Amgen profit beats estimates; raises 2012 forecast

Thu Jul 26, 2012 6:42pm EDT

(Reuters) - Amgen Inc (AMGN.O) on Thursday reported far higher-than-expected second-quarter profit and revenue on strong demand for many of its drugs, and the world's largest biotechnology company raised its full-year earnings and revenue forecasts.

Amgen shares rose more than 4 percent in after-hours trading.

Excluding items, Amgen had adjusted earnings of $1.83 per share, topping analysts' average expectations by 29 cents, according to Thomson Reuters I/B/E/S.

The company said it now expects full year adjusted earnings of $6.20 to $6.35 per share and revenue of $16.9 billion to $17.2 billion. It had previously forecast earnings of $5.90 to $6.15 per share and revenue of $16.1 billion to $16.5 billion.

"The quarter sure looks like a blowout, one that we haven't seen from Amgen in a long time," said Cowen and Co analyst Eric Schmidt. "The product sales are amazingly strong, which is driving the beat on the bottom line."

Amgen shares, which were already up about 22 percent for the year, rose another 4.7 percent to $83 in extended trading from their Nasdaq close at $79.29.

Earnings per share were helped by the buyback of about 17 million shares during the quarter. Amgen has been working to increase returns to shareholders through an aggressive share repurchase program and the initiation last year of a quarterly dividend.

Amgen posted a net profit of $1.27 billion, or $1.61 per share, compared with a profit of $1.17 billion, or $1.25 per share, a year ago.

It said total revenue rose 13 percent to $4.48 billion, exceeding Wall Street estimates of $4.08 billion. The company received $200 million from Takeda Pharmaceutical Co (4502.T) in the quarter as part of a deal on an experimental Amgen cancer drug.

Sanford Bernstein analyst Geoffrey Porges said without that Takeda payment and the impact of some inventory stocking the results were not quite as impressive as they may appear.

"It's a solid quarter that doesn't look as good on close examination as it did on first presentation," he said.

Sales of the rheumatoid arthritis and psoriasis drug Enbrel rose 11 percent from a year ago to $1.06 billion, sailing past Wall Street estimates of $962 million. Enbrel is expected to become even more profitable for Amgen late next year when a profit sharing deal with Pfizer Inc (PFE.N) expires, although it may also be facing competition from new drugs by then.

Bob Bradway, in his first quarterly conference call with analysts as chief executive since taking the helm in May, said he was delighted to see Enbrel's "constant increase in market share in patients new to biologics both in rheumatology and dermatology."

Xgeva, Amgen's new drug for preventing fractures caused by cancer that has spread to the bones, had sales of $179 million, up from $153 million in the prior quarter and in line with expectations.

The related osteoporosis drug Prolia posted sales of $120 million, up from $88 million in the first quarter and above Wall Street estimates of about $101 million.

Xgeva and Prolia are considered to be Amgen's most important near term future growth drivers.

Bradway expressed enthusiasm for several medicines in the company's developmental pipeline, particularly AMG 145 for lowering extremely high cholesterol.

Based on impressive Phase II data, Bradway said the company planned to begin pivotal Phase III trials in early 2013. AMG 145 belongs to a promising new class of drugs called PCSK9 inhibitors being pursued by several companies.

Combined worldwide sales of the white blood cell boosters Neupogen and Neulasta rose 2 percent to $1.35 billion due to price increases.

Even Amgen's anemia drugs, Aranesp and Epogen, which have been sharply declining for more than two years amid safety concerns and usage restrictions, surprised Wall Street with unexpected strength.

Sales of the older red blood cell booster Epogen, which had fallen 17 percent in the first quarter, were only down 3 percent to $525 million. Wall Street was looking for about $446 million.

Aranesp sales fell 8 percent from a year ago to $536 million, but were up from the prior quarter and topped expectations of about $528 million.

(Reporting by Bill Berkrot; editing by Carol Bishopric and M.D. Golan)

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