Amgen beat and then raised profit expectations after surging sales of its medicines, tight cost controls and other factors lifted the biologic drugmaker’s first-quarter profit by 17 per cent.
The maker of osteoporosis drug Prolia on Thursday reported net income of $1.9 billion, or $2.50 per share, trouncing forecasts for the sixth-straight quarter. Adjusted profit was $2.90 per share, an impressive 30 cents above what analysts surveyed by FactSet expected.
Revenue rose 10 per cent, to $5.53 billion, for the world’s biggest maker of biologic drugs, which are “manufactured” in living cells.
As a result, the Thousand Oaks, California, company increased its 2016 financial forecasts. It now expects adjusted earnings per share in the range of $10.85 to $11.20, up from $10.60 to $11, and sales of $22.2 billion to $22.6 billion, up from $22 billion to $22.5 billion.
Amgen Inc. shares slipped 55 cents to $160.01 in after-hours trading after falling 44 cents in regular trading Thursday.
While sales of Amgen’s older drugs have been growing steadily, some are nearing the end of their patents and could face competition in coming years from “biosimilars.” Those are slightly cheaper near-copies of biologic drugs that are just starting to come on the market in the U.S.
In hopes of counteracting eventual sales declines for those older medicines, Amgen is developing its own biosimilar versions of some rivals’ drugs and has launched four new drugs in the past 1 1/2 years. The company also has a war chest of nearly $35 billion in cash and marketable securities that it could use for acquisitions.
“We have a lot to look forward to this year,” research head Dr. Sean Harper told analysts during a conference call.
He referred to upcoming data on experimental drugs for treating osteoporosis and for preventing migraines, as well as possible approvals of drugs for conditions including a gland disorder affecting blood and bone calcium levels, and regulatory review or new data on three biosimilar drugs.
Amgen’s version of rival AbbVie’s rheumatoid arthritis and immune disorder drug Humira, the top-selling drug in the world, is under review for approval in multiple countries.
For now, sales and growth are mainly coming from the company’s three top drugs.
Enbrel, for rheumatoid arthritis and other immune disorders, posted sales of $1.4 billion in the first quarter, up 24 per cent from last year due to a price hike and wholesalers stocking more inventory. Anemia drugs Neulasta and Aranesp saw sales rise 4 per cent to $1.2 billion and 11 per cent to $532 million, respectively. Aranesp, a newer, improved version of Epogen, benefited from many customers switching to the newer drug. That and increased competition cut Epogen sales by 44 per cent to $300 million.
Sales of Prolia, touted in “break-a-leg” commercials starring actress Blythe Danner, posted sales of $352 million, up 29 per cent.
Two of Amgen’s newest drugs — Repatha, for treating sky-high cholesterol uncontrollable by standard medicines, and Blincyto, for a rare leukemia in patients with a particular genetic variation — posted first-quarter sales of $16 million and $27 million, respectively. But Corlanor, a drug Amgen touted as the first new heart failure medicine in a dozen years, still has sales too small to report.
“This was a good quarter,” Edward Jones analyst Ashtyn Evans wrote to investors. “The company is delivering strong results across most major products while improving operating margins, though we are slightly disappointed by the lower-than-expected sales in new products. In addition, these new products face considerable competition from other newly launched drugs.”
She noted sales of Repatha and of multiple myeloma drug Kyprolis fell short of expectations.
Besides the higher sales of most of its drugs, Amgen benefited from licensing global rights to an experimental drug to another, unnamed company, a deal that accounted for nearly half of its $288 million in reported “other income.”
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