The world’s number one biotechnology company Amgen saw its profit tumble for the second quarter of the year, as strong sales were masked by the impact of its recent acquisition of monoclonal antibody specialist Abgenix. But the results still came in ahead of general expectations, causing shares to rise almost 5% in after-hours trading.
Amgen generated a profit of just $14 million, a far cry from the $1 billion booked for the year-ago period, swallowing a one-time charge of $1.1 billion largely related to its Abgenix buy. Excluding this, earnings were up to $1.05 a share, comfortably beating analysts’ average forecast by $0.11, according to Reuters.
Product sales climbed 14% in the quarter to $3.49 billion, with growth primarily driven by Amgen’s blood products franchise: global sales of the anaemia drug Aranesp (darbepoetin alfa) jumped 26% to $1.05 billion; and total turnover of the white blood cell stimulators Neulasta (pegfilgrastim) and Neupogen (filgrastim) grew 12% to over $1 billion. On the down side, Epogen (epoetin alfa), Aranesp’s predecessor, dipped 5% to $613 million, on wholesaler inventory changes and Aranesp’s growing popularity in hospitals, the group said.
Other solid perfomers in the quarter include Enbrel (etanercept), North American sales of which leapt 13% to $724 million on steady demand for the product as well as a 4.9% price hike in May, and Sensipar (cinacalcet), which saw global revenues soar 119% to $79 million.
“I am pleased with our excellent financial performance in both the United States and internationally,” said Kevin Sharer, Amgen’s chief executive, commenting on the firm’s performance during the quarter. “Execution of our important clinical programs continued at an aggressive pace…and we raised our adjusted earnings per share guidance for the year despite a significant increase in R&D investment. This reflects our confidence in our ongoing business performance,” he added.
Amgen now targets 2006 adjusted EPS in the range of $3.75 to $3.85, excluding certain expenses, up from the initial forecast of $3.60 to $3.70 on a favourable product mix and lower cost of sales, and revenue guidance has been honed to $14.0-$14.3 billion from the original $13.9-$14.4 billion forecast.