⚠ Profit Share Expense Is RisingLow threat

Amgen (AMGN) — threat to the moat

Amgen's fastest-growing drugs include partnered ones, and higher profit share pushed its cost of sales up to 19.6% of product sales.

Amgen's fastest-growing drugs are not all wholly its own, and the cost shows up in its margins. In the second quarter of 2026 non-GAAP cost of sales rose to 19.6% of product sales from 17.7% a year earlier, driven by higher profit share expense and higher manufacturing costs1. The non-GAAP operating margin fell 0.5 percentage points to 48.4%2.

Non-GAAP cost of sales, share of product sales (%)17.7%Q2 202519.6%Q2 2026Amgen Q2 2026 results release
Partners take a larger share as the drugs grow.

The profit share is the price of partnership. EVENITY's commercialization profits and losses are shared equally with UCB3; TEZSPIRE is sold by AstraZeneca outside the United States4. The more these drugs grow, the more Amgen pays its partners, so their success raises Amgen's costs as well as its sales.

Partnerships reduced Amgen's risk when the drugs were uncertain. Now that they work, they cap how much of the growth Amgen keeps. EVENITY alone sold $714 million in the second quarter of 20265, and half of its profit belongs to UCB.

The margin effect is small so far. Amgen's non-GAAP operating margin of 48.4%6 is still high. But the direction matters because the growth mix is moving toward the shared drugs while the wholly owned older ones, ENBREL and Prolia, decline.

The measure to follow is the non-GAAP cost of sales ratio. If it rises above 21% of product sales without a matching rise in price or volume, the growth drivers will be adding revenue faster than they add profit, and Amgen's earnings will grow more slowly than its sales.

References
  1. ReportedIn the second quarter of 2026 non-GAAP cost of sales rose to 19.6% of product sales from 17.7% a year earlier, driven by higher profit share expense and higher manufacturing costs.
    Amgen second-quarter 2026 results release, Form 8-K exhibit 99.1 - financial results, margins, cash flow and 2026 guidance. — Q2 2026 · publ. 4 August 2026 · source ↗
  2. ReportedThe non-GAAP operating margin fell 0.5 percentage points to 48.4%.
    Amgen second-quarter 2026 results release, Form 8-K exhibit 99.1 - financial results, margins, cash flow and 2026 guidance. — Q2 2026 · publ. 4 August 2026 · source ↗
  3. ReportedEVENITY's commercialization profits and losses are shared equally with UCB; TEZSPIRE is sold by AstraZeneca outside the United States.
    Amgen Form 10-K for fiscal 2025 - Item 1 business: products, collaborations, staff and pipeline. — FY2025 · publ. 13 February 2026 · source ↗
  4. ReportedEVENITY's commercialization profits and losses are shared equally with UCB; TEZSPIRE is sold by AstraZeneca outside the United States.
    Amgen Form 10-K for fiscal 2025 - Item 1 business: products, collaborations, staff and pipeline. — FY2025 · publ. 13 February 2026 · source ↗
  5. ReportedEVENITY alone sold $714 million in the second quarter of 2026, and half of its profit belongs to UCB.
    Amgen second-quarter 2026 results release, Form 8-K exhibit 99.1 - product sales performance: Repatha, EVENITY, Prolia and XGEVA. — Q2 2026 · publ. 4 August 2026 · source ↗
  6. ReportedAmgen's non-GAAP operating margin of 48.4% is still high.
    Amgen second-quarter 2026 results release, Form 8-K exhibit 99.1 - financial results, margins, cash flow and 2026 guidance. — Q2 2026 · publ. 4 August 2026 · source ↗
Sources
Generated September 28, 2026