Amgen Reports Mixed Earnings Despite Revenue Boost from Horizon Therapeutics Acquisition

Amgen's second-quarter profit dropped by 1% due to higher expenses, including costs relating to its experimental obesity drug MariTide, despite a 20% revenue increase driven by the acquisition of Horizon Therapeutics. The company's adjusted earnings missed analyst estimates slightly, and it raised its capital spending target for 2024.

Amgen on Tuesday announced a second-quarter profit slide of 1%, attributing the decline to increased expenses, such as those for developing its experimental obesity drug, MariTide. This came despite a notable 20% revenue uptick following the acquisition of Horizon Therapeutics in October. Adjusted earnings stood at $4.97 per share, missing the average analyst estimate by 3 cents, according to LSEG data.

Quarterly revenue reached $8.39 billion, slightly surpassing the $8.37 billion forecasted by analysts. "The quarter overall looks fairly uneventful," commented Mizuho analyst Salim Syed in a research note, citing weaker margins and a higher share count as reasons for the earnings shortfall.

Amgen's share price closed up 1% at $328.95 but fell 2% after hours. Notable figures included a 25% increase in Repatha sales to $532 million and a 15% decline in Enbrel sales to $902 million. Sales for Horizon's thyroid eye disease drug, Tepezza, rose 7% to $479 million, while gout drug Krystexxa saw a 20% increase to $294 million. Excluding Horizon's drugs, product sales grew by 5%.

Investors are keenly watching the development of the weight-loss drug MariTide, with Amgen anticipating initial data from a mid-stage trial later this year and plans to begin human trials for another obesity drug before year-end. "We are laser focused on preparing to quickly launch a broad Phase 3 program in obesity, obesity-related conditions, and diabetes," said Amgen CFO Peter Griffith. Some analysts predict the weight-loss drug market could reach $130 billion annually by the early 2030s.

Amgen has raised its 2024 capital spending target to $1.3 billion, up from $1.1 billion, partly to support MariTide's development and manufacturing. The company also adjusted its 2024 revenue outlook, increasing the lower end to a range of $32.8 billion to $33.8 billion from a previous forecast of $32.5 billion. Its adjusted earnings estimate has been narrowed to between $19.10 and $20.10 per share, compared to the previous $19.00 to $20.20. Analysts project 2024 earnings per share at $19.51 on revenue of $33.1 billion.

(Reporting By Deena Beasley in Los Angeles, Editing by Bill Berkrot)