Amgen, a prominent player in the biopharmaceutical sector, has revised its earnings forecast for the year, reflecting new realities stemming from unanticipated operational expenditures. In a recent announcement, the company disclosed that it now expects its adjusted earnings per share (EPS) for 2024 to fall within the range of $19.10 to $20.10, a slight adjustment downward from its previous guidance of $19 to $20.20.
Analysts reviewing the data through Capital IQ had projected a consensus adjusted EPS of approximately $19.50. In the wake of this update, Amgen's shares experienced a downturn of 4.1% in premarket trading on Wednesday. The CFO of Amgen, Peter Griffith, provided insights during a late Tuesday earnings call, highlighting that adjusted research and development expenditures are poised to surge by more than 25% year-over-year.
This increase marks a change from earlier projections that anticipated a growth of roughly 25%. Griffith emphasized the need for these elevated investments to facilitate ongoing support of several key late-stage studies, signaling Amgen's commitment to its innovative pipeline. Additionally, Amgen has raised its estimate for capital expenditures, now expecting these to reach $1.3 billion for the current year, which is up from the previously estimated range of $1.1 billion to $1.2 billion.
This adjustment aligns with the company’s strategy to amplify its manufacturing capabilities, particularly for its obesity drug candidate, MariTide. Looking towards 2024, Amgen anticipates revenues to hover between $32.8 billion and $33.8 billion, showcasing a stronger bottom range than its earlier expectations, which had pinned the revenue estimate at $32.5 billion.
Market analysts are keenly watching these figures, with the consensus revenue forecast resting at $33.15 billion. In terms of quarterly performance, Amgen reported that for the quarter concluded on June 30, its adjusted EPS experienced a slight decline, dropping to $4.97 compared to $5 in the same quarter from the previous year.
This figure was anticipated by the market, which had been closely monitoring Amgen's profitability amidst rising costs. The firm attributed this dip in earnings to escalated operating expenses, influenced by additional costs related to its acquisition of Horizon Therapeutics, finalized last year, as well as interest expenses. However, there remained encouraging trends in Amgen’s revenue, which rose substantially by 20% year-over-year, hitting $8.39 billion, surpassing analyst expectations, which had pegged the revenue at $8.35 billion.
A significant driver of this revenue growth was a notable 20% increase in total product sales, amounting to $8.04 billion, tempered slightly by a 3% decline in the net selling price, as the company’s diverse product portfolio showed robust performance. Specifically, sales from the cholesterol treatment, Repatha, surged by 25% year-over-year, while the osteoporosis drugs Prolia and Evenity witnessed increases of 13% and 39%, respectively.
In contrast, some product lines faced challenges; sales from the rheumatoid arthritis treatment, Enbrel, plummeted 15%, and the metastatic colorectal cancer therapy, Mvasi, declined by 20%. Expressing confidence in the company’s trajectory, CEO Robert Bradway articulated, 'With a strong, balanced portfolio of in-market products and a rapidly advancing pipeline of innovative medicines, we are confident in our ability to deliver attractive long-term growth.' Amgen's stock currently trades at $315.47, reflecting a decrease of $13.48, or a 4.10% dip.
This latest round of analytics confirms Amgen’s position as a leader in its field, navigating through the exigencies of operational costs while striving to maintain its growth trajectory in the marketplace..