Amgen (AMGN) Q2 Profit Jumps 21%

Amgen (AMGN 0.40%), a leading biotechnology company with a wide portfolio of innovative medicines, released its second-quarter 2025 results on August 5, 2025. The headline news was a double-digit jump in profit and a 9% increase in revenue, beating analyst predictions (non-GAAP EPS and GAAP revenue) as strong product launches and pipeline progress boosted sales. Non-GAAP earnings per share came in at $6.02, handily above the $5.28 consensus (non-GAAP), while GAAP revenue hit $9.18 billion compared to the expected $8.94 billion. The quarter stood out for strong top-line growth and further advances in its late-stage drug pipeline, as total revenues increased 9% year-over-year, though lower free cash flow signals an area to watch going forward.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Company Overview and Recent Focus

Amgen is one of the world’s biggest biotech companies, developing and marketing a range of biologic and biosimilar drugs for conditions such as cancer, cardiovascular disease, rare diseases, and inflammation. Its portfolio includes both well-established products and a wave of newer, innovative drugs that address unmet medical needs.

In recent years, Amgen has emphasized expanding its product pipeline, growing in international markets, and investing in state-of-the-art manufacturing. Its ability to get regulatory approval for new treatments and to innovate, particularly through late-stage programs like the obesity drug MariTide and oncology therapies such as IMDELLTRA, remain central to its growth strategy. The company’s competitive positioning relies on both developing new branded drugs and creating biosimilars, which are follow-on biologic medicines similar to already approved drugs.

Quarter Highlights: Sales, Margins, and Products

The latest quarter brought strong financial results across many of Amgen’s therapy areas. Non-GAAP earnings per share of $6.02 represented a 21% increase compared to last year’s $4.97, and a $0.74 per share beat of analyst expectations (non-GAAP). Revenue (GAAP) of $9.179 billion was up 9%, driven by increases in emerging products. However, Free cash flow (non-GAAP) declined to $1.9 billion from $2.2 billion in Q2 2024. Management pointed to higher capital spending and the timing of tax payments as major drivers of this fall.

Non-GAAP operating margin rose 0.7 percentage points to 48.9%. This was a modest gain because expenses—especially research and development (R&D), which grew 18% (non-GAAP)—increased sharply. Overall operating expenses (non-GAAP) rose 8%, reflecting Amgen’s spending to advance its drug pipeline and commercialize new medicines. General and administrative costs (non-GAAP) fell 2%, helping partially offset these higher investments.

Product sales growth was not evenly spread. In general medicine, two cholesterol and bone-health drugs, Repatha and EVENITY, jumped more than 30% year over year, led by stronger volumes. However, Prolia, a bone-density medicine, slipped 4%, driven by lower net selling price. Rare disease products such as UPLIZNA and TAVNEOS posted sizable increases of 91% and 55%, respectively, while ultra-rare disease drugs dipped 2% year-over-year, largely due to lower selling prices.

Inflammation products saw varied trends. TEZSPIRE, used for severe asthma, grew 46% year-over-year on rising patient volume. Meanwhile, Enbrel, an older injectable for arthritis, dropped 34%, driven by unfavorable changes to estimated sales deductions and lower net selling price. Amgen’s own biosimilars, PAVBLU and WEZLANA, contributed new but smaller amounts, at $130 million and $35 million in revenue, respectively (GAAP). In oncology, BLINCYTO, a treatment for a type of leukemia, rose 45% year-over-year, while IMDELLTRA/IMDYLLTRA, a new therapy for small cell lung cancer, brought in $134 million. At the same time, mature cancer drugs like KYPROLIS and XGEVA showed flat or slightly weaker trends as competition increased.

One-off events in the quarter included the FDA approval of IMDELLTRA for small cell lung cancer and expanded approval and launches for several rare disease therapies. The dividend was raised 6% to $2.38 per share. Amgen retired $1.4 billion in debt and ended the period with $8.0 billion in cash. There were no share repurchases in the period.

Innovation, Pipeline, and Financial Performance: Details and Context

Amgen’s pipeline of potential new medicines advanced visibly. The most closely watched program, MariTide for obesity and type 2 diabetes, reported strong phase 2 data: participants lost up to 20% of body weight without reaching a plateau at 52 weeks, and those with type 2 diabetes showed significant improvement as well. The company launched four phase 3 trials for MariTide, including a cardiovascular outcomes study, with a sleep apnea trial planned for future initiation. Safety data remained consistent with similar drugs—gastrointestinal side effects, mostly mild or moderate, were the most common.

Rare disease assets also grew in importance. UPLIZNA, a biologic targeting B cells for neurologic and autoimmune disorders, posted a 91% year-over-year revenue increase. Its application for use in generalized myasthenia gravis is under review by the FDA, with a Prescription Drug User Fee Act (PDUFA) decision date of December 14, 2025. TEPEZZA, a biologic for thyroid eye disease, gained European approval in June 2025 and began its rollout in new markets. A Phase 3 study evaluating the subcutaneous route of administration of teprotumumab has completed enrollment.

Oncology (cancer) products showed both the promise and challenges of Amgen’s approach. IMDELLTRA, a bispecific T-cell engager for small cell lung cancer, received its first U.S. approval and grew quickly, with a Phase 3 trial showing a 40% drop in death risk versus standard chemotherapy. Meanwhile, older drugs faced headwinds. XGEVA, which prevents fractures in cancer patients, and Prolia both saw sales declines, with biosimilar-driven sales erosion expected in the second half of the year as biosimilars have now launched in the U.S. market, with further declines expected in the second half of 2025. BLINCYTO expanded use in early-stage disease and maintained strong growth in the first half of 2025.

Biosimilars, which are Amgen’s generic-like versions of complex biologic drugs, continued to grow, though pricing pressure intensified across the industry. Though new products like PAVBLU and WEZLANA are expanding Amgen’s share in this area, management warned that older biosimilars such as MVASI face ongoing declines as more competitors enter the market, driving prices—and in turn, sales—lower.

While the company increased its research investment to support late-stage development of assets like MariTide and bemarituzumab (an antibody for gastric cancer), cost of sales as a percentage of product sales increased 0.2 percentage points, driven by higher profit share expense and changes in sales mix. Capital expenditures (GAAP) were $0.369 billion as manufacturing expansion continued, particularly in new U.S. facilities in North Carolina and Ohio.

Management cited tax payment timing and higher capital expenditures as reasons for lower free cash flow. The company paid $1.3 billion in dividends and held debt at $56.2 billion as of June 30, 2025 (GAAP), having paid down $1.4 billion of debt.

The overall context for these moves is increased competition, pricing pressure—especially in the U.S.—and a greater need for differentiation through research and quick execution. The regulatory environment also remains top of mind, with new policies like the Inflation Reduction Act shaping drug pricing and reimbursement. Global market expansion supported results, with non-U.S. revenue helping balance trends in the domestic market.

Looking Ahead: Outlook and Investor Watchpoints

For FY2025, management reaffirmed its full-year total revenue (GAAP) target of $35.0–$36.0 billion. They guided EPS (earnings per share) to $10.97–$12.11 on a GAAP basis, and $20.20–$21.30 on a non-GAAP basis. Capital spending is expected to reach $2.3 billion. Plans for further share buybacks are capped at $500 million. Leadership highlighted continued focus on pipeline progress and execution; pricing, regulatory changes, and biosimilar competition remain areas that could affect results, particularly for established products.

The dividend per share was raised 6% to $2.38. Management did not indicate any major changes to dividend policy. Amgen continues to emphasize cash returns along with debt reduction, with no shares repurchased in the quarter.

Looking ahead, the main items for investors to watch are the pace of new drug approvals, further detail on late-stage pipeline data, and the impact of biosimilar competition on older franchises like Prolia, XGEVA, and Enbrel. Operating expenses, especially in R&D, will be key as pipeline investment ramps up. Management expects some erosion in sales of major legacy drugs due to biosimilar launches. Watch for updates on major pipeline milestones—such as new data and regulatory decisions for MariTide, UPLIZNA, and oncology programs—through late 2025 and beyond.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.