(Adds analyst, company comment, sales details, updates shares)
By Bill Berkrot
April 22 Amgen Inc on Tuesday reported lower-than-expected first quarter profit as sales of several key products fell short of Wall Street estimates, with its big-selling rheumatoid arthritis drug Enbrel particularly hard hit by inventory stocking by wholesalers late last year.
The company left its full year forecast unchanged, disappointing some investors who have become accustomed to Amgen raising its outlook as the year progresses, and its shares fell nearly 3 percent in extended trading.
Amgen still expects 2014 adjusted earnings of $7.90 to $8.20 per share and revenue $19.2 billion to $19.6 billion. Wall Street on average is looking for earnings of $8.16 per share and sales of $19.61 billion.
"We are confident that we can meet our full year revenue guidance," Chief Executive Robert Bradway said on a conference call with analysts and investors.
The world's largest biotechnology company said net profit fell to $1.07 billion, or $1.40 per share, compared with a profit of $1.43 billion, or $1.88 per share, a year ago, when earnings were helped by a tax gain.
Excluding special items, Amgen had adjusted earnings of $1.87 per share, missing analysts' average expectations by 7 cents, according to Thomson Reuters I/B/E/S.
"This quarter tends to be seasonally weak for Amgen," said Cowen and Co analyst Eric Schmidt. "Given this is all about wholesaler inventory changes, they were able to reiterate the guidance for the year, so we still think that things are on track, but Q1 does tend to be a tough period."
The results were also impacted by increased research and development spending and higher acquisition-related expenses.
Amgen said it still expects to begin filing for global approvals of its high profile new type of cholesterol fighter, evolocumab, this year. The drug is seen as a potentially important future growth driver as Amgen enters the arena of heart care.
Revenue for the quarter rose 7 percent to $4.52 billion, but fell short of Wall Street estimates of $4.76 billion.
The company generated $1 billion of free cash flow in the quarter, an increase of 9 percent.
Product sales, while up from a year ago, declined 9 percent from the previous quarter, which the company said was primarily due to inventory stocking late in 2013 ahead of potential 2014 price increases.
First quarter demand for Enbrel was hit by the draw down of inventory sold in the fourth quarter of last year, Amgen said.
Enbrel sales fell 5 percent to $988 million. Analysts had been estimating sales of about $1.1 billion for the quarter.
Sanford Bernstein analyst Geoffrey Porges said disappointing Enbrel sales "may be an indication that Enbrel is starting to suffer from too much competition."
Inventory drawdowns hurt sales of other products as well, Amgen said.
Some of Amgen's more important newer products also came in below Wall Street estimates.
Sales of the new multiple myeloma drug, Kyprolis, the centerpiece of Amgen's nearly $10 billion acquisition of Onyx Pharmaceuticals last year, were $68 million. That was down from the previous quarter's $73 million and well below analysts' expectations of about $82 million.
The company is expecting important clinical data later this year on Kyprolis that could help spark sales if it leads to a wider approval that would allow for the drug's use early in treatment of the disease rather than only after multiple prior medicines have been used.
"What really matters for this drug going forward is whether they are able to dramatically expand the label and get into earlier lines of therapy. That will all be data driven," Cowen's Schmidt said.
Sales of Xgeva, to prevent fractures when cancer has spread to the bones, rose 25 percent to $279 million, below Wall Street estimates of about $292 million.
The related osteoporosis drug Prolia saw sales jump 38 percent to $196 million, but that still missed analysts' estimates of about $209 million.
The company's white blood cell boosters Neulasta and Neupogen had combined worldwide sales of $1.38 billion, roughly in line with Wall Street expectations.
Amgen shares fell to $116 in after hours trading from a Nasdaq close at $119.30. (Additional reporting by Deena Beasley; Editing by Bernard Orr)