Amgen Inc. (AMGN)

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Amgen, Inc. (AMGN)

Q2 2009 Earnings Call

July 27, 2009 5:00 pm ET


Arvind Sood - Vice President of Investor Relations

Kevin Sharer - Chairman and Chief Executive Officer

Robert A. Bradway - Chief Financial Officer, Executive Vice President

George J. Morrow - Executive Vice President of Global Commercial Operations

Roger M. Perlmutter, MD, PhD - Executive Vice President of Research & Development


Geoff Meacham – J.P. Morgan

Geoffrey Porges - Bernstein

Bret Holley - Oppenheimer & Co.

Chris Raymond – Robert Baird

Steve Harr – Morgan Stanley

Yaron Werber – Citi

May-Kin Ho – Goldman Sachs

Eric Schmidt – Cowen and Company

Jim Birchenough – Barclays Capital

Michael Aberman – Credit Suisse

Mark Schoenebaum – Deutsche Bank

Joel Sendek – Lazard Capital Markets

Eun Yang – Jefferies

Aaron Reams – Wells Fargo

Maged Shenouda – UBS

Michael King – Merriman

Joshua Schimmer – Leerink Swann



Welcome to the Amgen second quarter 2009 financial results conference call. (Operator Instructions) I would now like to introduce Arvind Sood, Vice President of Investor Relations. Mr. Sood, you may now begin.

Arvind Sood

I would like to welcome you to our second quarter conference call. When we communicated our Q1 results, you may recall that several themes had affected our Q1 performance adversely, and yet we felt that we would see a sequential recovery going into the second quarter based on segmental share growth, planned price increases, and normalization of inventory levels. Most of these expectations materialized in the second quarter, and we’ll discuss these trends in detail. Today, we’ve also announced an important partnership with Glaxo Smith Klein related to the commercialization of denosumab outside the US. So, let’s get started as we have a lot of ground to cover.

Our Chairman and CEO Kevin Sharer will begin the call today with a strategic review of our business and offer additional insights on our partnership with GSK. Our Chief Financial Officer Bob Bradway will then review our quarterly results together with outlining reasons for raising our full guidance. George Morrow, who is our head of global commercial operations, will then discuss our performance in the US and International markets and provide a commercial context for our partnership with GSK as well as how this partnership will allow us to achieve greater value denosumab compared to what we would have achieved on our own in markets outside the US. Our head of R&D, Roger Perlmutter, will then provide a regulatory and pipeline update. He will provide some additional color on a Phase III study comparing denosumab to Zometa in delaying the time to skeletal related events in breast cancer patients. You might recall that had recently topline data from this study.

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.

Before I turn the call over to Kevin, I would like to remind you that our comments today will be governed by our Safe Harbor statement. In a nutshell, it means that through the course of our presentation today, we will make certain forward-looking statements and, of course, actual results can vary materially. As in the past, we’ll use non-GAAP financial measures to help you understand our underlying business performance. These non-GAAP figures have been reconciled with GAAP figures in the press release that we sent earlier.

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

Kevin Sharer

Good afternoon everyone, and thank you for joining us today. At the beginning of the year, we shared two broad objectives—focus on execution in the core business and deliver on the pipeline, and in particular the promise of denosumab. I’m pleased to report that we’ve made solid progress on these objectives in the second quarter and will continue to focus on them for the remainder of the year and beyond.

In terms of the core business, as we discussed last quarter, the first quarter is typically soft, and this year was further impacted by the down turn in the economy and its impact on unemployment and health insurance coverage in the US. However, we also shared our thoughts in why we would expect to see a recovery in the second quarter and the remainder of the year.

This quarter’s results have bolstered our outlook for the full year and give us confidence to raise our full year earning guidance and point expected sales towards the upper end of the $14.4 to $14.8 billion guidance range. In terms of the pipeline, we reviewed data from a denosumab study investigating its use in advanced breast cancer patients with bone metastases and are extremely pleased with the outcome as Roger will discuss. We were also expecting additional pivotal phase III study denosumab in oncology as well as Vectibix in colorectal cancer during the third quarter. Roger will provide more details in a moment.

Today, we announced our collaboration with Glaxo Smith Klein for commercializing denosumab internationally. George will outline the details of this important collaboration which we believe will maximize the value of denosumab for all stakeholders, most importantly patients and also create value for our shareholders. This collaboration which will include commercializing denosumab in European and emerging markets is a thoughtful approach to leveraging our strengths with those of Glaxo. It came together after months of intense conversation, data sharing, and joint planning. Glaxo has multinational presence and their expertise primary care markets in particular will be central to maximizing the value of denosumab. The agreement will also provide the sustained P&L benefit for Amgen allowing us to retain our significant financial flexibility to invest in other programs.

We’re preparing intensively for denosumab’s review by an FDA advisory panel on August 13th and look forward to working with the regulatory authorities both in the US and Europe to bring this important new therapy to market. We will increase our investment in denosumab during the second half, particularly in the US as we prepare for denosumab’s launch.

Before turning it over to Bob, I will share a few thoughts in the ongoing discussions around healthcare reform. Amgen supports healthcare reform aimed at providing all Americans access to affordable health insurance. We’re taking an active role in addressing the challenges facing our healthcare system by working towards solutions through effective healthcare policy including appropriate legislation on biosimilars. We are pleased to have a seat at the table. While there is still much uncertainty regarding the economic environment and healthcare reform, we remain focused on delivering financially, advancing the pipeline, making denosumab a success, and in so doing serving patients.

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