Amgen Sees Profit Increase, Raises Guidance -- Update
October 27 2016 - 06:56PM
Dow Jones News
By Tess Stynes
Amgen Inc. reported third-quarter earnings rose 8.3% as the
biotechnology company boosted its 2016 outlook as the results beat
expectations.
For the year, Amgen raised its per-share earnings estimate to
$11.40 to $11.55 on revenue of $22.6 billion to $22.8 billion, from
its previous estimate for per-share profit of $11.10 to $11.40 on
revenue of $22.5 billion to $22.8 billion.
The quarter's results showed the impact that biosimilar
competition could have on drug companies. One sore spot in Amgen's
performance was a 36% drop in sales of the company's cancer-care
drug Neupogen, which began facing competition late last year from
Novartis AG's Zarxio, the first lower-priced biosimilar approved in
the U.S. Neupogen sales fell to $183 million world-wide largely due
to U.S. competition, Amgen said.
Meanwhile, Amgen CEO Robert Bradway said on a conference call
that Amgen doesn't expect to begin selling its biosimilar version
of AbbVie Inc.'s Humira in 2017. The copy, called Amjevita, was
approved by the Food and Drug Administration in September, but Mr.
Bradway indicated he didn't expect resolution of AbbVie's
patent-infringement lawsuit in time to launch next year.
Like many other drugmakers, Amgen has been counting on new
medicines brought to market, along with cost cuts, as some older
drugs face competition from lower-priced treatments.
Sales of one of Amgen's newer drugs, anti-cholesterol treatment
Repatha, which initially got off to a slow start, gained more
traction in the latest quarter. Repatha sales reached $40 million,
up from $27 million in the second quarter and $3 million a year
earlier.
Amgen has said restrictions on Repatha's use by health insurers
and drug-benefit managers had been blunting sales of the drug that
initially was approved by U.S. regulators more than a year ago.
Even so, the company has been optimistic about Repatha's long-term
prospects as it works with such payers and gets more data on
patient outcomes.
In September, the FDA approved Amgen's biosimilar version of
AbbVie Inc.'s Humira. A month earlier, Novartis AG's biosimilar for
Amgen's Enbrel, which competes with Humira, also won FDA
approval.
Investors also may be listening on the call for details about
Amgen's strategy for multiple-myeloma drug Kyprolis, which failed
to meet its primary endpoint of superior progression-free survival
against a rival drug in a recent study, results that could limit
use in previously untreated patients. Still in the latest quarter,
Kyprolis sales climbed 34% to $183 million.
Sales of bone drugs Prolia and Xgeva also continued to boost
Amgen's top line, rising 18% and 4% respectively.
Over all, Amgen reported a profit of $2.02 billion, or $2.68 a
share, up from $1.86 billion, or $2.44 a share, a year earlier.
Excluding restructuring-related charges and other items, adjusted
per-share earnings rose to $3.02 from $2.72. Revenue increased 1.5%
to $5.81 billion.
Analysts polled by Thomson Reuters expected per-share profit of
$2.79 and revenue of $5.73 billion.
Overall, operating expenses declined 3%.
Research-and-development expenses fell 12% mostly on lower spending
for to support later-stage clinical programs and cost-savings
efforts.
Write to Tess Stynes at tess.stynes@wsj.com
Jonathan D. Rockoff contributed to this article
(END) Dow Jones Newswires
October 27, 2016 18:41 ET (22:41 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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