Amgen Sees Profit Increase, Raises Guidance -- Update

By Tess Stynes 

Amgen Inc. reported third-quarter earnings rose 8.3% as the biotechnology company boosted its 2016 outlook as the results beat expectations.

For the year, Amgen raised its per-share earnings estimate to $11.40 to $11.55 on revenue of $22.6 billion to $22.8 billion, from its previous estimate for per-share profit of $11.10 to $11.40 on revenue of $22.5 billion to $22.8 billion.

The quarter's results showed the impact that biosimilar competition could have on drug companies. One sore spot in Amgen's performance was a 36% drop in sales of the company's cancer-care drug Neupogen, which began facing competition late last year from Novartis AG's Zarxio, the first lower-priced biosimilar approved in the U.S. Neupogen sales fell to $183 million world-wide largely due to U.S. competition, Amgen said.

Meanwhile, Amgen CEO Robert Bradway said on a conference call that Amgen doesn't expect to begin selling its biosimilar version of AbbVie Inc.'s Humira in 2017. The copy, called Amjevita, was approved by the Food and Drug Administration in September, but Mr. Bradway indicated he didn't expect resolution of AbbVie's patent-infringement lawsuit in time to launch next year.

Like many other drugmakers, Amgen has been counting on new medicines brought to market, along with cost cuts, as some older drugs face competition from lower-priced treatments.

Sales of one of Amgen's newer drugs, anti-cholesterol treatment Repatha, which initially got off to a slow start, gained more traction in the latest quarter. Repatha sales reached $40 million, up from $27 million in the second quarter and $3 million a year earlier.

Amgen has said restrictions on Repatha's use by health insurers and drug-benefit managers had been blunting sales of the drug that initially was approved by U.S. regulators more than a year ago. Even so, the company has been optimistic about Repatha's long-term prospects as it works with such payers and gets more data on patient outcomes.

In September, the FDA approved Amgen's biosimilar version of AbbVie Inc.'s Humira. A month earlier, Novartis AG's biosimilar for Amgen's Enbrel, which competes with Humira, also won FDA approval.

Investors also may be listening on the call for details about Amgen's strategy for multiple-myeloma drug Kyprolis, which failed to meet its primary endpoint of superior progression-free survival against a rival drug in a recent study, results that could limit use in previously untreated patients. Still in the latest quarter, Kyprolis sales climbed 34% to $183 million.

Sales of bone drugs Prolia and Xgeva also continued to boost Amgen's top line, rising 18% and 4% respectively.

Over all, Amgen reported a profit of $2.02 billion, or $2.68 a share, up from $1.86 billion, or $2.44 a share, a year earlier. Excluding restructuring-related charges and other items, adjusted per-share earnings rose to $3.02 from $2.72. Revenue increased 1.5% to $5.81 billion.

Analysts polled by Thomson Reuters expected per-share profit of $2.79 and revenue of $5.73 billion.

Overall, operating expenses declined 3%. Research-and-development expenses fell 12% mostly on lower spending for to support later-stage clinical programs and cost-savings efforts.

Write to Tess Stynes at [e-mail]

Jonathan D. Rockoff contributed to this article

(END) Dow Jones Newswires

October 27, 2016 18:41 ET (22:41 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.