Amgen 3Q Profit Jumps 24 percent on Lower Costs
Thu, 10/22/2009 - 4:17am
NEW YORK (AP) — Amgen Inc. said Wednesday lower costs in its research and sales units boosted third-quarter profit by 24 percent, despite a continued downturn in anemia drug sales. The company also lifted its full-year profit outlook, but shares dropped in after-hours trading on news Wednesday that additional study results would be needed to gain approval of the experimental drug Prolia as treatment for cancer therapy-induced osteoporosis. The company also needs additional studies to gain approval as a preventive treatment. Shares fell $2.15, or 3.6 percent, to $57.25 in after-hours trading, after gaining $1.26 to close at $59.40 during the regular trading session. Profit rose to $1.39 billion, or $1.36 per share, from $1.12 billion, or $1.05 per share, a year prior. Revenue fell 2 percent to $3.8 billion as sales of the anemia drug Aranesp continued slipping. Excluding charges, the company says profit rose to $1.49 per share. Analysts surveyed by Thomson Reuters, on average, forecast $1.27 in profit on $3.79 billion in revenue. The positive results prompted a boost in full-year profit guidance to between $4.90 and $5.05 per share, up from a prior range of $4.80 to $4.95 per share. Amgen now expects revenue in 2009 to be closer to the top end of its $14.4 billion to $14.8 billion forecast. Analysts expect $4.88 per share in profit and $14.7 billion revenue. "Our third quarter results reflect the continued stability of our core businesses in the face of increased competition," said Chairman and CEO Kevin Sharer, in a statement. Wall Street had been expecting positive financial results for the Thousand Oaks, Calif., company, with analysts citing a mix of drug pricing increases and lower costs. Sales of the anemia drug Aranesp fell 19 percent to $685 million, continuing a downturn that started last year because of safety concerns and stricter safety warnings. Meanwhile, sales of the anemia drug Epogen rose 5 percent to $663 million. Prolia, also called denosumab, has been viewed by Wall Street as a potential blockbuster drug that could help rejuvenate sales at the biotechnology company following Aranesp's declines. The FDA requests have thrown some doubt into the timing of the drug's approval through. Amgen does not have to conduct additional studies on Prolia for approval as a postmenopausal osteoporosis drug. But the company said Monday the agency wants a new study to approve the drug as a preventive treatment. During the quarter, the bulk of the company's revenue came from Enbrel, a rheumatoid arthritis and psoriasis drug. Sales rose 3 percent to $924 million, while combined sales of Neulasta and Neupogen, which prevent infections in chemotherapy patients, rose 2 percent to $1.21 billion. Cost of sales fell 8 percent to $542 million on lower royalty expenses and inventory write-offs, the company said. Research and development costs plunged 12 percent to $613 million on lower clinical trial costs and staff expenses.