Amgen earnings beat expectations
Amgen trounced Wall Street expectations with a 50% jump in third-quarter profit, due to lower expenses and higher sales for nearly all the biologic drugmakers’ medicines.
A day after receiving an impressive fourth drug approval in the past year, the maker of injected osteoporosis treatment Prolia on Wednesday raised its 2015 profit forecast and issued an even higher one for 2016.
Its shares rose 69 cents in regular trading, then $2.34, or 1.4%, to $165.01 in after-hours trading following the release of earnings.
The world’s biggest biotech company reported net income of $1.86 billion, or $2.44 per share. Excluding one-time charges, adjusted profit was $2.72 per share, far above the $2.37 expected by analysts polled by FactSet.
The Thousand Oaks company said revenue rose 14% to $5.72 billion, also well above the $5.34 billion analysts expected.
However, some of that revenue will soon be siphoned off. One of Amgen’s older drugs, Neupogen, is starting to lose sales to a less-expensive “biosimilar” version, the first approved in the U.S. Biosimilars are near-copies of biologic drugs, which are produced in living cells rather than by mixing chemicals, as pills are made. A second drug, top seller Enbrel, could face biosimilar competition in the middle of next year.
Amgen Inc. has been working to make up for that, with a major restructuring, new drug development and two recent deals aimed at producing future drugs, an acquisition and a partnership with a second company.
In July 2014, Amgen began laying off about 12% of its staff and closing two sites to help fund final steps for approvals of those drugs and then their launches.
On Tuesday, the Food and Drug Administration approved Amgen’s Imlygic, a first-of-a-kind drug that uses the herpes virus to infiltrate and destroy deadly skin cancer tumors that cannot be removed surgically.
The others approved since last December include Blincyto, for treating a rare form of leukemia; Corlanor, the first new medication in a dozen years for heart failure, and Repatha, for people with sky-high cholesterol uncontrollable by standard medicines. Amgen also got approval for a kit with an easy-to-use self-injector for Neulasta, a newer version of Neupogen, for preventing infections in patients getting certain cancer drugs.
Amgen raised its 2015 forecasts for revenue, to a range of $21.4 billion to $21.6 billion, from $21.1 billion to $21.4 billion, and for adjusted earnings per share, to a range of $9.95 to $10.10, from $9.55 to $9.80.
It also said it expects 2016 revenue of $21.7 billion to $22.3 billion and adjusted earnings per share of $10.45 to $10.75.
