Tags: Amgen | Profit | Rebounds | Quarter

Amgen Profit Rebounds from Weak First Quarter

Tuesday, 30 Jul 2013 06:35 PM

Amgen Inc., which is attempting to buy Onyx Pharmaceuticals Inc to add to its cancer drug offerings, on Tuesday reported higher-than-expected second-quarter profit as sales of many of its medicines rebounded from a disappointing first quarter.

Most of Amgen's higher profile products had sales that exceeded Wall Street estimates, and the world's largest biotechnology company raised its full-year earnings forecast.

Excluding special items, Amgen earned $1.89 per share, topping analysts' average expectations by 15 cents, according to Thomson Reuters I/B/E/S. Many analysts had tempered their second-quarter forecasts after being caught off guard by a weaker-than-expected first quarter.

"Overall, it was a very solid quarter. Amgen is clearly back on track after sloppy first quarter," said Cowen and Co analyst Eric Schmidt.

"It was nice that the guidance was bumped up too," he added.

Amgen said it now expects 2013 adjusted earnings of $7.30 to $7.45 per share. It had previously forecast earnings above the midpoint of $7.05 to $7.35.

The company also said full-year revenue was expected to come in at the upper end of its previously forecast range of $17.8 billion to $18.2 billion, and that its tax rate for the year would be between 9 percent and 10 percent.

"We are carrying good momentum into the third and fourth quarters and are on track to deliver solid revenue and earnings growth for the year as indicated by our increased guidance," Amgen Chief Executive Robert Bradway told analysts on a conference call.

Revenue for the quarter rose 5 percent to $4.68 billion, topping analysts' average estimates of $4.49 billion.

The increased revenue was helped by a 9 percent increase in sales of the rheumatoid arthritis treatment Enbrel and a surge in demand for newer, fast-growing products Xgeva and Prolia.

Product sales included a positive adjustment of $185 million to previous estimates for managed Medicaid rebates based on recent claims experience, the company said.

The company posted a net profit of $1.26 billion, or $1.65 per share, compared with a profit of $1.26 billion, $1.61 per share, a year ago.

Research and development costs jumped 17 percent to $967 million, primarily due to expenses associated with the high profile experimental cholesterol drug AMG 145. The company expects key data in the first quarter of 2014 on the drug that is from a promising new class of medicines called PCS-K9 inhibitors.

Enbrel posted sales of $1.16 billion for the quarter, edging past analyst estimates of about $1.14 billion and up from $1.04 billion in the first quarter.

Sales of the white blood cell boosters Neupogen and Neulasta had combined sales of $1.44 billion, an increase of 7 percent and ahead of analysts' estimates of about $1.37 billion.

Xgeva for preventing fractures once cancer has spread to the bones saw sale sales jump 39 percent to $249 million, surpassing Wall Street expectations of about $241 million. The related osteoporosis drug Prolia posted a 57 percent increase in sales to $188 million. Wall Street had been looking for about $173 million.

The decline in sales of the red blood cell booster Aranesp slowed with sales down only 2 percent to $524 million, exceeding Wall Street estimates of $491 million and the previous quarter's $468 million. Sales of the older anemia drug Epogen fell 4 percent to $502 million, ahead of expectations of $477 million.

Sales of both drugs have been declining for years over usage and reimbursement restrictions and safety concerns, in part fueling Amgen's interest in acquiring newer, growing medicines, such as Onyx's Kyprolis for multiple myeloma.

Amgen's initial offer of $120 per share for Onyx was rejected as too low, but it is still considered the leading contender to acquire the company.

The company also announced plans to acquire the U.S. commercial rights to a heart failure drug developed by France's Servier that is sold in Europe under the brand name Procoralan.

After initially rising 1.4 percent in extended trading, Amgen shares slipped about 1 percent to $109.99. They closed at $111.20 on Nasdaq and are up about 28 percent for the year.

 

© 2017 Thomson/Reuters. All rights reserved.

 
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Amgen, which is attempting to buy Onyx Pharmaceuticals to add to its cancer drug offerings, on Tuesday reported higher-than-expected second-quarter profit as sales of many of its medicines rebounded from a disappointing first quarter.
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Tuesday, 30 Jul 2013 06:35 PM
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