Amgen (Nasdaq: AMGN) reported adjusted earnings per share (EPS) of $1.08 for the first quarter of 2009, a decrease of 4 percent compared to $1.12 for the first quarter of 2008. Adjusted net income decreased 8 percent to $1,120 million in the first quarter of 2009 compared to $1,218 million in the first quarter of 2008. Total revenue decreased 8 percent during the first quarter of 2009 to $3,308 million versus $3,613 million in the first quarter of 2008.
Adjusted EPS and adjusted net income for the first quarter of 2009 and 2008 exclude, for the applicable periods, stock option expense, certain expenses related to acquisitions, restructuring charges and certain other items. In addition, adjusted EPS and adjusted net income for the three months ended March 31, 2009 and 2008 exclude the incremental non-cash interest expense resulting from a change in accounting for convertible debt as discussed below. These expenses and other items are itemized on the attached reconciliation tables.
On a reported basis and calculated in accordance with United States (U.S.) Generally Accepted Accounting Principles (GAAP), Amgen's GAAP EPS were $0.98 in the first quarter of 2009, a 3 percent decrease compared to $1.01 in the same quarter last year. GAAP net income decreased 7 percent to $1,019 million in the first quarter of 2009 from $1,100 million in the first quarter of 2008. Effective Jan. 1, 2009, Amgen adopted Financial Accounting Standards Board's Staff Position No. APB 14-1, "Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)" ("FSP APB 14-1"), which changed the method of accounting for the Company's convertible notes. In addition, as required, the Company also revised its previously reported financial statements to apply this change in accounting to prior periods. Under this new accounting method, the Company's EPS and net income calculated in accordance with GAAP have been reduced as a result of recognizing incremental non-cash interest expense. In connection with adopting FSP APB 14-1, Amgen recorded $61 million and $57 million of additional non-cash interest expense in the three months ended March 31, 2009 and 2008, respectively. In addition, the Company's previously reported EPS and net income calculated in accordance with GAAP for the three months ended March 31, 2008 have been reduced by $0.03 per share and $36 million to $1.01 per share and $1,100 million, respectively, as a result of adopting this new accounting method.
"Our first quarter sales were affected by the continued deterioration of the global economy which has led to changes in patient and physician behavior," said Kevin Sharer, chairman and chief executive officer. "Our future prospects remain strong. We have made progress on our plans to commercialize denosumab for PMO. Also, we are looking forward to reviewing important data on pipeline products including denosumab in certain oncology indications and Vectibix in colorectal cancer," concluded Sharer.
About Amgen
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 and effective medicines from lab, to manufacturing plant, to patient. Amgen therapeutics have changed the practice of medicine, helping millions of people around the world in the fight against cancer, kidney disease, rheumatoid arthritis and other serious illnesses. With a deep and broad pipeline of potential new medicines, Amgen remains committed to advancing science to dramatically improve people's lives. To learn more about our pioneering science and our vital medicines, visit www.amgen.com.