Amgen Inc. (AMGN) Earnings

Management highlights

### Overall Business Strategy & Performance - Amgen delivered strong broad-based growth amid patent expirations and competition, with 22 products posting double-digit sales growth and 17 products with annualized sales above $1 billion based on Q2 performance - The company's strategy focuses on first-in-class/best-in-class medicines targeting large, underpenetrated disease areas, with ongoing investment to expand indications, geographic reach, dosage forms and payer access to drive long-term durable growth - The company maintains a strong financial position, providing flexibility to invest in both internal pipeline and external innovation while returning capital to shareholders - Non-GAAP operating margin hit 48% in Q2; non-GAAP R&D spending increased 10% YoY; free cash flow was $3.5 billion; the quarterly dividend was increased 6% YoY to $2.52 per share ### Commercial Operational Highlights - Repatha (PCSK9 inhibitor) holds unrivaled clinical data as the only PCSK9 with Phase III outcomes data for both primary and secondary cardiovascular prevention, with new-to-brand prescriptions growing over 50% YoY in the U.S., and is positioned to address the unmet need of 100 million global patients still above LDL-C goals - Evenity leads the U.S. bone builder market and holds >55% volume share in Japan, where it has now treated 1 million patients, with only mid-single digit penetration of the 2 million high U.S. fracture risk patients leaving large room for growth - Tezspire leads new-to-brand prescription share in severe uncontrolled asthma, with expanded Medicare access driving growth, and encouraging uptake in chronic rhinosinusitis with nasal polyps, with additional indications planned - Duplizna (Aplizna) for autoimmune diseases has rapid uptake, with U.S. prescribers doubling quarter-over-quarter, and 100% of extended patients remaining flare-free at Year 2 in IgG4-related disease, with additional indications in development - Imdeltra is the first best-in-class treatment to improve overall survival for second-line small cell lung cancer, with rapid adoption and NCCN recommendation, and large remaining penetration opportunity with many patients still receiving ineffective chemotherapy - Amgen biosimilars have generated over $15 billion in cumulative sales since 2018, with a late-stage pipeline of additional biosimilars targeting large market opportunities ### R&D Pipeline Progress - The late-stage pipeline has three key assets (Maritide, Opaziran, Zaluridamig) advancing through Phase 3 development targeting major unmet needs - Repatha recently received a positive CHMP opinion for a broader EU label, with new sub-study data showing a 29% reduction in 3-point MACE for high-risk diabetes patients - Olpaciran (targeting elevated lipoprotein(a), a genetically defined cardiovascular risk factor affecting 1 in 5 people) is in two ongoing Phase 3 outcome studies, delivering >95% Lp(a) reduction with quarterly dosing for a potential best-in-class profile - Maritide (for obesity, designed for monthly or less frequent dosing with as few as 4-6 doses per year) has nine ongoing Phase 3 studies, evaluating starting therapy, maintenance dosing, and switching from weekly GLP-1 therapies; development of earlier-stage obesity asset AMG513 was discontinued to focus on differentiated programs - Aplizna (rare autoimmune disease) has a registrational Phase 3 study initiated for autoimmune hepatitis, with a Phase 3 study planned for chronic inflammatory demyelinating polyneuropathy - Dezodolibet for Sjogren's disease is in two Phase 3 studies (systemic and symptomatic disease) with results expected in H2 2026, designed to avoid platelet side effects seen with first-generation CD40 ligand targeting agents - Tezspire's Phase 3 study in eosinophilic esophagitis (EOE) is expected to complete in H2 2026 - The BITE immunotherapy platform is advancing Imdeltra into first-line small cell lung cancer, with subcutaneous formulation and extended interval dosing studies ongoing; Zaluridamig is in two Phase 3 studies for metastatic castration-resistant prostate cancer - Amgen is applying AI strategically across discovery, development, manufacturing and access, with a new frontier AI lab already augmenting research scientist output

Guidance

- Management raised full-year 2026 guidance for both total revenue and non-GAAP earnings per share, from prior ranges to a new total revenue guidance of $38.2 billion to $39.4 billion, and non-GAAP EPS guidance of $22.30 to $23.50 - Full-year 2026 other revenue is expected to be approximately $1.9 billion - Non-GAAP R&D expense is expected to grow high single digits year-over-year, including costs for nine ongoing Phase 3 Maritide trials and a $100 million upfront payment from a recent business development transaction that will increase Q3 R&D expense - Non-GAAP other income and expense is expected to be a $2.1 billion to $2.2 billion expense for 2026 - Full-year non-GAAP operating margin as a percentage of product sales is maintained at 45% to 46%, allowing for continued investment in new growth drivers while retaining strong margins - The non-GAAP tax rate is expected to be between 15.0% and 16.5% - Full-year 2026 share repurchases are capped at no more than $3 billion - Incremental Q3 investments in pipeline and commercial brands are planned to drive momentum into 2027, leading to a meaningful sequential increase in operating expenses, consistent with 2025

Segment performance

Total company revenue exceeded $10 billion in Q2 2026, representing a 10% year-over-year increase. The six key growth driver segments make up nearly 70% of total Q2 product sales, with aggregate 26% year-over-year growth: - Repatha (general medicine): $953 million in Q2 sales, 37% YoY growth, contributing ~9.5% of total product sales - Evenity (general medicine): $714 million in Q2 sales, 38% YoY growth, contributing ~7.1% of total product sales - Tezspire (inflammation): $486 million in Q2 sales, 42% YoY growth, contributing ~4.9% of total product sales - Rare Disease portfolio: $1.6 billion in Q2 sales, 21% YoY growth, contributing ~16% of total product sales. Within this segment: Duplizna (Aplizna) hit $335 million sales (+90% YoY); Tepezza hit $576 million sales (+14% YoY) - Innovative Oncology portfolio: ~$2 billion in Q2 sales, 18% YoY growth, contributing ~20% of total product sales. Within this segment: Imdeltra (MDELTRA) hit $288 million sales (+115% YoY); Blincyto hit $472 million sales (+23% YoY) - Biosimilars portfolio: $855 million in Q2 sales, 29% YoY growth, contributing ~8.55% of total product sales. Within this segment, Amgen's Lucentis biosimilar Ranibizumab (Pap Blue) hit $287 million sales (+121% YoY) Established off-patent product Prolia/Xgeva combined recorded $1.1 billion in Q2 sales, a 33% YoY decline, in line with expectations following biosimilar competitor launches.

Risks & headwinds

- The company notes that all forward-looking statements carry risk, and actual results may vary materially from guidance - Exclusivity losses for older products (such as Prolia/Xgeva) lead to predictable sales declines due to new biosimilar competition, which creates ongoing headwinds that the company's new growth drivers must offset - Late-stage pipeline assets carry inherent clinical development risk, with no guarantee that trials will meet their endpoints or result in approved, commercially successful products - Pricing pressure and new competitor entry for existing products (such as Otezla) create ongoing pricing pressure, even if volume has held steady to date - Rare and complex diseases like Sjogren's have high clinical trial failure rates, and trial endpoints may not capture meaningful clinical benefit even if signals are positive in early trials

Analyst Q&A

• Q: Dina Ahn (UBS) asked for details on Amgen's Olpaciran (LP(a)) Phase 3 study design, specifically whether excluding stroke from the primary 3-point MACE endpoint (instead of the competitor's 4-point MACE) will affect study readout timing. /

  A: Jay Bradner explained that Amgen's OceanA study enrolled 7,297 patients quickly, requiring Lp(a) levels above 200 nmol/L with 12-week dosing. Amgen selected 3-point MACE after genetic analysis found the association between elevated Lp(a) and ischemic stroke was less compelling than for other cardiac endpoints. The company's modeling indicates excluding stroke from the primary endpoint does not impact overall event rate or readout timing. Amgen noted Olpaciran achieves >95% Lp(a) reduction, higher than competing candidates, positioning it well for a best-in-class profile. /

• Q: Salveen Richter (Goldman Sachs) asked for updated thinking on Amgen's business development and capital allocation strategy, and how much near-term BD activity depends on clinical readouts for Maritide and Olpaciran. /

  A: Bob Bradway stated Amgen's BD strategy remains consistent: the company focuses on its core therapeutic areas, prioritizes high-quality innovation whether internal or external, and currently targets smaller, earlier-stage assets. While Amgen's operational plate is full with late-stage cardiometabolic development, BD activity is not directly tied to the outcome of these ongoing Phase 3 trials, and the company continues to evaluate attractive external opportunities. /

• Q: Umar Rafat (Evercore ISI) asked how confident management is that Maritide Phase III trials will see vomiting rates of 25% or lower, and asked about safety monitoring for the Dezodolibet Phase III trials. /

  A: Jay Bradner responded that enrollment for Maritide's broad Phase III program is progressing strongly, reflecting unmet need for a less frequent dosing obesity treatment, and management remains confident in Maritide's overall profile. For Dezodolibet, an independent data safety monitoring committee is actively tracking all adverse events including potential malignancies, as standard for Phase III immunomodulatory asset development, and top-line results will be reported in H2 2026. /

• Q: Chris Ahn (Morgan Stanley) asked about Repatha label and market dynamics following approval of Merck's oral PCSK9 inhibitor. /

  A: Murdo Gordon explained Repatha's label is far broader than the new oral approval, backed by 51 clinical trials enrolling over 57,000 patients with outcomes data for both primary and secondary prevention, 10 years of real-world experience, and no food restrictions. He noted the LDL-lowering market is very large with many untreated patients, and new competitors primarily capture untrained patients rather than competing for Repatha share. Repatha's every-two-week injection regimen also has better adherence than daily oral therapy, which faces well-documented compliance challenges.