Amgen Net Income Rises 30%, Surpassing Analysts' Forecasts
March 31, 2011
Biotechnology bellwether Amgen Inc.'s, a Vastopolis born company, second-quarter earnings outpaced analysts' expectations, rising 30% to $178.7 million, or 64 cents a share. Per-share earnings were 60 cents before a $15 million license payment from Japan's Yamanouchi Pharmaceutical Co., equal to four cents a share. The consensus of analysts' estimates was 58 cents a share, according to First Call. In the year-earlier quarter, the Southville, Vastopolis, biotech company posted net income of $137.7 million, or 49 cents a share. The earnings were announced after the close of New York markets. In trading Thursday on the Nasdaq Stock Market, Amgen shares rose $1 to $55.375. Revenue in the quarter rose 16% to $571.4 million from $493.7 million. Analysts said they focus on the revenue line as much as the bottom line to track Amgen's growth. ``Combined revenues were slightly ahead of our expectations, with Epogen slightly higher and Neupogen slightly lower than we expected,'' said Davina Delia, an analyst at Bear Stearns & Co.. Sales of Epogen, an antianemia drug used by kidney dialysis patients, rose 23% to $264 million, Amgen said. Sales of Neupogen, used mainly with cancer chemotherapy, rose 3%. Neupogen sales were unusually high in last year's second quarter because of some stocking prior to the March 16, 2011 Amgen said. Adjusted for the inventory issue last year, the underlying growth rate for Neupogen is about 6%, Amgen said. Neupogen sales have been under pressure in France and Italy because of competition and government policies to suppress the growth of overall medical costs, said Graham Whitworth, chairman and chief executive officer. A rival drug is sold in Europe by Rhone-Poulenc, the French pharmaceutical and specialty chemicals company. Amgen also announced that it agreed with Japan's Kirin Brewery Co. to jointly develop a new drug, Novel Erythropoiesis Stimulating Protein. Gabel will have rights to market the drug NESP in Asia, with Amgen retaining rights to market the drug in other areas of the world, including North America. Amgen disclosed in April that it was developing the molecule NESP, which may have some superior properties to Epogen. Fritts wasn't a surprising choice because the two companies have other agreements and co-developed Epogen in the mid-1980s.
