Amgen Tops Fourth-Quarter Profit Estimates, Raises Guidance

  • Adjusted EPS totals $2.61, beating predictions for $2.29
  • Biotech giant maintains growth with six new drugs in 2015

Amgen Inc. posted fourth-quarter profit that easily topped analysts’ estimates as its operating margin widened. The biotechnology giant also raised its guidance for 2016 earnings.

Profit excluding one-time items was $2.61 a share, Amgen said Thursday in a statement, beating the $2.29 average of 16 analysts’ projections compiled by Bloomberg. Amgen’s operating margin increased by 5 percentage points in the fourth quarter from the previous year, helped by the company’s restructuring programs.

Amgen shares were little changed in extended trading in New York.

To maintain sales growth, the company has invested heavily in research and development, introducing six new drugs in 2015, including cholesterol treatment Repatha and cancer medicine Kyprolis. It will report results from a final-phase trial for bone-builder romosozumab in the first quarter, and from a mid-stage trial for a migraine medication in the second half of the year.

  • The company said 2016 revenue will be $22.0 billion to $22.5 billion, up from November guidance of $21.7 billion to $22.3 billion
  • Full-year earnings per share, excluding one-time items, will be $10.60 to $11, up from November guidance of $10.35 to $10.75
  • Fourth-quarter revenue rose 4 percent to $5.54 billion from a year earlier, compared with an average analyst prediction of $5.53 billion
  • Fourth-quarter net income rose 39 percent to $1.8 billion, topping estimates for $1.32 billion

Here’s how the company’s top drugs performed:

  • Enbrel: $1.44 billion, estimate was $1.33 billion
  • Neulasta: $1.16 billion, estimate was $1.18 billion
  • Aranesp: $499 million, estimate was $492 million

Anemia drug Epogen generated $342 million in sales, missing analysts’ estimates of $450 million. The lower results were due to the effects of competition as well as patients shifting to Amgen’s Aranesp, the company said.

Repatha’s uptake has been slowed by strict criteria set by health insurers, said Tony Hooper, executive vice president of global commercial operations, on a call with analysts.

“The prior authorization documents are five pages of handwritten stuff,” he said. “Most of the rejections are because the forms are not properly completed.”

Hooper said uptake should improve as the forms move from paper to an electronic process and after data on the drug’s effects on cardiovascular outcomes, such as heart attacks, are published later this year.

Developing Biosimilars

Amgen also has invested in developing biosimilars, drugs that mimic other biological treatments, creating one of the most ambitious pipelines in the industry. The Thousand Oaks, California-based company plans to have as many as five biosimilars on the market by 2019. The U.S. Food and Drug Administration accepted Amgen’s application for a biosimilar of AbbVie Inc.’s Humira in January.

At the same time, Amgen itself is under threat from other copycats. Novartis AG’s version of Amgen’s drug Neupogen was approved in the U.S. in March, becoming the first biosimilar to clear that hurdle. The company doesn’t expect to see biosimilar versions of Neulasta or Epogen in the U.S. until the end of 2016, said Hooper.

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