Amgen Raises 2016 Forecast as Profit Beats Analyst Estimates

  • Revenue increases 5.9%, led by sales of arthritis drug Enbrel
  • Neupogen sales drop 23% as biosimilar competition heats up

Biotechnology giant Amgen Inc.’s second-quarter profit beat analysts’ estimates, driven by higher-than-expected drug sales, and the company raised its guidance for the year.

Earnings excluding one-time items totaled $2.84 a share, Amgen said Wednesday in a statement, topping the $2.74 average of analysts’ projections compiled by Bloomberg. Revenue rose 5.9 percent to $5.69 billion from a year earlier, compared with an average prediction of $5.58 billion.

Amgen’s top drug, the arthritis treatment Enbrel, beat analyst expectations, as did its osteoporosis drug Prolia.

The drugmaker also raised its financial forecast for 2016. It now expects revenue of $22.5 billion to $22.8 billion, and earnings before one-time items of $11.10 to $11.40 a share. That compares to its predictions in April of $22.2 billion to $22.6 billion in revenue, and adjusted profit of $10.85 to $11.20 a share.

To maintain sales growth, Amgen has invested heavily in research and development, gaining six Food and Drug Administration approvals for new drugs or indications in 2015, including for cancer medicine Kyprolis and cholesterol treatment Repatha. In addition, the Thousand Oaks, California-based drugmaker said in June that an experimental chronic migraine treatment was successful in a mid-stage trial.

Possible Acquisitions

Amgen is also open to doing deals to fill its pipeline, Chief Financial Officer David Meline said Wednesday on a call with analysts. “We’ve got a number of pretty interesting prospects that we think could come to closure,” possibly within the year, he said.

Amgen shares fell less than 1 percent to $169.70 in late trading at 6:24 p.m. New York time. The stock is up 5.1 percent this year.

Amgen also is working to create a pipeline of biosimilars, which are near-copies of complex biologic drugs made from living organisms. The company’s biosimilar version of AbbVie Inc.’s best-selling arthritis drug, Humira, has been recommended for approval by a panel of Food and Drug Administration advisers. At the same time, it’s facing biosimilar competition from other drugmakers. Sales of blood-cancer treatment Neupogen fell 23 percent from the previous year, hurt by competition from Novartis AG’s biosimilar Zarxio.

Research and development expenses fell 6.6 percent from the prior year because of “transformation and process improvement efforts and lower spending required to support certain later-stage clinical programs,” according to the statement.

Repatha Launch

Investors and analysts will be looking for an update on the cholesterol drug Repatha, which has struggled to get off the ground since approval last year, hindered by stringent restrictions from insurers on which patients can receive the drug. Amgen reported Repatha sales for the first time in April, and they missed expectations by a large margin.

Second-quarter Repatha sales were $27 million, compared to the average estimate of $24.8 million. Amgen expects to report results from a study of Repatha’s effects on cardiovascular events such as heart attacks and strokes in the first quarter of 2017, according to the statement. If positive, it should persuade insurers to ease restrictions.

Net income rose 13 percent to $1.87 billion, or $2.47 a share, from $1.65 billion, or $2.15, a year earlier.

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

  • Enbrel: $1.48 billion, estimate was $1.41 billion
  • Neulasta: $1.15 billion, estimate was $1.17 billion
  • Aranesp: $504 million, estimate was $518 million
  • Prolia: $441 million, estimate was $389 million

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE