Amgen Testing Record Highs as Drug Sales Rise in Third Quarter

Andrew Klips  |

Drugmaker Amgen Inc. (AMGN) are pushing on new all-time highs in extended trading on Tuesday after reporting a 24-percent jump in third-quarter profits and beating analyst predictions on revenue as drug sales increased.

For the quarter ended September 30, Thousand Oaks, California-based Amgen posted revenue of $4.75 billion, up 10 percent from $4.32 billion in the same quarter last year.  GAAP net income was $1.37 billion, or $1.79 per share, versus $1.11 billion, or $1.41 per share, in the year prior quarter.  Excluding one-time items, net income totaled $1.94 per share, up from $1.67 in the third quarter of 2012.

Wall Street was expecting adjusted earnings of $1.78 per share on revenue of $4.58 billion.

Amgen, the world’s largest biotechnology company by revenue, reported double-digit growth in sales of six of its drugs.  Combined revenue from its blockbuster immune system boosting drugs Neulasta and Neupogen increased 18 percent to $1.6 billion.  Neupogen sales jumped 50 percent to $466 million.  Revenue from osteoporosis drug Prolia improved 62 percent to $178 million.  Blockbuster arthritis/psoriasis drug Enbrel produced $1.16 billion in revenue, up 7 percent from the year prior quarter.

Selling, general and administrative expenses increased 10 percent on higher profit share fees for Enbrel and the U.S. healthcare reform federal excise fee.  Research and development costs rose 14 percent.

"We delivered excellent operating performance this quarter," said Robert A. Bradway, chairman and chief executive officer of Amgen. "We also delivered excellent strategic progress with the acquisition of Onyx Pharmaceuticals in oncology, the opening of our alliances in Japan and China, and the repurchase of our rights to NEUPOGEN and Neulasta in key emerging growth markets around the world."

Amgen closed on the $9.7-billion acquisition of Onyx on October 1.  Sales of multiple myeloma drug Kyrprolis, which Amgen acquired in the purchase, increased by 6 percent to $65 million in the third quarter.

In China, a joint venture with Betta Pharma Co. Ltd. to commercialize cancer drug Vectibix® (panitumumab) also began operations.   In Japan, the Amgen-Astellas strategic alliance began operations on Oct. 1, 2013, and will develop and launch five Phase 3 molecules, starting with evolocumab (AMG 145).  In emerging growth markets, the company repurchased rights to Neulasta and Neupogen from Roche (RHHBY) , meaning that at the start of 2014 Amgen will assume responsibility for these products in markets outside the U.S. and Europe with annual sales of approximately $200 million.

With the earnings beat and upcoming revenue catalysts, Amgen raised its full-year revenue guidance and the low end of its earnings forecast.  The company now sees 2013 adjusted earnings of $7.35 to $7.45 per share and revenue of $18.3 billion to $18.5 billion.  It originally projected $17.8 billion to $18.2 billion.  Analysts expected $7.35 a share on revenue of $18.3 billion.

After closing the day up by 2 percent at $116.21, shares bounced around in extended trading as investors digested the report, rising as high as $118.  The all-time high for Amgen is $117.91, which was hit in September.  Through the close, shares were up about 37 percent so far in 2013.

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