Amgen Profit Rises 27% on Higher Sales of Key Drugs -- Update

By Tess Stynes And Jonathan D. Rockoff 

Amgen Inc. said fourth-quarter earnings rose about 27%, as sales growth was driven by such key drugs as cancer therapy Kyprolis and osteoporosis treatment Prolia. The company also said it is preparing for the approval of new drugs, including a treatment for high cholesterol.

The earnings results easily beat expectations.

Amgen reported a quarterly profit of $1.29 billion, or $1.68 a share, up from $1.02 billion, or $1.33 a share, a year earlier.

Excluding acquisition and restructuring-related charges and other items, earnings rose to $2.16 a share from $1.82. Revenue increased 6.4% to $5.33 billion. Analysts polled by Thomson Reuters projected a per-share profit of $2.05 and revenue of $5.2 billion. A key driver of Amgen's strong performance in earnings per share, analysts said, was its receiving a research-and-development credit. Amgen hadn't accounted for the credit, which analysts said added 14 or 15 cents a share.

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. Like other big drug makers, Amgen needs to bring new treatments to market, as older ones face the threat of low-price competition. Its biggest launch could be of evolocumab, a so-called PCSK9 drug for high cholesterol, though a rival medicine from Sanofi SA and Regeneron Pharmaceuticals Inc. is up for earlier approval from the Food and Drug Administration.

During October, the company laid out streamlining plans aimed at generating as much as $1.5 billion in annual cost savings by 2018. Chief Financial Officer David Meline said during an earnings call that Amgen had realized $300 million in cost savings during 2014.

The company has faced pressure from activist Dan Loeb, who has urged Amgen to trim its research and development structure and potentially break up, separating its mature business from faster-growing operations, an idea proposed earlier by Sanford Bernstein analyst Geoffrey Porges.

In the latest reporting quarter, sales of Kyprolis rose by 25% to $91 million, while sales for 2014 totaled $331 million in the first full year of commercialization since Amgen's $10.4 billion acquisition of Onyx Pharmaceuticals Inc. in 2013.

The drug was approved in the U.S. in 2012 as a treatment for a blood cancer known as multiple myeloma. On Tuesday, Amgen said it had submitted a supplemental new drug application in the U.S. and an application for regulatory approval in the European Union for Kyprolis as a treatment for relapsed multiple myeloma.

Combined sales of Neulasta and Neupogen, both of which are used to prevent infections in patients receiving chemotherapy, rose 3%. Neulasta sales rose 7% to $1.18 billion, mostly thanks to higher prices, but Neupogen sales fell 11% to $274 million amid lower-priced competition in the U.S.

Sales of Amgen's osteoporosis drugs again improved thanks to stronger volume. Prolia revenue climbed by a third to $315 million, while XGeva sales jumped 14% to $325 million. Enbrel sales increased 11% to $1.34 billion.

Amgen also reaffirmed its guidance for 2015, and said it is not making any adjustments for a stronger dollar. About 75% of Amgen sales are in the U.S., and the company has a three-year rolling hedging program to offset foreign-exchange movements, Mr. Meline said. If the dollar remains at its current high levels, it would hurt 2015 full-year revenues by about $250 million, or 5 cents a share, Mr. Meline said.

Write to Tess Stynes at [e-mail] and Jonathan D. Rockoff at [e-mail]

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