Amgen's Q1 Better Than Expected Sales, Profit Overshadowed By Tax Disclosure

Amgen Inc AMGN has recently received a notice of deficiency from the Internal Revenue Service centered on 2013 to 2015.
The agency seeks to increase Amgen's taxable income for the period by an amount that would result in an additional federal tax of approximately $5.1 billion, plus interest.
In addition, the notice proposes penalties of roughly $2 billion.
The notice is similar to the adjustments Amgen received from the IRS for the 2010 to 2012 period.
Amgen believes that the adjustments proposed by the IRS for the 2010-2015 period and the penalties proposed for the 2013-2015 period are without merit.
Earnings: Q1 revenues increased 6% Y/Y to $6.24 billion, slightly beating the consensus of $6.11 billion.
The increase resulted from a 2% growth in global product sales and increased other revenue from the COVID-19 manufacturing collaboration.
Unit volumes grew 9%, offset by a 7% lower net selling price.
Adjusted EPS increased 15% to $4.25, ahead of the consensus of $4.15.
Enbrel sales declined 7% to $862 million. Otezla sales compressed 5% to $451 million.
Sales of newer cancer drug Lumakras totaled $62 million for Q1.
Among Amgen's bigger products, sales of osteoporosis treatment Prolia rose 12% to $852 million, and revenue from cholesterol treatment Repatha inched 15% ahead to $329 million.
Aimovig, its migraine prevention drug, brought in $101 million, up 53% Y/Y. Sales of bone marrow-stimulating drug Neulasta tumbled by 28%. Sales from cancer drugs Mvasi and Kanjinti decreased 17% and 40%, respectively, due to increased competition and price erosion.
Guidance: Amgen expects FY22 sales of $25.4 billion - $26.5 billion, with adjusted EPS of $17.00 - $18.00, compared to the consensus of $26.14 billion and $17.63, respectively.
Price Action: AMGN shares closed 5.95% lower at $233.98 during after-hours trading on Wednesday.

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