Q4 2024 Amgen Inc Earnings Call

Julianne: My name is Julianne, and I will be your conference facilitator today for Amgen's fourth quarter and full year 2024 Financial Results Conference Call.

Julianne: All lines have been placed on mute to prevent any background noise.

Julianne: There will be a question and answer session at the conclusion of the last speaker's prepared remarks.

Julianne: In order to ensure that everyone has a chance to participate, we would like to request that you limit yourself to asking one question during the Q&A session.

Julianne: To ask a question, please press star from the number 1 on your telephone keypad.

To withdraw your question, please press star 1 again.

Speaker Change: I would now like to introduce Justin Claeys, Vice President of Investor Relations. Mr. Claeys, you may now begin.

Thank you, Julianne.

Justin Claeys: Good afternoon, everyone, and welcome to our fourth quarter 2024 earnings call.

Speaker Change: Bob Bradway will lead the call and be followed by a broader review of our performance by Murdo Gordon.

Jay Bradner, and Peter Griffith.

Speaker Change: Through the course of our discussion today, we will use non-GAAP financial measures to describe our performance.

Bob Bradway: and have provided appropriate reconciliations within the materials that accompany this call. We will also make some forward-looking statements which are qualified by our Safe Harbor Statement and please note that actual results can vary materially. Over to you, Bob.

Bob Bradway: Good afternoon, everyone, and thank you for joining us today. 2024 capped another year of strong execution at Amgen. Our operations teams supplied every patient every time. Our clinical teams reliably delivered quality results across the portfolio. And our commercial teams grew the business across our four therapeutic areas and in each of our geographic regions.

Bob Bradway: The operating rhythm that we've established in our business will serve us well for 2025 and the longer term. Looking ahead, our objective is to deliver long-term growth while navigating regulatory and political change, declining net prices, and losses of exclusivity.

We have a track record of doing just that.

Bob Bradway: If you consider the past decade, we grew revenues above a mid-single-digit percent level and EPS at approximately 9% per year over the period, despite facing biosimilar and generic competition across products that accounted for about 50% of our revenues.

Bob Bradway: As we look to the next decade, our novel medicines are well-positioned to address patient demographics in a rapidly aging world, and we expect that our operating discipline to enable us to scale to meet the needs of patients while continuing to deliver for our shareholders.

Bob Bradway: Reflecting on our marketed products in 2024, we exited the fourth quarter with 14 medicines, each annualizing at over a billion dollars, and notably, several of these will be key drivers of growth through the decade.

Bob Bradway: Let me highlight a few. Starting in general medicine, Repatha and Avenity continue to deliver attractive growth. Heart disease remains the leading cause of death globally, and Repatha, now a multi-billion dollar product, continues to expand as access improves worldwide.

Bob Bradway: We are the leader worldwide in bone health, addressing the huge need for fracture prevention in those living with osteoporosis.

Bob Bradway: The clinical performance of Avenity since its launch demonstrates the leading role it can play in reducing fracture risk for millions of postmenopausal women.

Bob Bradway: In rare diseases, 2025 will be an exciting year. We look forward to regulatory approvals for TAPEZA internationally and launches in new indications for EPLISNA, further strengthening the growth trajectory of our rare disease business.

Bob Bradway: In inflammation, we continue to be inspired by the strong performance of Tess Spire and the progress we're making advancing into new indications, including COPD, which is the third leading cause of death, where we intend to initiate Phase III studies.

Bob Bradway: And, of course, in chronic rhinocytis, which runs in parallel with other respiratory diseases.

Bob Bradway: In oncology, our leading bispecific T-cell engager platform provides further opportunities for growth, with BlinCyto moving into frontline treatment and demonstrating compelling survival benefit in BALL.

Bob Bradway: Imdeltra, showing impressive efficacy in hard-to-treat small-cell lung cancer, and Zaluritamig, advancing into Phase III in advanced prostate cancer.

Bob Bradway: 2025 promises to be another milestone year for our rapidly advancing pipeline, with important Phase III data readouts for programs, including across our general medicine, rare disease, inflammation, and oncology portfolios.

Bob Bradway: Beyond these readouts, we'll be initiating several new phase 3 trials of Meritide in obesity and related conditions.

Bob Bradway: This is an exciting time for innovation in our laboratories, in our factories with the science of manufacturing, and in leveraging technology across the company.

Bob Bradway: When it comes to artificial intelligence, we're finding new opportunities across our business, and AI is helping us deliver innovative medicines to more patients even faster.

Bob Bradway: To wrap up, 2024 demonstrated the strength of our business, the depth and breadth of our portfolio, and the power of our pipeline. As we step into 2025, we're poised to deliver continued growth and innovation in the near term through 2030 and beyond.

Bob Bradway: And I want to thank our global team for their exceptional contributions and dedication to our mission.

Bob Bradway: With that, I'll turn it over to Murdo for an update on our commercial organization. Thanks, Bob. In the fourth quarter, product sales grew 11% year-over-year, capping off a year of growth fueled by strong execution across the business.

Bob Bradway: For the full year, product sales grew 19% and 10 products grew by double digits or better, creating strong momentum for growth in 2025 and beyond.

Speaker Change: Two products on a strong growth trajectory are Repatha and Avenity, which together grew 35% year-over-year, driven by 39% volume growth and accounting for nearly $1 billion in sales growth in the year.

Speaker Change: Both of these important brands serve large patient populations that are mostly untreated despite the availability of highly impactful therapies, indicating robust growth potential.

Speaker Change: Repata sales increased 36% in 2024, reaching over $2.2 billion in sales.

Speaker Change: There are 100 million patients globally in need of effective treatment for lowering their LDL-C.

Speaker Change: And we see strong potential for growth of repata around the world as physicians, patients, and payers recognize the importance of therapies like repata for patients at risk of major cardiovascular events.

Speaker Change: In the United States, Repatha sales grew 44% in 2024, with volume growth of 54%. The majority of patients with elevated LDL-C are in the primary care setting.

Speaker Change: And in 2024, our increased investment focused on primary care physicians improved the number of Repatha prescribers by 50%, supporting future growth strategy.

Speaker Change: Our direct patient education efforts doubled the number of patients who asked their doctor for a PASA.

Speaker Change: Volume growth was further supported by Repatha's broad access and reimbursement, and we see more payers seeking to ease or even remove prior authorization barriers, making Repatha more accessible and affordable for patients.

Speaker Change: Cardiologists and primary care physicians reported in a recent survey that Repatha Access has improved significantly versus two years ago.

Speaker Change: Outside the US, Repatha continues to grow across major markets despite increased competition in the segment.

Speaker Change: Over the past several years, the price of Repata has been impacted by an expansion of coverage in the U.S.

Speaker Change: and the growth of new markets around the world. Moving forward, we expect less price erosion for Repapa, with 2025 net price expected to decline by mid-single digits or less.

Speaker Change: Evenity sales increased 35% in 2024, reaching almost $1.6 billion in sales. Evenity is the only therapeutic that both builds bone and slows resorption, which can play a critical role in reducing fracture risk for millions of women who are postmenopausal.

Speaker Change: Despite the significant need, only 210,000 patients in the U.S. have been treated with Avena-T to date, while millions remain at risk.

Speaker Change: With over 90% of very high-risk patients not currently receiving appropriate treatment, we see a significant opportunity to grow identity in 2025 and beyond.

Speaker Change: In the U.S., Avenity continues to be the segment leader in the bond builder market, with over 14% quarter-over-quarter increase in new customers ordering Avenity, and so an increase in prescription volume from both established and new Avenity prescribers.

Speaker Change: We've increased our investment in Ivenity and have fully shifted the focus of our U.S. Bone Field Force towards Ivenity.

Speaker Change: A move to our rare disease portfolio, which delivered over $4.5 billion in sales in 2024. Tepeza, our largest product in the rare disease portfolio, generated sales of $1.9 billion in the year, representing 5% year-on-year growth.

Speaker Change: Since launch, Tepeza has had a positive impact for thousands of patients living with thyroid eye disease.

Speaker Change: There are roughly 100,000 patients suffering from thyroid eye disease in the U.S. who could benefit from tepeza, and to reach them, we've intensified our efforts to engage a broad prescriber base of oculoplastic surgeons, ophthalmologists, and endocrinologists.

Speaker Change: We're moving quickly in international markets to secure regulatory approval for tepeza, which will drive additional growth. And we've successfully launched tepeza in Japan, where it's the first and only medicine approved to treat active thyroid eye disease.

Speaker Change: In 2025, we expect to launch the PESA in seven additional countries.

Speaker Change: In inflammation, Tespire continues a strong trajectory with nearly $1 billion in sales in the year, a 71% year-over-year increase. We've driven increased adoption by pulmonologists supported by Tespire's unique profile to treat patients with multiple severe uncontrolled asthma triggers and drivers.

Speaker Change: Tespire has strong future growth potential given the need to treat the 2.5 million patients worldwide with severe uncontrolled asthma.

Speaker Change: Our innovative oncology portfolio, including Blencito, Lumicraz, Dectabix, Kyprolis, Endplate, Xgeva, and Indeltra, contributed almost $8 billion in sales for the full year. Year-over-year sales grew 11%, driven by volume growth and higher net selling price.

Speaker Change: Our leading bi-specific T-cell engager platform, which developed BlinCyto and Imdeltra, continues to address critical unmet needs in oncology while providing significant opportunities for future growth.

Speaker Change: Lincito sales grew 41% for the full year, reaching over $1.2 billion in sales. We expect continued strong growth in 2025, driven by broad prescribing across academic and community segments.

Speaker Change: Physician prescribing is growing and compelling new clinical data is redefining Blinsito as the standard of care for both adult and pediatric patients with Philadelphia chromosome negative B-cell ALL.

Speaker Change: Our U.S. launch of Imdeltra for the treatment of patients with extensive-stage small-cell lung cancer who are progressing on or after chemotherapy is off to a strong start.

Speaker Change: generating $115 million in sales in seven months of launch. We see increasing breadth of adoption in both academic and community settings driven by strong clinical conviction for Mdeltra's transformational efficacy.

and Delta has treated approximately 2,000 patients since launch.

Speaker Change: Each year, an estimated 8,000 to 10,000 patients progress to second-line treatment for extensive stage small cell lung cancer. Our medical and commercial teams are operating with urgency to bring Amdelta to more patients living with this aggressive disease.

Speaker Change: Sales of our biosimilar products were $2.2 billion in 2024, an increase of 16% year-over-year. In the fourth quarter, our team readily executed the launch of PavBlue, a biosimilar to ILEA, with nine weeks of sales totaling $31 million.

Speaker Change: Response from retina specialists to PAD Blue has been very positive with strong intent to purchase and administer this high-quality antigen biosimilar delivered in an easy-to-use pre-filled syringe.

Speaker Change: The next wave of biosimilar launches continues in 2025. In January, building on the strong introduction of Pablo at the end of 2024, we launched Wislana, a biosimilar to Stellara. And in the second quarter, we expect to launch Bikambi, a biosimilar to Solaris.

Speaker Change: With this next wave of launches, we anticipate robust growth and attractive returns from our biosimilar portfolio.

2024 was a strong year of execution across Amgen.

Speaker Change: We view execution as a team effort. The tightly coordinated integration between research and development, manufacturing operations and our commercial teams enables us to serve record numbers of patients across the portfolio and around the world.

Speaker Change: This relentless cross-enterprise focus will accelerate our ability to reach even more patients with Amgen Medicines in 2025. And with that, I'll hand it over to Jay.

Thank you, Murdo, and good afternoon, everyone.

Speaker Change: At this time last year, we planned a very ambitious R&D agenda, and I'm very proud to say we delivered, meeting or exceeding almost all enrollment targets and generating impact and value across the portfolio.

Speaker Change: Specifically, in 2024, we received two important U.S. regulatory approvals in oncology, completed five positive Phase III studies, and initiated three new Phase III trials while advancing the broad Meritide program.

Let's begin with Maritide, a therapy with a unique,

Speaker Change: Since our Phase 2 Data Disclosure last November, we have engaged extensively with key opinion leaders and have received strong enthusiasm and support.

Speaker Change: This excitement stems from Maritide's ability to deliver consistent, predictable, and sustained weight loss through 52 weeks without hitting a weight loss plateau and convenient monthly or less frequent dosing, a clear advantage over current weekly therapies.

Speaker Change: Additionally, key opinion leaders conveyed their excitement for robust and clinically meaningful improvements in cardiometabolic parameters, including hemoglobin A1c, demonstrated by Meritide treatment.

Speaker Change: With a further optimized simple dose escalation schedule and significantly fewer injections per year, we expect to improve persistence and long-term health outcomes.

Speaker Change: Maritibe represents a promising treatment advance for people living with obesity and related conditions, and we are committed to fully realizing its potential.

Speaker Change: In the first half of 2025, we expect to initiate the first studies in our Broad Phase III Maritime Program and expect to present the full Maritime Phase II dataset at a major medical congress.

Speaker Change: In the second half of 2025, we expect key data readouts from both the ongoing Phase 2 Type 2 Diabetes Study and Part 2 of the ongoing Phase 2 Chronic Weight Management Study.

Speaker Change: Beyond Maritide, in General Medicine, we look forward to data from the Repatha Vesalius Phase 3 Primary Prevention Study in the second half of this year.

Speaker Change: Having demonstrated profound and sustained benefit of Repatha in the secondary prevention setting, we're excited about these data and the opportunity to reach additional patients at high risk of a first cardiovascular event.

Speaker Change: Turning to Opasaran, our promising best-in-class, small-interfering RNA medicine targeting Lp a, we are bringing a precision medicine to cardiovascular risk reduction for the many individuals with Lp a elevation.

Speaker Change: The fully enrolled OCEAN-A Phase III Cardiovascular Outcomes Trial of Opasaran continues to progress.

Speaker Change: And we expect to initiate an additional phase 3 outcome study in patients with elevated LP little a and at high risk for a first cardiovascular event late this year or in the first half of 2026.

Speaker Change: Shifting to rare disease, we are very excited about Eplizna's potential to serve even more patients facing rare inflammatory illnesses.

Speaker Change: In 2024, we generated compelling data from the Eplizona Phase III Mitigate Study in patients with IgG4-related disease, a serious inflammatory condition with no approved therapies.

Speaker Change: These data are now under FDA priority review, with a PDUFA date of April 3, 2025. The FDA also granted orphan drug designation to a plisna for the treatment of generalized myasthenia gravis, based upon 26-week data from the Phase III mints study.

Speaker Change: This study showed eplizuna to be highly effective on multiple clinical outcomes, also reducing the need for steroids with patient-centered, convenient dosing. We eagerly anticipate the 52-week data later this year, which will provide further insight into response and long-term durability.

Speaker Change: With two anticipated approvals on the horizon in IgG4-related disease and generalized myasthenia gravis, we are more confident than ever about Eplizuna's expanding impact on the management of rare inflammatory diseases.

Speaker Change: In inflammation, we remain on track to initiate Phase III studies of Tez-Spire in COPD, targeting patients with moderate to very severe COPD with bloody acinophil counts greater than or equal to 150 cells per microliter.

Speaker Change: COPD is the world's third leading cause of death, and we're excited about the impact Tespire could have in this setting.

Speaker Change: Beyond COPD, regulatory submissions are underway in chronic rhinosinusitis with nasal polyps supported by positive phase 3 data, and we continue advancing a phase 3 study in eosinophilic esophagitis.

Speaker Change: The Roka-Tinlamab Phase III rocket program in atopic dermatitis is progressing, with additional data expected throughout 2025.

These studies will provide deeper insight into Rokatin Lamad's profile.

Speaker Change: Beyond atopic dermatitis, we continue to explore rocotinlamab in moderates of severe asthma and emprurigo nodularis, a chronic skin condition characterized by extreme itchiness.

Speaker Change: As previously indicated, we are pursuing B-cell depletion in autoimmune disease with both blinitumumab and inebolizumab.

Speaker Change: Our initial focus is on systemic lupus erythematosus, with plans to expand into additional indications. 2025 will be an important year in oncology, where we expect three key Phase III data readouts.

I will start with our rapidly advancing bike portfolio.

Speaker Change: Last December, very exciting blintz cytodata were shared at ASH and published simultaneously in the New England Journal of Medicine.

Speaker Change: In a Phase III study conducted by the Children's Oncology Group, lincito added to chemotherapy improved three-year disease-free survival to 96 percent, compared to 88 percent with chemotherapy alone in the upfront treatment of pediatric B-cell acute lymphoblastic leukemia.

Speaker Change: We are also advancing a subcutaneous formulation of Blinitumumab with a potentially registration-enabling study in adults and adolescents with relapsed refractory BALL expected to begin in the second half of 2025.

Speaker Change: Based on our experience to date, subcutaneous splenotumumab has the potential to improve the patient experience, efficacy, and tolerability.

Speaker Change: Our second approved bite therapy, Imdeltra, a first-in-class bispecific T-cell engager targeting DLL3 for small cell lung cancer, is rapidly advancing into earlier lines of therapy.

Speaker Change: Phase III studies are ongoing in both extensive-stage and limited-stage disease. Data from DELPHI-304 are expected in the first half of 2025. This study compares Imdeltra with standard-of-care chemotherapy in second-line extensive-stage small cell lung cancer.

Speaker Change: Our first-in-class STEEP1-CV3 bispecific T-cell engager zeloridamide has entered phase 3 clinical development with a study in post-taxing metastatic castrate-resistant prostate cancer.

Speaker Change: We are also exploring xaliridamide in combination therapy and in earlier lines of prostate cancer with multiple Phase 1b studies ongoing.

Speaker Change: We remain excited about the growth potential of our BITE platform and the opportunity to reach additional cancer patients with Litsido and Deltra and Daleridumab.

Speaker Change: Beyond our T-cell engagers, bimerituzumab, our first-in-class fibroblast growth factor receptor 2B-directed monoclonal antibody, is advancing to frontline gastric cancer therapy.

Speaker Change: We expect data in the first half of 2025 from Fortitude 101, a phase 3 study of bimerituzumab combined with mFull Fox6 chemotherapy versus chemotherapy alone.

Speaker Change: On biosimilars, we are rapidly advancing three Phase III programs, evaluating our biosimilars to Opdivo, Keytruda, and Acrevis, the next wave of Amgen biosimilar products.

Speaker Change: In closing, I want to thank my Amgen colleagues for their unwavering commitment to patients facing grievous illnesses and for their focus and collaboration throughout a highly productive 2024. We look forward to an exciting year ahead and continued pipeline momentum. I'll now turn it over to Peter.

Peter: Thank you, Jay. We're pleased with our execution excellence in the fourth quarter and for the full year 2024, and we remain on track with our long-term objectives. The financial results are shown on slides 28 to 30 of this slide deck.

Peter: Full year total revenues of $33.4 billion grew 19% year over year, driven by 21 products with record sales.

Peter: Product sales increased 19% year-over-year, driven by 23% volume growth. Excluding products acquired from Horizon, product sales for the full year increased 7% year-over-year, driven by 11% volume growth.

Peter: For the full year, we delivered a non-GAAP operating margin of 47%.

Peter: We continue to invest in advancing our pipeline with non-GAAP R&D spend increasing 25% year-over-year for the full year.

Peter: to a record $5.9 billion due to investments in the late-stage pipeline including Meritide, Broca-Tinlamab, Bema-Rituzumab, and Dimdeltra as well as Horizon Acquired Programs.

Excluding Horizon, non-GAAP R&D spending increased 15% year-over-year.

Peter: The Horizon integration is progressing well, and we expect to reach the previously announced $500 million in pre-tax cost synergies by year three post-acquisition.

Peter: The acquisition was accretive to non-GAAP EPS for the full year 2024.

Peter: Full year non-GAAP, other income and expense was up $1.1 billion year-over-year, almost entirely due to increased interest expense from the Horizon acquisition.

Peter: We continue to strengthen our balance sheet with $4.5 billion of debt retired in 2024.

Peter: Our non-GAAP tax rate decreased two percentage points year-over-year to 14.5% for the full year.

Peter: Primarily due to the change in earnings mix, including the addition of the Horizon business.

and Net Favorable Items.

Peter: The company generated $10.4 billion in free cash flow for the full year.

Peter: and $4.4 billion in free cash flow in the fourth quarter. These results reflect strong momentum in the business and favorable timing of collections at year-end.

Peter: We executed capital expenditures in 2024 of $1.3 billion in line with the guidance provided, with the cash outflow being $1.1 billion and the remainder to be paid in 2025.

Peter: Our commitment to innovation is also evident as we deploy artificial intelligence across the value chain.

Peter: including informing molecule design and discovery research, enabling faster trial enrollment and streamlining regulatory filings in clinical development, and enhancing our responsiveness to customers in commercial operations.

Peter: In addition, we returned capital to shareholders as we paid competitive dividends of $2.25 per share in the fourth quarter. This represented a 6% increase compared to 2023. We expect that we will continue to increase our dividend.

Peter: Let's turn to the outlook for the business for 2025 on slide 31.

Peter: We expect our 2025 total revenues in the range of $34.3 billion to $35.7 billion, and non-GAAP earnings per share between $20 and $21.20.

Peter: Our revenue range reflects our strong growth outlook driven by numerous opportunities across each of our therapeutic areas.

Peter: We expect continued growth across a number of products, led by our near-term growth drivers Rapatha, Avenity, Tespire, our innovative oncology portfolio, our rare disease portfolio, and biosimilars.

Peter: This growth will more than offset declines due to the upcoming Denosumab patent expiration as well as continued price declines across our portfolio in 2025.

Peter: For total company revenues, we expect each quarter of 2025 to have a relatively similar year-over-year growth rate.

Peter: A reminder, as you model the first quarter of 2025, and consistent with our historical trends, we expect Otesla and Embro to follow their typical pattern of lower sales in the first quarter relative to subsequent quarters.

Peter: Also note that biosimilar sales in the U.S. can significantly vary quarter-to-quarter depending on customer ordering patterns.

Peter: For example, we expect Q1 Amgevita sales in the U.S. to be in line with Q3 2024.

Peter: For the full year, we expect other revenue to be approximately $1.4 billion.

Peter: In 2025, we are driving R&D investments to support our promising late-stage pipeline, including Meritide and El Paso Rams.

Peter: As a result, we project the full-year non-GAAP operating margin as a percentage of product sales to be roughly 46 percent.

Peter: We project non-GAAP cost of sales to be in the range of 18 to 19 percent as a percentage of product sales for 2025.

Peter: This projection reflects the ongoing impact of sales mix, including profit sharing royalties.

Peter: We expect non-GAAP R&D expense to grow year-over-year in the mid-teens in 2025, with investments increasing to advance key pipeline assets, including Meritide and Opatran.

Peter: We see significant potential in our innovative pipeline, and it is important that we strategically invest now to fully unlock these opportunities.

Peter: And for the non-GAAP SG&A spend, we expect the 2025 full-year amount as a percentage of product sales to decline by approximately one to two percentage points year-over-year as we continue to drive efficiencies and prioritize resources.

Peter: including leveraging both automation and our newly established innovation and technology hub in India.

Peter: Overall, the operating margin of roughly 46% indicates our commitment to investing in the best innovation while also driving execution excellence, efficiency, and prioritization across the organization.

Peter: Consistent with prior years and in line with typical lower product sales in Q1, we expect Q1 non-GAAP operating margin to be the lowest of the year at roughly 42%.

Peter: and then accelerate in each of the quarters following the first quarter.

Peter: We anticipate non-GAAP OI&E to be approximately $2.4 billion in 2025. We expect a non-GAAP tax rate of 15 to 16 percent.

Peter: Similar to 2024, we expect share repurchases not to exceed $500 million in 2025, and we expect the share count in the first quarter of 2025 to be flat to the fourth quarter of 2024.

Peter: We expect capital expenditures of approximately $2.3 billion in 2025. This is consistent with our capital allocation priority to invest in our business and scale capacity for growth in marketed products and the pipeline.

Peter: We expect to maintain strong investment-grade credit ratings as we continue to generate strong free cash flows, strengthen our balance sheet, and remain on track to return to our pre-horizon capital structure by the end of 2025.

Peter: In 2025, we expect free cash flow performance to be similar to 2023. This decline is primarily driven by 2024 working capital, favorability, and incremental capital expenditures.

Peter: Free cash flow in the first half of 2025 will be impacted by strong 2024 year-end collections timing.

Peter: The shift in 2024 tax payments to the second quarter of 2025 and also the final 1.8 billion dollar repatriation tax payment in the second quarter of 2025.

Peter: Our long-term outlook remains strong, and I'm grateful to our colleagues worldwide for their dedication to serving patients.

Peter: This concludes our financial update. I'll now hand it back to Bob for our Q&A session.

Peter: Okay, just to recap before we go to the Q&A session, as you can see our results highlight the breadth and depth of opportunities across our business.

Peter: And we exited the fourth quarter with 10 products growing at a double-digit sales rate and 14 products annualizing at over a billion dollars. And for the year, to repeat, we had 21 products delivering record sales. So this momentum supports our outlook for 2025 and through the long term.

And with that, we'd be happy to take questions.

Speaker Change: Julianne, if you could please remind our participants of the procedures here.

Speaker Change: Certainly, thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by one. Again, to ask a question, press star one.

Speaker Change: Our first question comes from Yaron Werber from TD Cowen. Please go ahead, your line is open.

Yaron Werber: Great. Thanks for taking my question. Maybe just a couple of things. On 514, the one that's on clinical hold for obesity, can you comment, was that an incretin or not an incretin mechanism?

Yaron Werber: And then secondly, maybe just for Murdo, a few things looked really strong. MJVDA was extremely strong at $294. Is that sustainable from now on? What drove that? Thank you.

Speaker Change: All right, we'll take it in two parts. Jay, you want to address the 513, I think it is. Thanks, Jerome. AMG 513 is a novel investigational medicine for patients with obesity. It's currently in Phase 1 investigation. We have not disclosed the mechanism of action. This remains a competitive space, as you know.

Speaker Change: And Yaron, it's Murdo here. We're pleased with overall Biosimilar's performance and our Biosimilar portfolio, as I mentioned, last year grew about 16% and we're confident we can continue to grow that portfolio going forward, one of which of those growth contributors will be Angevina.

Speaker Change: Great. Julian, we'll go to the next question. I will remind folks, we have quite a full queue today, so if you can limit yourselves to one question, that'd be great.

Speaker Change: Thank you, Yaron. Our next question comes from Courtney Breen from Bernstein. Please go ahead, your line is open.

Courtney Breen: Hi all, thanks for taking my question today. I wanted to ask a little bit about Repasa. Obviously we're seeing kind of strong growth there and there's new indications coming, particularly in the primary prevention space. Can you just talk a little bit about kind of

Courtney Breen: How you anticipate this market evolving as we think about the oral PCSK9s and Merck's coral reef lipids trial that is also scheduled to read out later this year. There seem to be suggestions that that could perform as well as an injectable in terms of the efficacy. So just wanting to understand how you would position.

Thank you.

Courtney Breen: Thanks, Courtney. We're obviously very pleased with the performance of Repata in 2024, putting up some very strong growth both in volume and in revenues.

both in the U.S. and outside of the United States.

Courtney Breen: and we expect to see that continue. We expect to be able to treat the many patients who have not had their LDL cholesterol optimized. And there's.

Millions upon millions of these patients.

Courtney Breen: We are barely scratching the surface when it comes to treating them.

with PBMs.

Secondary prevention of heart attacks, strokes, and other cardiovascular sequelae.

Courtney Breen: And the goal, of course, as you mentioned, is that with Vesalius, which reads out later this year, that we'll be able to show that you can actually lower the risk of a first heart attack or stroke or other cardiovascular event. So we're kind of, we're in the mode of helping treat hard endpoints now in this market, and not just lowering LDL. So we'll see what the evidence...

Courtney Breen: is and how it accumulates with not just the Orals but other competitors that are trying to come into this market. But again, obviously, Repatha is a very important growth driver for us now and into the future.

All right, Julian, take the next question, please.

Speaker Change: Thank you, Courtney. Our next question comes from Salveen Richter from Goldman Sachs. Please go ahead, your line is open.

Salveen Richter: Good afternoon. Thanks for taking my question. In the context of your 2025 sales guidance, can you speak to where you feel the street is underappreciating growth and discuss how you factored in the Part D redesign to your projections? Thank you.

Speaker Change: Let me take it in two pieces. Umer, why don't you first start on the Part D redesign and then Pete, why don't you jump in? Sure.

Speaker Change: Yeah, the Part D redesign, at a total portfolio level for us, is relatively neutral. Between...

between

content.

to do well when patience out-of-pocket is capped.

Speaker Change: and Smoothed. And that's what we believe will happen for products like Repatha going forward. Great. Murdo, thank you. Salveen, thank you for the question.

I would just remind you what we've...

said, which is, let's start from 10 products.

Speaker Change: With double 13 products annualizing or at blockbuster status of a billion or more

Speaker Change: and 21 that were records in 2024. So strong in-market portfolio, Salveen. So when we look at 2025, I'd really like to start with two and then add four more on to think about. Murdo talked about Repatha.

Speaker Change: So, as he said, 100 million people around the world needing treatment.

Speaker Change: And less price erosion, maybe mid-single-digit or less this year on that. He talked about the strong access globally. So, you know, we expect Repatha to continue to be a strong medicine going forward. And the second on, Avenity.

You know, it's got low single-digit penetration.

Speaker Change: You know, greater than 90% of the high-risk patients in the U.S. haven't been treated.

Speaker Change: with Avenity. So we think those two are very, very important. But let me also share, you know, Ted Spire.

Speaker Change: Up 71% in 2024 to almost a billion dollars, I think it was $972 million of product sales. Innovative Oncology up 11%, the seven Innovative Oncology products we have in 2024. We think that's a very strong portfolio.

Speaker Change: to help patients with oncology and hematology disease. A rare disease, up to about $4.5 billion in 2024. So they've got a ways to go. And when we think about those four, we see a lot of growth there and a lot of opportunity.

And then we get to biosimilars.

Speaker Change: We shared with you 16% growth up to about $2.2 billion.

In 2024, we've got some launches coming this year.

Speaker Change: and and and so we continue to see a lot of growth in that. So we think there's a lot of opportunity.

Speaker Change: And going forward, and as I shared in my opening remarks, we see that driving us right past the expiry on denosumab. So I'll leave it there, but we're very pleased with the business, and most importantly, we expect more medicine to more patients in 2025 around the world.

All right, Julianne, let's go to the next question, please.

Salveen Richter: Salveen, our next question comes from David Amselem from Piper Sandler. Please go ahead. Your line is open.

Thanks. So I wanted to switch gears and...

Get your thoughts on...

Salveen Richter: some of the Horizon products, Christexa, how are you thinking about similar down the road, and then also how you're thinking about the competitive landscape for Topeza. Thanks.

Salveen Richter: Sure. Murdo, you want to... Yep. Thank you, David. Chris, thanks. I had a very strong year in growth year over year. When we look at...

Um.

Salveen Richter: If we include the Horizon performance from the prior period, Christexa was up 23%, Duplizna up 40%, Tavneos up 111%, and Tepeza up 5%. So this is, as Peter mentioned,

Salveen Richter: Overall, it's a portfolio of products very early on in their life cycle.

with more data to flow.

Salveen Richter: As is the case, of course, with Euclizma, with our IgG4 data and additional GMG data coming on 52 weeks.

Salveen Richter: So we have a number of catalysts that will grow our business in the U.S. and then we have catalysts for growth outside.

Salveen Richter: The U.S. with, of course, international launches and expansion, which is well underway with the recent approval of TEPESA in Japan.

With respect to Chris-Texa overall, again...

Salveen Richter: Even though Prostexa is part of our rare disease portfolio, severe uncontrolled gout is not a rare disease. It's not a rare condition. There are lots of

Salveen Richter: Patients out there who suffer continuously, and with the immunomodulation data, we are now able to help many of those patients, and so we see continued robust opportunity for growth there. And we're also looking to develop additional pipeline assets, and so Jay and his team are looking at those opportunities.

All right, Julianne, we'll go to the next question, please.

Speaker Change: Thank you, David. Our next question comes from Michael Yee from Jeffreys. Please go ahead, your line is open.

Michael Yee: Hey guys, thanks for the question. Other than Maritide, you know, you've had one or two obesity assets have some slip-ups.

Michael Yee: Can you maybe comment about your strategic view about where you'd like to be in a couple years if you are so confident on Meritide, given that everyone's chasing a multiple asset portfolio, including orals?

Speaker Change: And you seem to be pretty early stage outside of Meritide. So maybe just comment about your appetite there and whether you can add to the portfolio. Thank you.

Speaker Change: Sure. Mike, I'm not sure we'd accept the premise, but anyway, let's talk about the portfolio of obesity programs. Go ahead, Jay. Yeah, thanks, Mike. Akin to what Bob said, I wouldn't call these flip-ups at all. Early phase clinical investigation here at Amgen has a really high bar for what medicines go forward.

and Melinda Gates. Thank you. Thank you.

Speaker Change: The next medicine up after Maritime did not meet that bar. Our obesity efforts fit very well with our strengths in cardiovascular disease, nephrology, and more generally, the emerging presence in primary care. And so we're...

Speaker Change: Very confident that we have all the talent, capabilities, ideas, and rising medicines to be a major player in obesity for the fullness of time, which we've studied for more than a decade.

Speaker Change: The research and early development pipeline has ideas targeting integrins, also non-integrins.

Speaker Change: We have medicines that will be given orally, others by subcutaneous administration.

Speaker Change: We're also interested to open partnerships through external innovation, and so...

Speaker Change: We're very confident in Meritide and very confident in the pipeline behind it.

Speaker Change: Sorry, Jay, just to clarify one thing, the 513, we still expect to have that development. We don't believe the issue that we referenced is related to the drug, but we'll go through the usual steps with the regulators on that. But Jay was referring to another product that we're no longer advancing that was previously in the clinic. So when he said it didn't...

Speaker Change: But again, we're excited about the program and the molecules that are coming forward to the clinic out of the obesity portfolio.

Alright Julian, let's go to the next question please.

Speaker Change: Thank you, Michael. Our next question comes from Jay Olson from Oppenheimer. Please go ahead. Your line is open.

Oh, hey, congrats.

Thank you for following this update.

Speaker Change: Hey Jay, Jay, we can't hear you. Jay, sorry, we can't hear you. Do you want to take another start?

Oh, can you hear better now?

Yes, go ahead.

Oh, okay.

Speaker Change: Could you describe the key lessons you expect to learn from the Repata Vesalia CV Outcome Study results, how you can leverage those lessons across your portfolio, including Olpassaran and Meritide, and any synergies you plan to capture across these programs? Thank you.

Speaker Change: Sure, Jay? Sure, why don't I start and then Murdo invite you to speak to Synergies and the like.

Speaker Change: We've learned a lot from RPAF already. We have a leading capability in...

Speaker Change: population genetics and epidemiology and the now the broad use of her path of secondary prevention is a fantastic setup for Vesalius CV. As you know this is a phase 3 large cardiovascular outcome study of more than 12,000 patients.

Speaker Change: placebo-controlled patients at high cardiovascular risk without prior MI or stroke. This is ongoing. We have an event-driven readout expected in the second half of this year.

Speaker Change: This will be a large and valuable data set for us to mine to understand the further improvement of cardiovascular outcomes for patients as it relates to LDL-C, but also for other parameters.

Speaker Change: We have already harvested so many insights from Murpath and carried that into the design and execution of the El Pasaran Phase 3 program, which as you heard has an event-driven outcome, expected a readout in the second half of next year. So a very valuable data set that will no doubt prompt significant further insights.

Speaker Change: Thanks Jay, and the synergies here are significant and substantial given the leadership presence we have in LDL lowering and being able to apply that to LP, LP little a lowering with Olpasser and obviously it's successful in the readout of our phase 3 trial. I do think there's going to be some differences though given that.

Speaker Change: Lp-a cannot be modified by lifestyle, diet, and exercise. There are no other generically available or branded available products that can lower Lp-a. We do think that the...

intentionality and the speed to move to a pharmacotherapeutic.

Speaker Change: for LP little a lowering will be different than it has been for LDL, but nonetheless

Speaker Change: We're clearly engaged with all of the different stakeholders in the lipid-lowering and atherosclerotic market and we're engaging them as appropriate to make sure that they understand the profile of opacirin and the design of the trial that Jay mentioned and ultimately when we have results to share.

All right, Julianne, let's go to the next question, please.

Courtney Breen: Thank you, Jay. Our next question comes from Alex Hammond from Wolf Research. Please go ahead. Your line is open.

Speaker Change: Thanks for taking the question. So with more and more companies looking to China for innovation, what is Amgen's stance on looking overseas for clinical SAGE assets? And I guess more broadly, what is your appetite for M&A now post the Horizon acquisition? Thank you.

Well, we're, our...

Speaker Change: The position on business development remains pretty consistent, Alex. We're focused on molecules that we think we can add value to, irrespective of where they come from. So we have had and maintain a very active search for interesting opportunities for licensing and acquisition all around the globe. And we're open for business, looking for those opportunities.

Alright Julian, let's go to the next question please.

Speaker Change: Thank you, Alex. Our next question comes from Terence Flynn from Morgan Stanley. Please go ahead, your line is open.

tied phase 2 obesity data. Thank you.

Speaker Change: Thanks Terence for your question and really appreciate the call out for the associates here and the area residents facing these fires.

Speaker Change: We have, as you know, an ongoing Part 2 of our Phase 2 study in Chronic Weight Management. That is a 52-week study, and we expect a data readout late this year.

Speaker Change: I can confirm that we look forward to presenting the Phase 2, Part 1 data at the ADA meeting in June this year in Chicago and look forward to seeing you there.

All right, Julian. Next question, please.

Speaker Change: Thank you Terence. Our next question comes from Dave Reisinger from Lee Rank Partners. Please go ahead, your line is open.

Dave Reisinger: Yes, thanks very much. So, I have sort of a simple question. Clearly, you've provided a lot of helpful pipeline updates on the call, so thank you for that. So, my question, Jay, is could you just explain

Speaker Change: While you're announcing today the plans to initiate a new Opasaran Phase 3 trial in high-risk patients when it's not going to be initiated until late 25 or early 26, what is pending, you know, initiating that trial? Thank you.

Bob Bradway: So again, Dave, maybe I just clarify, I mentioned this in January at JPM in the context, this is Bob speaking, Dave, in the context of what to expect for the year, but Jay, go ahead and address the specific piece of the question if you'd like.

Speaker Change: Yeah, no, nothing more to add. We have already announced our intention to initiate a Phase 3 clinical investigation of OPASRAN and primary prevention.

Speaker Change: This is a strong hypothesis for protecting patients with elevations of LP little a and we hope to initiate this study, intend to initiate this study in the second half of this year.

Speaker Change: Or in the first half of next year, we just have a total commitment to the benefit of patients facing, in this case, genetically defined risk of cardiovascular disease.

Alright Julian, let's go to the next question please.

Speaker Change: Thank you, Dave. Our next question comes from Chris Schott from JP Morgan. Please go ahead, your line is open.

Chris Schott: Great, thanks so much. I just wanted to kind of talk through TEPESA and just how we should be thinking about growth in both the U.S. and internationally here. I guess specifically, can you talk about ex-U.S., the Japan opportunity, and some of these new markets?

Chris Schott: And can we think about the rapid ramp that we saw in the U.S. kind of repeating itself in those markets, or are these more gradual ramps as these roll out? Thank you.

Chris Schott: Yeah, hi Chris, it's Murdo here. Thanks for the question on Tepeza. In Japan the epidemiology is quite significant here, roughly 25,000 patients what we're talking about.

Chris Schott: The care model in Japan does reduce the friction that prescribers and patients experience.

Chris Schott: in terms of finding access to the right physician and then access to a site of care.

Chris Schott: So we do expect there to be a pretty good uptake in this market.

Chris Schott: I'm not sure about the bolus dynamic that we saw in the United States, that did have some impact because it was a launch during the COVID period, so I'm not sure I would compare.

Curves there.

Chris Schott: but I would expect steady penetration of the Japanese patient population. We know there have been over 550 patients already identified by prescribers. I was there for the launch at the end of last year.

Chris Schott: The weekly data are showing some pretty good steady momentum and so Japan will be a very good source of growth for Tefesa internationally. As I mentioned, we've got seven other markets that we'll be launching in, hopefully this year, pending regulatory approvals.

Chris Schott: And we do see that international catalyst, that international growth as a catalyst for the overall brand. And it's obviously one of the things that drove the acquisition, the ability for Amgen's global footprint to bring these medicines to more patients.

Chris Schott: In the U.S. we continue to focus on broadening the prescriber base.

Chris Schott: for Tepeza, so helping general ophthalmology and endocrinology diagnose not just the Graves disease, but also the thyroid eye disease, and then find a site of care for patients to receive Tepeza treatment.

Just one one overarching comment I'll make on Tepeza.

Chris Schott: It does follow the pattern we see in some other products in our portfolio, where that first quarter this year will be a little bit lower than the other three quarters, mostly a function of people having their insurance re-verified and or purchasing patterns in the market. So, just something to watch out for. But long-term, Tepeza growth is looking very good, given the international approvals and the momentum that we plan to generate in the U.S.

All right, Julianne, let's go to the next question, please.

Speaker Change: Thank you, Chris. Our next question comes from James Shin from Deutsche Bank. Please go ahead, your line is open.

James Shin: Hey guys, thank you for taking my question. Any color on the indication for the maritime trials that will start in the first half of 2025, and can you say anything on whether or not maritime will have head-to-head against incumbents such as Terzapatite or SEMA at this point? Thank you.

James Shin: Thank you, James. The Maritime Phase III program has a focus on chronic weight management, on cardiovascular disease, kidney disease, type 2 diabetes.

sleep apnea, heart failure, and possibly additional indications.

James Shin: As our discussions are in a rather mature state with the federal regulators, it would be premature to talk through any design principles around these trials at this time, but we look very much forward to initiating the Maritime Phase III program.

All right, Julianne, let's go to the next question, please.

Speaker Change: Thank you, James. Our next question comes from Tim Anderson from Bank of America. Please go ahead, your line is open.

Tim Anderson: Thank you. I know Amgen commonly says it doesn't get enough credit by the street for its biosimilar business. So I'd like to ask about that and just one product in particular, Pavlu, the ILEA biosimilar.

Speaker Change: Why can't that be a very significant product for you guys as the only seller into that large market right for the next few years?

Speaker Change: It seems like it could, you know, get to a billion-dollar-plus type sales level. And can you give us some idea of what's in your 2025 guide for this? Thank you.

Speaker Change: Okay, Tim, we couldn't hear very clearly the beginning of your question, but it seems that you're asking about biosimilars.

Speaker Change: Perhaps you suggest that we don't get enough credit for what we do in biosimilars. If that's what you said, we're grateful. We are a world leader, as you know, in biosimilars.

Speaker Change: Our focus has been to reliably supply biosimilars when we're appropriately able to enter the market. And our objective is to be amongst the first wave of biosimilar entrants, and that's what we've achieved with Pav Blue. But as to the specifics, Murdo, do you want to address Tim's question?

Speaker Change: Yeah, Tim, as you know, we don't give product-specific guidance, but...

Speaker Change: Given your comments, I would say we're very pleased with how the launch is going.

try to target being in the first wave.

Speaker Change: We find ourselves being the only biosimilar available in the market right now and of course that represents an opportunity that we will capitalize on.

The current feedback from retina specialists that

We've been talking to, it's very enthusiastic, very positive.

Speaker Change: They are pleased that Amgen is bringing yet another high-quality biosimilar in a very easy-to-use pre-filled syringe. Given the number of administrations these retina specialists do each and every day, that device is quite important. And thanks to our legal colleagues and our manufacturing operations.

Speaker Change: and process development teams. They've done a very, very nice job of making sure that we have a path to helping many more patients with another MGen biosimilar.

Speaker Change: Maybe to add on just a little bit, Murdo and Bob, I would suggest, Tim, we build what we think, obviously, is an industry-leading biosimilar franchise. We operate very efficiently. We leverage the broader Amgen footprint, including manufacturing and operations.

Speaker Change: We believe we're earning attractive returns for our shareholders in this. When we pursue an opportunity, we deliver to date. I would remind you that we have a 100% success rate of FDA approval once we enter the clinic.

Speaker Change: And with $10 billion in cumulative biosimilar sales through 2024, we're on track to double 2021 sales to over $4 billion by the end of the decade. I think this reinforces our leadership and ability to deliver attractive returns. So it's a really important question. We're delighted, and we think this is a good use of shareholder capital.

All right, Julianne, let's go to the next question, please.

Speaker Change: Thank you, Tim. Our next question comes from Evan Seigerman from BMO Capital Markets. Please go ahead, your line is open.

Speaker Change: Hi there, this is Connor McKay on for Evan. Thanks for our question and congrats on the quarter. We just had one question on the Phase 3 rocket program with...

Speaker Change: Several readouts coming over the balance of the year, what are you looking to see from those readouts to get comfortable with your competitive positioning in the atopic dermatitis market and sort of any updated thoughts on how you're thinking about that? Thank you.

Speaker Change: Yeah, thanks for the question. Rocatinlamab, our T-cell rebalancing monoclonal antibody, targets the OX40 receptor. As you note, we are reading out this year a number of studies of this ROCCIT program.

Speaker Change: This eight-study, more than 3,300-patient program really gives a lot of granularity to answer your question around the target product profile, the safety and tolerability of rocatinlamab, and its full efficacy in patients with atopic dermatitis.

Speaker Change: In the SHUTTLE study, we study roputinilamide combination with topical steroids or calcineurins in adults with moderate to severe AD, day to first half of this year. In the IGNITE study, we study monotherapy in adults with moderate to severe, day to first half of this year.

Speaker Change: And then in the back half of the year, we have two studies, ASCEND and ASTRO. ASCEND will help us understand maintenance in adults and adolescents.

Speaker Change: And then ASTRO is an adolescent study with moderate to severe AD. And so, as you can tell, we're going to generate a lot of information about the potential to contribute to better therapy for this very common, and in many cases, morbid disease, as well as the tolerability profile.

Great. Julianne, I think we've got time for two more.

Speaker Change: Certainly. Thank you, Evan. Our next question will come from Gregory Renza from RBC Capital Markets. Please go ahead, your line is open.

Speaker Change: Great. Good afternoon, and thanks for taking my question, Bob and team. Bob, as you and the team talk about the global footprint and leveraging and penetrating new markets, I'm just wondering if you could comment a bit about the opportunity in China, and namely just about the commercial opportunity for those oncology medicines and how that's being achieved through your partnership with Beijing, and maybe just longer term, how is that Beijing or B1 arrangement just factoring into those longer term goals? Thank you very much.

Maybe we'll take it in two parts.

Speaker Change: The business is growing globally. All three of our geographic regions are growing. Our Japan, Asia, Pacific business is the most rapidly growing of our regions right now, so we're really pleased with the performance in Japan.

Speaker Change: in China and elsewhere in the region. And the collaboration with Beijing continues to go well and Murdo, feel free to jump in and address any specifics about the portfolio there and the plans.

Murdo Gordon: Yeah, both elements of our business in China are performing well, the Amgen affiliate business.

Murdo Gordon: is growing nicely, that's essentially Repatha and Prolia, both products doing well, both products listed on the National Reimbursement Drug List.

Speaker Change: and growing rapidly as Bob described and with B1, formerly Beijing, our partnership I think has exceeded our expectations in China. The team executed extremely well across Kaikouralas.

Speaker Change: Balint Saito and Xjiva and we continue to enjoy that partnership and feel good about it and obviously we continue to work closely with them on the other R&D projects that we've partnered on so overall pleased with that.

All right, Julian, we'll have time for one more question.

Speaker Change: Thank you Gregory. Our last question will come from Mohit Bansal from Wells Fargo. Please go ahead, your line is open.

Mohit Bansal: Great. Thank you very much for taking my question. I have a question regarding Dynastomab and mostly Dynastomab, mostly in the sense of

Mohit Bansal: How should we think about the cadence of biosimilar erosion, the biosimilars coming? I'm assuming it is more half-loaded, but we'll have to get any color how you are thinking about that.

Murdo Gordon: Sure. Murdo, do you want to address that for Mohit? Yeah, thanks, Mohit. Well, we have a bit of a clear understanding on the timing of when biosimilars will enter, given the settlements that we've reached.

Murdo Gordon: So I would agree that the slope of the biosimilar erosion is going to be, by definition of the timing, more towards the back end.

Murdo Gordon: I would just encourage everybody to remember the cadence of biosimilar erosion in general.

Murdo Gordon: Executives that have been calling on our Xtiva and Foley accounts for many years now and we are the bone market leader and so there's a certain incumbency that we have that we think physicians as well to defend against.

Other biosimilar competition as they enter the market.

Murdo Gordon: Okay, well thank you all for your interest and I appreciate you joining the call. We'll look forward to catching up after the next quarter. Thank you.

Murdo Gordon: This concludes our 2024 Q4 and Full Year Earnings Call. You may now disconnect.