UPDATE 3-Amgen Q1 profit beats Street, health reform weighs

* Q1 adjusted EPS $1.30 vs Street view $1.23

* Revenue up 9 percent to $3.59 billion

* Sees 2010 earnings at low end of forecast range

* Shares fall 0.9 percent

(Adds company comment, background)

By Bill Berkrot

NEW YORK, April 21 (Reuters) - Amgen Inc reported better- than-expected first quarter profit on Wednesday, but sales of two of its top drugs missed Wall Street estimates and it said 2010 earnings would be at the low end of its forecast due to healthcare reform costs.

The world's largest biotechnology company also said it anticipated new U.S. healthcare reform laws would cost it $200 million to $250 million this year. Amgen AMGN.O is the latest drugmaker to alter its 2010 forecast because of the healthcare reform. [nN21183420]

Amgen shares were off nearly 1 percent in extended trading after initially falling more than 3 percent.

“The impact is less than many of us had feared,” Cowen and Co analyst Eric Schmidt said of healthcare reform law costs.

“The top line was a little bit weak. Maybe that’s healthcare reform, maybe that’s some other things.”

The new U.S. healthcare law calls on drugmakers to offer higher price rebates for government funded health plans and will eventually require them to pay a fee based on their market share of the public plans. Some of the changes went into effect at the beginning of the year and all will be phased in by Jan. 1, 2014.

George Morrow, head of Amgen’s commercial operations, said during a conference call that the 2010 impact is equivalent to about 2 percent of the company’s domestic sales. He estimated that going forward, healthcare reform would trim annual U.S. sales revenue by 5 percent to 6 percent.

“Costs will be recognized for several years before any appreciable revenue is realized” from the expansion of healthcare insurance coverage, he said.

Amgen posted a net profit of $1.17 billion, or $1.18 per share, compared with a profit of $1.02 billion, or 98 cents per share, a year ago, when it endured a particularly bad quarter.

Excluding items, Amgen earned $1.30 per share, topping analysts’ average expectations by 7 cents, according to Thomson Reuters I/B/E/S.

“From a revenue and EPS standpoint everything looked okay and the healthcare reform guidance impact was pretty much in line with expectations,” said Michael Yee, an analyst for RBC Capital Markets.

Amgen Chief Executive Kevin Sharer said in a statement that the company “will take appropriate steps to manage the impact of the new U.S. healthcare reform law.”

The company is counting on sales of its experimental osteoporosis drug, denosumab, to help alleviate some of that impact. A U.S. approval decision for the drug is expected in late July and cancer prevention data for the drug is due in the second half of the year.

“We are optimistic about Prolia in the U.S. and the EU,” said Sharer, using the proposed brand name for denosumab.

The Thousand Oaks, California-based company previously forecast 2010 revenue of $15.1 billion to $15.5 billion and adjusted earnings of $5.05 to $5.25 per share, excluding items, and now believes it will end up toward the low end of that range.

Total revenue for the quarter rose 9 percent to $3.59 billion, shy of Wall Street estimates of $3.65 billion as sales of embattled anemia drug Aranesp and widely used rheumatoid arthritis treatment Enbrel missed analyst expectations.

Worldwide sales of Aranesp, which has been hit hard by safety concerns and reimbursement restrictions, had first-quarter sales of $627 million, below expectations of $638 million and the previous quarter’s $684 million.

Amgen’s older anemia drug, Epogen, fared better as sales rose 10 percent from the year ago quarter to $623 million, matching Wall Street consensus estimates.

But Enbrel sales, which often exceed expectations, rose 6 percent to $804 million, missing analysts’ estimates of $849 million and well below the $913 million recorded in the fourth quarter.

White blood cell boosters Neupogen and Neulasta had combined worldwide sales of $1.18 billion, an increase of 10 percent and slightly ahead of expectations of $1.15 billion.

Amgen shares were down to $58.20 in extended trading from their Nasdaq close at $58.71.

“There was nothing completely surprising to the upside here and at this point we are seeing a temporary rotation out of the healthcare sector,” RBC’s Yee said.

“Some people are selling healthcare right now as they digest the impact of reform.” (Additional reporting by Deena Beasley in Los Angeles; editing by Andre Grenon)