Amgen Inc.

05/01/2026 | Press release | Distributed by Public on 05/01/2026 07:44

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following MD&A is intended to assist the reader in understanding Amgen's business. MD&A is provided as a supplement to, and should be read in conjunction with, both the condensed consolidated financial statements and accompanying notes of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025. Our results of operations discussed in MD&A are presented in conformity with GAAP. Amgen operates in one operating segment: human therapeutics. Therefore, our results of operations are discussed on a consolidated basis.
Forward-looking statements
This report and other documents we file with the SEC contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about us, our future performance, our business, our beliefs and our management's assumptions. In addition, we, or others on our behalf, may make forward-looking statements in press releases, written statements or our communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls and conference calls. Such words as "expect," "anticipate," "outlook," "could," "target," "project," "intend," "plan," "believe," "seek," "estimate," "should," "may," "assume" and "continue" as well as variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance, and they involve certain risks, uncertainties and assumptions that are difficult to predict. We describe our respective risks, uncertainties and assumptions that could affect the outcome or results of operations in Item 1A. Risk Factors in Part II herein and in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2025. We have based our forward-looking statements on our management's beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may differ materially from what is expressed, implied or forecasted by our forward-looking statements. Reference is made in particular to forward-looking statements regarding product sales, regulatory activities, clinical trial results, reimbursement, expenses, EPS, liquidity and capital resources, trends, planned dividends, stock repurchases, and collaborations. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions or otherwise.
Overview
Amgen Inc. (including its subsidiaries, referred to as "Amgen," "the Company," "we," "our" or "us") discovers, develops, manufactures and delivers innovative medicines to fight some of the world's toughest diseases. We focus on areas of high unmet medical need and leverage our expertise to strive for solutions that dramatically improve people's lives, while also reducing the social and economic burden of disease. We helped launch the biotechnology industry more than 45 years ago and have grown to be one of the world's leading independent biotechnology companies. Our robust pipeline includes potential first-in-class medicines at all stages of development.
Our principal products are Repatha, Prolia, EVENITY, TEPEZZA, Otezla, BLINCYTO, Nplate, XGEVA, TEZSPIRE, KYPROLIS, ENBREL, Aranesp, Vectibix, UPLIZNA, IMDELLTRA/IMDYLLTRA and KRYSTEXXA. We also market a number of other products, including but not limited to PAVBLU, AMJEVITA/AMGEVITA, Neulasta, MVASI, TAVNEOS, LUMAKRAS/LUMYKRAS, Parsabiv, Aimovig, PROCYSBI and WEZLANA/WEZENLA.
Macroeconomic and other challenges
Uncertain macroeconomic conditions, including the risk of inflation, fluctuating interest rates and financial system instability, together with rising healthcare costs, evolving tariffs and trade protection measures, and expanding geopolitical conflict, including in the Middle East, continue to pose challenges to our business. The expanding geopolitical conflict, particularly in the Middle East, has increased volatility in the energy and transportation markets and disrupted global supply chains. Additionally, with public and private healthcare-provider focus, the industry continues to be subject to cost containment measures and significant pricing pressures, resulting in net price declines.
Moreover, provisions of the IRA, as well as the expanded utilization of the 340B Program, have negatively affected, and are likely to continue to negatively affect, our business. For example, CMS has selected ENBREL and Otezla for Medicare price setting beginning in 2026 and 2027, respectively. In addition to the IRA, other recent and proposed U.S. policy actions focus on drug pricing, including the Most-Favored-Nations Prescription Drug Pricing Executive Order (MFN EO) and the July MFN Letter that was delivered to a number of pharmaceutical companies, including Amgen. In December 2025, we announced that we are taking actions that satisfy the components outlined in the July MFN Letter, including the Administration's MFN pricing requests. We also announced the expansion of our direct-to-patient program. While this development reflects ongoing engagement on pricing policy, the ultimate effects on our pricing, reimbursement, net sales and profitability remain uncertain in
light of such evolving regulatory and policy expectations. See Part II, Item 1A. Risk Factors-Changing U.S. federal coverage and reimbursement policies and practices have affected, and are likely to continue to affect, access to, pricing of, and sales of our products, of this Quarterly Report on Form 10-Q for further discussion.
Numerous tariffs and trade protection measures have been proposed, and in a number of cases, implemented by the United States and other countries. Further, there have been previous proposals for sector-specific tariffs on our industry. In April 2026, the Administration issued a proclamation imposing Section 232 tariffs on certain patented pharmaceuticals and associated active pharmaceutical ingredients. However, in December 2025, in recognition of our capital investments in U.S. manufacturing, we received relief from Section 232 tariffs for approximately the next three years. Given the many uncertainties and variables, tariffs and trade protection measures may adversely affect our business and results of operations.
Finally, wholesale and end-user buying patterns can affect our product sales. These buying patterns can cause fluctuations in quarterly product sales, but have generally not been significant to date when comparing full-year product performance to the prior year. For additional discussion of these and other risks, see Part II, Item 1A. Risk Factors, of this Quarterly Report on Form 10-Q.
Significant developments
The following is a summary of select significant developments affecting our business that occurred since the filing of our Annual Report on Form 10-K for the year ended December 31, 2025. For additional developments, see our Annual Report on Form 10-K for the year ended December 31, 2025.
Products/pipeline
TEPEZZA
In April 2026, we announced positive topline results from a Phase 3 trial of TEPEZZA administered by subcutaneous injection via an on-body injector (OBI) in participants with moderate-to-severe active thyroid eye disease (TED) that demonstrated that TEPEZZA OBI provides comparable efficacy to intravenous TEPEZZA (TEPEZZA IV). The Phase 3 TEPEZZA OBI trial met its primary endpoint in moderate-to-severe active TED, showing a statistically significant and clinically meaningful 77% proptosis response rate during the 24-week placebo-controlled period. The trial also met a key secondary endpoint, with a mean reduction in proptosis of -3.17 mm at week 24. The overall safety results were generally consistent with the known safety profile of TEPEZZA IV. Mild-to-moderate injection site reactions were observed with subcutaneous administration in some patients, which did not result in treatment interruption or discontinuation. Full results from the TEPEZZA Phase 3 OBI trial will be presented at an upcoming medical congress. Additionally, a separate Phase 3b/4 trial, conducted to fulfill an FDA postmarketing requirement for TEPEZZA IV, has been completed. The primary objective of the study was to evaluate the safety and tolerability of three treatment durations (four, eight and 16 infusions) of TEPEZZA IV and assess the need for retreatment. The study was descriptive in nature. The observed risk profile was consistent with the known profile of TEPEZZA IV. The postmarketing data will be submitted to regulatory authorities and presented at an upcoming medical congress.
TAVNEOS
On March 31, 2026, the FDA issued a DSC in which it alerted patients and health care professionals about serious liver injury cases, including fatal cases, of DILI associated with TAVNEOS. The DSC is based on data available through October 9, 2024 and provides information about DILI and VBDS associated with TAVNEOS. Since approval in 2021, cases of VBDS have been reported, largely from Japan and none from the United States. Most patients who had VBDS were aged 65 years and older, and most cases occurred within 90 days of starting TAVNEOS. VBDS has been fatal in some of these patients. On April 29, 2026, the Company submitted a Changes Being Effected (CBE-30) supplement to the FDA. The CBE-30 filing amends the hepatotoxicity warning language in the label to provide more information on cases of VBDS that have been observed in the postmarketing setting, including that cases with fatal outcomes have been reported, and modifies language regarding liver panel testing and treatment discontinuation rules. On April 27, 2026, CDER issued a proposal to withdraw approval of TAVNEOS, alleging that there is new information indicating lack of substantial evidence of effectiveness for the drug and that ChemoCentryx's application that resulted in FDA approval contained untrue statements of material facts. ChemoCentryx, as the U.S. marketing authorization holder, may request a hearing on this proposal, after which the FDA will determine whether there is a genuine and substantial issue of fact that requires a hearing. If a hearing is not granted, the FDA may enter summary judgment and ultimately withdraw approval. On April 30, 2026, the FDA posted a notice in the Federal Register that proposes to withdraw approval of TAVNEOS and announced an opportunity for ChemoCentryx to request a hearing on this proposal. The Company intends to engage with the FDA, continues to believe that TAVNEOS demonstrates effectiveness and a favorable benefit-risk profile, and intends to follow the appropriate process to support its position. As the FDA's statement reporting its proposal indicates, TAVNEOS will remain on the market during the pendency of this process. For additional information, see
Note 8, Goodwill and other intangible assets, to the condensed consolidated financial statements, and Part II, Item 1A. Risk Factors-Our current products and products in development cannot be sold without regulatory approval, of this Quarterly Report on Form 10-Q.
Selected financial information
The following is an overview of our results of operations (in millions, except percentages and per-share data):
Three months ended
March 31,
2026 2025 Change
Product sales
U.S. $ 5,773 $ 5,662 2 %
ROW 2,445 2,211 11 %
Total product sales 8,218 7,873 4 %
Other revenues 400 276 45 %
Total revenues $ 8,618 $ 8,149 6 %
Operating expenses $ 5,952 $ 6,971 (15) %
Operating income $ 2,666 $ 1,178 *
Net income $ 1,819 $ 1,730 5 %
Diluted EPS $ 3.34 $ 3.20 4 %
Diluted shares 544 541 1 %
* Change in excess of 100%
In the following discussion of changes in product sales, any reference to volume growth or decline refers to changes in purchases of our products by healthcare providers (such as physicians or their clinics), dialysis centers, hospitals and pharmacies. In addition, any reference to increases or decreases in inventory refers to changes in inventory held by wholesaler customers and, in certain circumstances, end users (such as pharmacies) as may be noted.
Total product sales increased 4% for the three months ended March 31, 2026, driven by volume growth of 9%, partially offset by declines in net selling price of 2% and 2% from lower wholesaler and end user inventory.
For the three months ended March 31, 2026, U.S. volume grew 8% and ROW volume grew 13%, driven by certain brands, including Repatha, IMDELLTRA/IMDYLLTRA, PAVBLU, UPLIZNA and EVENITY.
Other revenues increased 45% for the three months ended March 31, 2026, driven by higher corporate partner revenue and royalty income.
Operating expenses decreased 15% for the three months ended March 31, 2026, reflecting the Otezla intangible asset impairment charge recorded in the first quarter of 2025 and lower amortization expense from acquisition-related assets, partially offset by higher spend in Later-Stage Clinical Programs. See Note 8, Goodwill and other intangible assets, to the condensed consolidated financial statements, for additional information related to the Otezla intangible asset impairment charge.
Uncertain macroeconomic conditions, including ongoing geopolitical conflict and rising geopolitical tensions, changes in the healthcare ecosystem, and potential government policy actions, including MFN pricing or similar drug pricing reforms and tariffs or trade protection measures, have the potential to introduce variability into product sales. Furthermore, product sales continue to be impacted by actions from governments and other entities to address macroeconomic challenges, provisions of the IRA, expanded utilization of the 340B Program and growth in numbers of Medicaid enrollees and uninsured individuals. See Part I, Item 1. Business-Reimbursement, and Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2025; and Part II, Item 1A. Risk Factors, of this Quarterly Report on Form 10-Q.
Results of operations
Product sales
Worldwide product sales were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
Repatha $ 876 $ 656 34 %
Prolia 727 1,099 (34) %
EVENITY 562 442 27 %
TEPEZZA 490 381 29 %
Otezla 431 437 (1) %
BLINCYTO 415 370 12 %
Nplate 412 313 32 %
XGEVA 411 566 (27) %
TEZSPIRE(1)
343 285 20 %
KYPROLIS 330 324 2 %
ENBREL 320 510 (37) %
Aranesp 311 340 (9) %
Vectibix 287 267 7 %
UPLIZNA 262 91 *
IMDELLTRA/IMDYLLTRA 258 81 *
KRYSTEXXA 255 236 8 %
Other products(2)
1,528 1,475 4 %
Total product sales $ 8,218 $ 7,873 4 %
* Change in excess of 100%
____________
(1) TEZSPIRE is marketed by our collaborator AstraZeneca outside the United States.
(2) Consists of product sales of our non-principal products.
Future sales of our products will depend in part on the factors discussed below and in the following sections of this report: (i) Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations-Overview, and Selected financial information; and (ii) Part II, Item 1A. Risk Factors, and in the following sections of our Annual Report on Form 10-K for the year ended December 31, 2025: (i) Part I, Item 1. Business-Marketing, Distribution and Selected Marketed Products; (ii) Part I, Item 1. Business-Reimbursement; (iii) Part I, Item 1A. Risk Factors; and (iv) Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Overview, and Results of operations-Product sales.
Repatha
Total Repatha sales by geographic region were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
Repatha - U.S. $ 465 $ 343 36 %
Repatha - ROW 411 313 31 %
Total Repatha $ 876 $ 656 34 %
The increase in global Repatha sales for the three months ended March 31, 2026 was driven by volume growth of 35% and favorable changes to estimated sales deductions of 8%, partially offset by lower net selling price of 7%.
For a discussion of litigation, including associated settlements, related to Repatha, see Part IV-Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025; and Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.
Prolia
Total Prolia sales by geographic region were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
Prolia - U.S. $ 461 $ 720 (36) %
Prolia - ROW 266 379 (30) %
Total Prolia $ 727 $ 1,099 (34) %
The decrease in global Prolia sales for the three months ended March 31, 2026 was primarily driven by lower volume of 17%, lower net selling price of 10% and 4% from lower inventory.
For 2026, we continue to expect accelerated sales erosion driven by increased competition, as multiple biosimilars have launched in the United States and ROW.
As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, Part I, Item 1. Business-Marketing, Distribution and Selected Marketed Products, our patents for RANKL antibodies, including sequences, for Prolia and XGEVA expired in February 2025 in the United States and in November 2025 in select countries in Europe.
For a discussion of litigation, including associated settlements, related to Prolia, see Part IV-Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025; and Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.
EVENITY
Total EVENITY sales by geographic region were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
EVENITY - U.S. $ 431 $ 320 35 %
EVENITY - ROW 131 122 7 %
Total EVENITY $ 562 $ 442 27 %
The increase in global EVENITY sales for the three months ended March 31, 2026 was driven by volume growth.
TEPEZZA
Total TEPEZZA sales by geographic region were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
TEPEZZA - U.S. $ 424 $ 365 16 %
TEPEZZA - ROW 66 16 *
Total TEPEZZA $ 490 $ 381 29 %
* Change in excess of 100%
The increase in global TEPEZZA sales for the three months ended March 31, 2026 was driven by a 22% impact from higher inventory, and higher net selling price.
Otezla
Total Otezla sales by geographic region were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
Otezla - U.S. $ 352 $ 343 3 %
Otezla - ROW 79 94 (16) %
Total Otezla $ 431 $ 437 (1) %
Global Otezla sales decreased 1% for the three months ended March 31, 2026, as lower net selling price of 8% and lower volume of 2% were offset by favorable changes to estimated sales deductions.
In January 2025, Otezla was selected by CMS for Medicare price setting that will be applicable beginning in 2027. As a result, we expect further declines in net selling price driven by Medicare price setting beginning in 2027. See Note 8, Goodwill and other intangible assets, to the condensed consolidated financial statements, for additional information related to the Otezla intangible asset impairment charge recorded in 2025.
BLINCYTO
Total BLINCYTO sales by geographic region were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
BLINCYTO - U.S. $ 221 $ 273 (19) %
BLINCYTO - ROW 194 97 100 %
Total BLINCYTO $ 415 $ 370 12 %
The increase in global BLINCYTO sales for the three months ended March 31, 2026 was driven by volume growth of 19%, partially offset by unfavorable changes to estimated sales deductions.
Nplate
Total Nplate sales by geographic region were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
Nplate - U.S. $ 283 $ 201 41 %
Nplate - ROW 129 112 15 %
Total Nplate $ 412 $ 313 32 %
Global Nplate sales for the three months ended March 31, 2026 increased 32% and included a U.S. government order of $60 million for the three months ended March 31, 2026. Excluding the U.S. government order from this comparison, global Nplate sales increased 12% for the three months ended March 31, 2026, driven by volume growth of 8% and higher net selling price.
XGEVA
Total XGEVA sales by geographic region were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
XGEVA - U.S. $ 228 $ 360 (37) %
XGEVA - ROW 183 206 (11) %
Total XGEVA $ 411 $ 566 (27) %
The decrease in global XGEVA sales for the three months ended March 31, 2026 was driven by lower volume of 19% and lower net selling price.
For 2026, we continue to expect accelerated sales erosion driven by increased competition, as multiple biosimilars have launched in the United States and ROW.
As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, Part I, Item 1. Business-Marketing, Distribution and Selected Marketed Products, our patents for RANKL antibodies, including sequences, for Prolia and XGEVA expired in February 2025 in the United States and in November 2025 in select countries in Europe.
For a discussion of litigation, including associated settlements, related to XGEVA, see Part IV-Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025; and Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.
TEZSPIRE
Total TEZSPIRE sales by geographic region were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
TEZSPIRE - U.S.
$ 343 $ 285 20 %
The increase in TEZSPIRE sales for the three months ended March 31, 2026 was driven by volume growth of 32%, partially offset by 8% from lower inventory.
KYPROLIS
Total KYPROLIS sales by geographic region were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
KYPROLIS - U.S. $ 218 $ 216 1 %
KYPROLIS - ROW 112 108 4 %
Total KYPROLIS $ 330 $ 324 2 %
The increase in global KYPROLIS sales for the three months ended March 31, 2026 was primarily driven by higher net selling price.
For a discussion of ongoing litigation related to KYPROLIS, see Part IV-Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025; and Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.
ENBREL
Total ENBREL sales by geographic region were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
ENBREL - U.S. $ 314 $ 504 (38) %
ENBREL - Canada 6 6 - %
Total ENBREL $ 320 $ 510 (37) %
The decrease in ENBREL sales for the three months ended March 31, 2026 was primarily driven by unfavorable changes to estimated sales deductions of 18% and lower net selling price of 15% resulting from the impact of U.S. Medicare Part D price setting under the IRA, effective January 1, 2026, as well as an increased 340B Program mix.
Aranesp
Total Aranesp sales by geographic region were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
Aranesp - U.S. $ 77 $ 91 (15) %
Aranesp - ROW 234 249 (6) %
Total Aranesp $ 311 $ 340 (9) %
The decrease in global Aranesp sales for the three months ended March 31, 2026 was driven by lower volume of 5%, lower net selling price of 2% and lower inventory.
Vectibix
Total Vectibix sales by geographic region were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
Vectibix - U.S. $ 136 $ 135 1 %
Vectibix - ROW 151 132 14 %
Total Vectibix $ 287 $ 267 7 %
The increase in global Vectibix sales for the three months ended March 31, 2026 was driven by volume growth of 11%, partially offset by lower inventory.
UPLIZNA
Total UPLIZNA sales by geographic region were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
UPLIZNA - U.S. $ 246 $ 82 *
UPLIZNA - ROW 16 9 78 %
Total UPLIZNA $ 262 $ 91 *
* Change in excess of 100%
The increase in global UPLIZNA sales for the three months ended March 31, 2026 was primarily driven by volume growth.
IMDELLTRA/IMDYLLTRA
Total IMDELLTRA/IMDYLLTRA sales by geographic region were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
IMDELLTRA - U.S. $ 188 $ 79 *
IMDYLLTRA - ROW 70 2 *
Total IMDELLTRA/IMDYLLTRA $ 258 $ 81 *
* Change in excess of 100%
The increase in global IMDELLTRA/IMDYLLTRA sales for the three months ended March 31, 2026 was driven by volume growth.
KRYSTEXXA
Total KRYSTEXXA sales by geographic region were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
KRYSTEXXA - U.S.
$ 255 $ 236 8 %
The increase in KRYSTEXXA sales for the three months ended March 31, 2026 was primarily driven by higher net selling price of 20%, partially offset by 8% from lower inventory, and unfavorable changes to estimated sales deductions.
Other products
Other product sales by geographic region were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
PAVBLU - U.S. $ 276 $ 99 *
PAVBLU - ROW 4 - N/A
AMJEVITA - U.S. 41 4 *
AMGEVITA - ROW
132 132 - %
Neulasta - U.S. 149 109 37 %
Neulasta - ROW 16 20 (20) %
MVASI - U.S.
96 138 (30) %
MVASI - ROW
54 41 32 %
TAVNEOS - U.S. 114 77 48 %
TAVNEOS - ROW 5 13 (62) %
LUMAKRAS - U.S.
49 55 (11) %
LUMYKRAS - ROW
45 30 50 %
Parsabiv - U.S. 43 50 (14) %
Parsabiv - ROW 44 38 16 %
Aimovig - U.S. 68 85 (20) %
Aimovig - ROW 6 5 20 %
PROCYSBI - U.S. 47 57 (18) %
PROCYSBI - ROW 1 2 (50) %
WEZLANA - U.S. 4 123 (97) %
WEZENLA - ROW 43 27 59 %
Other - U.S.(1)
244 312 (22) %
Other - ROW(1)
47 58 (19) %
Total other products $ 1,528 $ 1,475 4 %
Total U.S. - other products $ 1,131 $ 1,109 2 %
Total ROW - other products 397 366 8 %
Total other products $ 1,528 $ 1,475 4 %
* Change in excess of 100%
N/A = not applicable
____________
(1) Consists of product sales from KANJINTI, AVSOLA, RAVICTI, BKEMV/BEKEMV, RIABNI, EPOGEN, NEUPOGEN, IMLYGIC, ACTIMMUNE, Sensipar/Mimpara, RAYOS, BUPHENYL, QUINSAIR, DUEXIS, Corlanor and PENNSAID.
Operating expenses
Operating expenses were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025 Change
Operating expenses:
Cost of sales $ 2,744 $ 2,968 (8) %
% of product sales 33.4 % 37.7 %
% of total revenues 31.8 % 36.4 %
Research and development $ 1,719 $ 1,486 16 %
% of product sales 20.9 % 18.9 %
% of total revenues 19.9 % 18.2 %
Selling, general and administrative $ 1,602 $ 1,687 (5) %
% of product sales 19.5 % 21.4 %
% of total revenues 18.6 % 20.7 %
Other $ (113) $ 830 *
Total operating expenses $ 5,952 $ 6,971 (15) %
* Change in excess of 100%
Cost of sales
Cost of sales decreased to 31.8% of total revenues for the three months ended March 31, 2026, due to lower amortization expense from acquisition-related assets, partially offset by higher profit share and royalty expense and changes in our sales mix.
Research and development
The increase in R&D expense for the three months ended March 31, 2026, was driven by higher spend in Later-Stage Clinical Programs, including those related to MariTide.
We expect to continue to grow our spend on Later-Stage Clinical Programs as we advance our pipeline.
Selling, general and administrative
The decrease in SG&A expense for the three months ended March 31, 2026, was due to lower general and administrative expenses, partially offset by higher commercial product-related expenses.
Other
Other operating income for the three months ended March 31, 2026, included litigation settlements.
Other operating expenses for the three months ended March 31, 2025, included the Otezla intangible asset impairment charge of $800 million. See Note 8, Goodwill and other intangible assets, to the condensed consolidated financial statements.
Nonoperating expenses/income and income taxes
Nonoperating expenses/income and income taxes were as follows (dollar amounts in millions):
Three months ended
March 31,
2026 2025
Interest expense, net $ (657) $ (723)
Other income, net $ 75 $ 1,518
Provision for income taxes $ 265 $ 243
Effective tax rate 12.7 % 12.3 %
Interest expense, net
Interest expense, net, decreased for the three months ended March 31, 2026, primarily due to lower average debt outstanding driven by deleveraging in 2025 and, to a lesser extent, lower weighted-average fixed and floating interest rates on the debt.
Other income, net
Other income, net, decreased for the three months ended March 31, 2026, primarily due to net unrealized losses on equity investments, primarily BeOne, in the current-year period compared to net unrealized gains on equity investments, primarily BeOne, in the prior-year period. See Note 6, Investments, to the condensed consolidated financial statements.
Income taxes
The increase in our effective tax rate for the three months ended March 31, 2026, was primarily due to the change in earnings mix, including lower amortization expense from acquisition-related assets, partially offset by the net unrealized losses on equity investments in the current-year period compared to net unrealized gains in the prior-year period.
In 2021, the OECD reached an initial agreement to align countries on a minimum corporate tax rate and an expansion of the taxing rights of market countries. Select individual countries, including the United Kingdom, EU member countries and Singapore, have enacted the global minimum tax agreement that took effect starting in 2024. Singapore's enactment of the agreement effective 2025 applies irrespective of the Company's incentive grant. On January 5, 2026, the OECD issued administrative guidance related to the global minimum tax agreement that, when fully enacted, will exempt U.S. companies from extra territorial minimum taxes effective January 1, 2026. Countries have begun to enact, or have announced intentions to enact, the new guidance, and we continue to monitor the potential impact to our 2026 tax rate.
On July 4, 2025, OB3 was enacted in the United States. OB3 has various provisions, including the permanent extension of certain expiring provisions of the 2017 Tax Act and modifications to the international tax framework, including tax rate changes on foreign earnings. The legislation has multiple effective dates, with most provisions effective as of January 1, 2026.
In 2017, we received an RAR and a modified RAR from the IRS for the years 2010-2012, proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico. We disagreed with the proposed adjustments and calculations, and in 2021, we filed a petition in the U.S. Tax Court to contest two duplicate Statutory Notices of Deficiency (Notices) for the years 2010-2012. The Notices seek to increase our U.S. taxable income for the years 2010-2012 by an amount that would result in additional federal tax of approximately $3.6 billion, plus interest. Any additional tax that could be imposed for the years 2010-2012 would be reduced by up to approximately $900 million of repatriation tax previously accrued and paid on our foreign earnings.
In 2020, we received an RAR and a modified RAR from the IRS for the years 2013-2015, also proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico similar to those proposed for the years 2010-2012. We disagreed with the proposed adjustments and calculations, and in 2022, we filed a petition in the U.S. Tax Court to contest a Notice for the years 2013-2015. The Notice seeks to increase our U.S. taxable income for the years 2013-2015 by an amount that would result in additional federal tax of approximately $5.1 billion, plus interest and asserts penalties of approximately $2.0 billion. Any additional tax that could be imposed for the years 2013-2015 would be reduced by up to approximately $2.2 billion of repatriation tax previously accrued and paid on our foreign earnings.
We firmly believe that the IRS positions set forth in the 2010-2012 and 2013-2015 Notices are without merit. We continue to contest the 2010-2012 and 2013-2015 Notices through the judicial process. The two cases were consolidated in the U.S. Tax Court in 2022. The trial began on November 4, 2024 and concluded on January 17, 2025. The parties filed opening post-trial briefs on June 13, 2025, and the Court held oral argument on July 16, 2025. The parties filed post-trial reply briefs on October 10, 2025. On March 16, 2026, the Court ordered supplemental closing briefs, which are due May 20, 2026. The Company expects a decision from the U.S. Tax Court no earlier than the second half of 2026.
We are currently under examination by the IRS for the years 2016-2018. In April 2026, we received a draft notice of proposed adjustment (NOPA) from the IRS for years 2016-2018, which is similar to the proposed adjustments for years 2010-2015 and relates primarily to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico. If sustained in full, the adjustments set forth in the draft NOPA could have a material impact on our financial statements. We disagree with the draft NOPA and have informed the IRS audit team that its methodology is inconsistent with certain positions asserted by the IRS in the Tax Court, which positions were more favorable to Amgen than those previously taken by the exam team. We intend to contest the draft NOPA. We expect that the IRS will begin its audit for years 2019-2022 in the first half of 2026, and we believe that it may seek to continue to audit similar issues related to the allocation of income between the United States and our foreign jurisdictions. In addition, we are under examination by a number of state and foreign tax jurisdictions.
Final resolution of these complex matters is not likely within the next 12 months. We continue to believe our accrual for income tax liabilities is appropriate based on past experience, interpretations of tax law, application of the tax law to our facts and judgments about potential actions by tax authorities; however, due to the complexity of the provision for income taxes and uncertain resolution of these matters, the ultimate outcome of any tax matters may result in payments substantially greater than amounts accrued and could have a material adverse impact on our condensed consolidated financial statements.
See Part I, Item 1A. Risk Factors-We could be subject to additional tax liabilities, including from an adverse outcome in our ongoing tax dispute with the IRS and other tax examinations, enactment of the OECD minimum corporate tax rate agreement and the adoption and interpretation of new tax legislation, including OB3. Such tax liabilities could adversely affect our profitability and results of operations of our Annual Report on Form 10-K for the year ended December 31, 2025 and Note 4, Income taxes, to the condensed consolidated financial statements of this Quarterly Report on Form 10-Q for further discussion.
Financial condition, liquidity and capital resources
Selected financial data were as follows (in millions):
March 31, 2026 December 31, 2025
Cash and cash equivalents $ 12,038 $ 9,129
Total assets $ 92,504 $ 90,586
Current portion of long-term debt $ 5,437 $ 4,599
Long-term debt $ 51,886 $ 50,005
Stockholders' equity $ 9,190 $ 8,658
Cash and cash equivalents
Our balance of cash and cash equivalents was $12.0 billion as of March 31, 2026. The primary objective of our investment portfolio is to maintain safety of principal, prudent levels of liquidity and acceptable levels of risk. Our investment policy limits interest-bearing security investments to certain types of debt and money market instruments issued by institutions with primarily investment-grade credit ratings, and it places restrictions on maturities and concentration by asset class and issuer.
Capital allocation
Consistent with the objective to optimize our capital structure, we deploy our accumulated cash balances in a strategic manner and consider a number of alternatives, including investments in innovation both internally and externally (including investments that expand our portfolio of products in areas of therapeutic interest), capital expenditures, repayment of debt, payment of dividends and stock repurchases.
We intend to continue investing in our business while returning capital to stockholders through the payment of cash dividends and stock repurchases. This reflects our desire to optimize our cost of capital and our confidence in the future cash flows of our business. The timing and amount of future dividends and stock repurchases will vary based on a number of factors,
including future capital requirements for strategic transactions, debt levels and debt service requirements, our credit rating, availability of financing on acceptable terms, changes to applicable tax laws or corporate laws, changes to our business model and periodic determination by our Board of Directors that cash dividends and/or stock repurchases are in the best interests of stockholders and are in compliance with applicable laws and the Company's agreements. In addition, the timing and amount of stock repurchases may also be affected by our overall level of cash, stock price and blackout periods, during which we are restricted from repurchasing stock. The manner of stock repurchases may include block purchases, tender offers, accelerated share repurchases and market transactions.
In December 2025, our Board of Directors declared a quarterly cash dividend of $2.52 per share of common stock for the first quarter of 2026, an increase of 6% over the same period in the prior year, which was paid in March 2026. In March 2026, our Board of Directors declared a quarterly cash dividend of $2.52 per share of common stock to be paid in June 2026.
During the three months ended March 31, 2026, we did not repurchase shares under our stock repurchase program. As of March 31, 2026, $6.8 billion of authorization remained available under the stock repurchase program.
As a result of stock repurchases and quarterly dividend payments, we have an accumulated deficit as of March 31, 2026 and December 31, 2025. Our accumulated deficit is not anticipated to affect our future ability to operate, repurchase stock, pay dividends or repay our debt given our expected continued profitability and strong financial position.
During the three months ended March 31, 2026, we issued $4.0 billion of debt consisting of $1.0 billion of the 4.20% 2031 Notes, $1.75 billion of the 4.85% 2036 Notes, $500 million of the 5.50% 2046 Notes and $750 million of the 5.65% 2056 Notes. There were no debt issuances during the three months ended March 31, 2025.
During the three months ended March 31, 2026, we repaid the €750 million aggregate principal amount of our 2.00% 2026 euro Notes ($833 million upon settlement of the related cross-currency swap), compared to $2.5 billion of debt repayments during the three months ended March 31, 2025. We periodically consider the repurchase of our debt when conditions are favorable. During the three months ended March 31, 2026 and 2025, we repurchased aggregate principal amounts of our debt of $324 million and $414 million, respectively, for aggregate costs of $233 million and $301 million, respectively, which resulted in the recognition of gains on extinguishment of debt of $90 million and $111 million respectively, recorded in Other income, net, in the Condensed Consolidated Statements of Income.
We believe that existing funds, cash generated from operations and existing sources of and access to financing are adequate to satisfy our needs for working capital, capital expenditure and debt service requirements, as well as our plans to pay dividends and repurchase stock, and other business initiatives we plan to strategically pursue, including acquisitions and licensing activities. We anticipate that our liquidity needs can be met through a variety of sources, including cash provided by operating activities, borrowings through commercial paper and/or syndicated credit facilities and access to other domestic and foreign debt markets and equity markets. See Part II, Item 1A. Risk Factors-Global economic conditions may negatively affect us and may magnify certain risks that affect our business, of this Quarterly Report on Form 10-Q.
In February 2026, we filed a shelf registration statement with the SEC that allows us to issue unspecified amounts of debt securities, common stock, preferred stock, warrants to purchase securities (including debt securities, common stock, preferred stock or depositary shares), rights to purchase common stock or preferred stock, securities purchase contracts, securities purchase units, and depositary shares. Under this shelf registration statement, all of the securities available for issuance may be offered from time to time with terms to be determined at the time of issuance. This shelf registration statement expires in February 2029.
During the three months ended March 31, 2026, we extended the term of our $4.0 billion syndicated, unsecured, revolving credit facility by one year to March 2029. As of March 31, 2026 and December 31, 2025, no amounts were outstanding under this facility.
Certain of our financing arrangements contain nonfinancial covenants. In addition, our revolving credit agreement and term loan credit agreement include a financial covenant that requires us to maintain a specified minimum interest coverage ratio of (i) the sum of consolidated net income, interest expense, provision for income taxes, depreciation expense, amortization expense, unusual or nonrecurring charges and other noncash items (consolidated earnings before interest, taxes, depreciation and amortization) to (ii) Consolidated Interest Expense, each as defined and described in the respective agreements. We were in compliance with all applicable covenants under these arrangements as of March 31, 2026.
Cash flows
Our summarized cash flow activity was as follows (in millions):
Three months ended
March 31,
2026 2025
Net cash provided by operating activities $ 2,189 $ 1,391
Net cash used in investing activities $ (716) $ (447)
Net cash provided by (used in) financing activities $ 1,436 $ (4,107)
Operating
Cash provided by operating activities has been and is expected to continue to be our primary recurring source of funds. Cash provided by operating activities during the three months ended March 31, 2026, increased as compared to the same period in the prior year primarily due to higher net income in the current-year period after adjustments for noncash items and the timing of working capital items.
Investing
Cash used in investing activities during the three months ended March 31, 2026 and 2025, was primarily due to capital expenditures of $712 million and $411 million, respectively, including construction costs for new plants and expansion of manufacturing capacity. We currently estimate full year 2026 investments in capital projects to be approximately $2.6 billion.
Financing
Cash provided by financing activities during the three months ended March 31, 2026, was primarily due to $4.0 billion of net proceeds from long-term debt issuances, partially offset by the payment of dividends of $1.4 billion and the repayment and extinguishment of debt of $833 million and $233 million, respectively. Cash used in financing activities during the three months ended March 31, 2025, was primarily due to the repayment and extinguishment of debt of $2.5 billion and $301 million, respectively, and the payment of dividends of $1.3 billion. See Note 9, Financing arrangements, and Note 10, Stockholders' equity, to the condensed consolidated financial statements for further discussion.
Critical accounting policies and estimates
The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the notes to the financial statements. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. A summary of our critical accounting policies and estimates is presented in Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2026.
Recently issued accounting standards
For a discussion of recently issued accounting standards, see Note 1, Significant accounting policies, to the condensed consolidated financial statements.
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