Amgen Reports Better-Than-Expected Quarter

21

Amgen Inc. said late Monday that despite lagging sales of its largest anemia drug, second quarter net income grew 40 percent, boosted by earlier restructuring and cost-cutting.

After the markets closed, the Thousand Oaks biotech reported net income of $1.27 billion ($1.25 per share) compared with net income of $906 million (84 cents) a year ago.

Excluding charges, Amgen had a profit of $1.29 per share, better than the $1.16 average expected by analysts surveyed Thomson Reuters. Revenue fell 1 percent to $3.71 billion, also better than analyst expectations of $3.58 billion.

Sales of the anemia drug Aranesp, which have been hurt over the past two years by safety concerns and lower reimbursement rates, were down 16 percent to $693 million still better than Wall Street’s expectation of $653 million in sales. Sales of the older anemia drug Epogen were up 3 percent to $638 million.

Sales of the rheumatoid arthritis and psoriasis drug Enbrel rose 7 percent to $899 million while combined sales of infection fighters Neulasta and Neupogen fell 4 percent to $1.16 billion. Helping the bottom line was a 13 percent drop in operating expenses. The quarter also was improved by a $115 million tax benefit.

Also Monday, Amgen announced an European marketing partnership with British drug maker GlaxoSmithKline for its highly anticipated osteoporosis drug denosumab, which is under regulatory review in the United States and overseas.

Amgen will receive an initial payment and near-term commercial milestone payments totaling $120 million, plus royalties on sales. The deal with Glaxo includes emerging markets in countries such as China and India, and is limited to sales of drug to treat postmenopausal osteoporosis. Amgen also hopes to market the drug for osteoporosis caused by cancer treatments.

Looking ahead, Amgen said it now expects full year 2009 net income of between $4.80 and $4.95 per share, up from prior guidance of $4.55 to $4.75 per share. It expects revenue at the upper end of its $14.4 billion to $14.8 billion outlook. Analysts on average expect profit of $4.57 per share on revenue of $14.3 billion.

“We are optimistic about our financial performance in 2009 and are focused on making denosumab a success,” Chief Executive Kevin Sharer said in a statement.

Prior to the earnings report, Amgen shares closed down 15 cents, or less than 1 percent, to $60.77 on the Nasdaq; they rose 3 percent in after-market trading.