Amgen quarterly profit tops expectations despite sales decline

(Reuters) - Amgen Inc AMGN.O reported higher-than-expected third quarter profit on Wednesday as lower costs and improved operating margins helped offset sales declines in some of its most important products.

FILE PHOTO - An Amgen sign is seen at the company's office in South San Francisco, California, U.S. on October 21, 2013. REUTERS/Robert Galbraith/File Photo

The world’s largest biotechnology company also raised its full-year adjusted earnings forecast, but its shares fell in late trading as weaker-than-expected sales of a new drug and declines in sales of key blockbuster products may have spooked investors.

Amgen boosted its earnings outlook to $12.50 to $12.70 per share from $12.15 to $12.65 despite taking a financial hit to Puerto Rico operations from Hurricane Maria, which devastated the island last month.

Analysts on average were looking for 2017 earnings of $12.58 per share, according to Thomson Reuters data.

The low end of Amgen’s 2017 revenue forecast range was slightly raised to $22.7 billion with the top end still at $23 billion.

Amgen shares, up 21 percent this year, fell 1.5 percent to $174.75

“Repatha, which is a key new launch drug for Amgen, is disappointing,” said Cowen and Co analyst Eric Schmidt about the expensive cholesterol drug struggling to reach patients being repeatedly denied by insurers.

Repatha sales of $89 million were short of analyst estimates of $106 million.

“Improving patient access to Repatha remains a top priority,” Chief Executive Robert Bradway said.

In December, the company hopes U.S. regulators will allow Amgen to begin promoting data showing Repatha cuts the risk of heart attacks and strokes, seen as key to unlocking its sales potential.

Sales of Amgen’s two biggest products, Enbrel for rheumatoid arthritis and Neulasta, which prevents infections in cancer patients, each fell 6 percent - Enbrel to $1.36 billion due to increased competition and Neulasta to $1.12 billion as use of chemotherapies that increase infection risk declined.

Prolia for osteoporosis was a bright spot with sales up 22 percent at $464 million.

Amgen estimated the Puerto Rico-related cost to 2017 earnings would be 15 cents to 18 cents per share, with no expected disruption to product supply. It does not anticipate hurricane damage to significantly impact 2018 results.

The company expects its Puerto Rico facilities to be fully operational by next week, while still using generators due to extensive damage to the island’s electrical grid.

Revenue declined 1 percent to $5.77 billion, about in line with analysts’ estimates.

But research and development spending, cost of sales and selling, general and administrative expenses were all lower.

Excluding items, Amgen said it earned $3.27 per share, topping analysts’ average expectations by 16 cents.

Reporting by Bill Berkrot; Editing by Meredith Mazzilli and Andrew Hay