How Amgen Inc. Makes Money

This segment has lower margins than branded biologics but provides volume growth and demonstrates Amgen's commitment to lower-cost medicine access — a narrative that carries important political value during a period of intense congressional scrutiny of drug pricing. The problem is, Amgen's operating margins have typically run between 30% and 35% on a GAAP basis and higher on an adjusted basis, reflecting both the pricing power of its branded biologics and decades of operational refinement. Amgen's financial profile in fiscal year 2024 reflected both the far-reaching impact of the Horizon Therapeutics acquisition and the ongoing pressure from patent expirations and pricing pattern. Ten drugs were subject to the first round of negotiations for 2026 pricing, and Enbrel was among the drugs selected for the second cycle of negotiations targeting 2027. It added Tepezza for thyroid eye disease and Krystexxa for chronic refractory gout — rare disease assets with high per-patient pricing and limited competition.

But those same drugs carry price tags that have triggered congressional hearings, federal investigations, and public outrage. Amgen generates revenue through four primary mechanisms: branded biologic product sales in the United States, international product sales in Europe and other markets, licensing and royalty income from partnerships, and a rapidly expanding biosimilars portfolio. Key pipeline assets include MariTide (maridebart cafraglutide), an investigational obesity and diabetes drug that targets both GLP-1 receptor agonism and GIP receptor antagonism — a mechanism that could position Amgen to compete directly with Eli Lilly's tirzepatide and Novo Nordisk's semaglutide in the exploding weight loss drug market. The company has also advanced AMG 133 through Phase 2 trials with weight loss data that attracted significant investor attention in 2024 and 2025. The capital investment required to build and validate these facilities — routinely running into hundreds of millions or billions of dollars per site — creates a structural barrier that reinforces Amgen's competitive position. The company has invested in next-generation multiproduct manufacturing facilities that can be adapted to different biologic drug types with shorter reconfiguration times, improving capital efficiency. Capital allocation historically favored a combination of R&D reinvestment, dividend payments (the quarterly dividend reached $2.25 per share in 2024, yielding approximately 3%), and share repurchases. While the United States accounted for approximately 75% of product revenues in 2024, the company has been growing its ex-U.S. Presence, particularly in Europe where biosimilars face more receptive regulatory and market environments than in the U.S. Amgen's European commercial infrastructure, bolstered by its 2013 acquisition of deCODE Genetics in Iceland and longstanding partnerships across major EU markets, provides both revenue diversification and access to genomic research populations that inform drug discovery. Amgen Inc. Was established at the dawn of the biotechnology era and has grown to become the archetype of what a successful independent biotech company can achieve. The company is organized into research and development divisions focused on oncology, cardiovascular and metabolic diseases, inflammation, bone health, rare diseases, and neuroscience. Amgen's competitive posture has evolved from a largely defensive stance in the early 2010s — when it was focused primarily on defending Enbrel and Neulasta from biosimilar competition — toward a more aggressive offensive strategy combining pipeline development, strategic acquisitions, and biosimilar market entry. The question of how much revenue Amgen can sustain through the mid-2020s patent cliff cycle while simultaneously growing new franchises defines the company's near-term financial trajectory. Amgen's growth strategy rests on four interdependent pillars that CEO Robert Bradway has consistently articulated to investors since 2020. Tepezza has significant underpenetrated market opportunity — the vast majority of thyroid eye disease patients remain undertreated despite Tepezza's strong clinical evidence — and Amgen has invested heavily in patient identification programs, specialist education, and payer coverage expansion since the acquisition closed. The third pillar is building the biosimilars business into a durable revenue contributor. Amgen has committed to launching biosimilar versions of multiple high-revenue biologics as they lose exclusivity through 2030, using its manufacturing capabilities to achieve cost structures that enable profitable competition at biosimilar price points. The fourth pillar is disciplined financial management — specifically debt reduction from the Horizon acquisition while preserving R&D investment and the dividend. Management has targeted returning to investment-grade credit metrics by 2027, which would restore full capital allocation flexibility including potential smaller bolt-on acquisitions in therapeutic categories where Amgen wants to build pipeline depth. The geographic growth opportunity in emerging markets, particularly China and Japan, where Amgen is building direct commercial presence, represents a longer-term revenue diversification vector. Amgen is attempting to offset this through volume growth in Repatha, Otezla, Tepezza, and biosimilars, while simultaneously advancing pipeline assets in oncology including tarlatamab (AMG 757), a bispecific T-cell engager targeting DLL3 for small cell lung cancer that received FDA accelerated approval in May 2024. Tarlatamab's launch performance will be an important indicator of Amgen's ability to build new oncology franchises beyond its historical reliance on supportive care drugs. Bowes, a partner at the venture firm U.S. Venture Partners, conceived the idea of building a biotech company from the ground up with experienced professional management at its helm rather than waiting for academics to evolve into businesspeople. Rathmann was not a molecular biologist, but he was a scientist with deep industry experience and an intuitive understanding of how to build research organizations. The company's initial scientific strategy was deliberately broad: it would pursue multiple research directions in protein biology simultaneously, betting that some would eventually yield commercial products without pre-committing to any single therapeutic hypothesis. Amgen moved its operations to a leased building in Newbury Park, California (later incorporated into Thousand Oaks), hiring scientists from Caltech, UCLA, and major pharmaceutical companies. This partnership, unconventional in the extreme — a biotechnology company licensing its core technology to a brewery — demonstrated the creative financial pragmatism that would characterize Amgen's management style for decades. The dual-product base gave the company the financial stability to invest in a research pipeline that would take two more decades to produce its next generation of commercially significant medicines.