Amgen Posts Profit That Tops Estimates, Raises Guidance

  • Third-quarter revenue increases 14%, net income soars 50%
  • Surging drug sales led by arthritis treatment Enbrel

Biotechnology giant Amgen Inc. posted third-quarter earnings that topped analysts’ estimates, driven by higher drug sales, and raised its forecast for the year.

Profit excluding one-time items rose to $2.72 a share, while analysts had forecast $2.38 on average, according to estimates compiled by Bloomberg. Revenue grew 14 percent to $5.72 billion, the Thousand Oaks, California-based company said Wednesday in a statement. Analysts had predicted $5.34 billion.

Net income jumped 50 percent to $1.86 billion, or $2.44 a share, from $1.24 billion, or $1.61, a year earlier. Amgen’s shares rose 0.9 percent to $164.20 in late trading after the results were announced.

The drugmaker raised its forecast for the year, predicting adjusted earnings per share of $9.95 to $10.10, and revenue of $21.4 billion to $21.6 billion. Previously Amgen had said 2015 profit would be $9.55 to $9.80 a share, with sales of $21.1 billion to $21.4 billion.

‘Impressive Numbers’

“The company just clobbered all the earnings estimates all year,” Bill Smead, chief executive officer of Smead Capital Management, said by phone. Amgen is the $1.2 billion fund’s largest holding. Smead said he was impressed by the growth in sales of Prolia and Xgeva, drugs for osteoporosis and bone cancer.

“For them to be growing now in the third year of these products at the 19 percent revenue level, especially when you take a little haircut on the currency on the sales outside the United States, those are impressive numbers,” he said. Prolia’s quarterly sales rose 25 percent from a year earlier, and Xgeva was up 19 percent.

Amgen also provided financial guidance for 2016, predicting adjusted earnings per share of $10.35 to $10.75 and revenue of $21.7 billion to $22.3 billion. The company said it plans to increase the quarterly dividend to $1 a share in the first quarter of next year from the current 79 cents. It also plans to buy back $2 billion to $3 billion of its shares in 2016.

The increase in product sales was driven by higher prices, low inventory levels in the previous year and higher unit demand, according to Amgen’s statement. Sales of the rheumatoid arthritis treatment Enbrel, Amgen’s top drug, totaled $1.39 billion, beating analysts’ estimate of $1.25 billion.

Drug Approvals

Amgen has brought multiple new drugs to the U.S. market this year, gaining approval on Tuesday for Imlygic, a cancer therapy for advanced melanoma. Heart failure drug Corlanor was cleared in April, and Repatha, a cholesterol-lowering drug, was approved in August. 

Repatha belongs to a new class of treatments called PCSK9 inhibitors, designed to help patients who can’t get their LDL, or bad, cholesterol under control with statins alone. Amgen didn’t report sales for Repatha in the third quarter. The injection competes with a drug from Sanofi and Regeneron Pharmaceuticals Inc.

Anthony Hooper, head of commercial operations at Amgen, said the Repatha rollout was going well.

“Having launched a number of cardiovascular drugs in my life, this one feels pretty good,” Hooper said on a conference call with investors. “The level of discussion we’re getting among cardiologists and high-prescribing primary care physicians is more than what I would have expected.”

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