Amgen Raises 2015 Outlook, Results Beat Expectations

For the year, the biotechnology company now expects per-share earnings of $9.55 to $9.80 and revenue of $21.1 billion to $21.4 billion, compared with its previously boosted estimate for per-share profit of $9.35 to $9.65 a share on revenue of $20.9 billion to $21.3 billion. Amgen reduced its capital spending outlook to about $700 million, from its previous estimate of about $800 million.

Amgen, based in Thousand Oaks, Calif., has continued to showcase its drug pipeline, which includes the potential for a number of product launches this year, including a cholesterol-lowering PCSK9 drug that analysts expect to be a blockbuster. Like other big drug makers, Amgen needs to bring new treatments to market, as older ones face the threat of low-price competition.

While Amgen recently launched its heart-drug Corlanor, which received approval from the U.S. Food and Drug Administration in April, the company didn’t break out early sales figures on Thursday.

Amgen also recently received approval from European regulators for cholesterol-lowering drug Repatha and is expecting a decision from the FDA in late August.

In June, an FDA advisory panel recommended that the agency approve Repatha, part of a class of drugs known as PCSK9 agents. The FDA often follows the recommendations of its advisory panels, but it isn’t required to do so.

The FDA recently granted approval for Amgen’s Kyprolis combination therapy as a second-line treatment for patients with multiple myeloma, which will allow access to the drug to a broader population of patients. Kyprolis, which Amgen obtained with its $10.4 billion acquisition of Onyx Pharmaceuticals Inc. in 2013, initially received FDA approval in 2012 as a third-line treatment.

Amgen also said Thursday that Fred Hassan, former chief executive of Pharmacia and Schering-Plough, is joining the board of directors.

Amgen is among the health-care companies that has been targeted by a shareholder activist, in its case Dan Loeb and his hedge fund Third Point Capital LLC. In response, the company has cut costs and raised its dividend, while looking to its pipeline of potential new products for growth.

The company also faces the threat of low-price competition for its aging portfolio of drugs. A federal appeals court recently ruled that Novartis AG could begin selling a lower-priced, or biosimilar, version of Amgen’s Neupogen cancer-care therapy on Sept. 2, though Amgen is expected to appeal.

In the latest quarter, sales of Kyprolis surged 53% to $119 million on higher volume.

Sales of Amgen’s osteoporosis drugs increased, also on stronger volume. Prolia revenue climbed 29% to $340 million, while XGeva sales improved by 11% to $331 million.

Sales of arthritis drug Enbrel rose 8% to $1.35 billion as a boost from higher prices was partly offset by impacts from increased competition.

In the latest quarter, Amgen’s operating expenses declined about 1%, including a benefit of three percentage points from foreign-exchange rates. Research-and-development costs fell 6%, driven by the company’s efforts to reduce expenses.

During October, the company laid out streamlining plans aimed at generating as much as $1.5 billion in annual cost savings by 2018.

Overall, Amgen reported a profit of $1.65 billion, or $2.15 a share, up from $1.55 billion, or $2.01 a share, a year earlier. Excluding certain costs from acquisitions and restructuring as well as other items, per-share earnings rose to $2.57 from $2.37.

Revenue increased 3.7% to $5.37 billion. Currency fluctuations had a negative impact of about 2.5 percentage points on the growth.

Analysts polled by Thomson Reuters expected per-share profit of $2.43 and revenue of $5.319 billion.

Combined sales of Neulasta and Neupogen, both of which are used to prevent infections in patients receiving chemotherapy, decreased 1% to $1.41 billion. Neulasta sales rose 2% to $1.15 billion, driven by price.

In the quarter, Neupogen sales fell 14% compared with the same period a year earlier to $256 million, partly because of competition from products like Granix from Teva Pharmaceutical Industries Ltd., Amgen said.

Updated July 30, 2015 5:37 p.m. ET

—Jonathan Rockoff contributed to this article.

Write to Tess Stynes at [email protected]

Source: Wall Street Journal Health