Amgen Faces $10.7B+ IRS Tax Dispute, FDA Conflict on TAVNEOS Amid Strong Pipeline Growth

summarizeSummary

Amgen's annual report details robust 2025 financial performance and significant pipeline advancements, but also reveals a major ongoing $10.7 billion IRS tax dispute, a regulatory conflict with the FDA over TAVNEOS, and a $1.2 billion impairment charge for Otezla.

check_boxKey Events

• Major IRS Tax Dispute

  Amgen is engaged in ongoing litigation with the IRS for the years 2010-2015, with proposed adjustments totaling approximately $8.7 billion in additional federal tax plus interest and $2.0 billion in penalties. The trial concluded in January 2025, and a decision from the U.S. Tax Court is expected no earlier than the second half of 2026. Amgen firmly believes the IRS positions are without merit and has not recorded a liability for this potential $10.7 billion+ obligation.

• FDA Conflict Over TAVNEOS

  On January 16, 2026, the FDA requested that Amgen's subsidiary, ChemoCentryx, voluntarily withdraw TAVNEOS from the U.S. market due to concerns about clinical trial data re-adjudication and hepatotoxicity. Amgen refused the withdrawal on January 28, 2026, expressing confidence in TAVNEOS's effectiveness and benefit-risk profile, and is evaluating next steps with the FDA. The related intangible asset has a carrying value of $2.5 billion.

• Significant Pipeline Advancements

  Amgen initiated six global Phase 3 studies for MariTide (a GLP-1/GIPR asset) in chronic weight management, cardiovascular disease, heart failure, and obstructive sleep apnea, following positive Phase 2 data for Type 2 diabetes. The company also secured full FDA approval for IMDELLTRA in extensive stage small cell lung cancer (ES-SCLC) and new indications for UPLIZNA and TEZSPIRE.

• Otezla Impairment Charge

  Amgen recorded aggregate impairment charges of $1.2 billion in 2025 for its Otezla intangible asset. This was triggered by the selection of Otezla for Medicare price setting under the Inflation Reduction Act, which is expected to significantly reduce its profitability in Medicare starting in 2027.

auto_awesomeAnalysis

Amgen's annual report details robust 2025 financial performance and significant pipeline advancements, but also reveals a major ongoing $10.7 billion IRS tax dispute, a regulatory conflict with the FDA over TAVNEOS, and a $1.2 billion impairment charge for Otezla. While the company reported strong double-digit growth in revenue and EPS for 2025, consistent with prior disclosures, several high-magnitude risks and negative financial impacts are highlighted. The ongoing IRS tax dispute, with a potential liability exceeding $10.7 billion, represents a significant contingent financial risk, especially given the expected court decision in late 2026 and Amgen's decision not to accrue for it. The direct regulatory conflict with the FDA regarding TAVNEOS, a product with a $2.5 billion carrying value, introduces substantial uncertainty and potential for market disruption. Furthermore, the $1.2 billion impairment charge for Otezla due to Medicare price setting and the 33% decline in ENBREL sales underscore increasing pricing pressures and biosimilar competition. These immediate challenges are partially offset by robust pipeline progress, particularly the advancement of the GLP-1 asset MariTide into multiple Phase 3 studies and several new regulatory approvals for other key products. Investors should closely monitor the outcomes of the IRS litigation, the TAVNEOS regulatory dispute, and the impact of biosimilar entries on Prolia/XGEVA sales, while also considering the long-term growth potential from the advanced pipeline.