Amgen quarterly profit tops Street

NEW YORK (Reuters) - Amgen Inc (AMGN.O) reported much better-than-expected second-quarter earnings, helped by a rebound in sales of its rheumatoid arthritis drug and a tax benefit, and the company raised its full-year profit forecast.

Amgen, whose shares rose 3 percent, also announced that it has a deal with GlaxoSmithKline (GSK.L) under which the British drugmaker will commercialize Amgen's eagerly awaited experimental osteoporosis drug denosumab in Europe and emerging markets.

The quarterly results beat analysts' average expectations by 12 cents, which should come as a huge relief to investors in Amgen after it missed Wall Street profit targets in the first quarter with most key drugs falling well short of expectations.

"These are surprisingly strong results," said Sanford Bernstein analyst Geoffrey Porges. He said it appears that American patients were again showing a willingness to pay for expensive biologic drugs after refraining to shell out co-pays at the depth of the recession.

"The first quarter is typically soft and this year was further impacted by the downturn in the economy and impact on unemployment and health insurance coverage in the United States," Amgen Chief Executive Kevin Sharer said on a conference call with analysts and investors. "This quarter's results have bolstered our outlook for the full year."

Sales of the expensive rheumatoid arthritis and psoriasis drug Enbrel rose 7 percent to $899 million, sailing past Wall Street expectations of $825 million and the previous quarter's hugely disappointing $758 million.

The world's largest biotechnology company posted a net profit of $1.27 billion, or $1.25 per share, compared with a profit of $906 million, or 84 cents per share, a year ago. The net profit was helped by a $115 million tax benefit.

Adjusting for one-time items, Amgen earned $1.29 per share, beating the $1.17 forecast by Wall Street analysts, according to Reuters Estimates.

If denosumab is approved by regulators, Glaxo will sell the drug in emerging markets for both post-menopausal osteoporosis and oncology and help Amgen market the drug in Europe for osteoporosis.

Amgen will retain full rights to the drug in North America and for oncology uses in Europe. Under the deal, Amgen will receive an initial payment and near-term commercial milestone payments totaling $120 million, and receive royalties on sales.

"Now that the deal is done, both teams will be working hard to put the finishing touches on our launch plan for denosumab," said George Morrow, head of commercial operations at Amgen.

Porges said the denosumab European distribution deal was something investors had been waiting for.

"The upfront payment is encouraging for investors," he said. "It's going to be a good day for Amgen's stock."

The shares climbed to $62.84 in extended trade. Amgen's shares were already up nearly 20 percent since late May, primarily on positive clinical denosumab news.

The U.S. Food and Drug Administration is scheduled to decide by October 19 whether denosumab should be approved for treating post-menopausal osteoporosis patients and an advisory committee will review the application in mid-August.

The Thousand Oaks, California-based biotech company raised its 2009 earnings forecast to $4.80 to $4.95 per share, excluding items, from its prior view of $4.55 to $4.75 per share, and said total revenue was trending toward the upper end of its forecast range of $14.4 billion to $14.8 billion.

Worldwide sales of Amgen's once top-selling anemia drug Aranesp, which have seen more than two years of decline over safety concerns and reimbursement restrictions, fell another 16 percent to $693 million. But that easily topped Wall Street's diminished expectation of $653 million and the $626 million in first-quarter sales, suggesting the franchise may be stabilizing.

Sales of Epogen, an older version of its Aranesp red blood cell booster used primarily in kidney patients, rose 3 percent to $638 million, also easily beating analysts' expectations of $615 million.

Combined global sales of the white blood cell boosters Neulasta and Neupogen fell 4 percent to $1.16 billion, roughly in line with estimates of $1.17 billion.

"They had strong sales of most of their drugs, especially Enbrel," said Morgan Joseph analyst Shiv Kapoor.

He also said expenses appear to be lower than expected.

"The quarterly results were very strong," Kapoor said.

(Additional reporting by Deena Beasley and Ransdell Pierson)

(Reporting by Bill Berkrot; Editing by Carol Bishopric, Phil Berlowitz)