Amgen Raises 2015 Outlook, Results Beat Expectations

Amgen Inc. raised its 2015 guidance after reporting that its second-quarter earnings rose 6.9% on better-than-expected sales growth and lower operating expenses.

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. Like other big drug makers, Amgen needs to bring new treatments to market, as older ones face the threat of low-price competition.

The U.S. Food and Drug Administration 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 gained with its $10.4 billion acquisition of Onyx Pharmaceuticals Inc. in 2013, initially received FDA approval in 2012 as a third-line treatment.

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. Neupogen sales dropped 14% to $256 million mostly because of competition in the U.S.

Write to Tess Stynes at [e-mail]

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