By Tess Stynes
Amgen Inc. raised its 2015 guidance after reporting that its
second-quarter earnings rose 6.9% on better-than-expected sales
growth and lower operating expenses.
For the year, the biotechnology company now expects per-share
earnings of $9.55 to $9.80 and revenue of $21.1 billion to $21.4
billion, compared with its previously boosted estimate for
per-share profit of $9.35 to $9.65 a share on revenue of $20.9
billion to $21.3 billion. Amgen reduced its capital spending
outlook to about $700 million, from its previous estimate of about
$800 million.
Amgen, based in Thousand Oaks, Calif., has continued to showcase
its drug pipeline, which includes the potential for a number of
product launches this year, including a cholesterol-lowering PCSK9
drug that analysts expect to be a blockbuster. Like other big drug
makers, Amgen needs to bring new treatments to market, as older
ones face the threat of low-price competition.
While Amgen recently launched its heart-drug Corlanor, which
received approval from the U.S. Food and Drug Administration in
April, the company didn't break out early sales figures on
Thursday.
Amgen also recently received approval from European regulators
for cholesterol-lowering drug Repatha and is expecting a decision
from the FDA in late August.
In June, an FDA advisory panel recommended that the agency
approve Repatha, part of a class of drugs known as PCSK9 agents.
The FDA often follows the recommendations of its advisory panels,
but it isn't required to do so.
The FDA recently granted approval for Amgen's Kyprolis
combination therapy as a second-line treatment for patients with
multiple myeloma, which will allow access to the drug to a broader
population of patients. Kyprolis, which Amgen obtained with its
$10.4 billion acquisition of Onyx Pharmaceuticals Inc. in 2013,
initially received FDA approval in 2012 as a third-line
treatment.
Amgen also said Thursday that Fred Hassan, former chief
executive of Pharmacia and Schering-Plough, is joining the board of
directors.
Amgen is among the health-care companies that has been targeted
by a shareholder activist, in its case Dan Loeb and his hedge fund
Third Point Capital LLC. In response, the company has cut costs and
raised its dividend, while looking to its pipeline of potential new
products for growth.
The company also faces the threat of low-price competition for
its aging portfolio of drugs. A federal appeals court recently
ruled that Novartis AG could begin selling a lower-priced, or
biosimilar, version of Amgen's Neupogen cancer-care therapy on
Sept. 2, though Amgen is expected to appeal.
In the latest quarter, sales of Kyprolis surged 53% to $119
million on higher volume.
Sales of Amgen's osteoporosis drugs increased, also on stronger
volume. Prolia revenue climbed 29% to $340 million, while XGeva
sales improved by 11% to $331 million.
Sales of arthritis drug Enbrel rose 8% to $1.35 billion as a
boost from higher prices was partly offset by impacts from
increased competition.
In the latest quarter, Amgen's operating expenses declined about
1%, including a benefit of three percentage points from
foreign-exchange rates. Research-and-development costs fell 6%,
driven by the company's efforts to reduce expenses.
During October, the company laid out streamlining plans aimed at
generating as much as $1.5 billion in annual cost savings by
2018.
Overall, Amgen reported a profit of $1.65 billion, or $2.15 a
share, up from $1.55 billion, or $2.01 a share, a year earlier.
Excluding certain costs from acquisitions and restructuring as well
as other items, per-share earnings rose to $2.57 from $2.37.
Revenue increased 3.7% to $5.37 billion. Currency fluctuations
had a negative impact of about 2.5 percentage points on the
growth.
Analysts polled by Thomson Reuters expected per-share profit of
$2.43 and revenue of $5.319 billion.
Combined sales of Neulasta and Neupogen, both of which are used
to prevent infections in patients receiving chemotherapy, decreased
1% to $1.41 billion. Neulasta sales rose 2% to $1.15 billion,
driven by price.
In the quarter, Neupogen sales fell 14% compared with the same
period a year earlier to $256 million, partly because of
competition from products like Granix from Teva Pharmaceutical
Industries Ltd., Amgen said.
Write to Tess Stynes at tess.stynes@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires