Amgen Sales Top Analysts’ Estimate on Growth of Key DrugsMeg Tirrell
Amgen Inc., the world’s largest biotechnology company by revenue, reported second-quarter sales that beat analysts’ estimates on growth of top medicines and a one-time boost from a drug reimbursement adjustment.
Revenue increased 4.5 percent to $4.68 billion from $4.48 billion in the same period a year earlier, Thousand Oaks, California-based Amgen said today in a statement. Twenty analysts’ estimates compiled by Bloomberg averaged $4.49 billion. Profit, excluding some one-time items, was $1.89 a share while analysts had estimated $1.74.
Investors are paying close attention to Amgen’s ability to increase sales as some of the company’s top-selling drugs may face competition from cheaper versions called biosimilars in the next few years, said Michael Yee, an analyst with RBC Capital Markets. Amgen also is developing new products and trying to expand its business outside the U.S. as it seeks new revenue. Sales in the quarter included an extra $185 million from an adjustment to Medicaid rebates, the company said.
“Amgen just reported a good quarter,” Mark Schoenebaum, an analyst with ISI Group, wrote today in a note to clients. “The ‘print’ indicates a blow-out, but there is one-time revenue boost from a Medicaid adjustment that explains virtually all of the revenue ‘beat.’”
Amgen declined 2 percent to $109 at 4:48 p.m. New York time in extended trading after closing at $111.20. The shares increased 29 percent this year through the close today.
Amgen raised its 2013 forecast, saying it expects total revenue for the year to be at the upper end of $17.8 billion to $18.2 billion, and for earnings excluding certain items to be $7.30 a share to $7.45 a share. The company had previously forecast earnings of $7.05 to $7.35 a share.
Net income in the second quarter declined less than 1 percent to $1.26 billion, or $1.65 a share, the company said. Amgen is spending more on research and development as it moves experimental programs into later stages of testing, RBC’s Yee said today in an interview before the results were released.
Sales of top drugs Enbrel, for rheumatoid arthritis, and Neulasta, for patients taking chemotherapy, increased 9 percent and 10 percent in the quarter, respectively, Amgen said.
“People will be looking at the top line as a very important gauge,” Ravi Mehrotra, an analyst with Credit Suisse, said in a telephone interview today before the results were released. “But the street will also be looking for a grasp on where the company gets its long-term growth.”
Amgen made an unsolicited offer to buy Onyx Pharmaceuticals Inc. last month for $120 a share, Onyx said. That would value the South San Francisco-based company at about $10 billion. Onyx rejected the offer and said it’s working with advisers on finding other bidders.