.9 billion in the third quarter of 2023, up 4% year-over-year, and just in line with analysts’ expectations, according to FactSet.
Moreover, the company’s adjusted earnings per share of $4.96 were up 6% from the third quarter of last year and topped analysts forecasts of $4.68 per share.
“We are excited about our pipeline progress and our operating performance in the third quarter,” Robert Bradway, chairman and CEO of Amgen, said during the company’s earnings call on Oct. 31.
But it wasn’t all perfect.
Amgen’s non-adjusted earnings per share actually fell 19% year-over-year from $3.98 to $3.22.
This is because Amgen scrapped an experimental prostate cancer treatment during the quarter that ended Sept. 30.
Dubbed AMG 340, Amgen picked up the treatment in its $900 million acquisition of Teneobio in 2021.
The company did not provide insight into the decision to scrap the drug, which was tested in metastatic castration-resistant prostate cancer.
But as a result of the decision, Amgen took on a $650 million net impairment charge, which hurt non-adjusted earnings.
That could be one reason Amgen’s stock tumbled 3% after the company announced its third-quarter earnings before the markets opened on Oct. 31.
Amgen’s stock closed at $256.30 on Oct. 31, down from a $266 close on Oct. 30. But it has regained some of that loss since, closing at $260.84 on Nov. 1.
Regardless, the big thing for Amgen is the close of its latest acquisition of Horizon Therapeutics, which finally closed after a months-long delay due to external circumstances.
Amgen raised its outlook for the year and now expects to earn an adjusted $18.20 to $18.80 per share on $28 billion to $28.4 billion in sales all based on its $27.8 billion purchase of Horizon.
“The Horizon acquisition, coupled with our purchase of ChemoCentryx, which we acquired a little more than a year ago, gives Amgen a significant rare disease business that fits squarely within our overall strategy and will be additive to the growth we expect from our base business,” Bradway said during the earnings call.
With the acquisition, Amgen adds treatments to its portfolio such as Tepezza and Krystezza, the only available FDA-approved treatments for thyroid eye disease and chronic refractory gout, respectively.
Also as part of the acquisition, Vikram Karnani joined Amgen from Horizon and will be leading a newly created rare disease business that will be the fourth leg of Amgen’s commercial lineup alongside its inflammation, oncology and general medicine businesses, Bradway announced on the call.
Karnani said that Tepezza generated $453 million in sales in the third quarter, representing 2% quarter-over-quarter growth while Krystexxa delivered a record $253 million of sales in the third quarter, representing 32% year-over-year growth.
Sales for Krystexxa are now annualizing at a $1 billion run rate.
Even Horizon’s other treatment, Uplinza, saw sales increase 54% year-over-year in the third quarter to $67 million.
Karnani concluded by stating that the rest of Horizon’s portfolio generated $173 million of sales in the third quarter, primarily driven by its portfolio of ultra-rare medicines.
“We see an opportunity for this basket of products to continue to generate robust sales,” he said.
“We are excited to work together by leveraging Amgen and Horizon’s combined capabilities to ensure our medicines reach more patients even faster who are suffering from serious and rare diseases globally.
Also excited, Bradway mentioned that there will be a lot of opportunities to continue expanding the market of many of these treatments.
“These medicines are also early enough in their life cycles that we can positively impact their growth by leveraging Amgen’s capabilities in process development, lifecycle management and manufacturing,” Bradway said.
Bradway also added that Amgen has spent the last decade building out its international footprint, with the company’s medicines now available in about 100 countries.
“And today our rare disease sales come almost exclusively from the U.S. So, we’ll be able to leverage our global presence to quickly bring these medicines to patients around the world,” Bradway said.
Amgen sales were again led by Enbrel at $1.04 billion, despite being down 6% year-over-year due to increased competition.
Sales for Prolia were up 14% to $986 million while Evenity and Reptha saw sales increase 51% and 32%, respectively to lead the portfolio.
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