Amgen’s Net Income Climbs 24%

Amgen Inc. said Thursday that net income soared 24% in the first quarter as changes in Medicare reimbursement did not slow drug sales as expected.

Buoyed by its strong performance, the biotechnology company raised revenue and earnings guidance for all of 2005.

Investors, however, pushed Amgen’s shares down in after-hours trading, discouraged by flat sales of Amgen’s mainstay drug, Epogen.

Net income in the quarter was $859 million, or 67 cents a share, compared with $695 million, or 52 cents, in the year-earlier quarter.

Excluding charges related to the 2002 Immunex Corp. acquisition and other special items, net income was $929 million, or 72 cents a share, compared with $757 million, or 57 cents, a year earlier. On that basis, Thousand Oaks-based Amgen beat Wall Street’s consensus forecast by 4 cents, according to Thomson First Call.

Revenue was $2.8 billion, up 21% from $2.3 billion in the first quarter of 2004.

“We had a really great first quarter,” Chief Executive Kevin Sharer said in a conference call. “Our product performance was strong.”

Driving Amgen’s results were better-than-expected sales of Aranesp, a long-acting anemia drug used mostly by cancer patients. Aranesp sales totaled $723 million in the quarter, up 33%, largely because of gains in the U.S. market.

Investors had been worried that changes in Medicare drug reimbursement during the quarter would hurt Aranesp sales growth, but those fears did not materialize.

“So far, oncologists have not made any meaningful changes in prescribing patterns,” Sharer said.

Christopher Raymond, an analyst at Robert W. Baird & Co., said he was encouraged by Amgen’s results.

“It is hard to argue with these numbers,” he said.

Sales of Neulasta and Neupogen, drugs for chemotherapy-related infections, were $795 million in the quarter, up 20%.

Enbrel, a drug for rheumatoid arthritis, psoriasis and other diseases, had sales of $592 million, up 49%.

Sales of Epogen fell 1% to $583 million, despite increased demand, because of adjustments to sales from previous quarters.

Amgen said it now expected full-year revenue percentage growth in the low double digits to mid-teens, up from high single digits to low teens.

The company said adjusted earnings per share would range from $2.80 to $2.90, up from the previous range of $2.70 to $2.85.

Wall Street had expected revenue growth of 15% and per-share earnings of $2.82, according to Thomson First Call.

Amgen said it was continuing to make progress on experimental drugs for colon cancer and osteoporosis and announced the start of clinical trials of two drugs, one for cancer and the other for asthma.

Investors have been skeptical about Amgen’s drug development pipeline, and that is one reason the company’s shares have remained relatively flat while shares of its rival Genentech Inc. have soared.

However, some analysts believe that Amgen’s experimental osteoporosis drug, AMG-162, could become a blockbuster with more than $1 billion in annual sales.

Amgen announced its results after the stock market closed. In regular Nasdaq trading, Amgen shares rose $1.12 to $59.25. In early after-hours trading, Amgen sank to $57.51.

Raymond, the Baird analyst, said investors were reacting to lower Epogen sales.