What caused the sharp rise in Amgen's R&D expenses in 2024?

Amgen's Research and Development (R&D) expenses increased by 0.25% in 2024, reaching a total of $5.96 billion. While the overall increase might seem modest, it is important to consider the context of Amgen's strategic initiatives and developments that contributed to this rise:

1. **Acquisitions and Product Development**: Amgen's acquisition of ChemoCentryx in 2022 brought Tavneos, a drug approved for the treatment of ANCA-associated vasculitis, into its portfolio. The integration of Horizon, which includes products and pipeline contributions, has been proceeding well. These acquisitions and the development of new products naturally lead to increased R&D expenses as the company invests in integrating new assets and advancing their respective pipelines.
2. **Pipeline Development**: Amgen has been actively developing a broad range of potential first-in-class medicines, including tarlatamab for small cell lung cancer and MariTide for obesity and related conditions. The expansion of the manufacturing capacity to support clinical and commercial supply indicates a forward-looking investment in preparing for future product launches. The development of these new treatments requires significant investment in research and development.
3. **Strategic Growth Focus**: Amgen has reported a 22% revenue increase and significant progress in rare disease treatments and pipeline development. The company's focus on rare diseases and the significant sales achieved by Evenity and Repatha highlight the importance of continued R&D investment in these areas.
4. **Innovation in Biotechnology**: As a biotechnology company, Amgen is at the forefront of innovation, using biological processes and biocatalysts to develop new products. The sector's growth and the need to keep pace with technological advancements drive the need for higher R&D investments.

In summary, Amgen's R&D expenses increased in 2024 due to a combination of strategic acquisitions, pipeline development, and a focus on innovation in biotechnology, which are all critical for maintaining a competitive edge in the pharmaceutical industry.