Amgen Falls After Revenue Growth Misses EstimatesRyan Flinn
Amgen Inc., the world’s largest biotechnology company, declined the most in four years after reporting sales growth that missed analysts’ estimates.
Amgen fell 6.9 percent to $104.93 at the close in New York, the biggest single-day drop since February 2009. The shares of the Thousand Oaks, California-based company had gained 65 percent in the 12 months through yesterday.
Revenue increased 5 percent to $4.24 billion, Amgen said in a statement yesterday. The sales were less than the $4.37 billion estimated by analysts, the first time in 11 quarters the company has missed expectations, according to Bloomberg Industries.
“This is a negative quarter,” Judson Clark, an analyst with Edward Jones & Co., said in an interview. “The bigger question mark is their sales numbers -- it was a pretty broad-based disappointment.”
Net income increased 21 percent to $1.4 billion, or $1.88 a share, from $1.18 billion, or $1.48 a share, a year earlier, Amgen said. Earnings, excluding some items, of $1.96 a share topped by 12 cents the average of 20 analysts’ estimates compiled by Bloomberg.
The company benefited in the first quarter from a 2012 U.S. research tax credit that wasn’t renewed until January. The company said it expects 2013 profit “to be above the mid-point” of its previous forecast of earnings excluding one-time items of $7.05 to $7.35 a share.
Amgen shares rose 19 percent in the first quarter, its best three-month gain since the third quarter of 2008. The company was benefiting from investor interest in the sector, with drugmakers, health insurers and biotechnology companies in the Standard & Poor’s 500 Index returning 20 percent this year, the most among the 10 main groups.
Amgen is looking for new products and acquisitions as its former core anemia business declines. Eight late-stage medicines in development will generate data through 2016 and some may lead to billions of dollars in sales, Chief Executive Officer Robert Bradway said in February at a business review meeting in New York.
One, a heart medication called AMG-145, targets the cholesterol-regulating gene PCSK9 in the liver. Another therapy, romosozumab, grows bone for patients with osteoporosis.
Last year, the company agreed to buy gene researcher DeCode Genetics Inc. for $415 million and gained an experimental leukemia treatment by acquiring Micromet Inc. for $1.16 billion. Amgen also signed a development deal with London-based AstraZeneca Plc and boosted its presence in the cancer market with Xgeva, a bone drug that reduces fractures.
The company is focusing on the potential of the experimental treatments to help offset declining revenue from its anemia drugs Aranesp and Epogen. Sales of Aranesp fell 10 percent to $468 million, and Epogen, an older version, declined 2 percent to $435 million in the first quarter.
Sales of Xgeva, approved by the U.S. Food and Drug Administration in November 2010, and Prolia, used to treat osteoporosis in menopausal women, increased 51 percent to $365 million in the quarter, falling short of analysts’ estimates of $394.2 million.
Sales of Amgen’s top product Enbrel, used to treat rheumatoid arthritis, rose 11 percent to $1.04 billion in the quarter. Analysts had estimated $1.06 billion.