Amgen Earnings Call Highlights Growth Amid Headwinds

Amgen Inc ((AMGN)) has held its Q1 earnings call. Read on for the main highlights of the call.

Amgen Inc.’s latest earnings call struck a cautiously upbeat note as strong growth from newer medicines, upgraded guidance, and robust cash generation outweighed mounting headwinds from legacy product declines, cost pressures, regulatory uncertainty, and a sizeable tax dispute. Management emphasized that its six key growth drivers now anchor the franchise, providing a buffer as older drugs face accelerating erosion.

Growth Engines Offset Erosion

Amgen’s six key growth drivers delivered the core of its momentum, generating roughly 70% of product sales in the quarter and growing 24% year over year in aggregate. This performance is central to the company’s strategy of offsetting losses of exclusivity as older brands come under sustained competitive pressure.

Broad-Based Product Sales Strength

Overall product sales climbed 4% year over year, underpinned by a wide base of contributors across the portfolio. Management highlighted that 16 products posted double-digit growth and 17 brands are now annualizing at $1 billion or more in sales, underscoring depth rather than reliance on a single blockbuster.

Repatha Surges With Strong Outcomes Data

Repatha stood out with first-quarter sales of $876 million, up 34% from a year earlier as cardiology adoption continued to build. Supporting the commercial story, subgroup data from the VESALIUS‑CV trial showed a 31% reduction in major cardiovascular events in high-risk diabetes patients and notable reductions in cardiovascular and all-cause mortality.

Evenity Anchors Bone Health Franchise

Evenity kept the bone health franchise in growth mode, with sales rising 27% year over year to $562 million and U.S. revenue climbing 35%. The drug now holds about 65% of the U.S. bone‑builder market and has treated roughly 320,000 domestic patients, while in Japan more than 900,000 patients have been treated and share exceeds 55%.

Rare Disease and Specialty Portfolio Expands

Amgen’s rare disease and specialty portfolio posted a 25% year-over-year revenue increase to $1.2 billion, reflecting steady uptake across key assets. Eplisna sales surged 188% to $262 million, while TEPEZZA U.S. revenue grew 29% to $490 million, aided by positive Phase III data for an on‑body injector that could facilitate subcutaneous dosing.

Oncology and Biosimilars Show Solid Momentum

Innovative oncology products grew 25% year over year to $1.8 billion, with Imdeltra generating $258 million and Blincyto reaching $415 million, up 12%. The biosimilars segment also contributed, delivering 14% growth to $835 million in sales, led by PABLUE, which brought in $280 million during the quarter.

Financial Discipline and Upgraded Outlook

Financially, Amgen delivered a non‑GAAP operating margin of 45% and generated $1.5 billion in free cash flow in the quarter, reinforcing its balance sheet flexibility. On the back of this performance, the company raised its 2026 revenue and earnings guidance, signaling confidence in the durability of its growth drivers.

Heavy Investment in R&D and Manufacturing

R&D spending on a non‑GAAP basis increased 16% year over year, reflecting heavier investment in late‑stage programs such as Meritide, Imdeltra, and olpasiran. Capital expenditures reached $700 million in the quarter, and management expects about $2.6 billion for the full year as it scales manufacturing capacity for anticipated launches.

Pipeline Advances in Meritide and Olpasiran

Meritide is progressing through multiple Phase III studies, including switch and long‑term maintenance trials that test every eight- and 12‑week dosing and a three‑step dose‑escalation scheme to improve gastrointestinal tolerability. Olpasiran remains a key cardiovascular asset, with Phase III data showing more than 95% reductions in lipoprotein(a) and the launch of the OCEANA CCTA imaging study.

AI-Driven Productivity Gains

Management spotlighted AI as a meaningful driver of operational efficiency, claiming roughly 50% faster antibody lead optimization and sharply improved clinical site enrollment rates. On the manufacturing side, AI tools reportedly cut production line clearance times from about 30 minutes to around two minutes per batch and are beginning to streamline regulatory documentation.

Legacy Brands Face Loss-of-Exclusivity Drag

The downside of Amgen’s portfolio transition was visible in its osteoporosis franchise, where combined Prolia and XGEVA sales fell 32% year over year to $1.1 billion. Management cautioned that sales erosion is likely to accelerate through 2026 as multiple biosimilar competitors enter, further pressuring top-line growth from legacy brands.

Rising Cost of Sales and Margin Headwinds

Non‑GAAP cost of sales rose to 19.5% of product sales, driven by higher profit‑share obligations, royalties, and an evolving product mix tilted toward partnerships. Executives warned that these factors are expected to continue, representing a persistent drag on margins even as newer products expand.

Regulatory and Clinical Challenges

The pipeline is not without setbacks, as the FDA has proposed withdrawing Tabneos approval and Amgen paused certain blinatumomab subcutaneous and SLE trial enrollments due to inflammatory events. The company also discontinued development of AMG 193, underscoring that not all experimental programs will translate into commercial assets.

Tax Disputes and Higher Financing Costs

On the legal front, Amgen received a draft IRS adjustment for 2016–2018 related to profit allocation between the U.S. and Puerto Rico that could be material if upheld, adding uncertainty alongside unresolved prior tax litigation. Non‑GAAP other income and expense totaled $480 million of expense in the quarter, and full‑year OI&E is expected to remain a $2.2–$2.3 billion headwind.

Limited Impact from Repatha Cash-Pay Channel

The company’s Amgen Now cash‑pay program for Repatha is drawing some interest, with roughly 8,000 to 9,000 patients moving through the channel. However, management stressed that it remains a small fraction of overall Repatha volume and is not yet a meaningful share driver in the broader cholesterol-lowering market.

Guidance and Outlook

Amgen raised its 2026 revenue target to a range of $37.1 billion to $38.5 billion and now expects non‑GAAP EPS between $21.70 and $23.10, supported by other revenue of $1.7–$1.8 billion and a tax rate of 15.0–16.5%. The company projected a full‑year non‑GAAP operating margin of roughly 45–46%, reiterated about $2.6 billion in capital spending and capped share repurchases at up to $3 billion, excluding any future deals.

Amgen’s earnings call painted the picture of a company successfully transitioning toward a new set of growth engines while wrestling with inevitable growing pains and legacy drag. For investors, the balance of upgraded guidance, strong execution in critical franchises, and visible pipeline progress suggests a constructive medium‑term setup, tempered by regulatory risk, tax uncertainty, and sustained pressure on older products and margins.