Amgen Inc.

03/30/2023 | News release | Distributed by Public on 03/30/2023 14:30

Amgen CEO Bob Bradway's 2022 Letter to Shareholders

Download Amgen's 2022 Letter to Shareholders and Annual Report

To My Fellow Shareholders:

Robert A. Bradway
Chairman and Chief Executive Officer

Amgen performed very effectively in 2022, reaching roughly 10 million patients around the world with our approved medicines, advancing many promising new medicines, delivering strong financial performance, and keeping the Company on track to achieve attractive growth through the end of the decade.

Total revenues in 2022 were up 1% from the prior year to a record $26.3 billion. We also achieved record non-GAAP earnings per share of $17.69, up 27% from the prior year, and free cash flow of $8.8 billion.1

In a challenging year for the stock market as a whole, Amgen delivered total shareholder return in 2022 of 20%, ahead of the S&P 500 and the NASDAQ Biotechnology indices, both of which declined last year. We returned approximately $10.5 billion to shareholders in 2022 through share repurchases and dividends, with our dividend increasing for the eleventh consecutive year, up 10% per share over 2021.

Our portfolio now includes 27 approved medicines, 16 of which generated record 2022 sales and nine of which generated 2022 sales in excess of $1 billion. Looking across our portfolio as a whole, we achieved healthy volume growth of 9% in 2022, partially offset by a 5% decline in net selling price.

A number of our innovative medicines performed particularly well last year, including our cholesterol treatment Repatha® (sales +16% versus the prior year), our osteoporosis medicines EVENITY® (+48%) and Prolia® (+12%), and several of our oncology and hematology therapies, such as Nplate® (+27%), BLINCYTO® (+24%), and KYPROLIS® (+13%). Two of our newest innovations - LUMAKRAS®/LUMYKRAS to treat a type of non-small cell lung cancer and TEZSPIRE® to treat severe asthma - collectively contributed more than $450 million in 2022 sales, and we are pursuing additional indications for both.

$17.69

Non-GAAP
Earnings Per Share1

$4.4B

GAAP Research and Development Investment

51.5%

Non-GAAP
Operating Margin1,3

We also offer a number of high-quality biosimilars that have been prescribed to patients globally, with the potential to deliver savings to healthcare systems that can be reallocated toward innovative medicines. In 2022, we generated positive phase 3 clinical trial data for our biosimilar candidates to EYLEA®, SOLIRIS®, and STELARA®,2 positioning us to be in the first wave of these launches in the coming years, which we know is critical to success.

Product sales outside the U.S. exceeded $7 billion in 2022, with strong growth coming from the Asia-Pacific region.

You can find more information about our products at www.amgen.com/products.

As a leader in the fight against cardiovascular disease, Amgen is partnering with the Family Heart Foundation to highlight the urgent need for the U.S. healthcare system to prioritize control of LDL (or "bad") cholesterol, the leading modifiable risk factor for heart attacks and strokes. "Our real-world analysis of 38 million high-risk Americans found that less than 30% ever reach their recommended LDL levels, and many are on no therapy at all," said Katherine Wilemon (shown at left), the founder and CEO of the Family Heart Foundation, which conducted the study. "Additionally, only 2% of high-risk patients are treated with more than one lipid-lowering therapy even though many patients can't get their LDL to goal with a single medicine."

Advancing Our Pipeline

We invested $4.4 billion in research and development in 2022, with three-quarters of the molecules in our pipeline representing potential first-in-class medicines for serious diseases where new treatments are very much needed. I'll highlight three of these medicines that we are advancing rapidly through clinical development.

Olpasiran is being studied in patients with high levels of lipoprotein(a), a type of "bad" cholesterol that is genetically determined and cannot be modified by diet or exercise. Phase 2 data released in 2022 showed remarkable reductions in lipoprotein(a) levels of as much as 95% in patients with established cardiovascular disease. We are currently enrolling several thousand patients in a phase 3 cardiovascular outcomes trial. In parallel, we are conducting a study in the U.S. focused on Black Americans, who are twice as likely to have elevated lipoprotein(a) levels as non-Hispanic whites. We are collaborating with the Morehouse School of Medicine and the Association of Black Cardiologists on this study, recognizing that minorities are often underrepresented in clinical trials despite being more susceptible to many diseases than the general population.

Tarlatamab is being studied as a treatment for relapsed/refractory small-cell lung cancer (SCLC), a very aggressive disease where the five-year survival rate is a mere 3%. We released phase 1 data last year showing that tarlatamab delivered significant antitumor activity and very encouraging overall survival rates and response durability in heavily pretreated SCLC patients. We are now enrolling patients in a potentially registrational trial of tarlatamab.

In a drive to transform how medicines are discovered, developed, and used, Amgen and its subsidiary deCODE Genetics are mining human data at a scale that was once unimaginable. When Amgen acquired deCODE in 2012, for example, deCODE had accumulated detailed genetic and health information on approximately 100,000 people, all from deCODE's home country of Iceland. Today, we have that information on 2.5 million volunteers from around the world. "Our industry-leading human data capabilities allow us to rapidly generate insights into disease and human health that inform our first-in-class clinical programs," said David Reese, executive vice president, Amgen R&D. "We have an unrivaled opportunity to move personalized medicine forward."

AMG 133 is a potential new medicine to treat obesity, one of the most pressing public health issues of our time. Once thought to be a matter of lifestyle solvable through "willpower," obesity is now understood to be a complex, serious disease that affects approximately 750 million people worldwide and one which can lead to a myriad of health problems. Last year, we announced results from a phase 1 trial showing that a once-monthly dose of AMG 133 produced weight loss that was notable for its degree, rate, and durability. We have initiated a phase 2 trial of AMG 133 and are studying additional, earlier-stage molecules to treat obesity, all with different mechanisms of action.

The three molecules described above are all "multispecific" medicines, which we believe represent the next wave of drug discovery. Multispecifics are medicines that have more than one target and can work in a variety of ways. For example, as is the case with olpasiran and tarlatamab, they can act as "molecular matchmakers," linking a disease-causing target to a potent natural effector in our bodies that acts upon that target. They also can bind to multiple targets, acting on each one in a highly specific manner, as is the case with AMG 133. Multispecifics give us the potential to tackle the approximately 85% of disease-causing targets in the body that have long been considered "undruggable."

You can find more information about our pipeline at www.amgenpipeline.com.

Accessing External Innovation

Even as we continue to invest heavily in our own pipeline, we also recognize that there is great innovation happening outside our Company.

In October of last year, we acquired ChemoCentryx, Inc. (ChemoCentryx) for approximately $3.8 billion, net of cash acquired, adding to our portfolio TAVNEOS®, a first-in-class medicine to treat antineutrophil cytoplasmic autoantibody (ANCA)-associated vasculitis, an autoimmune disease that leads to inflammation and eventual destruction of small blood vessels in vital organs such as the kidneys.

In December, we announced an agreement to acquire Horizon Therapeutics plc (Horizon) for $27.8 billion. The acquisition is expected to close in the first half of this year and will add a number of first-in-class biologic medicines to our portfolio that treat serious inflammatory diseases. Horizon's best-selling product, TEPEZZA®, for example, is the first and only medicine approved in the U.S. for the treatment of active thyroid eye disease, a progressive and potentially vision-threatening disease that can cause symptoms such as eye bulging and double vision.

The strategic rationale behind both our acquisition of ChemoCentryx and our announced Horizon acquisition is the same. We believe that our decades of leadership in inflammation and nephrology, combined with our global presence and world-class biologic capabilities, will enable us to reach many more patients with life-changing medicines like TAVNEOS and TEPEZZA than either company could achieve on its own. We're off to a strong start with TAVNEOS, which, combined with the medicines we expect to come to us through the Horizon acquisition, will enhance Amgen's growth profile through the end of the decade and beyond, as these products are all early in their lifecycle - giving us the opportunity to positively impact their success over time.

Bemarituzumab and rocatinlimab are two additional first-in-class medicines that were sourced externally. Bemarituzumab came to us through our 2021 acquisition of Five Prime Therapeutics, Inc., an oncology-focused biotechnology company. Two phase 3 studies of bemarituzumab are underway in gastric cancer, which is the fifth-most-common cause of cancer death worldwide and particularly prevalent in the Asia-Pacific region, with earlier-stage trials exploring its use in other types of cancer. We are also enrolling patients with moderate-to-severe atopic dermatitis in a phase 3 trial of rocatinlimab in collaboration with our long-time partner in Japan, Kyowa Kirin Co., Ltd.

We will continue to pursue the best innovation, irrespective of where we find it.

Amgen's mission is to serve patients and in 2022, the Company held its first-ever Mission Week, giving employees around the world the chance to hear directly from patients about their experiences. Deborah Carpenter (shown here holding the arm of her sister) was diagnosed with KRAS G12C-mutated lung cancer more than two years ago and is currently being treated with Amgen's LUMAKRAS. She said that speaking at Mission Week was a big step toward her new purpose in life: to share a story of hope and survival with those who have lung cancer. "You are the reason that I am still here," Deborah told Amgen employees. "You are the reason that I am breathing and standing."

Operating Responsibly

Society confronts many challenges and is increasingly looking to the business community for solutions. I'll share two ways Amgen is looking to help.

We know, for example, that young people around the world do not have equal access to science education - a reality that the COVID-19 pandemic only served to exacerbate. And so in 2020 the Amgen Foundation and Harvard University launched LabXchange, a free, online science education platform that enables students to practice scientific experiments using interactive simulations of the same cutting-edge equipment found in modern biotech laboratories. In 2022, the Amgen Foundation announced that it would more than double its financial commitment to LabXchange over the next three years as part of a push to reach 50 million users worldwide by 2025.

We also know that minority-owned businesses in the U.S. have all too often lacked the capital they need to flourish. Earlier this year, Amgen committed to investing $150 million in Project Black, a fund that will create minority-owned businesses of scale that can serve as suppliers to Fortune 500 companies that spend billions of dollars a year on outside goods and services. This is consistent with the goal Amgen set in 2020 to double our 2019 spend with diverse suppliers in the U.S. and triple our spend with Black-owned businesses by 2023. It's also complementary to our participation in OneTen, a coalition of companies collectively seeking to hire 1 million Black Americans into good-paying jobs over the next 10 years.

Environmental sustainability has long been a priority for Amgen, with the Company targeting to achieve carbon neutrality in its operations by 2027, along with reductions in water used and waste disposed of 40% and 75%, respectively4. In 2022, hundreds of Amgen employees participated in International Coastal Cleanup® day - the 17th consecutive year that we have been a part of one of the world's largest efforts to keep our oceans healthy. Tanya Nunez, manager, Environmental Health, Safety and Sustainability, organized the Company's first cleanup event at our Thousand Oaks headquarters in 2005, and she is proud to see that our participation has grown to include 13 locations around the world. "Every day grants a new opportunity to impact our local environment," she said.

You can learn more about our commitment to good corporate citizenship at www.amgen.com/responsibility.

Leading Into the Future

This is an exciting time to be in biotechnology. The need for innovative medicines has never been greater, driven by a rapidly-aging global population. Our ability to innovate has never been greater, either, driven by remarkable advances in science and technology. Amgen has been a biotechnology leader for more than 40 years, and I believe we are very well-positioned to build on our leadership in the coming years.

As the COVID-19 pandemic recedes, many companies have opted to bring their workers back to the office. Amgen has made a different choice, providing our office-based employees with continued flexibility to determine, together with their manager, where, when, and how to get their work done. This has helped to keep engagement high among current employees and it has also given us a competitive advantage in attracting new employees, especially diverse talent from different parts of the country. Ayandry Ruiz (shown at left with her husband and two boys) joined Amgen as an accounting manager in 2022, based in Miami. The ability to spend time with her young children - rather than sitting in rush-hour traffic - was a top priority when she began searching for a new job. "It's a critical time in my kids' lives when I need to be hands-on," she said. "I'm happy to be part of Amgen."

Everything we achieved last year, and everything we will achieve moving forward, is due to the hard work and commitment of our people. They are passionate about our mission to serve patients, they are clear on how their work contributes to our success, and they are ready to seize the many opportunities that await us. I'm grateful to all of them.

On behalf of Amgen's board of directors, our senior leadership team, and our employees around the world, I thank you for your continued support of our Company and the important work we do.

Robert A. Bradway
Chairman and Chief Executive Officer
March 18, 2023



  1. Non-GAAP financial measures. See reconciliations to U.S. generally accepted accounting principles (GAAP) accompanying this letter.
  2. EYLEA is a registered trademark of Regeneron Pharmaceuticals, Inc., SOLIRIS is a registered trademark of Alexion Pharmaceuticals, and STELARA is a registered trademark of Janssen Biotech, Inc.
  3. Non-GAAP operating margin is calculated as a percentage of product sales.
  4. Reductions are measured against a 2019 baseline and take into account only verified reduction projects, and do not take into account changes associated with the contraction or expansion of Amgen. Carbon neutrality goal refers to Scope 1 and 2 emissions.