Amgen Tops Estimates on Increased Arthritis Drug Sales

Amgen Inc. (AMGN), the world’s largest biotechnology company, boosted its earnings forecast for the year after posting third-quarter profit that beat analysts’ estimates by 20 cents as sales of arthritis and bone drugs rose.

Net income increased to $1.11 billion, or $1.41 a share, from $454 million, or 50 cents, a year earlier, when Amgen took a $780 million charge for legal settlement costs, the Thousand Oaks, California-based company said today in a statement. Profit, excluding one-time items, was $1.67 a share, topping the $1.47 average of 20 analyst estimates compiled by Bloomberg.

Amgen is trading at a record high as shareholders reward the company for its $10 billion share buyback program initiated last year, a dividend and slowing declining sales of its former core anemia drugs by signing long-term deals, said Michael Yee, an analyst with RBC Capital Markets Corp. in San Francisco. Robert Bradway, who took over as chief executive officer in May, has kept up the momentum from the previous management.

“The new CEO is doing a good job overseeing the execution with his first full quarter under his belt,” Yee said in an interview. “They had better than expected sales of Epogen, managed costs, and have the dividend.”

Revenue jumped 10 percent to $4.32 billion. The company now estimates revenue for 2012 will be $17.2 billion to $17.3 billion, on earnings per share of $6.50 to $6.60. Earlier the company had forecast $16.9 billion to $17.2 billion on earnings of $6.20 to $6.35 a share.

Bone Drugs

Sales of Xgeva, approved in November 2010 by the U.S. Food and Drug Administration to reduce fractures in cancer patients, and Prolia, used to treat osteoporosis in menopausal women, generated $311 million in the quarter, Amgen said. Analysts had estimated sales of $329.9 million.

Sales of Enbrel, used to treat rheumatoid arthritis, increased 17 percent to $1.08 billion. Analysts had projected $1.03 billion.

Amgen said sales of the anemia drug Aranesp fell 17 percent to $497 million in the third quarter. Epogen, an older version, rose 3 percent to $491 million. Amgen’s Neulasta and Neupogen, medications used to reduce the risk of infection in patients on chemotherapy, increased 1.5 percent to $1.36 billion.

Amgen’s 36 percent gain this year bests the Standard & Poor’s 500 Health Care Index’s (S5HLTH) 15 percent increase, and the shares are trading at their highest level since 1984. The stock may end the year with the company’s best annual gain since 1999.

The shares rose 1.4 percent to $88.55 at 5 p.m. New York time in extended trading after closing at $87.32

To contact the reporter on this story: Ryan Flinn in San Francisco at rflinn@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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