Amgen Q3 2010 Earnings Call Transcript

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Amgen (AMGN)

Q3 2010 Earnings Call

October 25, 2010 5:00 pm ET

Executives

Arvind Sood - Vice President of Investor Relations

George Morrow - Executive Vice President

Roger Perlmutter - Executive Vice President of Research & Development

James Daly -

Kevin Sharer - Chairman of the Board, Chief Executive Officer, Chairman of Executive Committee and Member of Equity Award Committee

Robert Bradway - President and Chief Operating Officer

Jonathan Peacock - Chief Financial Officer

Analysts

Geoffrey Porges - Bernstein Research

Robyn Karnauskas - Deutsche Bank AG

Joel Sendek - Lazard Capital Markets LLC

Ian Somaiya - Piper Jaffray Companies

Yaron Werber - Citigroup Inc

Maged Shenouda - Stifel, Nicolaus & Co., Inc.

Christopher Raymond - Robert W. Baird & Co. Incorporated

Michael Yee - RBC Capital Markets Corporation

Steve Yoo - Leerink Swann LLC

Eric Schmidt - Cowen and Company, LLC

Eun Yang - Jefferies & Company, Inc.

Mark Schoenebaum - ISI Group Inc.

Gene Mack - Soleil Securities Group, Inc.

Rachel McMinn - BofA Merrill Lynch

Geoffrey Meacham - JP Morgan Chase & Co

Presentation

Operator

My name is Christian, and I will be your conference facilitator today for Amgen's Third Quarter 2010 Financial Results Conference Call. [Operator Instructions] I would now like to introduce Arvin Sood, Vice President of Investor Relations. Mr. Sood, you may now begin.

Arvind Sood

Okay, thank you, Christian. Good afternoon, everybody. I would like to welcome you to our third quarter results conference call. We have another productive quarter behind us, as we get into the home stretch for the year. This has been one busy year, and there are important events remaining going into the last couple of months. So we are going to try a slightly different format for our call today.

Many of you have commented in the past that you have appreciated the details [ph] for our calls. And yes, I believe that a certain amount of redundancy has crept in our prepared comments compared to what's already detailed in our press release. Beginning with this call, we'll try to make this process more efficient without compromising the quality of the information or the opportunity to have a dialogue. In our prepared comments today, we'll focus only on those comments that provide added clarity on issues outlined in our press release. We'll continue to provide slides as we have in the past as they serve as good reference tool, and a link to these slides has been sent separately.

So with that, I would like to introduce our presenters. I'm joined today by our Chairman and CEO, Kevin Sharer, who will lead the discussion by providing a strategic review of our business. Following Kevin, you'll hear from our recently appointed CFO, Jon Peacock, who will highlight key aspects of our financial performance during the quarter. Our President and Chief Operating Officer, Bob Bradway, will then give you a high-level summary of our global commercial sales as well as a report on full year commercialization. Our Head of R&D, Roger Perlmutter, will conclude our prepared comments by providing a regulatory and pipeline update.

As of the case in such calls, our comments today are only governed by our Safe Harbor statements. What it states in summary is that through the course of our presentation today, we may make certain forward-looking statements and actual results could vary materially.

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

Kevin Sharer

Thanks, Arvind, and good afternoon. Thank you, all on the call for joining us. I'd like to make a few comments about our business as kind of a higher level before I turn the mic over to Jon.

Overall, I think we had a solid quarter, as we build the foundation for top line growth and invest for the future. Jon Peacock, our new CFO, will comment more fully, but I do note the growth on operating expenses compared to last year. We had an unusually low R&D quarter last year and a few other onetime unfavorable comparisons. I want to reinforce that we manage here very efficiently, and these quarter-over-quarter comparisons are not an indication of this approach has or will change.

Bob will lead the discussion of the Prolia experience to date, but I'd like to make a few comments first. Forecasting the growth ramp of any new product is a challenge. That said, we hear in independent surveys reinforced the attractiveness of Prolia in physician's eyes to treat osteoporosis for significant numbers of patients. Doctors and their offices are working to become accustomed to the new reimbursement dynamics Prolia often represents for them. Once this reimbursement process is mastered and they gain experience, I'm confident usage will be significant.

We look forward to the PDUFA date of November 18 for Denosumab oncology and the AMG 147 results near year end. We cannot predict what will happen November 18, but I am very confident in the medicine.

I am especially proud of our Cardiac team and the high-quality and scientific discussions the panel conducted that day. That was all of us in the medicines development, review and regulatory areas at our best. Finally, I would like to welcome Jon in his new role, and Bob's report after a full quarter in his new role. Jon, over to you.

Jonathan Peacock

Thanks, Kevin. I'll briefly review the P&L and balance sheet to provide a perspective on performance in the quarter. Overall, our revenues were $3.8 billion at the same level as the third quarter in 2009. Bob will take you through the drivers of product sales in a few minutes. You'll also see that other revenues were down versus a year ago. This is primarily due to the lower partnership income following the PROCRIT recall.

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