Amgen Expects Sales to Rise 32% Annually

Biotechnology giant Amgen Inc. on Tuesday forecast that its annual sales may grow as much as 32% through 2005, driven by demand for its three newest drugs.

The Thousand Oaks-based company said much of its sales momentum would come from Enbrel, its anti-inflammatory drug, and second-generation medications to treat anemia and chemotherapy-related infections. Amgen’s total product sales will double to $9.8 billion in 2005, up from $4.9 billion in 2002, the company said.

Wall Street, accustomed to the steady roar of Amgen’s growth engine, nudged Amgen’s shares up 71 cents to $53.86 on Nasdaq Tuesday. Amgen’s market capitalization is now $69.3 billion, the highest of any Southland company and 19th of S&P; 500 industrial companies.

Amgen said its per share earnings should grow by 25% to 27% annually. “We expect to produce strong financial performance,” said Amgen Chief Executive Kevin W. Sharer.

Amgen announced the projections at a meeting with 250 analysts and investors in Hollywood before the markets closed.

“It is a very solid company,” said Fariba Ghodsian of Castle Creek Life Sciences Partners, a Beverly Hills hedge fund. “In terms of growth, the numbers are definitely achievable.”

Amgen’s drug Enbrel was the crown jewel of last year’s acquisition of rival Immunex Corp. Amgen estimated that sales of the drug would grow an average of 40% a year and climb to sales of $2.1 billion in 2005, up from $800 million in 2002.

But as recently as July, Sharer pegged Enbrel’s 2005 sales at $3 billion. Amgen spokesman Jeff Richardson said that Enbrel could reach the $3-billion mark in 2006 if growth trends continue.

The drug, used mainly to treat rheumatoid arthritis, faces competition from several new biotechnology drugs, including Abbott Laboratories’ Humira. Amgen said it will seek Food and Drug Administration approval this year to market Enbrel to the 1 million patients with severe psoriasis, where it will meet competition from Biogen Inc.

Sales of Amgen’s drugs for chemotherapy-related infections, Neulasta and Neupogen, should rise up to 20% a year to $3.1 billion in 2005, from $1.8 billion in 2002, according to Amgen. Aranesp, a second-generation anemia drug, will help spur growth in Amgen’s anemia franchise. Aranesp competes with Procrit, a first-generation treatment invented by Amgen but sold by Johnson & Johnson Inc. under a contentious 18-year licensing agreement.

Combined sales of Aranesp and Epogen, a first-generation anemia drug, could hit $4.6 billion in 2005.

A wild card in Amgen’s sales forecast are changes in Medicare’s reimbursement for Aranesp. Amgen is fighting Medicare in court over a reduction in the reimbursement rate for Aranesp that threatens to shift $100 million in sales to J&J;’s Procrit, the cheaper drug.

Amgen is discounting Aranesp’s price to hospital outpatients. But its sales projections assume the Medicare reimbursement cuts will be restored.