Interferon gamma-1b

THOUSAND OAKS, Calif., Feb. 6, 2024 /PRNewswire/ -- Amgen (NASDAQ:AMGN) today announced financial results for the fourth quarter and full year 2023 versus comparable periods in 2022. "2023 was another year of performance and progress for our company," said Robert A. Bradway, chairman and chief executive officer. "Our marketed products are reaching many more patients around the world, and we anticipate more than a dozen significant pipeline milestones in 2024." Key results include: For the fourth quarter, total revenues increased 20% to $8.2 billion in comparison to the fourth quarter of 2022. Product sales grew 20%, driven by 23% volume growth, partially offset by 3% lower net selling price. Nine brands(1) achieved record sales in the quarter, and Repatha® (evolocumab), EVENITY® (romosozumab-aqqg), Prolia® (denosumab) and BLINCYTO® (blinatumomab) delivered double-digit volume growth globally. U.S. volume grew 26% and ex-U.S. volume grew 15%, including 46% volume growth in the Asia Pacific region. Our performance included $954 million of sales for the period of Oct. 6 - Dec. 31 from our recent Horizon Therapeutics (Horizon) acquisition, driven by several first-in-class, early-in-lifecycle medicines such as TEPEZZA® (teprotumumab-trbw), KRYSTEXXA® (pegloticase) and UPLIZNA® (inebilizumab-cdon). Excluding the impact of these sales from Horizon, our product sales grew 5%, driven by volume growth of 9%. For the full year, total revenues increased 7% to $28.2 billion, resulting from a 9% increase in product sales. Product sales growth was driven by 15% volume growth, partially offset by 3% lower net selling price, 1% unfavorable changes from estimated sales deductions and 1% negative impact from foreign exchange. GAAP earnings per share (EPS) decreased 53% from $3.00 to $1.42 in the fourth quarter, driven by acquisition-related expenses and incremental operating expenses from Horizon, partially offset by increased revenues. For the full year, GAAP EPS increased 3% from $12.11 to $12.49 driven by net gains on our BeiGene, Ltd equity investment in 2023 and higher revenues, partially offset by higher operating expenses, including acquisition-related expenses and incremental expenses from Horizon. For the fourth quarter, GAAP operating income decreased from $2.2 billion to $1.3 billion, and GAAP operating margin decreased 17.8 percentage points to 16.2%. For the full year, GAAP operating income decreased from $9.6 billion to $7.9 billion, and GAAP operating margin decreased 9.3 percentage points to 29.3%. Non-GAAP EPS increased 15% from $4.09 to $4.71 in the fourth quarter and increased 5% from $17.69 to $18.65 for the full year, driven by increased revenues, partially offset by higher operating expenses, including incremental expenses from Horizon. Fourth quarter non-GAAP EPS was also unfavorably impacted by higher interest expense. For the fourth quarter, non-GAAP operating income increased from $3.0 billion to $3.7 billion, and non-GAAP operating margin increased 0.8 percentage points to 46.7%. For the full year, non-GAAP operating income increased from $12.8 billion to $13.4 billion, and non-GAAP operating margin decreased 1.7 percentage points to 49.8%. The Company generated $7.4 billion of free cash flow for the full year versus $8.8 billion in 2022. The decrease in 2023 was primarily driven by transaction expenses related to the Horizon acquisition and higher repatriation tax payments. (1) Includes product sales for the full fourth quarter of 2023 from UPLIZNA and KRYSTEXXA in connection with Horizon acquisition. References in this release to "non-GAAP" measures, measures presented "on a non-GAAP basis," "free cash flow" (computed by subtracting capital expenditures from operating cash flow), "EBITDA, or earnings before interest, taxes, depreciation and amortization" (computed by adding interest expense, provision for income taxes, and depreciation and amortization expense to GAAP net income) and "debt leverage ratio" (calculated as the ratio of GAAP total debt to EBITDA) refer to non-GAAP financial measures. Adjustments to the most directly comparable GAAP financial measures and other items are presented on the attached reconciliations. Refer to Non-GAAP Financial Measures below for further discussion. Product Sales Performance Total product sales increased 20% for the fourth quarter of 2023 versus the fourth quarter of 2022. Volume grew 23%, partially offset by 3% lower net selling price. Full year product sales increased 9% versus 2022, driven by 15% volume growth, partially offset by 3% lower net selling price, 1% unfavorable changes from estimated sales deductions and 1% negative impact from foreign exchange. General Medicine Repatha® sales increased 25% year-over-year for the fourth quarter, driven by 35% volume growth, partially offset by lower net selling price. Full year sales increased 26%, driven by 37% volume growth, partially offset by lower net selling price. Repatha remains the global proprotein convertase subtilisin/kexin type 9 (PCSK9) segment leader, with over 2.5 million patients treated since launch. Prolia® sales increased 12% year-over-year, to a record $1.1 billion for the fourth quarter, and 12% for the full year, primarily driven by volume growth and higher net selling price. Volume grew 10% for the quarter and 9% for the full year. In 2023, over 7.5 million patients were treated with Prolia. EVENITY® sales increased 41% year-over-year to a record $318 million for the fourth quarter and 47% for the full year, driven by strong volume growth. U.S. volume grew 44% year-over-year and volume outside the U.S. grew 55% for the full year. Aimovig® (erenumab-aooe) sales decreased 32% year-over-year for the fourth quarter and 22% for the full year, driven by lower net selling price. Oncology BLINCYTO® sales increased 47% year-over-year to a record $241 million for the fourth quarter and 48% for the full year, driven by 55% and 49% volume growth, respectively. Volume growth was supported by broad prescribing across academic and community settings for patients with B-cell precursor acute lymphoblastic leukemia. Vectibix® (panitumumab) sales increased 5% year-over-year for the fourth quarter and 10% for the full year, driven by 5% and 10% volume growth, respectively. KYPROLIS® (carfilzomib) sales increased 8% year-over-year for the fourth quarter and 13% for the full year, driven by 8% and 12% volume growth, respectively. LUMAKRAS®/LUMYKRAS™ (sotorasib) sales increased 8% year-over-year for the fourth quarter, driven by 5% volume growth and higher net selling price. Full year sales decreased 2%, driven by unfavorable changes to estimated sales deductions, including changes related to ongoing reimbursement negotiations in France. Full year sales were also impacted by lower net selling price and lower inventory levels, partially offset by 16% volume growth. XGEVA® (denosumab) sales increased 9% year-over-year for the fourth quarter and 5% for the full year, primarily driven by higher net selling price. Nplate® (romiplostim) sales decreased 18% year-over-year for the fourth quarter, driven by volume decline related to timing of orders placed by the U.S. government, partially offset by volume growth across our U.S. and ex-U.S. regions. U.S. government orders were $207 million in Q4'22 compared to $62 million in Q4'23. Full year sales increased 13%, primarily driven by volume growth, including U.S. government orders. U.S. government orders were $207 million for FY'22 compared to $286 million for FY'23. Excluding these U.S. government orders, Nplate sales grew 23% year-over-year for the fourth quarter and 8% for the full year. MVASI® (bevacizumab-awwb) sales decreased 8% year-over-year for the fourth quarter, primarily driven by lower net selling price, partially offset by 12% volume growth. Full year sales decreased 11%, primarily driven by lower net selling price, partially offset by 13% volume growth. Going forward, we expect continued net selling price erosion driven by increased competition. KANJINTI® (trastuzumab-anns) sales decreased 33% year-over-year for the fourth quarter and 50% for the full year, driven by lower net selling price and volume decline. Inflammation TEZSPIRE® (tezepelumab-ekko) generated $177 million of sales in the fourth quarter. Quarter-over-quarter sales increased 10%, driven by 18% volume growth that benefited from the pre-filled, single-use pen, which was approved for self-administration by the U.S. Food and Drug Administration (FDA) in the first quarter. Healthcare providers recognize TEZSPIRE's unique, differentiated profile and its broad potential to treat the 2.5 million patients worldwide with severe asthma who are uncontrolled, without any phenotypic or biomarker limitation. Otezla® (apremilast) sales increased 2% year-over-year for the fourth quarter, driven by favorable changes to estimated sales deductions and 3% volume growth, partially offset by lower inventory levels and lower net selling price. Full year sales decreased 4%, driven by lower net selling price and lower inventory levels, partially offset by 2% volume growth. We expect future growth for Otezla to be driven by its established efficacy and safety profile, strong payer coverage with limited prior authorization requirements and ease of administration. Otezla remains the only approved oral systemic therapy with a broad indication and is well-positioned to help the 1.5 million U.S. patients with mild-to-moderate psoriasis who cannot be optimally addressed by a topical and can benefit from a systemic treatment like Otezla. Enbrel® (etanercept) sales decreased 8% year-over-year for the fourth quarter, driven by a 4% impact from unfavorable changes to estimated sales deductions and lower net selling price. Full year sales decreased 10%, driven by lower net selling price, lower inventory levels and a 3% impact from unfavorable changes to estimated sales deductions. Year-over-year volume remained flat, with U.S. volume growing 1% in the fourth quarter, supported by an increase in new patients starting treatment as a result of improved payer coverage. Going forward, we expect net selling price to continue to decline year-over-year, driven by higher rebates to maintain broad first-line payer coverage and changes in patient mix. We expect Otezla and Enbrel to follow the historical pattern of lower sales in the first quarter relative to subsequent quarters due to the impact of benefit plan changes, insurance reverification and increased co-pay expenses as U.S. patients work through deductibles. AMJEVITA®/AMGEVITA™ (adalimumab) sales increased 34% year-over-year for the fourth quarter and 36% for the full year, primarily driven by 35% and 46% volume growth, respectively. Ex-U.S. sales increased 9% for the full year, driven by 20% volume growth, partially offset by lower net selling price. U.S. sales increased 43% quarter-over-quarter, driven by higher inventory levels and higher net selling price, partially offset by volume decline. Rare Disease Excluding TAVNEOS®, the products listed below were acquired from our Horizon transaction on Oct. 6, 2023. Sales figures reflect only sales in the period from Oct. 6 2023 through the end of the year, and not the full quarter. TEPEZZA® (teprotumumab-trbw) generated $448 million of sales for the period. TEPEZZA is the first and only FDA-approved treatment for thyroid eye disease (TED). KRYSTEXXA® (pegloticase) generated $272 million of sales for the period. KRYSTEXXA is the first and only FDA-approved treatment for chronic refractory gout. UPLIZNA® (inebilizumab-cdon) generated $65 million of sales for the period. UPLIZNA is used to treat adults with neuromyelitis optica spectrum disorders (NMOSD). TAVNEOS® (avacopan) generated $44 million of sales in the fourth quarter. Quarter-over-quarter sales increased 19%, primarily driven by volume growth. U.S. volume grew 23% quarter-over-quarter. In the U.S., approximately 2,700 patients have now been treated with TAVNEOS. Ultra rare products, which consist of RAVICTI® (glycerol phenylbutyrate), PROCYSBI® (cysteamine bitartrate), ACTIMMUNE® (interferon gamma-1b), BUPHENYL® (sodium phenylbutyrate) and QUINSAIR® (levofloxacin) generated $164 million of sales for the period. Established Products Total sales of our established products, which consist of EPOGEN® (epoetin alfa), Aranesp® (darbepoetin alfa), Parsabiv® (etelcalcetide) and Neulasta® (pegfilgrastim), decreased 10% year-over-year for the fourth quarter, primarily driven by lower net selling price and volume declines, partially offset by favorable changes to estimated sales deductions. Full year sales decreased 19%, driven by lower net selling price and volume declines. In the aggregate, we expect the year-over-year net selling price and volume declines for this portfolio of products to continue. Product Sales Detail by Product and Geographic Region Operating Expense, Operating Margin and Tax Rate Analysis On a GAAP basis: Total Operating Expenses increased 50% year-over-year for the fourth quarter. For the full year, Total Operating Expenses increased 21%. Cost of Sales as a percentage of product sales increased 13.0 percentage points in the fourth quarter primarily driven by higher amortization expense from acquisition-related assets as well as higher profit share and royalties, partially offset by Puerto Rico excise tax, changes in product mix, and lower manufacturing cost. For the full year, cost of sales as a percentage of product sales increased 5.6 percentage points primarily driven by higher amortization expense from acquisition-related assets, higher profit share and royalties, and changes in product mix, partially offset by Puerto Rico excise tax. Research & Development (R&D) expenses increased 16% in the fourth quarter and increased 8% for the full year driven by higher spend in later-stage clinical programs and marketed products support, including spend from programs acquired from the Horizon acquisition. Selling, General & Administrative (SG&A) expenses increased 45% in the fourth quarter and increased 14% for the full year primarily driven by higher acquisition-related costs, in addition to commercial and general administrative expenses related to the Horizon acquisition. For the full year, this was partially offset by a decline in other marketed product spend. Other operating expenses for the full year consisted of net impairment charges for AMG 340 and Teneobio IPR&D assets in addition to expenses related to our restructuring plan initiated in the first quarter of 2023. Operating Margin as a percentage of product sales decreased 17.8 percentage points to 16.2% in the fourth quarter and decreased 9.3 percentage points for the full year to 29.3%. Tax Rate increased 2.4 percentage points in the fourth quarter and increased 3.7 percentage points for the full year, primarily driven by the 2022 Puerto Rico tax law change that replaced the excise tax with an income tax beginning in 2023. For the fourth quarter this was partially offset by the change in earnings mix. On a non-GAAP basis: Total Operating Expenses increased 18% for the fourth quarter and increased 9% for the full year. Cost of Sales as a percentage of product sales remained flat in the fourth quarter primarily driven by higher profit share and royalties, offset by Puerto Rico excise tax, changes in product mix, and lower manufacturing cost. For the full year, cost of sales as a percentage of product sales increased 1.1 percentage points primarily driven by higher profit share and royalties and changes in product mix, partially offset by Puerto Rico excise tax. R&D expenses increased 16% in the fourth quarter and increased 8% for the full year driven by higher spend in later-stage clinical programs and marketed products support, including spend from programs acquired from the Horizon acquisition. SG&A expenses increased 20% in the fourth quarter and increased 5% for the full year primarily driven by higher commercial and general administrative expenses related to the Horizon acquisition. For the full year, this was partially offset by a decline in other marketed product spend. Operating Margin as a percentage of product sales increased 0.8 pts. percentage points to 46.7% in the fourth quarter and decreased 1.7 percentage points for the full year to 49.8%. Tax Rate increased 2.5 percentage points in the fourth quarter and increased 2.7 percentage points for the full year primarily due to the 2022 Puerto Rico tax law change that replaced the excise tax with an income tax beginning in 2023. Cash Flow and Balance Sheet The Company generated $0.3 billion of free cash flow in the fourth quarter of 2023 versus $2.3 billion in the fourth quarter of 2022, primarily driven by timing of federal and repatriation tax payments. The Company generated $7.4 billion of free cash flow for the full year 2023 versus $8.8 billion in 2022. The Company's fourth quarter 2023 dividend of $2.13 per share was declared on October 24, 2023, and was paid on December 8, 2023, to all stockholders of record as of November 17, 2023, representing a 10% increase from 2022. During the fourth quarter, there were no repurchases of shares of common stock. Cash and investments totaled $10.9 billion and debt outstanding totaled $64.6 billion as of December 31, 2023. Debt leverage was approximately 4.4 times EBITDA as of December 31, 2023. 2024 Guidance For the full year 2024, the Company expects: Total revenues in the range of $32.4 billion to $33.8 billion. On a GAAP basis, EPS in the range of $8.42 to $9.87, and a tax rate in the range of 11.5% to 13.0%. On a non-GAAP basis, EPS in the range of $18.90 to $20.30, and a tax rate in the range of 16.0% to 17.0%. Capital expenditures to be approximately $1.1 billion. Share repurchases not to exceed $500 million. Fourth Quarter Product and Pipeline Update The Company provided the following updates on selected product and pipeline programs: General Medicine Maridebart cafraglutide (AMG 133) A Phase 2 study of maridebart cafraglutide, a multispecific molecule that inhibits the gastric inhibitory polypeptide receptor (GIPR) and activates the glucagon like peptide 1 (GLP-1) receptor, in overweight or obese adults with or without type 2 diabetes mellitus has completed enrollment, with topline data anticipated in late 2024. The Company recently added a Part 2 to this study which explores durable weight loss beyond 52 weeks. Planning for a comprehensive Phase 3 program across multiple indications remains on track. In February 2024, results of preclinical studies and the Phase 1 study of maridebart cafraglutide were published in Nature Metabolism. AMG 786 A Phase 1 study of AMG 786, a small molecule obesity program, is ongoing with initial data readout anticipated in H1 2024. This molecule has a different target than maridebart cafraglutide and is not an incretin-based therapy. Olpasiran (AMG 890) A Phase 3 cardiovascular outcomes study of olpasiran, a potentially best-in-class small interfering ribonucleic acid (siRNA) molecule that reduces lipoprotein(a) (Lp(a)) synthesis in the liver, in patients with atherosclerotic cardiovascular disease and elevated Lp(a) continues to enroll patients. To date, over 7,000 patients have been enrolled, with enrollment completion anticipated in H1 2024. Repatha EVOLVE-MI, a Phase 4 study of Repatha administered within 10 days of an acute myocardial infarction to reduce the risk of cardiovascular events, continues to enroll patients. A Phase 3 cardiovascular outcomes study (VESALIUS-CV) in patients at high cardiovascular risk without prior myocardial infarction or stroke is ongoing. Oncology Tarlatamab (AMG 757) The U.S. Food and Drug Administration (FDA) has granted Priority Review for the Company's Biologics License Application (BLA) for tarlatamab, a first-in-class investigational delta-like ligand 3 (DLL3) targeting BiTE® (bispecific T-cell engager) molecule. The BLA is based on the results from the Phase 2 DeLLphi-301 clinical trial, which demonstrated antitumor activity with a durable response and encouraging survival outcomes in previously treated small cell lung cancer (SCLC). The safety profile was consistent with the Phase 1 trial. Based on the Priority Review designation, the Prescription Drug User Fee Act (PDUFA) date for tarlatamab is June 12, 2024. DeLLphi-304, a Phase 3 study comparing tarlatamab with standard of care chemotherapy in second-line SCLC, continues to enroll patients. DeLLphi-306, a Phase 3 study comparing tarlatamab with placebo in limited-stage SCLC, was initiated. DeLLphi-305, a Phase 3 study comparing tarlatamab and durvalumab with durvalumab alone in first-line, extensive-stage SCLC, will be initiated in H1 2024. DeLLphi-300, a Phase 1 study of tarlatamab in relapsed/refractory SCLC, continues to enroll patients. DeLLphi-302, a Phase 1b study of tarlatamab in combination with AMG 404, an anti-programmed cell death protein 1 (PD1) monoclonal antibody, in second-line or later SCLC, is ongoing.   DeLLphi-303, a Phase 1b study of tarlatamab in combination with standard of care in first-line SCLC, continues to enroll patients. DeLLpro-300, a Phase 1b study of tarlatamab in de novo or treatment-emergent neuroendocrine prostate cancer, is ongoing. BLINCYTO The FDA granted Priority Review for the Company's supplemental BLA for BLINCYTO in early-stage, CD19-positive B-cell precursor acute lymphoblastic leukemia (B-ALL) based in part on the Phase 3 E1910 study conducted by the National Cancer Institute, the Eastern Cooperative Oncology Group and the American College of Radiology Imaging Network Cancer Research Group. Based on the Priority Review designation, the PDUFA date for BLINCYTO is June 21, 2024. Additional global regulatory authority submissions are underway. Golden Gate, a Phase 3 study of BLINCYTO alternating with low-intensity chemotherapy in older adults with newly diagnosed Philadelphia chromosome-negative (Ph-) B-ALL, continues to enroll patients. The Company is planning to amend the Golden Gate Phase 3 study to include an evaluation of blinatumomab subcutaneous administration with initiation anticipated in H2 2024. A Phase 1/2 study of subcutaneous blinatumomab in adults with relapsed or refractory Ph- B-ALL continues to enroll patients. Xaluritamig (AMG 509) A Phase 1b monotherapy and combination dose-escalation and -expansion study of xaluritamig, a first-in-class bispecific T-cell engager targeting six-transmembrane epithelial antigen of prostate 1 (STEAP1) in metastatic castrate resistant prostate cancer continues to enroll patients in the dose-expansion portion of the study, where enrollment is almost complete. A reduced monitoring cohort was also initiated. Two additional Phase 1 studies of xaluritamig to evaluate preliminary efficacy and safety in patients with early prostate cancer are planned. AMG 193 The Phase 1/1b/2 study of AMG 193, a first-in-class small molecule methylthioadenosine (MTA)-cooperative protein arginine methyltransferase 5 (PRMT5) inhibitor, continues to enroll patients with advanced methylthioadenosine phosphorylase (MTAP)-null solid tumors. To date, responses have been seen in nine patients across seven tumor types. Master protocols in thoracic and gastrointestinal malignancies exploring combinations with standard of care will be initiated in H1 2024. A Phase 1/2 study of AMG 193 in combination with IDE397, an investigational methionine adenosyltransferase 2A (MAT2A) inhibitor, is enrolling patients. Nplate A Phase 3 study of Nplate in chemotherapy-induced thrombocytopenia in gastrointestinal, pancreatic, or colorectal malignancies is fully enrolled. Data readout is anticipated in H2 2024. LUMAKRAS/LUMYKRAS A U.S. regulatory submission is planned for the Phase 3 CodeBreaK 300 trial in H1 2024. This study evaluated two doses of LUMAKRAS (960 mg or 240 mg) in combination with Vectibix in patients with chemorefractory KRAS G12C-mutated metastatic colorectal cancer (CRC). A Phase 3 study of LUMAKRAS in combination with Vectibix and FOLFIRI in first-line KRAS G12C-mutated CRC was initiated. A Phase 3 study of LUMAKRAS plus chemotherapy vs. pembrolizumab plus chemotherapy in first-line KRAS G12C-mutated and programmed cell death protein ligand-1 (PD-L1) negative advanced non-small cell lung cancer (NSCLC) is enrolling patients. Regulatory review by the European Medicines Agency (EMA) of the CodeBreaK 200 Phase 3 trial of adults with previously treated locally advanced or metastatic KRAS G12C-mutated NSCLC along with data from the Phase 2 dose-comparison substudy is ongoing. The FDA completed its review of the Company's supplemental New Drug Application seeking full approval of LUMAKRAS based on the CodeBreaK 200 trial results. The FDA issued a new postmarketing requirement for an additional confirmatory study to support full approval to be completed no later than February 2028, while also concluding that LUMAKRAS at 960 mg once-daily will remain the dose for patients with KRAS G12C-mutated NSCLC under accelerated approval. Bemarituzumab FORTITUDE-101, a Phase 3 study of bemarituzumab, a first-in-class fibroblast growth factor receptor 2b (FGFR2b) targeting monoclonal antibody, plus chemotherapy in first-line gastric cancer, continues to enroll patients. FORTITUDE-102, a Phase 1b/3 study of bemarituzumab plus chemotherapy and nivolumab in first-line gastric cancer, continues to enroll patients in the Phase 3 portion of the study. FORTITUDE-103, a Phase 1b/2 study of bemarituzumab plus oral chemotherapy regimens with or without nivolumab in first-line gastric cancer, continues to enroll patients. FORTITUDE-301, a Phase 1b/2 basket study of bemarituzumab monotherapy in solid tumors with FGFR2b overexpression, is ongoing. Inflammation TEZSPIRE In severe asthma, the WAYFINDER Phase 3b study is fully enrolled. The PASSAGE Phase 4 real-world effectiveness study and the SUNRISE Phase 3 study continue to enroll patients. A Phase 3 study of TEZSPIRE in chronic rhinosinusitis with nasal polyps is fully enrolled. Primary analysis is anticipated in H2 2024. A Phase 3 study of TEZSPIRE in eosinophilic esophagitis continues to enroll patients. A Phase 2 study of TEZSPIRE in chronic obstructive pulmonary disease is fully enrolled. Data readout is anticipated in H1 2024. Rocatinlimab (AMG 451/KHK4083) The ROCKET Phase 3 program, now composed of eight studies evaluating rocatinlimab, a first in class monoclonal antibody targeting OX40, in moderate to severe atopic dermatitis, continues to enroll adult and adolescent patients. To date, over 2,400 patients have been enrolled in the ROCKET program. The Phase 3 HORIZON study (part of the ROCKET program) evaluating rocatinlimab monotherapy vs. placebo in adults with moderate to severe atopic dermatitis is fully enrolled. Data readout is anticipated in H2 2024. A Phase 2 study of rocatinlimab in asthma will be initiated in H1 2024 and a Phase 3 study of rocatinlimab in prurigo nodularis will be initiated in H2 2024. Otezla In November 2023, data were presented from the MOSAIC and FOREMOST studies: In the MOSAIC Phase 4 study, primary and key secondary outcomes highlighted that Otezla led to better inflammatory disease control in psoriatic arthritis patients with moderate clinical disease activity than in patients with high disease activity. In the FOREMOST Phase 4 study, Otezla when added to standard of care, significantly improved disease activity in patients with early oligoarticular (few joints involved) psoriatic arthritis at 16 weeks compared to placebo. Efavaleukin alfa (AMG 592) A Phase 2b study of efavaleukin alfa, an interleukin 2 (IL 2) mutein Fc fusion protein, in ulcerative colitis continues to enroll patients. Ordesekimab (AMG 714/PRV-015) A Phase 2b study of AMG 714, a monoclonal antibody that binds interleukin-15, in nonresponsive celiac disease has completed enrollment. Rare Disease TAVNEOS In November 2023, data were presented from the Phase 3 ADVOCATE trial demonstrating that outcomes in patients with anti-neutrophil cytoplasmic antibody (ANCA)-associated vasculitis favored TAVNEOS versus a prednisone taper across subgroups of patients 65 years and older, patients with kidney involvement and albuminuria, and patients with diffuse alveolar hemorrhage at baseline. TEPEZZA In December 2023, TEPEZZA received orphan drug designation in Japan for patients with moderate to severe active thyroid eye disease (TED). A New Drug Application was submitted for TEPEZZA in Japan based on the results from the OPTIC-J study evaluating TEPEZZA in patients with active TED. A Phase 3 study of TEPEZZA in Japan for chronic or low clinical activity score (CAS) TED continues to enroll patients. The Company plans to initiate a Phase 3 study evaluating the subcutaneous route of administration of TEPEZZA in patients with TED in H1 2024. UPLIZNA A Phase 3 study of UPLIZNA in myasthenia gravis is fully enrolled. Data readout is anticipated in H2 2024. A Phase 3 study of UPLIZNA for the prevention of flare in immunoglobulin G4- (IgG4) related disease is fully enrolled. Data readout is anticipated in H2 2024. Dazodalibep A Phase 3 study of dazodalibep, a cluster of differentiation 40 (CD40) ligand inhibitor fusion protein in Sjögren's syndrome is enrolling patients. Daxdilimab A Phase 2 study of daxdilimab, a fully human monoclonal antibody targeting immunoglobulin-like transcript 7 (ILT7), in moderate-to-severe active primary discoid lupus erythematosus refractory to standard of care is enrolling patients. A Phase 2 study of daxdilimab in dermatomyositis and antisynthetase inflammatory myositis is enrolling patients. Fipaxalparant (formerly AMG 670 / HZN 825) A Phase 2 study of fipaxalparant, a lysophosphatidic acid receptor 1 (LPAR1) antagonist, in idiopathic pulmonary fibrosis is enrolling patients. Data readout is anticipated in H2 2024. A Phase 2 study of fipaxalparant in diffuse cutaneous systemic sclerosis is enrolling patients. Biosimilars The clinical comparative study portion of a randomized, double-blind pivotal study evaluating pharmacokinetic (PK) similarity of ABP 206 compared with OPDIVO® (nivolumab) in resected stage III or stage IV melanoma patients in the adjuvant setting is enrolling patients. TEZSPIRE is being developed in collaboration with AstraZeneca. Rocatinlimab, formerly AMG 451/KHK4083, is being developed in collaboration with Kyowa Kirin. Ordesekimab, formerly AMG 714 and also known as PRV-015, is being developed in collaboration with Provention Bio, a Sanofi Company. For the purposes of the collaboration, Provention Bio conducts a clinical trial and leads certain development and regulatory activities for the program. Xaluritamig, formerly AMG 509, is being developed pursuant to a research collaboration with Xencor, Inc. IDE397 is an investigational MAT2A inhibitor from IDEAYA Biosciences. OPDIVO is a registered trademark of Bristol-Myers Squibb Company. Non-GAAP Financial Measures In this news release, management has presented its operating results for the fourth quarters and full years of 2023 and 2022, in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and on a non-GAAP basis. In addition, management has presented its full year 2024 EPS and tax 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, divestitures, restructuring and certain other items from the related GAAP financial measures. Beginning January 1, 2022, following industry guidance from the U.S. Securities and Exchange Commission, the Company no longer excludes adjustments for upfront license fees, development milestones and in-process research and development (IPR&D) expenses of pre-approval programs related to licensing, collaboration and asset acquisition transactions from its non-GAAP financial measures. Management has presented Free Cash Flow (FCF), which is a non-GAAP financial measure, for the fourth quarters and full years of 2023 and 2022. FCF is computed by subtracting capital expenditures from operating cash flow, each as determined in accordance with GAAP. Management has also presented Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and debt leverage ratio for 2023, both of which are non-GAAP financial measures. EBITDA is computed by adding interest expense, provision for income taxes, and depreciation and amortization expense to GAAP net income. Debt leverage ratio is calculated as the ratio of GAAP total debt to EBITDA. 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 normal and recurring business activities by facilitating comparisons of results of normal and recurring business operations among current, past and future periods. The Company believes that FCF provides a further measure of the Company's liquidity. The Company believes its debt leverage ratio provides a supplemental operating metric for the full year period as it compares the amount of cash generated by our operations for the year. 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. About Amgen Amgen is committed to unlocking the potential of biology for patients suffering from serious illnesses by discovering, developing, manufacturing and delivering innovative human therapeutics. This approach begins by using tools like advanced human genetics to unravel the complexities of disease and understand the fundamentals of human biology. Amgen focuses on areas of high unmet medical need and leverages its expertise to strive for solutions that improve health outcomes and dramatically improve people's lives. A biotechnology pioneer since 1980, Amgen has grown to be one of the world's leading independent biotechnology companies, has reached millions of patients around the world and is developing a pipeline of medicines with breakaway potential. Amgen is one of the 30 companies that comprise the Dow Jones Industrial Average and is also part of the Nasdaq-100 index. In 2023, Amgen was named one of "America's Greatest Workplaces" by Newsweek, one of "America's Climate Leaders" by USA Today and one of the "World's Best Companies" by TIME. For more information, visit Amgen.com and follow us on X (formerly known as Twitter), LinkedIn, Instagram, TikTok, YouTube and Threads. 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, or potential collaborations, with any other company (including BeiGene, Ltd. or Kyowa Kirin Co., Ltd.), the performance of Otezla® (apremilast) (including anticipated Otezla sales growth and the timing of non-GAAP EPS accretion), our acquisitions of Teneobio, Inc., ChemoCentryx, Inc., or Horizon (including the prospective performance and outlook of Horizon's business, performance and opportunities and any potential strategic benefits, synergies or opportunities expected as a result of such acquisition, and any projected impacts from the Horizon acquisition on our acquisition-related expenses going forward), 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, effects of pandemics or other widespread health problems on our business, outcomes, progress, 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. An outbreak of disease or similar public health threat, such as COVID-19, and the public and governmental effort to mitigate against the spread of such disease, could have a significant adverse effect on the supply of materials for our manufacturing activities, the distribution of our products, the commercialization of our product candidates, and our clinical trial operations, and any such events may have a material adverse effect on our product development, product sales, business and results of operations. 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. There can be no guarantee that we will be able to realize any of the strategic benefits, synergies or opportunities arising from the Horizon acquisition, and such benefits, synergies or opportunities may take longer to realize than expected. We may not be able to successfully integrate Horizon, and such integration may take longer, be more difficult or cost more than expected. A breakdown, cyberattack or information security breach of our information technology systems 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 and operations may be negatively affected by the failure, or perceived failure, of achieving our environmental, social and governance objectives. The effects of global climate change and related natural disasters could negatively affect our business and operations. Global economic conditions may magnify certain risks that affect our business. 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. ### CONTACT: Amgen, Thousand Oaks Jessica Akopyan, 805-440-5721 (media) Justin Claeys, 805-313-9775 (investors) * The known adjustments are presented net of their related tax impact, which amount to approximately $2.60 per share. (a) The adjustments include noncash amortization of intangible assets and fair value step-up of inventory acquired in business combinations. Our GAAP diluted EPS guidance does not include the effect of GAAP adjustments triggered by events that may occur subsequent to this press release such as acquisitions, asset impairments, litigation, changes in fair value of our contingent consideration obligations and changes in fair value of our equity investments. SOURCE Amgen

Second-Quarter 2023 Results: -- Net Sales of $945.0 Million, Representing Year-Over-Year Growth of 11% Excluding Inflammation Medicines -- -- GAAP Net Income of $127.1 Million; Adjusted EBITDA of $320.4 Million -- -- TEPEZZA® (teprotumumab-trbw) Net Sales of $445.5 Million -- -- KRYSTEXXA® (pegloticase injection) Net Sales of $244.3 Million -- -- UPLIZNA® (inebilizumab-cdon) Net Sales of $68.1 Million -- -- Cash Position of $2.5 Billion as of June 30, 2023 -- Second-Quarter and Recent Company Highlights: -- Announced Positive Topline Data from TEPEZZA Phase 4 Clinical Trial in Patients with Chronic/Low Clinical Activity Score (CAS) Thyroid Eye Disease (TED) -- -- Obtained U.S. FDA Approval for Updated TEPEZZA Indication to Specify Treatment of TED Patients Regardless of Disease Activity or Duration -- -- Announced Positive Topline Data from TEPEZZA Phase 3 Clinical Trial (OPTIC-J) in Japanese Patients -- -- Received Approval for TEPEZZA in Brazil for the Treatment of TED; First Country Outside the U.S. to Approve TEPEZZA -- -- Announced Initiation of TEPEZZA Phase 3 Clinical Trial in Chronic/Low CAS TED in Japan and Daxdilimab Phase 2 Clinical Trial in Lupus Nephritis -- -- Presented New Data from Dazodalibep Phase 2 Clinical Trial in Sjögren’s Syndrome and KRYSTEXXA MIRROR Randomized Controlled Trial at EULAR European Congress of Rheumatology -- -- Continue to Expect Amgen Transaction to Close by Mid-December, Assuming the Federal Trade Commission’s Request for a Preliminary Injunction Is Denied -- -- Named One of Fortune’s 100 Best Companies to Work For® and Ranked as Top Biotechnology/Pharmaceutical Company, Both for Third Consecutive Year -- -- Ranked First in Overall Corporate Reputation by U.S. Patient Advocacy Groups -- DUBLIN--(BUSINESS WIRE)--Horizon Therapeutics plc (Nasdaq: HZNP) today announced second-quarter 2023 financial results. “We delivered strong growth in the second quarter, with double-digit year-over-year growth in our core business and mid-teens growth sequentially,” said Tim Walbert, chairman, president and chief executive officer, Horizon. “This performance was driven by exceptional 46% year-over-year KRYSTEXXA sales growth as a result of strong commercial execution and the success of our immunomodulation strategy, in addition to positive and consistent trends we are generating for TEPEZZA, which reflects the success of our expansion efforts to further penetrate the TED market and reach new prescribers. We delivered impressive 76% year-over-year UPLIZNA sales growth and see a long runway ahead as we progress our two Phase 3 programs in IgG4-RD and MG. We also announced several important clinical milestones for TEPEZZA, including strong data in low CAS and long-duration TED and data from our Phase 3 clinical trial in Japan, both of which we expect to contribute to the future growth of this medicine.” Financial Highlights (in millions except for per share amounts and percentages) Q2 23 Q2 22 % Change YTD 23 YTD 22 % Change Net sales $ 945.0 $ 876.4 8 $ 1,777.0 $ 1,761.7 1 Net income 127.1 61.0 108 181.8 265.2 (31 ) Non-GAAP net income 280.1 253.8 10 474.4 569.6 (17 ) Adjusted EBITDA 320.4 306.6 4 553.3 677.8 (18 ) Earnings per share - diluted 0.54 0.26 108 0.78 1.12 (30 ) Non-GAAP earnings per share - diluted 1.20 1.07 12 2.03 2.41 (16 ) Second-Quarter and Year-to-Date 2023 Net Sales Results (in millions except for percentages) Q2 23 Q2 22 % Change YTD 23 YTD 22 % Change TEPEZZA® $ 445.5 $ 479.8 (7 ) $ 850.8 $ 981.3 (13 ) KRYSTEXXA® 244.3 167.8 46 431.3 308.5 40 RAVICTI® 88.4 75.7 17 178.7 154.1 16 UPLIZNA®(1) 68.1 38.6 76 121.9 69.1 76 PROCYSBI® 53.1 47.7 11 103.6 97.3 7 ACTIMMUNE® 29.0 30.0 (3 ) 58.2 61.3 (5 ) PENNSAID 2%®(2) 7.0 23.6 (70 ) 16.1 59.0 (72 ) RAYOS® 8.0 11.1 (28 ) 13.0 24.6 (47 ) BUPHENYL® 1.3 1.4 (10 ) 2.6 3.5 (25 ) QUINSAIRTM 0.3 0.3 3 0.6 0.6 1 DUEXIS® - 0.1 (100 ) 0.1 1.2 (91 ) VIMOVO® - 0.3 (100 ) 0.1 1.2 (91 ) Total Net Sales(3) $ 945.0 $ 876.4 8 $ 1,777.0 $ 1,761.7 1 (1) Second-quarter and year-to-date 2023 UPLIZNA net sales included $15.4 million and $22.0 million, respectively, in international net sales. Second-quarter and year-to-date 2022 UPLIZNA net sales included $8.6 million and $13.8 million, respectively, in international net sales. (2) On May 6, 2022, Apotex Inc. initiated an at-risk launch of generic PENNSAID 2% in the United States. (3) Excluding the Company’s inflammation business unit (RAYOS, PENNSAID 2%, DUEXIS and VIMOVO), which was wound down at the end of 2022 due to generic competition, second-quarter year-over-year net sales growth was 11%. Key Growth Drivers TEPEZZA: TEPEZZA net sales in the second quarter were $446 million, representing a 10% sequential increase compared to the first quarter of 2023 and a 7% year-over-year decline compared to the second quarter of 2022. The TEPEZZA field-force expansion initiated late in 2022 continues to drive consistent and positive momentum in the business, including increases in new prescribers, patient enrollment forms and patient starts. Through the first half of 2023, as a result of the field-force expansion, the Company expanded its reach to new physician targets, which led to a 50% year-over-year increase in the number of ophthalmologists and endocrinologists prescribing TEPEZZA. In line with the Company’s expansion strategy, prescriber growth has largely come from ophthalmologists, with continued strong referral volume from endocrinologists. In April 2023, the Company announced positive topline results from its TEPEZZA Phase 4 clinical trial in patients with low CAS and long-duration TED and received FDA approval for an update to the indication for TEPEZZA that supports its potential benefit in TED, regardless of disease activity or duration. The Company is executing on its payer strategy to educate key stakeholders and ease the access burden so all eligible patients can benefit from TEPEZZA. As a result of this process, large national and regional payers are beginning the process of updating their access requirements. To date, the Company has obtained favorable policy changes for greater than 20% of U.S. covered lives, which are expected to take effect in the second half of 2023. The Company expects these strategies and initiatives to further develop the TED market and impact net sales in 2024. In addition, the Company made significant advancements in its global expansion strategy by announcing the positive topline results from its TEPEZZA Phase 3 clinical trial in Japanese patients, as well as the approval of TEPEZZA in Brazil for patients with TED. There are no medicines approved for the treatment of TED in Brazil or Japan, representing a significant unmet need in both markets. These accomplishments, which are expected to impact net sales beginning in 2025, are important milestones in the Company’s global expansion strategy to bring TEPEZZA to more patients worldwide. KRYSTEXXA: KRYSTEXXA net sales in the second quarter were a record $244 million, representing a 31% sequential increase compared to the first quarter of 2023 and a 46% year-over-year increase compared to the second quarter of 2022. KRYSTEXXA net sales are now annualizing at a nearly one-billion-dollar run rate. The second-quarter results were driven by execution across all phases of the patient journey – demand generation, stakeholder education and adherence to treatment. The Company continued to see significant uptake from both its rheumatology and nephrology market segments in the quarter, with KRYSTEXXA with immunomodulation usage now at more than 70% of new patient starts. The Company’s efforts to educate physicians and key stakeholders continues to lead to strong patient growth from both new and existing prescribers across both market segments. UPLIZNA: UPLIZNA net sales in the second quarter were a record $68 million, representing a 27% sequential increase compared to the first quarter of 2023 and a 76% year-over-year increase compared to the second quarter of 2022. Net sales in the U.S. were $53 million, an increase of 76% year-over-year, driven by strong commercial execution. The second-quarter results were driven by robust demand generation and new patient starts, increased depth among the Company’s existing prescribers and strong adherence to maintenance treatment. The Company continues to drive uptake among both patients naïve to biologics as well as patients switching from competitive biologic therapies, establishing UPLIZNA as the fastest-growing biologic in neuromyelitis optica spectrum disorder (NMOSD) year-to-date by market share. The Company expects to advance its global expansion strategy, with multiple planned international launches in 2023. The Company also continues to make progress on its two Phase 3 programs in IgG4-related disease (IgG4-RD) and myasthenia gravis (MG). Conference Call In light of the announced agreement to be acquired by Amgen Inc. and applicable securities laws, the Company will not be hosting a conference call to discuss its financial results. This earnings press release, investor deck and the related Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 are publicly available in the Investor Relations section of the Company’s website at . About Horizon Horizon is a global biotechnology company focused on the discovery, development and commercialization of medicines that address critical needs for people impacted by rare, autoimmune and severe inflammatory diseases. Our pipeline is purposeful: we apply scientific expertise and courage to bring clinically meaningful therapies to patients. We believe science and compassion must work together to transform lives. For more information on how we go to incredible lengths to impact lives, visit and follow us on Twitter, LinkedIn, Instagram and Facebook. Note Regarding Use of Non-GAAP Financial Measures Horizon provides certain non-GAAP financial measures, including EBITDA, or earnings before interest, taxes, depreciation and amortization, adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP gross profit and gross profit ratio, non-GAAP operating expenses, non-GAAP operating income, non-GAAP tax benefit (expense) and tax rate, non-GAAP operating cash flow and certain other non-GAAP income statement line items, each of which include adjustments to GAAP figures. These non-GAAP measures are intended to provide additional information on Horizon’s performance, operations, expenses, profitability and cash flows. Adjustments to Horizon’s GAAP figures exclude, as applicable, acquisition and/or divestiture-related costs, costs associated with our pending transaction with Amgen Inc., including responding to a second request review of the transaction by the United States Federal Trade Commission (the “FTC”) and subsequent lawsuit seeking to enjoin the transaction, manufacturing facility start-up costs, restructuring and realignment costs and gain on sale of asset, as well as non-cash items such as share-based compensation, inventory step-up expense, depreciation and amortization, non-cash interest expense, goodwill and long-lived assets impairment charges, gain (loss) on equity security investments and other non-cash adjustments. Certain other special items or substantive events may also be included in the non-GAAP adjustments periodically when their magnitude is significant within the periods incurred. Horizon maintains an established non-GAAP cost policy that guides the determination of what costs will be excluded in non-GAAP measures. Horizon believes that these non-GAAP financial measures, when considered together with the GAAP figures, can enhance an overall understanding of Horizon’s financial and operating performance. The non-GAAP financial measures are included with the intent of providing investors with a more complete understanding of the Company’s historical and expected financial results and trends and to facilitate comparisons between periods and with respect to projected information. In addition, these non-GAAP financial measures are among the indicators Horizon’s management uses for planning and forecasting purposes and measuring the Company's performance. These non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, non-GAAP financial measures used by other companies. Forward-Looking Statements This press release contains forward-looking statements, including, but not limited to, statements related to the pending transaction with Amgen Inc., development, manufacturing and commercialization plans; expected timing of clinical trials and commercial launches; expected future milestones, pipeline expansions and regulatory approvals; potential market opportunities for, and benefits of, Horizon’s medicines and medicine candidates; expected impact of commercial strategies, clinical trial results and product label updates; and business and other statements that are not historical facts. These forward-looking statements are based on Horizon’s current expectations and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, whether the pending transaction with Amgen Inc. will be completed in a timely manner or at all, including whether the district court grants or denies the FTC’s request for a preliminary injunction; the parties’ ability to satisfy (or willingness to waive) the conditions to the consummation of the pending transaction with Amgen Inc., including with respect to the absence of orders preventing the consummation of the transaction; the effect of the pending transaction with Amgen Inc. on Horizon’s business relationships, operating results and business generally; risks that Horizon’s actual future financial and operating results may differ from its expectations or goals; Horizon’s ability to grow net sales from existing medicines; impacts of the on-going war between Russia and Ukraine; changes in inflation, interest rates and general economic conditions; the availability of coverage and adequate reimbursement and pricing from government and third-party payers; Horizon’s ability to successfully implement its business strategies, including the risks that its medicine growth and global expansion initiatives and strategies may not be successful and that new challenges to growth may arise in the future; risks inherent in developing novel medicine candidates and existing medicines for new indications; whether additional clinical trial results or data analyses will be consistent with preliminary results, results from other trials or Horizon’s expectations; risks associated with regulatory approvals; risks in the ability to recruit, train and retain qualified personnel; competition, including generic competition; the ability to protect intellectual property and defend patents; regulatory obligations and oversight, including any changes in the legal and regulatory environment in which Horizon operates and those risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in Horizon’s filings and reports with the SEC. Horizon undertakes no duty or obligation to update any forward-looking statements contained in this press release as a result of new information. Horizon Therapeutics plc Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except share and per share data) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net sales $ 944,959 $ 876,411 $ 1,777,018 $ 1,761,656 Cost of goods sold 219,958 230,216 428,521 445,278 Gross profit 725,001 646,195 1,348,497 1,316,378 OPERATING EXPENSES: Research and development (1) 150,035 103,246 284,183 206,378 Selling, general and administrative 434,125 398,221 887,479 770,955 Impairment of goodwill - 56,171 - 56,171 Gain on sale of asset (2,000 ) - (2,000 ) - Total operating expenses 582,160 557,638 1,169,662 1,033,504 Operating income 142,841 88,557 178,835 282,874 OTHER EXPENSE, NET: Interest expense, net (12,098 ) (21,409 ) (27,638 ) (42,665 ) Foreign exchange gain 326 28 417 448 Other income (expense), net 4,183 (2,389 ) 2,840 (3,131 ) Total other expense, net (7,589 ) (23,770 ) (24,381 ) (45,348 ) Income before expense (benefit) for income taxes 135,252 64,787 154,454 237,526 Expense (benefit) for income taxes 8,181 3,813 (27,301 ) (27,709 ) Net income $ 127,071 $ 60,974 $ 181,755 $ 265,235 Net income per ordinary share - basic $ 0.56 $ 0.27 $ 0.80 $ 1.16 Weighted average ordinary shares outstanding - basic 228,743,143 230,020,004 228,571,356 229,559,715 Net income per ordinary share - diluted $ 0.54 $ 0.26 $ 0.78 $ 1.12 Weighted average ordinary shares outstanding - diluted 233,935,591 236,166,384 233,938,149 236,077,147 (1) Beginning with the third quarter of 2022, the Company is separately presenting upfront, milestone, and similar payments pursuant to collaborations, licenses of third-party technologies, and asset acquisitions as “Acquired in-process research and development and milestones” expenses in the condensed consolidated statement of comprehensive income. Amounts recorded in this line item would have historically been recorded to research and development (“R&D”) expenses. The Company believes the new classification assists users of the financial statements in better understanding the payments incurred to acquired in-process research and development, or IPR&D. Prior period consolidated statements of comprehensive income have been reclassified to conform with the new classification. There were no acquired IPR&D and milestones expenses during the three and six months ended June 30, 2023 and 2022. Horizon Therapeutics plc Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except share data) As of June 30, 2023 December 31, 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 2,464,623 $ 2,352,833 Restricted cash 4,791 4,755 Accounts receivable, net 717,417 676,347 Inventories, net 170,325 169,559 Prepaid expenses and other current assets 564,808 449,349 Total current assets 3,921,964 3,652,843 Property, plant and equipment, net 362,326 340,509 Developed technology and other intangible assets, net 2,486,565 2,664,777 In-process research and development 810,000 810,000 Goodwill 1,010,538 1,010,538 Deferred tax assets, net 444,306 431,814 Other long-term assets 263,042 204,135 Total assets $ 9,298,741 $ 9,114,616 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 85,543 $ 155,800 Accrued expenses and other current liabilities 496,669 457,557 Accrued trade discounts and rebates 319,469 319,780 Long-term debt—current portion 16,000 16,000 Total current liabilities 917,681 949,137 LONG-TERM LIABILITIES: Long-term debt, net 2,541,458 2,546,837 Deferred tax liabilities, net 264,815 342,017 Other long-term liabilities 263,828 204,451 Total long-term liabilities 3,070,101 3,093,305 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Ordinary shares, $0.0001 nominal value; 600,000,000 shares authorized at June 30, 2023 and December 31, 2022; 229,323,393 and 227,625,913 shares issued at June 30, 2023 and December 31, 2022, respectively; and 228,939,027 and 227,241,547 shares outstanding at June 30, 2023 and December 31, 2022, respectively 23 23 Treasury stock, 384,366 ordinary shares at June 30, 2023 and December 31, 2022 (4,585 ) (4,585 ) Additional paid-in capital 4,522,145 4,474,199 Accumulated other comprehensive income 21,612 12,528 Retained earnings 771,764 590,009 Total shareholders' equity 5,310,959 5,072,174 Total liabilities and shareholders' equity $ 9,298,741 $ 9,114,616 Horizon Therapeutics plc Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 127,071 $ 60,974 $ 181,755 $ 265,235 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 96,285 97,426 191,145 192,538 Equity-settled share-based compensation 60,271 45,149 118,391 92,449 Impairment of goodwill - 56,171 - 56,171 Amortization of debt discount and deferred financing costs 1,308 2,327 2,779 3,904 Gain on sale of asset (2,000 ) - (2,000 ) - Deferred income taxes (4,642 ) 30,864 (91,952 ) (3,032 ) Foreign exchange and other adjustments (5,708 ) 7,376 (6,143 ) 10,566 Changes in operating assets and liabilities: Accounts receivable (92,670 ) 11,152 (41,140 ) (40,513 ) Inventories (5,833 ) 22,818 (766 ) 22,033 Prepaid expenses and other current assets (60,191 ) (38,373 ) (108,816 ) (71,578 ) Accounts payable 7,807 (48,047 ) (70,233 ) (11,980 ) Accrued trade discounts and rebates 9,386 (27,047 ) (552 ) 20,232 Accrued expenses and other current liabilities 20,532 36,874 63,390 (76,901 ) Other non-current assets and liabilities 9,851 (8,468 ) 11,931 5,863 Net cash provided by operating activities 161,467 249,196 247,789 464,987 CASH FLOWS FROM INVESTING ACTIVITIES: Payments for acquisitions, net of cash acquired - - - (3,122 ) Purchases of property, plant and equipment (18,466 ) (10,154 ) (42,594 ) (24,352 ) Payments for long-term investments (1,560 ) (6,443 ) (4,183 ) (4,847 ) Receipts from long-term investments - 4,416 - 4,416 Payments related to license and collaboration agreements - - (15,000 ) (25,000 ) Net cash used in investing activities (20,026 ) (12,181 ) (61,777 ) (52,905 ) CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of term loans (4,000 ) (4,000 ) (8,000 ) (8,000 ) Proceeds from the issuance of ordinary shares in conjunction with ESPP program 14,912 13,884 14,912 13,884 Proceeds from the issuance of ordinary shares in connection with stock option exercises 2,628 12,951 6,049 22,022 Payment of employee withholding taxes relating to share-based awards (4,506 ) (5,419 ) (92,055 ) (120,527 ) Net cash provided by (used in) financing activities 9,034 17,416 (79,094 ) (92,621 ) Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash 2,539 (4,396 ) 4,908 (6,317 ) Net increase in cash, cash equivalents and restricted cash 153,014 250,035 111,826 313,144 Cash, cash equivalents and restricted cash, beginning of the period(1) 2,316,400 1,647,265 2,357,588 1,584,156 Cash, cash equivalents and restricted cash, end of the period(1) $ 2,469,414 $ 1,897,300 $ 2,469,414 $ 1,897,300 (1) Amounts include restricted cash balance in accordance with ASU No. 2016-18. Cash and cash equivalents excluding restricted cash are shown on the balance sheet. Horizon Therapeutics plc GAAP to Non-GAAP Reconciliations Net Income and Earnings Per Share (Unaudited) (in thousands, except share and per share data) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 GAAP net income $ 127,071 $ 60,974 $ 181,755 $ 265,235 Non-GAAP adjustments: Acquisition/divestiture-related costs 52 1,023 733 2,612 Transaction-related costs 16,539 - 26,323 - (Gain) loss on equity security investments (2,437 ) 438 (2,789 ) 5,084 Restructuring and realignment costs 854 1,253 2,676 1,790 Manufacturing facility start-up costs 1,896 1,582 5,372 2,389 Amortization and step-up: Intangible amortization expense 89,598 91,335 178,212 180,595 Inventory step-up expense 1,572 17,362 31,315 44,563 Amortization of debt discount and deferred financing costs 1,308 2,327 2,779 3,904 Impairment of goodwill - 56,171 - 56,171 Gain on sale of asset (2,000 ) - (2,000 ) - Share-based compensation 60,271 45,149 118,391 92,449 Depreciation 6,687 6,091 12,933 11,943 Total of pre-tax non-GAAP adjustments 174,340 222,731 373,945 401,500 Income tax effect of pre-tax non-GAAP adjustments (21,354 ) (29,919 ) (81,297 ) (97,131 ) Total of non-GAAP adjustments 152,986 192,812 292,648 304,369 Non-GAAP net income $ 280,057 $ 253,786 $ 474,403 $ 569,604 Non-GAAP Earnings Per Share: Weighted average ordinary shares - Basic 228,743,143 230,020,004 228,571,356 229,559,715 Non-GAAP Earnings Per Share - Basic: GAAP earnings per share - Basic $ 0.56 $ 0.27 $ 0.80 $ 1.16 Non-GAAP adjustments 0.66 0.83 1.28 1.32 Non-GAAP earnings per share - Basic $ 1.22 $ 1.10 $ 2.08 $ 2.48 Weighted average ordinary shares - Diluted Weighted average ordinary shares - Basic 228,743,143 230,020,004 228,571,356 229,559,715 Ordinary share equivalents 5,192,448 6,146,380 5,366,793 6,517,432 Weighted average ordinary shares - Diluted 233,935,591 236,166,384 233,938,149 236,077,147 Non-GAAP Earnings Per Share - Diluted GAAP earnings per share - Diluted $ 0.54 $ 0.26 $ 0.78 $ 1.12 Non-GAAP adjustments 0.66 0.81 1.25 1.29 Non-GAAP earnings per share - Diluted $ 1.20 $ 1.07 $ 2.03 $ 2.41 Horizon Therapeutics plc GAAP to Non-GAAP Reconciliations EBITDA and Adjusted EBITDA (Unaudited) (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 GAAP net income $ 127,071 $ 60,974 $ 181,755 $ 265,235 Depreciation 6,687 6,091 12,933 11,943 Amortization and step-up: Intangible amortization expense 89,598 91,335 178,212 180,595 Inventory step-up expense 1,572 17,362 31,315 44,563 Interest expense, net (including amortization of debt discount and deferred financing costs) 12,098 21,409 27,638 42,665 Expense (benefit) for income taxes 8,181 3,813 (27,301 ) (27,709 ) EBITDA $ 245,207 $ 200,984 $ 404,552 $ 517,292 Other non-GAAP adjustments: Share-based compensation 60,271 45,149 118,391 92,449 (Gain) loss on equity security investments (2,437 ) 438 (2,789 ) 5,084 Impairment of goodwill - 56,171 - 56,171 Gain on sale of asset (2,000 ) - (2,000 ) - Acquisition/divestiture-related costs 52 1,023 733 2,612 Transaction-related costs 16,539 - 26,323 - Manufacturing facility start-up costs 1,896 1,582 5,372 2,389 Restructuring and realignment costs 854 1,253 2,676 1,790 Total of other non-GAAP adjustments 75,175 105,616 148,706 160,495 Adjusted EBITDA $ 320,382 $ 306,600 $ 553,258 $ 677,787 Horizon Therapeutics plc GAAP to Non-GAAP Reconciliations Operating Income (Unaudited) (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 GAAP operating income $ 142,841 $ 88,557 $ 178,835 $ 282,874 Non-GAAP adjustments: Acquisition/divestiture-related costs 52 1,023 733 2,612 Transaction-related costs 16,539 - 26,323 - Restructuring and realignment costs 854 1,253 2,676 1,790 Manufacturing facility start-up costs 1,896 1,582 5,372 2,389 Amortization and step-up: Intangible amortization expense 89,598 91,335 178,212 180,595 Inventory step-up expense 1,572 17,362 31,315 44,563 Impairment of goodwill - 56,171 - 56,171 Gain on sale of asset (2,000 ) - (2,000 ) - Share-based compensation 60,271 45,149 118,391 92,449 Depreciation 6,687 6,091 12,933 11,943 Total of non-GAAP adjustments 175,469 219,966 373,955 392,512 Non-GAAP operating income $ 318,310 $ 308,523 $ 552,790 $ 675,386 Foreign exchange gain 326 28 417 448 Other income (expense), net 1,746 (1,951 ) 51 1,953 Adjusted EBITDA $ 320,382 $ 306,600 $ 553,258 $ 677,787 Horizon Therapeutics plc GAAP to Non-GAAP Reconciliations Gross Profit and Operating Cash Flow (Unaudited) (in thousands, except percentages) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Non-GAAP Gross Profit: GAAP gross profit $ 725,001 $ 646,195 $ 1,348,497 $ 1,316,378 Non-GAAP gross profit adjustments: Acquisition/divestiture-related costs 52 (119 ) 20 (1,423 ) Intangible amortization expense 89,259 90,439 177,537 179,164 Inventory step-up expense 1,572 17,362 31,315 44,563 Share-based compensation 3,141 2,294 5,803 4,471 Depreciation 130 55 178 111 Total of Non-GAAP adjustments 94,154 110,031 214,853 226,886 Non-GAAP gross profit $ 819,155 $ 756,226 $ 1,563,350 $ 1,543,264 GAAP gross profit % 76.7 % 73.7 % 75.9 % 74.7 % Non-GAAP gross profit % 86.7 % 86.3 % 88.0 % 87.6 % GAAP cash provided by operating activities $ 161,467 $ 249,196 $ 247,789 $ 464,987 Cash payments for acquisition/divestiture-related costs 11 748 51 5,196 Cash payments for restructuring and realignment costs 931 570 5,572 1,144 Cash payments for manufacturing facility start-up costs 2,116 895 5,910 2,663 Cash payments for transaction-related costs 14,074 - 20,668 - Non-GAAP operating cash flow $ 178,599 $ 251,409 $ 279,990 $ 473,990 Horizon Therapeutics plc GAAP to Non-GAAP Tax Rate Reconciliation (Unaudited) (in millions, except percentages and per share amounts) Q2 2023 Pre-tax Net Income Income Tax Expense Tax Rate Net Income Diluted Earnings Per Share As reported - GAAP $ 135.3 $ 8.2 6.0 % $ 127.1 $ 0.54 Non-GAAP adjustments 174.3 21.4 153.0 Non-GAAP $ 309.6 $ 29.5 9.5 % $ 280.1 $ 1.20 Q2 2022 Pre-tax Net Income Income Tax Expense Tax Rate Net Income Diluted Earnings Per Share As reported - GAAP $ 64.8 $ 3.8 5.9 % $ 61.0 $ 0.26 Non-GAAP adjustments 222.7 29.9 192.8 Non-GAAP $ 287.5 $ 33.7 11.7 % $ 253.8 $ 1.07 YTD 2023 Pre-tax Net Income Income Tax (Benefit) Expense Tax Rate Net Income Diluted Earnings Per Share As reported - GAAP $ 154.5 $ (27.3 ) (17.7 )% $ 181.8 $ 0.78 Non-GAAP adjustments 373.9 81.3 292.6 Non-GAAP $ 528.4 $ 54.0 10.2 % $ 474.4 $ 2.03 YTD 2022 Pre-tax Net Income Income Tax (Benefit) Expense Tax Rate Net Income Diluted Earnings Per Share As reported - GAAP $ 237.5 $ (27.7 ) (11.7 )% $ 265.2 $ 1.12 Non-GAAP adjustments 401.5 97.1 304.4 Non-GAAP $ 639.0 $ 69.4 10.9 % $ 569.6 $ 2.41 Horizon Therapeutics plc Certain Income Statement Line Items - Non-GAAP Adjusted For the Three Months Ended June 30, 2023 (Unaudited) (in thousands) Cost of Goods Research & Selling, General Gain on sale Interest Other Income Income Tax Sold Development & Administrative of asset Expense, net (Expense), net Expense GAAP as reported $ (219,958 ) $ (150,035 ) $ (434,125 ) $ 2,000 $ (12,098 ) $ 4,183 $ (8,181 ) Non-GAAP Adjustments: Acquisition/divestiture-related costs(1) 52 - - - - - - Transaction-related costs(2) - - 16,539 - - - - Gain on equity security investments(3) - - - - - (2,437 ) - Restructuring and realignment costs(4) - 253 601 - - - - Manufacturing facility start-up costs(5) - - 1,896 - - - - Amortization and step-up: Intangible amortization expense(6) 89,259 - 339 - - - - Inventory step-up expense(7) 1,572 - - - - - - Amortization of debt discount and deferred financing costs(8) - - - - 1,308 - - Gain on sale of asset(9) - - - (2,000 ) - - - Share-based compensation(10) 3,141 9,395 47,735 - - - - Depreciation(11) 130 588 5,969 - - - - Income tax effect on pre-tax non-GAAP adjustments(12) - - - - - - (21,354 ) Total of non-GAAP adjustments 94,154 10,236 73,079 (2,000 ) 1,308 (2,437 ) (21,354 ) Non-GAAP $ (125,804 ) $ (139,799 ) $ (361,046 ) $ - $ (10,790 ) $ 1,746 $ (29,535 ) Horizon Therapeutics plc Certain Income Statement Line Items - Non-GAAP Adjusted For the Three Months Ended June 30, 2022 (Unaudited) (in thousands) Cost of Goods Research & Selling, General Impairment of Interest Other (Expense) Income Tax Sold Development & Administrative goodwill Expense, net Income, net Expense GAAP as reported $ (230,216 ) $ (103,246 ) $ (398,221 ) $ (56,171 ) $ (21,409 ) $ (2,389 ) $ (3,813 ) Non-GAAP Adjustments: Acquisition/divestiture-related costs(1) (119 ) - 1,142 - - - - Loss on equity security investments(3) - - - - - 438 - Restructuring and realignment costs(4) - 804 449 - - - - Manufacturing facility start-up costs(5) - - 1,582 - - - - Amortization and step-up: Intangible amortization expense(6) 90,439 - 896 - - - - Inventory step-up expense(7) 17,362 - - - - - - Amortization of debt discount and deferred financing costs(8) - - - - 2,327 - - Share-based compensation(10) 2,294 6,742 36,113 - - - - Depreciation(11) 55 267 5,769 - - - - Impairment of goodwill(13) - - - 56,171 - - - Income tax effect on pre-tax non-GAAP adjustments(12) - - - - - - (29,919 ) Total of non-GAAP adjustments 110,031 7,813 45,951 56,171 2,327 438 (29,919 ) Non-GAAP $ (120,185 ) $ (95,433 ) $ (352,270 ) $ - $ (19,082 ) $ (1,951 ) $ (33,732 ) Horizon Therapeutics plc Certain Income Statement Line Items - Non-GAAP Adjusted For the Six Months Ended June 30, 2023 (Unaudited) (in thousands) Income Tax Cost of Goods Research & Selling, General Gain on sale Interest Other Income Benefit Sold Development & Administrative of asset Expense, net (Expense), net (Expense) GAAP as reported $ (428,521 ) $ (284,183 ) $ (887,479 ) $ 2,000 $ (27,638 ) $ 2,840 $ 27,301 Non-GAAP Adjustments: Acquisition/divestiture-related costs(1) 20 - 713 - - - - Transaction-related costs(2) - - 26,323 - - - - Gain on equity security investments(3) - - - - - (2,789 ) - Restructuring and realignment costs(4) - 50 2,626 - - - - Manufacturing facility start-up costs(5) - - 5,372 - - - - Amortization and step-up: Intangible amortization expense(6) 177,537 - 675 - - - - Inventory step-up expense(7) 31,315 - - - - - - Amortization of debt discount and deferred financing costs(8) - - - - 2,779 - - Gain on sale of asset(9) - - - (2,000 ) - - - Share-based compensation(10) 5,803 18,561 94,027 - - - - Depreciation(11) 178 971 11,784 - - - - Income tax effect on pre-tax non-GAAP adjustments(12) - - - - - - (81,297 ) Total of non-GAAP adjustments 214,853 19,582 141,520 (2,000 ) 2,779 (2,789 ) (81,297 ) Non-GAAP $ (213,668 ) $ (264,601 ) $ (745,959 ) $ - $ (24,859 ) $ 51 $ (53,996 ) Horizon Therapeutics plc Certain Income Statement Line Items - Non-GAAP Adjusted For the Six Months Ended June 30, 2022 (Unaudited) (in thousands) Income Tax Cost of Goods Research & Selling, General Impairment of Interest Other (Expense) Benefit Sold Development & Administrative goodwill Expense, net Income, net (Expense) GAAP as reported $ (445,278 ) $ (206,378 ) $ (770,955 ) $ (56,171 ) $ (42,665 ) (3,131 ) $ 27,709 Non-GAAP Adjustments: Acquisition/divestiture-related costs(1) (1,423 ) 2,000 2,035 - - - - Loss on equity security investments(3) - - - - - 5,084 - Restructuring and realignment costs(4) - 804 986 - - - - Manufacturing facility start-up costs(5) - - 2,389 - - - - Amortization and step-up: Intangible amortization expense(6) 179,164 - 1,431 - - - - Inventory step-up expense(7) 44,563 - - - - - - Amortization of debt discount and deferred financing costs(8) - - - - 3,904 - - Impairment of goodwill(13) - - - 56,171 - - - Share-based compensation(10) 4,471 15,720 72,258 - - - - Depreciation(11) 111 493 11,339 - - - - Income tax effect on pre-tax non-GAAP adjustments(12) - - - - - - (97,131 ) Total of non-GAAP adjustments 226,886 19,017 90,438 56,171 3,904 5,084 (97,131 ) Non-GAAP $ (218,392 ) $ (187,361 ) $ (680,517 ) $ - $ (38,761 ) $ 1,953 $ (69,422 ) NOTES FOR CERTAIN INCOME STATEMENT LINE ITEMS - NON-GAAP Primarily represents transaction and integration costs, including, advisory, legal, consulting and certain employee-related costs, incurred in connection with our acquisitions and divestitures. Primarily represents transaction-related costs, including, advisory, legal, consulting and field-based employee retention costs, incurred in connection with the transaction with Amgen. The legal costs include costs incurred in responding to the FTC’s second request and subsequent lawsuit seeking to enjoin the transaction. We held investments in equity securities with readily determinable fair values of $9.8 million and $8.1 million as of June 30, 2023 and 2022, respectively, which are included in other long-term assets in the condensed consolidated balance sheet. For the three and six months ended June 30, 2023, we recognized net unrealized gains of $2.4 million and $2.8 million, respectively, due to the change in fair value of these securities. Primarily represents severance and consulting costs related to the wind down of our former inflammation business during 2022 and rent and maintenance charges as a result of vacating the leased Lake Forest office in the first quarter of 2021. During the three months ended June 30, 2023 and 2022, we recorded $1.9 million and $1.6 million, respectively, and $5.4 million and $2.4 million for the six months ended June 30, 2023 and 2022, respectively, of manufacturing facility start-up costs related to our drug product biologics manufacturing facility in Waterford, Ireland. Intangible amortization expenses are primarily associated with our developed technology related to TEPEZZA, KRYSTEXXA, RAVICTI, UPLIZNA, PROCYSBI, ACTIMMUNE, RAYOS and BUPHENYL. During the three and six months ended June 30, 2023, we recognized in cost of goods sold $1.6 million and $31.3 million, respectively, for inventory step-up expense related to UPLIZNA inventory revalued in connection with the Viela Bio, Inc. acquisition. We recorded $17.4 million and $44.6 million of UPLIZNA inventory step-up expense in cost of goods sold during the three and six months ended June 30, 2022, respectively. Because inventory step-up expense is related to an acquisition, will not continue indefinitely and has a significant effect on our gross profit, gross margin percentage and net income for all affected periods, we exclude inventory step-up expense from our non-GAAP financial measures. Represents amortization of debt discount and deferred financing costs associated with our debt. During the six months ended June 30, 2023, gain on sale of asset represents a $2.0 million contingent consideration payment related to the sale of MIGERGOT in 2019. The contingent consideration payment was triggered during the second quarter of 2023 and it was received in July 2023. Represents share-based compensation expense associated with restricted stock unit and performance stock unit grants to our employees and non-employee directors, and our employee share purchase plan. Represents depreciation expense related to our property, plant, equipment, software and leasehold improvements. Income tax adjustments on pre-tax non-GAAP adjustments represent the estimated income tax impact of each pre-tax non-GAAP adjustment based on the statutory income tax rate of the applicable jurisdictions for each non-GAAP adjustment. Our interim goodwill impairment test in the second quarter of 2022 indicated an impairment which represented the difference between the estimated fair value of the former inflammation reporting unit and its carrying value. As a result, we recognized an impairment charge of $56.2 million in June 2022 representing the full amount of goodwill for the former inflammation reporting unit.