Charge Hurts Amgen’s Earnings

Amgen Inc. said Wednesday that fourth-quarter earnings fell 23%, reflecting a $203-million charge arising from unsuccessful drug collaborations.

The Thousand Oaks-based company, which is in the process of acquiring rival Immunex Inc., said net income fell to $163 million, or 15 cents a share, from $210.8 million, or 19 cents, for the fourth quarter of 2001.

Revenue in the quarter rose to $1.12 billion, up 18% from a year earlier, driven by gains in Amgen’s anti-anemia and chemotherapy drugs.

Amgen shares edged lower in after-hours trading after closing at $58.46, up $2.40 on Nasdaq.

Analysts said they were surprised by the size of the charge, which stemmed from discontinued research collaborations with Praecis Pharmaceuticals Inc. and Guilford Pharmaceuticals Inc.

Analysts also said acceptance of Aranesp, Amgen’s new anti-anemia drug, is growing more slowly than they had expected.

Amgen said sales from Aranesp in the United States and Europe totaled $37 million for the fourth quarter and $42 million for the year. About half the sales went into inventory at wholesalers, a sign of sluggish demand.

“Overall, it is disappointing,” said Fariba Ghodsian, an analyst with Roth Capital Partners. Ghodsian had expected $60 million from Aranesp in 2001. “But the drug is in the early stages, and it is always hard to judge.”

Amgen said sales of Aranesp are “on track” but it is taking steps to speed adoption of the drug, a second-generation version of Amgen’s blockbuster drug, Epogen. Aranesp is aimed at kidney disease patients in the U.S., where it competes against Procrit, a first-generation product sold by Johnson & Johnson Inc. under a license from Amgen.

Sales of Neupogen, used to prevent infections in chemotherapy patients, rose 13% in the quarter to $353 million from $311 million a year earlier. Neupogen sales rose 10% in 2001, to $1.3 billion from $1.2 billion in 2000.