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Amgen Inc. Q1 2010 Earnings Call Transcript

Amgen Inc. Q1 2010 Earnings Call Transcript

Amgen Inc. (AMGN)

Q1 2010 Earnings Call

April 21, 2010; 05:00pm ET


Kevin Sharer - Chairman and Chief Executive Officer

Bob Bradway - Our Chief Financial Officer

George Morrow - Executive Vice President of Global Commercial Operations

Roger Perlmutter - Executive Vice President of R&D

Arvind Sood - Vice President of Investor Relations


Jeff Meacham - JP Morgan

Yaron Werber - Citi

Eric Schmidt - Cowen & Co.

Steven Harr - Morgan Stanley

Geoffrey Porges - Sanford Bernstein

Michael Yee - RBC Capital Markets.

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My name is Christian and I will be your conference facilitator today for Amgen’s first quarter 2010 financial results conference call. All lines have been placed on mute to prevent any background noise. There will be a question-and-answer session at the conclusion of the last speaker’s prepared remarks. (Operator Instructions)

I would now like to introduce Arvind Sood, Vice President of Investor Relations. Mr. Sood, you may now begin.

Arvind Sood

Thanks Christian. Good afternoon everybody. I would like to welcome you to our first quarter results conference call. Along with a 9% gain in revenues and a 20% increase in adjusted EPS, I would say we are off to a pretty good start this year. This year is already shaping up to be one with remarkable changes. I am referring of course to the passage of the healthcare reform bill, which is a major development for our company and our industry.

I’m joined today by Kevin Sharer, our Chairman and CEO. Kevin will address our strategic priorities for this year, and also provide his perspective on the healthcare reform legislation. Our Chief Financial Officer, Bob Bradway, will then discuss our first quarter results in greater detail and address how healthcare reform is expected to influence our growth outlook for the full year.

George Morrow, our Executive Vice President of Global Commercial Operations, will then discuss our product performance in the United States, and our strong performance in international markets, together with a description of how different components of the healthcare reform legislation are expected to influence our business and when.

Then finally Roger Perlmutter, our Executive Vice President of R&D will provide an update on recently completed studies of denosumab, in the treatment of skeletal related events and our regulatory interactions regarding Prolia in the US and Europe.

We’ll use slides for our presentation today. These slides have been posted on our website and a link was sent to you separately by email.

I would like to remind you that our comments today will be governed by our Safe Harbor statements. In other words, through the course of our presentation today, we may make certain forward-looking statements, and actual results could vary materially. We will use non-GAAP financial measures to help you understand our underlying business performance, although the GAAP reconciliations are provided in our press release.

So with that, I would like to turn the call over to Kevin.

Kevin Sharer

Thanks Arvind. Good afternoon everyone. As Arvind mentioned, we are pleased with our first quarter results, and I want to thank all of Amgen’s staff who worked so hard to deliver them on behalf of patients and share holders.

As you’ll see when George talks, our base business of marketed products in the US is performing well and we note the continued strong growth from our international business. Arvind talked about healthcare reform and we will provide you with the granularity today about how healthcare reform will affect us. George will with Bob’s help talk about that, but I’d like to give you some perspective.

Healthcare reform will come at us in basically three ways. One is costs through our marketed products which George will outline; another will be a fee later, almost a tax like thing; and the third thing is the preservation of the frame work for innovation, and importantly the new follow-on biologics frame work, which we believe is fair to innovators, it lets new entrants come in, and it gives patients and doctors the right frame work. We think that’s particularly an important development and good for our industry and good for patients.

When we provided our guidance for 2010 in January as you recall, we did not include the impact of healthcare reform. Now that we can see the details, we’ve got a better sense of the probable impact and I am pleased to note that we will be able to stay within the previous guidance range, although at the low end, but I consider that a prudent move. As also said in my quote, we will take steps over time to address some of the new costs in healthcare reform, and we’ll have more details on that as time goes on.

Obviously this year we are all keenly anticipating the launch of Prolia in the United States and in Europe. Roger will give you more color on that. I’m sure it’ll be part of our conversation, but I must say, I am in a very optimistic place right now. We are not going to predict any timing, but I feel very very good about where we are around the world.

We had in the US a world class sales force. We retained the people we hired; they are busy working. In markets outside the US and Japan we have a collaboration with GlaxoSmithKline that we are increasingly pleased with. We are also enthusiastic about the motesanib’s potential to help people with cancer and we’ll file for that indication; Roger will talk about that.

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