(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
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
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,
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
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)