Amgen : Investor Insights Newsletter Q4 2019

Investor Insights Newsletter

Corporate Profile:

• Amgen discovers, develops, manufactures, and delivers innovative human therapeutics. A biotechnology pioneer since 1980, Amgen was one of the first companies to realize the new science's promise by bringing safe, effective medicines from lab to manufacturing plant to patient. Amgen therapeutics have changed the practice of medicine, helping people around the world in the fight against serious illnesses. With a deep and broad pipeline of potential new medicines, Amgen remains committed to advancing science to dramatically improve people's lives.

MESSAGE FROM BOB BRADWAY, CEO

Q4 and Full Year 2019 Financial Highlights:

• Total revenues in Q4 2019 decreased 1% to $6.2 billion in comparison to the fourth quarter of 2018, reflecting the impact of biosimilar and generic competition against select products.
• For the full year, total revenues decreased 2% to $23.4 billion, with a 1% decrease in product sales.
• Non-GAAPEPS increased 6% in the fourth quarter to $3.64 and 3% for the full year to $14.82 benefiting from lower weighted-average shares outstanding.
• The Company generated $8.5 billion of free cash flow in 2019.
• 2020 total revenues guidance of $25.0 - $25.6 billion and 2020 non-GAAP EPS guidance of $14.85 - $15.60*

$Millions, except EPS, dividends paid per share and		Q4'19		Q4'18	YOY		FY'19		FY'18	YOY
percentages
Total Revenues	$	6,197	$	6,230	(1%)	$	23,362	$	23,747	(2%)
GAAP Operating Income	$	2,048	$	2,382	(14%)	$	9,674	$	10,263	(6%)
GAAP Net Income	$	1,703	$	1,928	(12%)	$	7,842	$	8,394	(7%)
GAAP EPS	$	2.85	$	3.01	(5%)	$	12.88	$	12.62	2%
Non-GAAP Operating Income	$	2,621	$	2,717	(4%)	$	11,157	$	11,857	(6%)
Non-GAAP Net Income	$	2,174	$	2,186	(1%)	$	9,028	$	9,573	(6%)
Non-GAAP EPS	$	3.64	$	3.42	6%	$	14.82	$	14.40	3%
Dividends Paid Per Share	$	1.45	$	1.32	10%	$	5.80	$	5.28	10%

References in this document to "non-GAAP" measures, measures presented "on a non-GAAP basis" and to "free cash flow" (computed by subtracting capital expenditures from operating cash flow) refer to non-GAAP financial measures. Adjustments to the most directly comparable GAAP financial measures and other items are presented on the attached reconciliations.

* Guidance and message from Bob Bradway as of January 30, 2020, and are not being updated at this time.

2019 was the transition year we had long been preparing for, and I believe we managed this well, as evidenced by the fact that we delivered earnings growth in 2019 and expect to return to top line growth in 2020. In 2019, drug prices in the U.S. actually fell overall for the first time since 1974. In anticipation of this challenge, over the last several years we repositioned the company's expense base and embedded productivity initiatives that are serving us well. In addition, we reshaped our portfolio, committing to medicines that can deliver growth, primarily through volume increases.

In 2019, we delivered 3% volume growth globally and 19% volume growth outside the United States. We're seeing especially strong performance in our Asia Pacific region. Over the next decade, we expect this region to account for as much as 25% of Amgen's growth, driven by our strategic collaboration in China with BeiGene and our wholly owned subsidiary in Japan.

We expect several important data readouts from our pipeline in 2020. We expect data for AMG510, our KRAS G12C inhibitor for cancer; for tezepelumab in allergic and nonallergic asthma; for omecamtiv mecarbil in heart failure; and for Otezla in mild to moderate psoriasis. In addition, we expect to generate some important data across our BiTE portfolio in 2020.

Amgen also recognizes and accepts the need to be part of the solution in addressing other environmental, social and governance matters. To that end, several years ago, we set targets for reducing our carbon emissions and water consumption by the year 2020. Having hit those targets in 2019, we are now developing a next set of goals that we will share later this year. These goals will include a further commitment to our next-generation manufacturing technologies, which have a much smaller environmental footprint than traditional biologics manufacturing.

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AMGEN MISSION

To serve patients

AMGEN QUICK FACTS

Headquarters

Thousand Oaks, California

Staff

Approximately 23,400 worldwide

Stock Listing

NASDAQ: AMGN

Chairman, CEO and President

Robert A. Bradway

2019 Financial Highlights

Total revenue: $23.4 billion

Product sales: $22.2 billion

Non-GAAP R&D expense: $4.0 billion

Stock Price Performance (Last 12 Months)

Source: NASDAQ

(data from 2/11/19 through 2/11/20)

$229

$186

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb

Quarterly Per Share Dividend History

AMGEN PRODUCTS

Aimovig® (erenumab-aooe) AMGEVITA™ (adalimumab-atto) Aranesp® (darbepoetin alfa) BLINCYTO® (blinatumomab) Corlanor® (ivabradine)

$0.28 $0.36

$1.45

$1.32

$1.15

$1.00

$0.79

$0.61

$0.47

$1.60

Enbrel® (etanercept) EPOGEN® (epoetin alfa) EVENITY® (romosozumab-aqqg) IMLYGIC® (talimogene laherparepvec) KANJINTI™ (trastuzumab-anns) KYPROLIS® (carfilzomib)

MVASI™ (bevacizumab-awwb) Neulasta® (pegfilgrastim) Otezla® (apremilast) NEUPOGEN® (filgrastim) Nplate® (romiplostim) Parsabiv® (etelcalcetide) Prolia® (denosumab) Repatha® (evolocumab) Sensipar® (cinacalcet) Vectibix® (panitumumab) XGEVA® (denosumab)

For product information, including important safety information, visit www.amgen.com.

QUESTIONS?

CONTACT US

Amgen

Investor Relations

Mailstop 28-3-D

Phone: [phone]

E-mail:[e-mail] investors.amgen.com

Transfer Agent

American Stock Transfer and Trust Co. 59 Maiden Lane

New York, NY 10038 Phone: [phone] or 800-937-5449

2011 * 2012 2013 2014 2015 2016 2017 2018 2019 2020**

• Dividend initiated in September 2011
• Represents Q1 dividend payable on March 6, 2020 to all stockholders of record as of the close of business on February 14, 2020

Key News:

We Expect 25% of Our Sales Growth from the Asia Pacific Region over the Next 10 Years

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Non-GAAP Financial Measures

In this news release, management has presented its operating results for the fourth quarters and full years of 2019 and 2018, in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and on a non-GAAP basis. In addition, management has presented its full year 2020 EPS and tax rate guidance in accordance with GAAP and on a non-GAAP basis. These non-GAAP financial measures are computed by excluding certain items related to acquisitions, restructuring and certain other items from the related GAAP financial measures. Reconciliations for these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the news release. Management has also presented Free Cash Flow (FCF), which is a non-GAAP financial measure, for the fourth quarters and full years of 2019 and 2018. FCF is computed by subtracting capital expenditures from operating cash flow, each as determined in accordance with GAAP.

The Company believes that its presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. The Company uses certain non-GAAP financial measures to enhance an investor's overall understanding of the financial performance and prospects for the future of the Company's ongoing business activities by facilitating comparisons of results of ongoing business operations among current, past and future periods. The Company believes that FCF provides a further measure of the Company's liquidity.

The Company uses the non-GAAP financial measures set forth in the news release in connection with its own budgeting and financial planning internally to evaluate the performance of the business, including to allocate resources and to evaluate results relative to incentive compensation targets. The non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

Forward-Looking Statements

This news release contains forward-looking statements that are based on the current expectations and beliefs of Amgen. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including any statements on the outcome, benefits and synergies of collaborations with any other company, including BeiGene, Ltd., or the Otezla acquisition, including anticipated Otezla sales growth and the timing of non-GAAP EPS accretion, as well as estimates of revenues, operating margins, capital expenditures, cash, other financial metrics, expected legal, arbitration, political, regulatory or clinical results or practices, customer and prescriber patterns or practices, reimbursement activities and outcomes and other such estimates and results. Forward-looking statements involve significant risks and uncertainties, including those discussed below and more fully described in the Securities and Exchange Commission reports filed by Amgen, including our most recent annual report on Form 10-K and any subsequent periodic reports on Form 10-Q and current reports on Form 8-K. Unless otherwise noted, Amgen is providing this information as of the date of this news release and does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.

No forward-looking statement can be guaranteed and actual results may differ materially from those we project. Our results may be affected by our ability to successfully market both new and existing products domestically and internationally, clinical and regulatory developments involving current and future products, sales growth of recently launched products, competition from other products including biosimilars, difficulties or delays in manufacturing our products and global economic conditions. In addition, sales of our products are affected by pricing pressure, political and public scrutiny and reimbursement policies imposed by third-party payers, including governments, private insurance plans and managed care providers and may be affected by regulatory, clinical and guideline developments and domestic and international trends toward managed care and healthcare cost containment. Furthermore, our research, testing, pricing, marketing and other operations are subject to extensive regulation by domestic and foreign government regulatory authorities. We or others could identify safety, side effects or manufacturing problems with our products, including our devices, after they are on the market. Our business may be impacted by government investigations, litigation and product liability claims. In addition, our business may be impacted by the adoption of new tax legislation or exposure to additional tax liabilities. If we fail to meet the compliance obligations in the corporate integrity agreement between us and the U.S. government, we could become subject to significant sanctions. Further, while we routinely obtain patents for our products and technology, the protection offered by our patents and patent applications may be challenged, invalidated or circumvented by our competitors, or we may fail to prevail in present and future intellectual property litigation. We perform a substantial amount of our commercial manufacturing activities at a few key facilities, including in Puerto Rico, and also depend on third parties for a portion of our manufacturing activities, and limits on supply may constrain sales of certain of our current products and product candidate development. We rely on collaborations with third parties for the development of some of our product candidates and for the commercialization and sales of some of our commercial products. In addition, we compete with other companies with respect to many of our marketed products as well as for the discovery and development of new products. Discovery or identification of new product candidates or development of new indications for existing products cannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no guarantee that any particular product candidate or development of a new indication for an existing product will be successful and become a commercial product. Further, some raw materials, medical devices and component parts for our products are supplied by sole third-party suppliers. Certain of our distributors, customers and payers have substantial purchasing leverage in their dealings with us. The discovery of significant problems with a product similar to one of our products that implicate an entire class of products could have a material adverse effect on sales of the affected products and on our business and results of operations. Our efforts to collaborate with or acquire other companies, products or technology, and to integrate the operations of companies or to support the products or technology we have acquired, may not be successful. A breakdown, cyberattack or information security breach could compromise the confidentiality, integrity and availability of our systems and our data. Our stock price is volatile and may be affected by a number of events. Our business performance could affect or limit the ability of our Board of Directors to declare a dividend or our ability to pay a dividend or repurchase our common stock. We may not be able to access the capital and credit markets on terms that are favorable to us, or at all.

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