Peter Griffith
Executive Vice President and Chief Financial Officer at Amgen
Thank you, Bob. We're pleased with our execution and growth this quarter as we drive towards our long-term goal. I will walk through our first quarter financial results before discussing our 2022 guidance. The financial results are shown on slide five of the slide deck. The first quarter marked another period of solid execution, with year-over-year revenue growth of 6% and non-GAAP EPS growth of 15%. For product sales, strong volume growth of 9% was driven by Repatha, Prolia and EVENITY. Volume growth was partially offset by declines in net selling price and foreign exchange headwinds. Our established portfolio comprised of EPOGEN, Aranesp, Neulasta, NEUPOGEN, Sensipar and Parsabiv, generated almost $1 billion of product sales and continues to deliver strong cash flows. Transitioning to our biosimilars, AMGEVITA remains the most prescribed adalimumab biosimilar in Europe. And looking forward, we will leverage this successful experience as we prepare to launch and grow this product in the United States in January of 2023. For MVASI and KANJINTI, as anticipated, we experienced year-over-year declines driven by net selling price reductions, and we expect this trend to continue for these products.
Murdo will discuss product sales in more detail in his remarks. Other revenues of $500 million increased 64% year-over-year, primarily driven by our COVID-19 antibody collaboration. First quarter total non-GAAP operating expenses increased 2% year-over-year as we invest in our pipeline, execute product launches and drive digitalization across the company. On a non-GAAP basis, cost of sales as a percent of product sales increased 1.1 percentage points on a year-over-year basis to 16.6%, primarily due to higher direct manufacturing costs, COVID-19 antibody manufacturing costs and increased royalties and profit shares. Non-GAAP R&D spend in the quarter decreased 1% year-over-year. Recall that Q1 2021 included $53 million related to our acquisition of Rodeo Therapeutics. Excluding the $53 million for Rodeo in 2021, non-GAAP R&D increased 5% year-over-year. Non-GAAP SG&A expenses in the first quarter declined 1% year-over-year. We continue to focus on prioritizing key investments and activities and driving productivity. Non-GAAP other income and expenses were a net $413 million expense in Q1.
This line item is driven by interest expense and our share of BeiGene results as a result of our use of the equity method of accounting. We have a strong balance sheet, generate significant cash flow and retain excellent financial flexibility to evaluate strategic business development opportunities. We continue to execute on our capital allocation priorities. First, investing in the best innovation, internal and external; second, investing in our business through capital expenditures, including for our new environmentally friendly facilities under construction in Ohio and North Carolina; and third, returning capital to shareholders through growing dividends, including $1.94 per share in the quarter, representing a 10% increase from Q4 2021; and fourth, opportunistic share repurchases, including 24.6 million shares of common stock in the first quarter, which included 23.3 million initial shares received and retired under the accelerated stock buyback agreement. Turning to the outlook for the business for 2022. We're pleased with our growth to date in 2022, and we're tracking to our 2022 plan.
Accordingly, we're reaffirming our 2022 guidance with a revenue range of $25.4 billion to $26.5 billion and a non-GAAP EPS range of $17 to $18. This non-GAAP EPS guidance does not include upfront expenses that may occur from certain types of transactions in the future. Similar to our peers, we have updated our non-GAAP policy to no longer exclude such expenses from our non-GAAP results in accordance with guidance recently issued by the SEC. For reference, the only impact as we recast 2021 to incorporate this change is that our non-GAAP operating expenses will now include two items that were previously excluded in 2021. First, $1.5 billion recorded and acquired in-process R&D associated with the Five Prime acquisition in Q2 2021. And second, $400 million recorded in research and development related to an upfront payment to license rights to AMG 451 from Kyowa Kirin Co. in Q3 2021.
Important additional points to consider for the remainder of 2022. Foreign exchange had an adverse impact on our Q1 2022 sales, and based on current rates, it is expected to create headwinds to our reported product sales of approximately $400 million year-over-year and has been included in our guidance. We note that while the results of our hedging program are reported in product sales, our hedging program is designed to partially mitigate the foreign exchange impact on our net income over the full year. In total, our 2022 non-GAAP EPS guidance includes a negative impact from foreign exchange of approximately 2% or approximately $0.35. We continue to expect other revenue for 2022 to be in the range of $1.4 billion to $1.7 billion. Q1 included a majority of our full year's projected revenue from our COVID collaboration and recall that these revenues in 2021 were recognized across Q2 to Q4. Our COVID collaboration revenue outlook depends on the state of the pandemic and continued government support. Our expectations for total non-GAAP operating expenses for 2022 are unchanged from the last time we spoke. However, when comparing against our recast 2021 results, total non-GAAP operating expenses will now reflect a low double-digit decrease year-over-year.
We continue to expect 2022 operating margin as a percentage of product sales to be roughly 50%. We continue to expect cost of sales as a percent of product sales to be 15.5% to 16.5%. Our expectations for non-GAAP R&D expenses in 2022 remain unchanged. Based on our recast 2021 results, in response to the SEC guidance mentioned above, which increased non-GAAP R&D expense in 2021 by $400 million, our expected 2022 non-GAAP R&D expense now equates to a decrease of 4% to 6% year-over-year. We continue to expect SG&A spend to be flat year-over-year as a percentage of product sales. And we now expect other income and expenses to be in the range of $1.6 billion to $1.8 billion, reflecting increasing interest rates and our share of BeiGene's results. This is a change from our previous range of $1.4 billion to $1.6 billion. And for the full year, we anticipate a non-GAAP tax rate range of 13.5% to 14.5%, up from our prior guidance of 13% to 14%. You've had an opportunity to read the update to our litigation and dispute with the IRS over the proposed adjustments for the period from 2010 to 2015, included in the press release. We firmly believe that the adjustments proposed by the IRS for that time period and the penalties proposed by the IRS for the 2013 to 2015 period are without merit.
Further, the amount of the adjustments proposed by the IRS for 2010 to 2015 period overstates by billions of dollars the magnitude of the dispute. We filed a petition in the U.S. Tax Court in July 2021 to contest the adjustments previously proposed for the 2010 to 2012 period. And we plan to file another petition in the U.S. Tax Court to contest the adjustments proposed in the notice for the 2013 to 2015 period. The dispute is expected to take several years to resolve. Amgen believes the IRS assertion of approximately $2 billion in penalties for the 2013 to 2015 period is wholly unwarranted. We've applied a consistent transfer pricing methodology since 2002. We've documented that transfer pricing methodology is required under relevant tax regulations and have extensively discussed that methodology with the IRS across multiple tax audits over multiple tax years. The IRS has never previously proposed transfer pricing penalties. Amgen also believes, based upon the positions advanced by the IRS, that the IRS adjustments for the 2010 to 2015 period are overstated by approximately $2 billion due to the IRS failure to account for certain income and expenses.
Amgen has reported its income and expenses in a consistent manner for many years, and the IRS has appropriately accounted for the company's income and expenses in all prior audits. Any additional tax that could be imposed for the 2010 to 2015 period would be reduced by up to approximately $3.1 billion of repatriation tax previously accrued with respect to the company's Puerto Rico earnings. Amgen previously made advanced tax deposits to the IRS totaling $1.1 billion for the 2010 to 2015 period. These deposits would further reduce any additional cash tax that could be imposed. The IRS is currently auditing the 2016 to 2018 period. We expect the audit to continue for several years, and it is possible that the 2010 to 2015 dispute will be resolved before the conclusion of the 2016 to 2018 audit and administrative appeals process. Any transfer pricing adjustments the IRS may propose for this period will be lessened by the change in tax rates resulting from the 2017 tax reform law, which reduced the difference between the tax rates applicable in the U.S. and Puerto Rico by approximately 2/3 beginning in 2018. We are highly confident in our positions in the litigation and dispute. We are grateful to all of our highly skilled colleagues in Puerto Rico and their important and ongoing contributions to Amgen's mission of serving patients. And now back to the mission of serving every patient every time. Our confidence in the long-term growth of Amgen remains strong given the strength of the business and our outstanding and dedicated team of 24,000 colleagues that deliver every day for patients.
This concludes the financial update. I'll now turn it over to Murdo.
