Key Takeaways
- Top- and bottom-line beat: Revenue $8.62B beat consensus by ~$40M; non-GAAP EPS $5.15 beat by ~$0.37 (+8%) on operating leverage and lower share count.
- Volume-driven growth: Volume +9% globally was the primary growth driver; net selling price was a 2% headwind reflecting IRA Part D price-setting and 340B mix.
- Guidance raised: FY26 revenue raised to $37.1-$38.5B (midpoint $37.8B, prior ~$37.2B); non-GAAP EPS raised to $21.70-$23.10 (midpoint $22.40).
- Repatha breakout: Repatha $876M (+34%) is now annualizing above $3.5B; volume +35% on cardiovascular guideline expansion and lower co-pay support.
- Biosimilars accelerating: Biosimilar portfolio $735M (+35%) led by PAVBLU $280M (Eylea biosimilar) - Amgen has emerged as the U.S. biosimilar share leader.
- LOE/IRA absorbed: Enbrel -37% to $320M and Prolia -34% to $727M reflect IRA Medicare price-setting (effective Jan 1, 2026) and Prolia biosimilar entry.
- Margin & cash flow: Non-GAAP operating margin 45.3% (within FY guide of 45-46%); free cash flow $1.5B vs $1.0B Q1’25; $12.0B cash, $57.3B debt.
- Risks flagged: Two unresolved overhangs: FDA proposed withdrawal of TAVNEOS (post-marketing liver injury reports) and IRS NOPA on 2016-18 Puerto Rico profit allocation - both potentially material if adverse.
Snapshot
| Metric | Actual | Consensus / Prior | Variance |
|---|---|---|---|
| Revenue | $8.62B | +6.0% YoY | Beat consensus of $8.58B by ~$40M |
| Non-GAAP EPS | $5.15 | +5.1% YoY | Beat $4.78 consensus by +7.7% |
| GAAP EPS | $3.34 | +4.4% YoY | Beat $3.07 consensus by +8.8% |
| Non-GAAP Operating Margin | 45.3% | +80bps YoY | Within FY26 guide of 45-46% |
| Free Cash Flow | $1.5B | +50% YoY | Vs $1.0B in Q1’25 |
| Operating Cash Flow | $2.2B | +~29% YoY | Vs $1.7B in Q1’25 |
| Repatha Sales | $876M | +34% YoY | Volume +35%, guideline-driven CV share gains |
| IMDELLTRA Sales | $258M | +219% YoY | First-in-class T-cell engager in SCLC |
| Biosimilar Portfolio | $735M | +35% YoY | Led by PAVBLU $280M (Eylea biosimilar) |
| Net Debt | $45.3B | -$1.5B vs YE’25 | ~2.5x net debt-to-EBITDA; sub-2.0x by YE 2027 |
| FY26 Revenue Guidance | $37.1-$38.5B | +$0.5B midpoint | Raised from prior ~$36.7-$38.0B |
| FY26 Non-GAAP EPS Guidance | $21.70-$23.10 | +$0.65 midpoint | Raised from prior $20.95-$22.45 |
Detail
Q1 2026 was the first quarterly print under the full IRA Medicare price-setting regime and the first to fully reflect Prolia biosimilar competition. The franchise still delivered 6% topline growth, +5% non-GAAP EPS growth, +80bps margin expansion, and 50% free cash flow growth. Total revenue of $8.62B grew 6% YoY, with product sales growing 4% on volume of +9% partially offset by 2% lower net selling price and another 2% from inventory normalization. Non-GAAP operating income of $3.7B (45.3% non-GAAP operating margin) expanded by roughly 90bps YoY despite a 16% increase in R&D spend ($1.7B) - the highest quarterly R&D outlay in Amgen’s history, concentrated on the MariTide MARITIME Phase 3 program. Management explicitly framed the quarter around six growth drivers - Repatha, Evenity, TEPEZZA, UPLIZNA, IMDELLTRA, and the biosimilar portfolio - that collectively grew 35-40% in aggregate and are now annualizing well above $13B. Biosimilars are emerging as a genuine third leg, with PAVBLU (Eylea biosimilar) already at $280M/quarter just six months from launch. MariTide remains the single largest swing factor, with management disclosing additional Phase 3 studies including a ‘switch’ protocol reinforcing the differentiation argument versus tirzepatide and semaglutide; Phase 3 MARITIME 1/2 read-throughs are expected in 2H 2026 / 1H 2027. We anchor our $385 12-month price target on a probability-weighted blend of (i) 17.0x our 2026E non-GAAP EPS of $22.65 - in line with the historical large-cap pharma band - and (ii) a five-year DCF with 8.0% WACC and 2.0% terminal growth yielding $397. AMGN remains our highest-conviction non-LLY large-cap pharma name with optionality in obesity (MariTide) and the most credible BiTE platform in oncology.
Risks
- MariTide Phase 3 disappointment: Phase 2 data showed competitive but not best-in-class weight loss versus tirzepatide. A Phase 3 readout that fails to differentiate on tolerability, durability, or dosing convenience would compress the multiple meaningfully and remove the largest single bull-case lever.
- FDA TAVNEOS withdrawal: The FDA’s proposed withdrawal following serious liver injury reports is unprecedented for a recently approved drug. Beyond the ~$300M revenue impact, an adverse outcome would damage the regulatory narrative around the rare-disease franchise.
- IRS NOPA on 2016-18 Puerto Rico profit allocation: Amgen has disclosed that if sustained in full, the assessment could be material to financial statements. Resolution path likely runs through Tax Court; final outcome may take 2-3 years.
- IRA negotiation expansion: Enbrel impact (-15% net price in Q1) is in numbers; the next rounds of CMS-negotiated drugs (selected in 2026 for 2028 effective) may include Otezla, Krystexxa, or other Horizon-acquired specialty assets.
- Prolia biosimilar erosion velocity: Q1 erosion of -34% was at the steeper end of Street models. If interchangeability designations and payer-mandated formulary substitution accelerate, the 2026 Prolia base could erode faster than the -40% to -45% we assume for the full year.
- Horizon-deal de-leverage trajectory: $45.3B net debt and 2.5x leverage means buybacks remain paused. A material slowdown in free cash flow generation - or a large unforeseen capital deployment - would push the leverage glide path beyond 2027 and risk credit-rating actions.
Catalysts (Next 90 Days)
- Q2 2026 earnings release (late July/early August 2026): focus on whether Repatha/Evenity/IMDELLTRA volume momentum is sustaining and whether the Prolia erosion stabilizes around the Q1 trajectory.
- MariTide MARITIME Phase 3 enrollment milestones and any interim safety/dosing disclosures at the ADA Scientific Sessions (June 2026) and ESC Congress (August/September 2026).
- TAVNEOS FDA decision update: the proposed-withdrawal process includes a hearing and final Commissioner decision; outcome within Q2/Q3 would resolve a key overhang.
- BLINCYTO subQ regulatory updates: the subcutaneous formulation BLA is under FDA review with a decision expected in 2H 2026; positive outcome would extend the BiTE franchise’s growth runway.
- Possible IRS NOPA procedural disclosure: Amgen has indicated it intends to vigorously contest the assessment - any update on protest filing or Tax Court timeline would help investors size the tail risk.