12 05 08 deutsche bank healthcare conference supporting materials

  • 196 views
Uploaded on

 

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
196
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
2
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Deutsche Bank37th Annual Health Care ConferenceMay 8, 2012
  • 2. Safe Harbor StatementThis presentation contains forward-looking statements that are based on management’s current expectations and beliefs and are subject to anumber of risks, uncertainties and assumptions that could cause actual results to differ materially from those described. All statements, otherthan statements of historical fact, are statements that could be deemed forward-looking statements, including statements about the plannedcompletion of the tender offer and the merger, estimates of revenues, operating margins, capital expenditures, cash, other financial metrics,expected legal, arbitration, political, regulatory or clinical results or practices, customer and prescriber patterns or practices, reimbursementactivities and outcomes and other such estimates and results. Forward-looking statements involve significant risks and uncertainties, includingthose discussed below and more fully described in the Securities and Exchange Commission (SEC) reports filed by Amgen, including Amgen’smost recent annual report on Form 10-K and most recent periodic reports on Form 10-Q and Form 8-K. Please refer to Amgen’s most recentForms 10-K, 10-Q and 8-K for additional information on the uncertainties and risk factors related to our business. Unless otherwise noted, Amgenis providing this information as of May 8, 2012 and expressly disclaims any duty to update information contained in this presentation.No forward-looking statement can be guaranteed and actual results may differ materially from those we project. The Company’s results may beaffected by our ability to successfully market both new and existing products domestically and internationally, clinical and regulatorydevelopments (domestic or foreign) involving current and future products, sales growth of recently launched products, competition from otherproducts (domestic or foreign) and difficulties or delays in manufacturing our products. In addition, sales of our products are affected byreimbursement policies imposed by third-party payers, including governments, private insurance plans and managed care providers and may beaffected by regulatory, clinical and guideline developments and domestic and international trends toward managed care and healthcare costcontainment as well as U.S. legislation affecting pharmaceutical pricing and reimbursement. Government and others’ regulations andreimbursement policies may affect the development, usage and pricing of our products. Furthermore, our research, testing, pricing, marketingand other operations are subject to extensive regulation by domestic and foreign government regulatory authorities. We or others could identifysafety, side effects or manufacturing problems with our products after they are on the market. Our business may be impacted by governmentinvestigations, litigation and products liability claims. Further, while we routinely obtain patents for our products and technology, the protectionoffered by our patents and patent applications may be challenged, invalidated or circumvented by our competitors. We depend on third partiesfor a significant portion of our manufacturing capacity for the supply of certain of our current and future products and limits on supply mayconstrain sales of certain of our current products and product candidate development. In addition, we compete with other companies withrespect to some of our marketed products as well as for the discovery and development of new products. Discovery or identification of newproduct candidates cannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no guarantee that anyparticular product candidate will be successful and become a commercial product. Further, some raw materials, medical devices and componentparts for our products are supplied by sole third-party suppliers. Our business performance could affect or limit the ability of our Board ofDirectors to declare a dividend or our ability to pay a dividend or repurchase our common stock.This presentation includes GAAP and non-GAAP financial measures. In accordance with the requirements of SEC Regulation G, reconciliationsbetween these two measures, if these slides are in hard copy, accompany the hard copy presentation or, if these slides are deliveredelectronically, are available on the Companys website at www.amgen.com within the Investors section.Provided May 8, 2012 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update. 2
  • 3. 2012 Is Off to a Strong Start• Record first quarter for both revenues and adjusted EPS*• Broad strength across our product portfolio – Neulasta®/NEUPOGEN® grew 9%; Enbrel® grew 7% – XGEVA® and Prolia® contributed over $240M – Our growth-phase products grew 22%• ESA business now represents a much smaller proportion of our overall sales• Pipeline continues to advance (with recent compelling data from AMG 145† and AMG 827††; initiation of our phase 3 program for AMG 785 in PMO)• Partnership and acquisition activity have enhanced our pipeline and adds to our business internationally*Adjusted, non-GAAP financial measure—if this slide is in hard copy, see reconciliations accompanying the presentation, or if thisslide is delivered electronically, see reconciliations available at: www.amgen.com within the Investors section.†Phase 1b; ††Phase 2ESA = erythropoiesis-stimulating agent; PMO = postmenopausal osteoporosisProvided May 8, 2012 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update. 3
  • 4. We See Growth Potential in OurNeulasta®/NEUPOGEN® Franchise• Potential growth in Neulasta®/NEUPOGEN® franchise through our focus on first and every cycle use – Unit growth in both US and EU for Neulasta® in Q1, which is now ~80% of the franchise• 40% of patients not receiving G-CSF with first and every cycle of chemotherapy• Continued Neulasta® growth in Europe despite the availability of G-CSF biosimilarsG-CSF = granulocyte colony-stimulating factorProvided May 8, 2012 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update. 4
  • 5. We Are Looking at Ways to FurtherGrow Enbrel®• With strong performance and extended exclusivity we are investing in ENBREL for the short and long term – Positive response to recent DTC TV campaign – Increasing share in patients new to biologics• We don’t expect to see ENBREL biosimilar competition for the foreseeable future• We continue to develop strategies to ensure patient accessDTC = direct to consumerProvided May 8, 2012 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update. 5
  • 6. Our ESA Business Now Represents aMuch Smaller Proportion of Overall Sales• Q1 ESA sales represented 25% of total sales vs ~50% 5 years ago• Declines in our ESA business were more than offset by revenue gains of our denosumab franchise• We expect to compete effectively with peginesatide and believe EPOGEN®’s attributes are well appreciated for the dialysis setting• We believe any significant further dose declines will result in an increase in transfusions• We continue to expect stabilization in the Aranesp® business by mid-yearProvided May 8, 2012 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update. 6
  • 7. XGEVA®/Prolia® Have SignificantGrowth Potential• XGEVA® is taking unit share and growing the overall SRE segment• We will continue to launch XGEVA® in key European markets throughout the year• We are expanding the prescriber base for Prolia®• Initial indicators on our DTC TV campaign with Blythe Danner are positiveSRE = skeletal-related eventProvided May 8, 2012 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update. 7
  • 8. Our Pipeline Continues to AdvanceAMG 145• Phase 2 studies as monotherapy, in combination with statin therapy, in heterozygous familial hypercholesterolemia, and in statin intolerant subjects are completely enrolled—data expected this yearAMG 785*• Phase 3 study in PMO initiated• Phase 2 fracture healing data expected this yearSensipar®/Mimpara®• Phase 3 EVOLVE data expected mid-yearTalimogene Laherparepvec (T-VEC)• Interim phase 3 melanoma data (durable response) expected in Q4 for internal review• Overall survival data expected 2013Brodalumab (AMG 827)• Phase 3 psoriasis study initiation this year*AMG 785 is being developed in collaboration with UCBEVOLVE = Evaluation of Cinacalcet Therapy to Lower Cardiovascular EventsProvided May 8, 2012 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update. 8
  • 9. We Have Taken Decisive Actions to OptimizeOur Pipeline and Expand Internationally• AstraZeneca partnership enables us to fund a greater number of opportunities in our pipeline• Planned acquisition of KAI brings an experimental intravenous therapy for CKD patients with SHPT that is administered coincident with dialysis• Integration of Micromet is proceeding smoothly and we are focused on advancing blinatumomab programs in R/R ALL and NHL• Recently announced planned acquisition of Mustafa Nevzat provides a platform for future growth in Turkey and the surrounding regionCKD = chronic kidney diseaseSHPT = secondary hyperparathyroidismR/R ALL = relapsed/refractory acute lymphoblastic leukemiaNHL = non-Hodgkin lymphomaProvided May 8, 2012 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update. 9
  • 10. We Are Executing on Our CapitalAllocation Plan• We purchased 21 million shares in Q1 at an average price of $67.92 per share – At the end of Q1, we had $3.6B in authorization remaining and will continue to repurchase our shares in the open market• We will continue to increase our dividend meaningfully over time• We seek to improve our return on equity over time• We will also continue to grow cash flowsProvided May 8, 2012 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update. 10
  • 11. Beyond 2012 We See Significant GrowthOpportunities• Growing contribution of recently launched products• Increased confidence in long-term outlook for Enbrel® and margin expansion driven by change in profit share with Pfizer• Products emerging from R&D pipeline• Growing international presence and entry into biosimilarsProvided May 8, 2012 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update. 11
  • 12. Reconciliations
  • 13. 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 March 31, 2012 March 31, 2011 GAAP Adjustments "Adjusted" GAAP Adjustments "Adjusted" Revenues: Product sales................................................................ $ 3,901 $ - $ 3,901 $ 3,618 $ - $ 3,618 Other revenues............................................................. 147 - 147 88 - 88 Total revenues...................................................... 4,048 - 4,048 3,706 - 3,706 Operating expenses: Cost of sales (excludes amortization of certain acquired intangible assets presented below)....... 679 (13) (a) 666 564 (24) (a) 540 Research and development.......................................... 736 (13) (b) 723 736 (33) (b) 703 Selling, general and administrative............................... 1,076 (19) (c) 1,057 1,023 (12) (c) 1,011 Amortization of certain acquired intangible assets....... 74 (74) (d) - 74 (74) (d) - Other……...................................................................... 6 (6) (e) - 16 (16) (e) - Total operating expenses..................................... 2,571 (125) 2,446 2,413 (159) 2,254 Operating income................................................................ 1,477 125 1,602 1,293 159 1,452 Interest expense, net........................................................... 235 (34) (f) 201 135 (44) (f) 91 Interest and other income, net............................................ 124 - 124 148 - 148 Income before income taxes............................................... 1,366 159 1,525 1,306 203 1,509 Provision for income taxes.................................................. 182 56 (g) 238 181 70 (g) 251 Net income.......................................................................... $ 1,184 $ 103 $ 1,287 $ 1,125 $ 133 $ 1,258 Earnings per share: Basic............................................................................. $ 1.50 $ 1.63 $ 1.21 $ 1.35 Diluted (h)...................................................................... $ 1.48 $ 1.61 $ 1.20 $ 1.34 Average shares used in calculation of earnings per share: Basic............................................................................. 791 791 933 933 Diluted (h)...................................................................... 800 799 941 940 (a) - (h) See explanatory notes on the following pages.Provided May 8, 2012 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update. 13
  • 14. Amgen Inc. Notes to Reconciliation of GAAP Earnings to "Adjusted" Earnings (In millions, except per share data) (Unaudited) Three months ended March 31, 2012 2011 (a) Adjustments to cost of sales: Incremental expense resulting from accelerating depreciation and/or accruing losses for facility operating $ (10) $ (21) leases as a result of our transaction with Boehringer Ingelheim involving our Fremont, California manufacturing facility (the BI transaction) Stock option expense (i) (3) (3) Total adjustments to cost of sales $ (13) $ (24) (b) Adjustments to research and development expenses: Acquisition-related expenses $ (7) $ (7) Non-cash amortization of R&D technology intangible assets acquired in business combinations in prior years - (17) Stock option expense (i) (6) (9) Total adjustments to research and development expenses $ (13) $ (33) (c) Adjustments to selling, general and administrative expenses: Acquisition-related expenses $ (12) $ (2) Stock option expense (i) (7) (10) Total adjustments to selling, general and administrative expenses $ (19) $ (12) (d) Adjustments to amortization of certain acquired intangible assets: Non-cash amortization of product technology rights acquired in a prior year business combination $ (74) $ (74) (e) Adjustments to other operating expenses: Certain charges pursuant to our continuing efforts to improve cost efficiencies in our operations $ (1) $ (16) Expense resulting from changes in the estimated fair values of the contingent consideration obligations related to a prior year business combination (2) - Expense related to certain legal proceedings (3) - Total adjustments to other operating expenses $ (6) $ (16) (f) Adjustments to interest expense, net: Non-cash interest expense associated with our convertible notes $ (34) $ (44) (g) Adjustments to provision for income taxes: Income tax effect of the above adjustments (j) $ 56 $ 65 Income tax benefit related to certain prior period charges excluded from "Adjusted" earnings - 5 Total adjustments to provision for income taxes $ 56 $ 70Provided May 8, 2012 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update. 14
  • 15. Amgen Inc. Notes to Reconciliation of GAAP Earnings to "Adjusted" Earnings (In millions, except per share data) (Unaudited) (h) The following table presents the computations for GAAP and "Adjusted" diluted EPS, computed under the treasury stock method. "Adjusted" EPS presented below excludes stock option expense: Three months ended Three months ended March 31, 2012 March 31, 2011 GAAP "Adjusted" GAAP "Adjusted" Income (Numerator): Net income for basic and diluted EPS………………………………………………………..…………………………$ 1,184 $ 1,287 $ 1,125 $ 1,258 Shares (Denominator): Weighted-average shares for basic EPS………………………………………………….…………………………… 791 791 933 933 Effect of dilutive securities……………………………………………………………………...………………………… 9 8 (*) 8 7 (*) Weighted-average shares for diluted EPS……………………………………………...……………………………… 800 799 941 940 Diluted EPS $ 1.48 $ 1.61 $ 1.20 $ 1.34 (*) Dilutive securities used to compute "Adjusted" diluted EPS for the three months ended March 31, 2012 and 2011 were computed under the treasury stock method assuming that we do not expense stock options. (i) For the three months ended March 31, 2012 and 2011, the total pre-tax expense for employee stock options was $16 million and $22 million, respectively. "Adjusted" diluted EPS including the impact of stock option expense for the three months ended March 31, 2012 and 2011 was as follows: Three months ended March 31, 2012 2011 "Adjusted" diluted EPS, excluding stock option expense………………………………….……………………………$ 1.61 $ 1.34 Impact of stock option expense (net of tax)……………………………………………………...…………………… (0.02) (0.02) "Adjusted" diluted EPS, including stock option expense………………………………...…………………………… $ 1.59 $ 1.32 (j) The tax effect of the adjustments between our GAAP and “Adjusted” results takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). Generally, this results in a tax impact at the U.S. marginal tax rate for certain adjustments, including amortization of intangible assets and non-cash interest expense associated with our convertible notes, whereas the tax impact of other adjustments, including stock option expense, depends on whether the amounts are deductible in the tax jurisdictions where the expenses are incurred or the asset is located and the applicable tax rate(s) in those jurisdictions. Due to these factors, the effective tax rates for the adjustments to our GAAP results noted in notes (a) - (f) above, for the three months ended March 31, 2012 and 2011 were 35.2% and 32.0%, respectively.Provided May 8, 2012 as part of an oral presentation and is qualified by such,contains forward-looking statements, actual results may vary materially;Amgen disclaims any duty to update. 15
  • 16. Deutsche Bank37th Annual Health Care ConferenceMay 8, 2012