AMGEN INC

Previous wording

The following MD&A is intended to assist the reader in understanding Amgen’s business. MD&A is provided as a supplement to, and should be read in conjunction with, both the condensed consolidated financial statements and accompanying notes of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2024. Our results of operations discussed in MD&A are presented in conformity with GAAP. Amgen operates in one operating segment: human therapeutics. Therefore, our results of operations are discussed on a consolidated basis.

Current wording

The following MD&A is intended to assist the reader in understanding Amgen’s business. MD&A is provided as a supplement to, and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2024, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. Our results of operations discussed in MD&A are presented in conformity with GAAP. Amgen operates in one operating segment: human therapeutics. Therefore, our results of operations are discussed on a consolidated basis.

Previous wording

This report and other documents we file with the SEC contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about us, our future performance, our business, our beliefs and our management’s assumptions. In addition, we, or others on our behalf, may make forward-looking statements in press releases, written statements or our communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls and conference calls. Such words as “expect,” “anticipate,” “outlook,” “could,” “target,” “project,” “intend,” “plan,” “believe,” “seek,” “estimate,” “should,” “may,” “assume” and “continue” as well as variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance, and they involve certain risks, uncertainties and assumptions that are difficult to predict. We describe our respective risks, uncertainties and assumptions that could affect the outcome or results of operations in Item 1A. Risk Factors in Part II herein and in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024. We have based our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may differ materially from what is expressed, implied or forecasted by our forward-looking statements. Reference is made in particular to forward-looking statements regarding product sales, regulatory activities, clinical trial results, reimbursement, expenses, EPS, liquidity and capital resources, trends, planned dividends, stock repurchases, and collaborations. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions or otherwise.

Current wording

This report and other documents we file with the SEC contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about us, our future performance, our business, our beliefs and our management’s assumptions. In addition, we, or others on our behalf, may make forward-looking statements in press releases, written statements or our communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls and conference calls. Such words as “expect,” “anticipate,” “outlook,” “could,” “target,” “project,” “intend,” “plan,” “believe,” “seek,” “estimate,” “should,” “may,” “assume” and “continue” as well as variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance, and they involve certain risks, uncertainties and assumptions that are difficult to predict. We describe our respective risks, uncertainties and assumptions that could affect the outcome or results of operations in Item 1A. Risk Factors in Part II herein and in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024, and in Part II, Item 1A. Risk Factors of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. We have based our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may differ materially from what is expressed, implied or forecasted by our forward-looking statements. Reference is made in particular to forward-looking statements regarding product sales, regulatory activities, clinical trial results, reimbursement, expenses, EPS, liquidity and capital resources, trends, planned dividends, stock repurchases, and collaborations. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions or otherwise.

Previous wording

Our principal products are Prolia, Repatha, XGEVA, ENBREL, EVENITY, Otezla, TEPEZZA, BLINCYTO, Aranesp, KYPROLIS, Nplate, TEZSPIRE, Vectibix and KRYSTEXXA. We also market a number of other products, including but not limited to MVASI, WEZLANA/WEZENLA, AMJEVITA/AMGEVITA, Neulasta, PAVBLU, RAVICTI, UPLIZNA, TAVNEOS, Aimovig, Parsabiv, LUMAKRAS/LUMYKRAS, IMDELLTRA/IMDYLLTRA and PROCYSBI.

Current wording

Our principal products are Prolia, Repatha, ENBREL, XGEVA, Otezla, EVENITY, TEPEZZA, BLINCYTO, KYPROLIS, Aranesp, Nplate, TEZSPIRE, KRYSTEXXA and Vectibix. We also market a number of other products, including but not limited to MVASI, AMJEVITA/AMGEVITA, UPLIZNA, PAVBLU, IMDELLTRA/IMDYLLTRA, Neulasta, TAVNEOS, RAVICTI, WEZLANA/WEZENLA, Parsabiv, LUMAKRAS/LUMYKRAS, Aimovig and PROCYSBI.

Previous wording

The imposition of tariffs and trade protection measures by the United States and other countries, including the universal 10% tariff on goods imported into the United States, the currently-suspended country-specific tariffs, the China retaliatory tariffs on U.S. goods, the imposition of new and/or other retaliatory tariffs, and potential sector-specific tariffs on our industry and others, may adversely affect our business and operations. While existing tariffs have not had a material adverse effect on our results of operations for the first quarter of 2025, we are currently evaluating the potential impact of such tariffs on our business in future periods and our ability to mitigate such impacts. For example, the tariffs that are currently in effect, or anticipated to take effect in the future, will increase our manufacturing and operating expenses in future quarters, including the cost to deliver products to markets, cost of sourcing materials for the manufacturing of our products and cost of materials used in our research and development activities. Such tariffs may also adversely affect the cost to expand our manufacturing capacity in the United States, including increased construction costs and/or delays in construction for our Ohio and North Carolina facilities. Furthermore, retaliatory tariffs imposed by other countries may adversely affect our business, operations and delivery and launches of products in such markets, including the performance of our collaborations in such markets. However, the degree of adverse effects of any tariffs on our business and operations in future periods will depend on various factors, including the rates of such tariffs, the expansion of such tariffs to include certain goods such as pharmaceutical products, the magnitude of response by other countries to U.S. tariffs and the length of time such tariffs are in effect. For additional information, see Part II, Item 1A. Risk Factors—Global economic conditions may negatively affect us and may magnify certain risks that affect our business.

Current wording

The imposition of tariffs and trade protection measures by the United States and other countries, including the universal 10% tariff on goods imported into the United States, the currently-suspended country-specific tariffs, the recently announced preliminary tariff agreements, the China retaliatory tariffs on U.S. goods, the imposition of new and/or other retaliatory tariffs, and potential sector-specific tariffs on our industry, including the Section 232 pharmaceutical tariff, and others, may adversely affect our business and operations. While existing tariffs have not had a material adverse effect on our results of operations for the first half of 2025, we are currently evaluating the potential impact of such tariffs on our business in future periods and our ability to mitigate such impacts. For example, certain tariffs that are currently in effect, or anticipated to take effect in the future, have increased, and are expected to further increase, our manufacturing and operating expenses in future quarters, including the cost to deliver products to markets, cost of sourcing materials for the manufacturing of our products and cost of materials used in our R&D activities. Such tariffs have had a limited impact in the first half of 2025, but may increasingly affect the cost to expand our manufacturing capacity in the United States, including increased construction costs and/or delays in construction for our Ohio and North Carolina facilities. Furthermore, retaliatory tariffs imposed by other countries may adversely affect our business, operations and delivery and launches of products in such markets, including the performance of our collaborations in such markets. However, the degree of adverse effects from any tariffs on our business and operations in future periods will depend on various factors, including the rates of such tariffs, the expansion of such tariffs to include certain goods (such as pharmaceutical products), the magnitude of response by other countries to U.S. tariffs and the length of time such tariffs are in effect. For additional discussion of these and other risks, see Part II, Item 1A. Risk Factors, of this Quarterly Report on Form 10-Q.

Previous wording

Uncertain macroeconomic conditions, including the risk of inflation, fluctuating interest rates and instability in the financial system, as well as rising healthcare costs, continue to pose challenges to our business. Further, uncertainty around tariffs and trade protection measures in the United States and other countries, including the imposition of new or retaliatory tariffs, along with ongoing geopolitical conflicts, continue to create additional uncertainty in global macroeconomic conditions. Additionally, with public and private healthcare-provider focus, the industry continues to be subject to cost containment measures and significant pricing pressures, resulting in net price declines. Moreover, provisions of the IRA, as well as the 340B Program, have affected, and are likely to continue to affect, our business. For example, ENBREL and Otezla have been selected by CMS for Medicare price setting beginning in 2026 and 2027, respectively. Finally, wholesale and end-user buying patterns can affect our product sales. These buying patterns can cause fluctuations in quarterly product sales, but have generally not been significant to date when comparing full-year product performance to the prior year. See Part II, Item 1A. Risk Factors, of this Quarterly Report on Form 10-Q.

Current wording

Uncertain macroeconomic conditions, including the risk of inflation, fluctuating interest rates and instability in the financial system, as well as rising healthcare costs, continue to pose challenges to our business. Uncertainty around tariffs and trade protection measures in the United States and other countries, including the imposition of new or retaliatory tariffs, along with ongoing geopolitical conflicts and rising geopolitical tensions, continue to create additional uncertainty in global macroeconomic conditions. Additionally, with public and private healthcare-provider focus, the industry continues to be subject to cost containment measures and significant pricing pressures, resulting in net price declines.

Previous wording

The following is a summary of select significant developments affecting our business that occurred since the filing of our Annual Report on Form 10-K for the year ended December 31, 2024. For additional developments, see our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

The following is a summary of select significant developments affecting our business that occurred since the filing of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. For additional developments, see our Annual Report on Form 10-K for the year ended December 31, 2024 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025.

Previous wording

In April 2025, we announced that the global Phase 3 DeLLphi-304 clinical trial evaluating IMDELLTRA as a treatment for patients with small cell lung cancer (SCLC) who progressed on or after a single line of platinum-based chemotherapy met its primary endpoint at a planned interim analysis. IMDELLTRA demonstrated statistically significant and clinically meaningful improvement in overall survival (OS) compared to local standard-of-care (SOC) chemotherapy. The safety profile for IMDELLTRA was consistent with its known profile.

Current wording

In June 2025, Amgen announced interim results from the global Phase 3 DeLLphi-304 trial evaluating IMDELLTRA/IMDYLLTRA in patients with small cell lung cancer (SCLC) who had progressed on or after one line of platinum-based chemotherapy. The study demonstrated that IMDELLTRA/IMDYLLTRA significantly reduced the risk of death by 40% compared to standard-of-care chemotherapy, with a median overall survival of 13.6 months compared to 8.3 months.

Previous wording

Total product sales increased 11% for the three months ended March 31, 2025, primarily driven by volume growth of 14%, partially offset by declines in net selling price of 6%.

Current wording

Total product sales increased 9% and 10% for the three and six months ended June 30, 2025, respectively, driven by volume growth of 13% and 14%, respectively, partially offset by declines in net selling price of 3% and 4%, respectively.

Previous wording

For the three months ended March 31, 2025, U.S. volume grew 16% and ROW volume grew 11%, driven by volume growth in certain brands, including Repatha, WEZLANA/WEZENLA, Prolia, BLINCYTO, TEZSPIRE and EVENITY.

Current wording

For the six months ended June 30, 2025, U.S. volume grew 14% and ROW volume grew 13%, driven by volume growth in certain brands, including Repatha, BLINCYTO, PAVBLU, TEZSPIRE, EVENITY, IMDELLTRA/IMDYLLTRA, WEZLANA/WEZENLA and Prolia.

Previous wording

Uncertain macroeconomic conditions, including uncertainty around tariffs and trade production measures and ongoing geopolitical conflicts, and changes in the healthcare ecosystem have the potential to introduce variability into product sales. Furthermore, product sales continue to be impacted by actions from governments and other entities to curb high inflation, provisions of the IRA, inappropriate expanded utilization of the 340B Program and growth in numbers of Medicaid enrollees and uninsured individuals. See Part I, Item 1. Business—Reimbursement, and Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024; and Part II, Item 1A. Risk Factors, of this Quarterly Report on Form 10-Q.

Current wording

Uncertain macroeconomic conditions, including uncertainty around tariffs and trade production measures, ongoing geopolitical conflicts and rising geopolitical tensions, and changes in the healthcare ecosystem have the potential to introduce variability into product sales. Furthermore, product sales continue to be impacted by actions from governments and other entities to address macroeconomic challenges, provisions of the IRA, inappropriate expanded utilization of the 340B Program and growth in numbers of Medicaid enrollees and uninsured individuals. See Part I, Item 1. Business—Reimbursement, and Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024; and Part II, Item 1A. Risk Factors, of our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025 and June 30, 2025.

Previous wording

Operating expenses increased for the three months ended March 31, 2025, driven by the Otezla intangible asset impairment charge, partially offset by lower amortization expense from the fair value step-up of inventory acquired from Horizon. See Note 8, Goodwill and other intangible assets, to the condensed consolidated financial statements, for additional information related to the Otezla intangible asset impairment charge.

Current wording

Operating expenses increased 1% for the three months ended June 30, 2025. Operating expenses increased 4% for the six months ended June 30, 2025, driven by the Otezla intangible asset impairment charge and higher R&D expense, partially offset by lower amortization expense from the fair value step-up of inventory acquired from Horizon. See Note 8, Goodwill and other intangible assets, to the condensed consolidated financial statements, for additional information related to the Otezla intangible asset impairment charge.

Previous wording

Future sales of our products will depend in part on the factors discussed below and in the following sections of this report: (i) Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview, and Selected financial information; and (ii) Part II, Item 1A. Risk Factors, and in the following sections of our Annual Report on Form 10-K for the year ended December 31, 2024: (i) Part I, Item 1. Business—Marketing, Distribution and Selected Marketed Products; (ii) Part I, Item 1. Business—Reimbursement; (iii) Part I, Item 1A. Risk Factors; and (iv) Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview, and Results of operations—Product sales.

Current wording

Future sales of our products will depend in part on the factors discussed below and in the following sections of this report: (i) Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview, and Selected financial information; and (ii) Part II, Item 1A. Risk Factors, and in the following sections of our Annual Report on Form 10-K for the year ended December 31, 2024: (i) Part I, Item 1. Business—Marketing, Distribution and Selected Marketed Products; (ii) Part I, Item 1A. Risk Factors; and (iii) Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview, and Results of operations—Product sales, as well as in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025: (i) Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of operations—Product sales; and (ii) Part II, Item 1A. Risk Factors.

Previous wording

The increase in global Prolia sales for the three months ended March 31, 2025 was primarily driven by volume growth of 13%, partially offset by lower net selling price of 5%.

Current wording

The increase in global Prolia sales for the six months ended June 30, 2025 was driven by volume growth of 7%, partially offset by lower net selling price.

Previous wording

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, Part I, Item 1. Business—Marketing, Distribution and Selected Marketed Products—Patents, our patents for RANKL antibodies, including sequences, for Prolia and XGEVA expired in February 2025 in the United States and will expire in November 2025 in select countries in Europe. For 2025, we expect sales erosion driven by biosimilar competition, particularly in the second half of the year.

Current wording

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, Part I, Item 1. Business—Marketing, Distribution and Selected Marketed Products—Patents, our patents for RANKL antibodies, including sequences, for Prolia and XGEVA expired in February 2025 in the United States and will expire in November 2025 in select countries in Europe. For 2025, we expect sales erosion driven by biosimilar competition in the second half of the year, as biosimilars have now launched in the U.S. market.

Previous wording

For a discussion of litigation, including associated settlements, related to Prolia, see Part IV—Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024; and Note 13, Contingencies and commitments, to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q for the period ended March 31, 2025.

Current wording

For a discussion of litigation, including associated settlements, related to Prolia, see Part IV—Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024; and Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025 and June 30, 2025.

Previous wording

The increase in global Repatha sales for the three months ended March 31, 2025 was primarily driven by volume growth of 41%, partially offset by lower net selling price of 9%.

Current wording

The increase in global Repatha sales for the six months ended June 30, 2025 was primarily driven by volume growth of 38%, partially offset by lower net selling price of 3% and unfavorable changes to estimated sales deductions.

Previous wording

For a discussion of ongoing litigation related to Repatha, see Part IV—Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024; and Note 13, Contingencies and commitments, to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q for the period ended March 31, 2025.

Current wording

For a discussion of ongoing litigation related to Repatha, see Part IV—Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024; and Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025 and June 30, 2025.

Previous wording

The decrease in ENBREL sales for the three months ended March 31, 2025 was driven by lower net selling price of 47% resulting from increased 340B Program mix and higher commercial discounts, partially offset by favorable changes to estimated sales deductions of 19%, higher inventory and volume growth. The year-over-year impact on net selling price is expected to be less pronounced in future quarters.

Current wording

The decrease in ENBREL sales for the three months ended June 30, 2025 was driven by unfavorable changes to estimated sales deductions of 20% and lower net selling price of 19% resulting from increased 340B Program mix and the impact of the U.S. Medicare Part D redesign, partially offset by volume growth of 3%.

Previous wording

Global XGEVA sales for the three months ended March 31, 2025 increased 1%.

Current wording

The decrease in global XGEVA sales for the three months ended June 30, 2025 was driven by unfavorable changes to estimated sales deductions of 2% and lower volume.

Previous wording

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, Part I, Item 1. Business—Marketing, Distribution and Selected Marketed Products—Patents, our patents for RANKL antibodies, including sequences, for Prolia and XGEVA expired in February 2025 in the United States and will expire in November 2025 in select countries in Europe. For 2025, we expect sales erosion driven by biosimilar competition, particularly in the second half of the year.

Current wording

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, Part I, Item 1. Business—Marketing, Distribution and Selected Marketed Products—Patents, our patents for RANKL antibodies, including sequences, for Prolia and XGEVA expired in February 2025 in the United States and will expire in November 2025 in select countries in Europe. For 2025, we expect sales erosion driven by biosimilar competition in the second half of the year, as biosimilars have now launched in the U.S. market.

Previous wording

For a discussion of litigation, including associated settlements, related to XGEVA, see Part IV—Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024; and Note 13, Contingencies and commitments, to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q for the period ended March 31, 2025.

Current wording

For a discussion of litigation, including associated settlements, related to XGEVA, see Part IV—Note 20, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024; and Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025 and June 30, 2025.

Previous wording

In January 2025, Otezla was selected by CMS for Medicare price setting that will be applicable beginning in 2027. See Note 8, Goodwill and other intangible assets, to the condensed consolidated financial statements, for additional information related to the Otezla intangible asset impairment charge of $800 million.

Current wording

In January 2025, Otezla was selected by CMS for Medicare price setting that will be applicable beginning in 2027. See Note 8, Goodwill and other intangible assets, to the condensed consolidated financial statements, for additional information related to the Otezla intangible asset impairment charge of $800 million recorded in the first quarter of 2025.

Previous wording

The increase in global EVENITY sales for the three months ended March 31, 2025 was driven by volume growth.

Current wording

The increases in global EVENITY sales for the three and six months ended June 30, 2025 were primarily driven by volume growth.

Previous wording

The decrease in global TEPEZZA sales for the three months ended March 31, 2025 was primarily driven by lower volume of 9% and lower inventory of 8%, partially offset by higher net selling price.

Current wording

The decrease in global TEPEZZA sales for the six months ended June 30, 2025 was driven by lower volume of 5%, partially offset by higher net selling price.

Previous wording

The increase in global BLINCYTO sales for the three months ended March 31, 2025 was primarily driven by volume growth.

Current wording

The increases in global BLINCYTO sales for the three and six months ended June 30, 2025 were driven by volume growth.

Previous wording

The decrease in global KYPROLIS sales for the three months ended March 31, 2025 was driven by lower volume due to increased competition.

Current wording

The decrease in global KYPROLIS sales for the six months ended June 30, 2025 was driven by lower volume due to increased competition.

Previous wording

The increase in global Otezla sales for the three months ended March 31, 2025 was driven by favorable changes to estimated sales deductions of 12%, as volume growth of 4% was offset by lower net selling price of 5%.

Current wording

The increase in global Aranesp sales for the three months ended June 30, 2025 was driven by favorable changes to estimated sales deductions of 7%, partially offset by lower net selling price.

Previous wording

Global Nplate sales for the three months ended March 31, 2025 decreased 1% as volume growth was more than offset by unfavorable changes to both estimated sales deductions and foreign currency exchange rates.

Current wording

The increase in global Nplate sales for the three months ended June 30, 2025 was driven by volume growth.

Previous wording

The decrease in global Aranesp sales for the three months ended March 31, 2025 was driven by unfavorable changes to foreign currency exchange rates of 4% and unfavorable changes to estimated sales deductions of 3%, partially offset by volume growth outside the United States.

Current wording

The increase in global Nplate sales for the six months ended June 30, 2025 was primarily driven by volume growth of 9%, partially offset by unfavorable changes to estimated sales deductions of 3% and unfavorable changes to foreign currency exchange rates.

Previous wording

The increase in TEZSPIRE sales for the three months ended March 31, 2025 was driven by volume growth.

Current wording

The increases in TEZSPIRE sales for the three and six months ended June 30, 2025 were driven by volume growth.

Previous wording

The increase in global Vectibix sales for the three months ended March 31, 2025 was driven by volume growth.

Current wording

The increases in global Vectibix sales for the three and six months ended June 30, 2025 were driven by volume growth.

Previous wording

(1)Consists of product sales from AVSOLA, KANJINTI, RIABNI, EPOGEN, BEKEMV, ACTIMMUNE, NEUPOGEN, IMLYGIC, Corlanor, RAYOS, BUPHENYL, Sensipar/Mimpara, QUINSAIR, DUEXIS and PENNSAID.

Current wording

(2)Consists of product sales from AVSOLA, KANJINTI, EPOGEN, RIABNI, BKEMV/BEKEMV, ACTIMMUNE, NEUPOGEN, IMLYGIC, Corlanor, RAYOS, BUPHENYL, QUINSAIR, DUEXIS, Sensipar/Mimpara and PENNSAID.

Previous wording

Cost of sales decreased to 36.4% of total revenues for the three months ended March 31, 2025, driven by lower amortization expense from the fair value step-up of inventory acquired from Horizon and lower manufacturing costs, partially offset by changes in our sales mix.

Current wording

Cost of sales decreased to 32.8% and 34.5% of total revenues for the three and six months ended June 30, 2025, respectively, driven by lower amortization expense from the fair value step-up of inventory acquired from Horizon and lower manufacturing costs, partially offset by higher profit share expense and changes in our sales mix.

Previous wording

The increase in R&D expense for the three months ended March 31, 2025, was driven by higher spend in later-stage clinical programs, partially offset by lower spend in marketed product support and research and early pipeline. We expect to continue to grow our spend on later-stage clinical programs as we advance our pipeline.

Current wording

The increase in R&D expense for the six months ended June 30, 2025, was driven by investments in Later-Stage Clinical Programs, including those related to MariTide, partially offset by lower spend in Research and Early Pipeline and Marketed Product Support.

Previous wording

The decrease in SG&A expense for the three months ended March 31, 2025, was driven by lower commercial product-related expenses and lower Horizon acquisition-related expenses, partially offset by higher general and administrative expenses.

Current wording

The decrease in SG&A expense for the six months ended June 30, 2025, was primarily driven by lower commercial product-related expenses and lower Horizon acquisition-related expenses, partially offset by higher general and administrative expenses.

Previous wording

Other operating expenses for the three months ended March 31, 2025, consisted primarily of the Otezla intangible asset impairment charge of $800 million following its selection for price setting under the IRA. See Note 8, Goodwill and other intangible assets, to the condensed consolidated financial statements.

Current wording

Other operating expenses for the three months ended June 30, 2025, included litigation expenses. Other operating expenses for the six months ended June 30, 2025, included the Otezla intangible asset impairment charge of $800 million following its selection for price setting under the IRA. See Note 8, Goodwill and other intangible assets, to the condensed consolidated financial statements.

Previous wording

Other operating expenses for the three months ended March 31, 2024, consisted primarily of a net impairment charge associated with an IPR&D intangible asset and changes in the fair values of contingent consideration liabilities, both related to our Teneobio, Inc. acquisition from 2021.

Current wording

Other operating expenses for the three months ended June 30, 2024, included changes in the fair values of contingent consideration liabilities related to our Teneobio, Inc. (Teneobio) acquisition from 2021. Other operating expenses for the six months ended June 30, 2024, included a net impairment charge associated with an IPR&D asset and changes in the fair values of contingent consideration liabilities, both related to our Teneobio acquisition.

Previous wording

Interest expense, net, decreased for the three months ended March 31, 2025 primarily due to lower average debt outstanding.

Current wording

Interest expense, net, decreased for the three and six months ended June 30, 2025 primarily due to lower average debt outstanding.

Previous wording

The change in Other income (expense), net, for the three months ended March 31, 2025, was primarily due to net unrealized gains on equity investments, primarily BeiGene, compared to net unrealized losses on equity investments, primarily BeiGene, in the prior year period.

Current wording

The change in Other (expense) income, net, for the three months ended June 30, 2025, was primarily due to higher net unrealized losses on equity investments, primarily BeOne, partially offset by a gain on extinguishment of debt in the second quarter of 2025.

Previous wording

The increase in our effective tax rate for the three months ended March 31, 2025, was primarily due to the change in earnings mix as a result of net unrealized gains in the first quarter of 2025 compared to net unrealized losses in the first quarter of 2024 on equity investments (primarily BeiGene). See Note 6, Investments—BeiGene, Ltd., to the condensed consolidated financial statements.

Current wording

The change in Other (expense) income, net, for the six months ended June 30, 2025, was primarily due to net unrealized gains on our equity investments, primarily BeOne, in the first half of 2025 compared with net unrealized losses, primarily BeOne, in the first half of 2024. See Note 6, Investments, to the condensed consolidated financial statements.