July 28 (Bloomberg) -- Amgen Inc., the world's largest biotechnology company, beat analysts' estimates after sales of its top-selling anemia drugs declined less than expected. The company also raised its full-year earnings forecast.

Second-quarter net income dropped 7.7 percent to $941 million, or 87 cents a share as sales of the anemia medicines, Aranesp and Epogen, fell, the Thousand Oaks, California-based company said today in a statement. Profit excluding certain costs was $1.14, exceeding the $1.03 average estimate of 19 analysts surveyed by Bloomberg.

Amgen shares rose as much as 3.3 percent to $62.50 in extended trading. Earlier, Amgen rose 12 percent in Nasdaq Stock Market composite trading after the company said its experimental osteoporosis drug, denosumab, prevented fractures, signaling the medicine's potential to counter declining anemia drug sales.

This was an ``overall, stellar quarter; all major products beat estimates,'' said Mark Schoenebaum, an analyst with Deutsche Bank in New York, in a note to clients today.

Amgen shares plunged 32 percent last year after its anemia medications were linked to risks of heart attack, stroke and death at high doses, hurting sales. The company is betting on denosumab, shown to prevent fractures in a July 25 study of 7,800 women.

``There is a recovery story under way with denosumab,'' said Eric Schmidt, an analyst with Cowen & Co. in New York, in a telephone interview last week.

Raised Forecast

Amgen raised its 2008 earnings forecast, excluding some items, to $4.25 to $4.45 a share from a previous projection of $4.00 to $4.30.

Revenue for the second quarter rose 1 percent to $3.76 billion. Worldwide sales of Aranesp, the company's top-selling product for anemia caused by chemotherapy, fell 13 percent to $825 million. That beat analysts' $740 million sales projection for the quarter, Schoenebaum said.

Sales of Epogen, an older anemia drug for patients with chronic kidney disease, were flat at $622 million, compared with $624 million a year earlier. Analysts had forecast $582 million, Schoenebaum said.

``The worst is clearly behind us,'' said Amgen's Chief Executive Officer Kevin Sharer, on a conference call with investors today.

Enbrel, a treatment for rheumatoid arthritis and psoriasis, generated $841 million in revenue in the quarter, up 2 percent from a year earlier. The U.S. Food and Drug Administration asked Amgen on July 24 for more information on the use of Enbrel in pediatric patients with the skin disorder psoriasis, the company said today.

Stock Upgrades

Amgen's stock climbed the most in three years today, before the earnings release, as analysts upgraded the company based on denosumab data released after the close of U.S. markets July 25.

A three-year trial of 7,800 women with osteoporosis found that the medicine strengthened bones and reduced fractures in the spine, hip and other locations more than a placebo, Amgen said in a statement. Research already showed that denosumab strengthens bones better than the top drug for osteoporosis, Merck & Co.'s Fosamax, which had $3 billion in sales last year.

``We now view the drug's status as a future blockbuster to be secure,'' said Michael G. King Jr., an analyst at Rodman & Renshaw in New York, in a research note today, citing the safety data in the study. King recommended buying the shares, a change from a previous recommendation to hold, and set a target price of $80. He doesn't own Amgen stock.

An additional three analysts upgraded to buy recommendations: Stephen D. Harr at Morgan Stanley in New York, M. Ian Somaiya of Thomas Weisel Partners in New York, and Adam A. Walsh of Jefferies & Co. in Boston. Shiv S. Kapoor of Morgan Joseph & Co. in New York began coverage with a buy recommendation. In all, 16 analysts recommend buying Amgen, compared with nine holds and no sells, according to Bloomberg data.

To contact the reporter on this story: Lisa Rapaport in New York at Lrapaport1@bloomberg.net

Last Updated: July 28, 2008 18:46 EDT