Amgen Credit Suisse Healthcare Presentation

24th Annual Credit Suisse Healthcare
Conference
David Meline
Executive Vice President and Chief Financial Officer
November 10, 2015
Safe Harbor Statement

This presentation contains forward-looking statements that are based on managements current expectations and beliefs and are subject to a number of risks,
uncertainties and assumptions that could cause actual results to differ materially from those described. All statements, other than statements of historical fact, are
statements that could be deemed forward-looking statements, including statements about 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, reimbursement
activities and outcomes and other such estimates and results. Forward-looking statements involve significant risks and uncertainties, including those discussed
below and more fully described in the Securities and Exchange Commission (SEC) reports filed by Amgen, including Amgens most recent annual report on Form
10-K and any subsequent periodic reports on Form 10-Q and Form 8-K. Please refer to Amgens most recent Forms 10-K, 10-Q and 8-K for additional information on
the uncertainties and risk factors related to our business. Unless otherwise noted, Amgen is providing this information as of November 10, 2015 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 Companys results may be affected by our
ability to successfully market both new and existing products domestically and internationally, clinical and regulatory developments (domestic or foreign) involving
current and future products, sales growth of recently launched products, competition from other products (domestic or foreign) and difficulties or delays in
manufacturing our products. In addition, sales of our products are affected by reimbursement policies imposed by third-party payers, including governments,
private insurance plans and managed care providers and may be affected by regulatory, clinical and guideline developments and domestic and international trends
toward managed care and healthcare cost containment as well as U.S. legislation affecting pharmaceutical pricing and reimbursement. Government and others
regulations and reimbursement policies may affect the development, usage and pricing of our products. Furthermore, our research, testing, pricing, marketing and
other operations are subject to extensive regulation by domestic and foreign government regulatory authorities. We or others could identify safety, side effects or
manufacturing problems with our products after they are on the market. Our business may be impacted by government investigations, litigation and products
liability claims. If we fail to meet the compliance obligations in the corporate integrity agreement between us and the U.S. government, we could become subject to
significant sanctions. Further, while we routinely obtain patents for our products and technology, the protection offered by our patents and patent applications may
be challenged, invalidated or circumvented by our competitors. We depend on third parties for a significant portion of our manufacturing capacity for the supply of
certain of our current and future products and limits on supply may constrain sales of certain of our current products and product candidate development. In
addition, we compete with other companies with respect to some of our marketed products as well as for the discovery and development of new products.
Discovery or identification of new product candidates cannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no
guarantee that any particular product candidate will be successful and become a commercial product. Further, some raw materials, medical devices and
component parts for our products are supplied by sole third-party suppliers. Our efforts to integrate the operations of companies we have acquired may not be
successful. Cost saving initiatives may result in us incurring impairment or other related charges on our assets. We may experience difficulties, delays or
unexpected costs and not achieve anticipated benefits and savings from our ongoing restructuring plan. Our business performance could affect or limit the ability
of our Board of Directors 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, reconciliations between these two
measures, if these slides are in hard copy, accompany the hard copy presentation or, if these slides are delivered electronically, are available on the Company's
website at www.amgen.com within the Investors section.
Provided November 10, 2015, 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.
Amgen Is Positioned Well for Future

Sustainable Growth
We will meet or exceed the commitments we made to
shareholders in October 2014
We are driving meaningful growth of key products, including
Enbrel, Prolia, XGEVA, Vectibix, Sensipar and Nplate
We expect our legacy products to continue to deliver strong
cash flows for many years to come
With six launches, a significant new product cycle is underway
We are active in business development
Our pipeline has made significant progress in the last year
Guidance as of October 28, 2015, and is not being updated at this time.
We Expect to Meet or Exceed the Commitments

We Made to Shareholders in October 2014
Key 2018 Commitments
Status
Double-digit adjusted EPS* growth, on average,

through 20142018
On track; 17% growth 20142015 YTD
Adjusted operating margin* of 52%54% vs. 38% in 2013
On track; 49% margin YTD
$1.5B gross cost savings, $800M net of reinvestment
On track; $700M gross savings by year-end 2015 and

$1.1B by year-end 2016
Headcount reduction of 3,5004,000
On track
Facilities footprint reduction of 23%
On track; 16% reduction in 2015
Return of ~ 60% of adjusted net income* to shareholders, on

average
On track; dividend increased 30% for 2015 and 27%

increase planned for 2016; expect ~ $4-5B
cumulative share repurchases through year-end 2016
*Adjusted, non-GAAP financial measureif this slide is in hard copy, see reconciliations accompanying the presentation, or if this slide is delivered electronically,
or amounts pertain to previously issued financial guidance, see reconciliations available at: www.amgen.com within the Investors section
Our Growth Products Are Performing Well;

Legacy Products Generate Strong Cash Flows
$ Billions, Worldwide Net Sales
Enbrel
YTD Sep. 30 15
$3.9
1.0
1.0
0.9
0.4
0.4
0.4
3.6
1.5
1.5
0.8
0.2
$15.6
XGEVA
Sensipar/Mimpara
Prolia
Vectibix
Nplate
Kyprolis
Neulasta
EPOGEN
Aranesp
NEUPOGEN
Other*
Total Product Sales
*Other includes MN Pharma, BLINCYTO, Bergamo, Corlanor and Repatha
YoY
17%
17%
23%
30%
11%
11%
52%
4%
1%
0%
(11%)
10%
Six Major Regulatory Approvals Over the Last Year
We Expect Kyprolis and Repatha

to be Blockbuster Sales Opportunities
Neulasta Onpro Kit Launch

Is Progressing Very Well
~ 19% share of Neulasta business in Q3 2015

Important differentiator versus potential biosimilar competition
Note: Refer to the Instructions for Use for complete administration instructions
New Kyprolis Indication in Relapsed Multiple

Myeloma Is Driving Future Growth
The KRd regimen, approved in the U.S. in July, is increasingly
recognized by many as the new standard of care for relapsed
multiple myeloma*
KRd new patient share has doubled in the relapsed setting since
ASPIRE approval
Expect continued sales growth as new relapsed patients start and stay
on therapy for longer duration
ENDEAVOR U.S. PDUFA January 22, 2016
Expect approvals in Europe, Canada and some South American and
Asian countries in Q4 15
*Following 13 prior lines of therapy
KRd = Kyprolis + Revlimid + dexamethasone; PDUFA = Prescription Drug User Fee Act
We Are Maximizing the Repatha Opportunity Globally

Current Progress
Next Steps
Ongoing payer negotiations globally
Japan approval expected H1 2016;

partnered with Astellas in Japan
Event-driven outcomes study

events expected to be accrued by
mid-year 2016
Intravascular ultrasound (IVUS)

study H2 2016
First PCSK9 to be approved (EU),

now also approved in U.S.
and Canada
Key program design attributes
Simple, single dose delivering
intensive, predictable LDL-C reduction
Every-two-weeks or once-monthly
dosing options and HoFH indication
30-day room temperature stability
in U.S.
Single-injection monthly dosing

option submitted in U.S. and EU
LDL-C = low-density lipoprotein cholesterol; HoFH = homozygous familial hypercholesterolemia

We Are Successfully Executing Our Repatha Launch

U.S. Launch Update:

Sales force fully trained and promoting Repatha

within five days of approval
> 80% of top targets have been reached in the first

four weeks
Significant ongoing speaker program activity
More than 37,000 visits to Repathahcp.com for

healthcare providers, with an average time on
site of > 5 minutes
Volume of insurance verifications through

RepathaReady running significantly ahead
of projections
National and regional plan negotiations ongoing;

Express Scripts co-preferred formulary position
10
We Are Defending Our Mature Brands

Leveraging both EPOGEN and Aranesp in dialysis clinics
Good response to Neulasta Onpro kit (includes On-body
Injector) with 19% share of Neulasta units in Q3
NEUPOGEN maintained ~ 77% share of the short-acting
G-CSF segment in the U.S. in Q3
We will compete account by account, based on our decadeslong history of reliably supplying safe, effective medicines
We will leverage our U.S. experience vs. branded
competition and EU experience vs. biosimilars
G-CSF = granulocyte colony-stimulating factor
11
We Expect Biosimilars to Be More Like Branded

Biologics Than Generic Small Molecules
Significant and specialized development, manufacturing
and commercialization expertise required for success
Investment of ~ $200M per molecule required versus
<$5M for a small molecule generic
Regulatory and customer requirements more stringent
than small molecule generics
We expect patients, providers and payers to place a high value
on the reputation, reliability and safety of biosimilars
12
Amgen Biosimilars Have the Potential

to Deliver $3B+ in Annual Revenue
Status
Originator Worldwide
2014 Sales*
ABP 501
Phase 3 complete (RA and PsO)
HUMIRA ~ $13B
ABP 980
Phase 3 breast cancer
Herceptin ~ $7B
ABP 215
Phase 3 complete (NSCLC)
Avastin ~ $7B
ABP 710
Phase 1
REMICADE ~ $9B
ABP 798
Clinical ready
RITUXAN ~ $8B
ABP 494
Process development
ERBITUX ~ $2B
Molecules #7#9
Process development
~ $7B
Total
~ $52B
RA = rheumatoid arthritis; PsO = psoriasis; NSCLC = non-small-cell lung cancer

*Per company-reported numbers and EvaluatePharma (February 24, 2015), numbers may not add due to rounding.
Guidance as of September 18, 2015, and is not being updated at this time.
13
Our Next Set of Pipeline Opportunities Is Advancing

Clinical Program
Indication
Milestone
Etelcalcetide
Secondary hyperparathyroidism
Global regulatory reviews ongoing
Omecamtiv mecarbil*
Heart failure
Phase 2 complete
Romosozumab
Postmenopausal osteoporosis
Phase 3 registrational data expected H1 2016
AMG 334
Migraine prophylaxis
Phase 3 episodic migraine study enrolling

Phase 2b chronic migraine data expected 2016
ABP 215 biosimilar

bevacizumab (Avastin)
Advanced NSCLC
Phase 3 study complete
ABP 501 biosimilar

adalimumab (HUMIRA)
Inflammatory diseases
Global regulatory submissions expected Q4 2015
ABP 780 biosimilar

trastuzumab (Herceptin)
Breast cancer
Phase 3 data expected H2 2016
*Developed in collaboration with Cytokinetics; Developed in world-wide collaboration with UCB and Astellas in Japan; Developed in collaboration with Novartis
14
We Will Continue to Be Active

in Strategic Business Development
2015 Transactions
Preclinical
CAR-T immuno-oncology
collaboration
Phase 1
CNP 520BACE inhibitor with

differentiated development
strategy
Expands on existing
bispecific antibody platform
and expertise in multiple
myeloma (CD-38)
Equity investment; secondgeneration BTK inhibitor in latestage development for CLL
Expands cardiovascular
franchise with potentially
best-in-class CETP inhibitor
CLL = chronic lymphocytic leukemia

Phase 3
Phase 2
15
We Have Increased Our 2015 Revenue

and EPS Guidance Three Times This Year
Updated
Guidance
Previous
Guidance
$21.4B$21.6B
$21.1B$21.4B
$9.95$10.10
$9.55$9.80
Adjusted Tax Rate*
18%19%
18%19%
Capital Expenditures
~ $700M
~ $700M
Revenue
Adjusted EPS*
16
Our 2016 Preliminary Revenue and EPS Guidance

Shows Continued Progress Toward Long-Term Goals
Preliminary Guidance
Revenue
$21.7B$22.3B
Adjusted EPS*
$10.35$10.75
Adjusted Tax Rate*
20.5%21.5%
Capital Expenditures
~ $700M
Dividend Growth
27%
Share Repurchases
~ $2B$3B
17
Amgen Is Positioned Well for Future

Sustainable Growth
Our focus, expense discipline and priorities are clear
Successfully execute on new product launches, including
Kyprolis and Repatha
Grow key products, including Enbrel, Prolia, XGEVA,
Vectibix, Sensipar and Nplate
Advance our robust pipeline of important medicines
Transform our business to increase agility and deliver
efficiencies and cost savings across the company
Continue to deliver progress against long-term objectives
18
Reconciliations
Amgen Inc.
Reconciliations of GAAP Diluted Earnings Per Share to Adjusted Diluted Earnings Per Share
($ In millions)
(Unaudited)
GAAP earnings per share (diluted)

Adjustments to GAAP earnings per share (a):
Acquisition-related expenses (b)
Certain charges pursuant to our restructuring and other cost savings initiatives (c)
Expense related to various legal proceedings
Expense resulting from clarified guidance on branded prescription drug fee (d)
Write-off of acquired inprocess research and development program
Non-cash interest expense associated with our convertible notes
Other tax adjustments (e)
Adjusted earnings per share (diluted)
(a)
Nine months ended

September 30, 2015
Year ended
December 31, 2014
Nine months ended

September 30, 2014
6.70
6.70
5.02
0.86
0.16
0.08
(0.02)
7.78
1.30
0.52
0.17
0.04
(0.03)
8.70
0.98
0.37
0.19
(0.02)
6.54
Year ended
December 31, 2013
$
6.64
0.91
0.06
0.02
0.01
(0.04)
7.60
The above adjustments are presented net of their related per-share tax impact of $0.53 and $0.69 for the nine months ended September 30, 2015 and 2014, respectively, and $0.93 and $0.49 for
the years ended December 31, 2014 and 2013, respectively.
(b) To exclude acquisition-related expenses related primarily to non-cash amortization of intangible assets, including developed product technology rights, acquired in business combinations. The
2014 periods also included a $99-million charge related to the termination of a supply contract with F. Hoffmann-La Roche Ltd. as a result of acquiring the licenses to filgrastim and pegfilgrastim
effective January 1, 2014.
(c)
To exclude expenses related primarily to severance, as well as accelerated depreciation and other charges related to the closure of our facilities.
(d) To exclude the expense related to the Internal Revenue Service issuing final regulations that required us to recognize an additional year of the non-tax deductible branded prescription drug fee.
(e)
The adjustments related to certain prior period items excluded from adjusted earnings. The 2015 adjustments also included the impact from a change in interpretation of tax law. The 2013
adjsutments also included the impact of resolving certain non-routine transfer-pricing and acquisition-related issues with tax authorities

20
Amgen Inc.
Reconciliations of GAAP Operating Income and Margin to Adjusted Operating Income and Margin
($ In millions)
(Unaudited)
Nine months ended
September 30, 2015
GAAP operating income
Adjustments to operating income:
Acquisition-related expenses (a)
Certain charges pursuant to our restructuring and other cost savings initiatives (b)
Expense related to various legal proceedings
Stock option expense
Total adjustments to operating income
Adjusted operating income
6,437
Product sales
GAAP operating margin
Impact of total adjustments to operating income
Adjusted operating margin
Year ended
December 31, 2013
$
5,867
1,010
166
73
1,249
7,686
986
71
14
34
1,105
6,972
15,615
18,192
41.2%
8.0%
49.2%
32.3%
6.0%
38.3%
(a)
The adjustments related primarily to non-cash amortization of intangible assets, including developed product technology rights, acquired in
business combinations.
(b)
The adjustments related primarily to severance, as well as accelerated depreciation and other charges related to the closure of our facilities.

21
Reconciliation of GAAP EPS Guidance to Adjusted

EPS Guidance for the Years Ending December 31, 2015 and 2016
(Unaudited)
2015
GAAP diluted EPS guidance.......................................................................................... ..
Known adjustments to arrive at Adjusted earnings*:

Acquisition-related expenses.................................................................................. (a)
Restructuring charges............................................................................................
Legal proceeding expense.....................................................................................
Tax adjustments..................................................................................................... (b)
Adjusted diluted EPS guidance .................................................................................... ..
8.47
0.19
9.95
2016
$
8.66
1.18
0.09
(0.02)
0.23
10.10
8.89
0.09
10.35
1.32
-
The known adjustments are presented net of their related tax impact which amount to approximately $0.66 to $0.69 per share in 2015 and 2016,
each in the aggregate.
(a)
The adjustments relate primarily to non-cash amortization of intangible assets acquired in prior year business combinations.
(b)
The adjustments relate to a change in interpretation of tax law and certain prior period items excluded from adjusted earnings.
9.34
0.14
10.75
Reconciliation of GAAP Tax Rate Guidance to Adjusted

Tax Rate Guidance for the Years Ending December 31, 2015 and 2016
(Unaudited)
2015
GAAP tax rate guidance.................................................................................................
Tax rate effect of known adjustments discussed above.............................................
Adjusted tax rate guidance ...........................................................................................

22
14.0%
3.0%
18.0%
2016
16.0%
18.5%
4.0%
19.0%
19.5%
2.0%
20.5%
21.5%
Amgen Inc.
Reconciliation of Future GAAP to Adjusted Financial Measures
Management has presented herein certain forward-looking statements about the Companys future financial performance that include non-GAAP (or asadjusted) operating margin and earnings per share for various years through December 31, 2018. These nonGAAP financial measures are derived by
excluding certain amounts, expenses or income, from the corresponding financial measures determined in accordance with GAAP. The determination of the
amounts that are excluded from these non-GAAP financial measures are a matter of management judgment and depend upon, among other factors, the
nature of the underlying expense or income amounts recognized in a given period. We are unable to present a quantitative reconciliation of the
aforementioned forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measure because
management cannot reliably predict all of the necessary components of such GAAP measures. Historically, management has excluded the following items
from these non-GAAP financial measures, and such items may also be excluded in future periods and could be significant:
Expenses related to the acquisition of businesses, including amortization and / or impairment of acquired intangible assets, including in-process
research and development, adjustments to contingent consideration, integration costs, severance and retention costs and transaction costs;
Charges associated with restructuring or cost saving initiatives, including but not limited to asset impairments, accelerated depreciation,
severance costs and lease abandonment charges;
Legal settlements or awards;
The tax effect of the above items; and
Non-routine settlements with tax authorities.

23
24th Annual Credit Suisse Healthcare

Conference
David Meline
Executive Vice President and Chief Financial Officer
November 10, 2015

Amgen Credit Suisse Healthcare Presentation

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Amgen Credit Suisse Healthcare Presentation

Uploaded by

Copyright:

Available Formats

24th Annual Credit Suisse Healthcare

Safe Harbor Statement

Amgen Is Positioned Well for Future

We Expect to Meet or Exceed the Commitments

Double-digit adjusted EPS* growth, on average,

On track; 17% growth 20142015 YTD

Adjusted operating margin* of 52%54% vs. 38% in 2013

On track; 49% margin YTD

$1.5B gross cost savings, $800M net of reinvestment

On track; $700M gross savings by year-end 2015 and

Headcount reduction of 3,5004,000

Facilities footprint reduction of 23%

On track; 16% reduction in 2015

Return of ~ 60% of adjusted net income* to shareholders, on

On track; dividend increased 30% for 2015 and 27%

Our Growth Products Are Performing Well;

Six Major Regulatory Approvals Over the Last Year

We Expect Kyprolis and Repatha

Neulasta Onpro Kit Launch

~ 19% share of Neulasta business in Q3 2015

New Kyprolis Indication in Relapsed Multiple

We Are Maximizing the Repatha Opportunity Globally

Ongoing payer negotiations globally

Japan approval expected H1 2016;

Event-driven outcomes study

Intravascular ultrasound (IVUS)

First PCSK9 to be approved (EU),

Single-injection monthly dosing

LDL-C = low-density lipoprotein cholesterol; HoFH = homozygous familial hypercholesterolemia

We Are Successfully Executing Our Repatha Launch

Provided November 10, 2015, as part of an oral presentation and is qualified

Sales force fully trained and promoting Repatha

> 80% of top targets have been reached in the first

Significant ongoing speaker program activity

More than 37,000 visits to Repathahcp.com for

Volume of insurance verifications through

National and regional plan negotiations ongoing;

We Are Defending Our Mature Brands

We Expect Biosimilars to Be More Like Branded

Amgen Biosimilars Have the Potential

Phase 3 complete (RA and PsO)

Phase 3 breast cancer

Phase 3 complete (NSCLC)

RA = rheumatoid arthritis; PsO = psoriasis; NSCLC = non-small-cell lung cancer

Our Next Set of Pipeline Opportunities Is Advancing

Global regulatory reviews ongoing

Phase 3 registrational data expected H1 2016

Phase 3 episodic migraine study enrolling

ABP 215 biosimilar

Phase 3 study complete

ABP 501 biosimilar

Global regulatory submissions expected Q4 2015

ABP 780 biosimilar

Phase 3 data expected H2 2016

We Will Continue to Be Active

CNP 520BACE inhibitor with

Equity investment; secondgeneration BTK inhibitor in latestage development for CLL

CLL = chronic lymphocytic leukemia

We Have Increased Our 2015 Revenue

Adjusted Tax Rate*

Our 2016 Preliminary Revenue and EPS Guidance

Adjusted Tax Rate*

Amgen Is Positioned Well for Future

GAAP earnings per share (diluted)