Beating the expectations of analysts, Amgen Inc., the country's largest independent biotechnology company, reported earnings of 82 cents per share for the second quarter, up 14% from the same period a year ago.
Company officials attributed the increase to improved sales of the firm's best-selling product, Epogen, a medication used by dialysis patients to boost their red blood cell counts and ward off anemia.
Sales rebounded after federal authorities eased restrictions imposed last year on the level of Epogen use covered by Medicare. The Health Care Financing Administration, which sets policy for the Medicare system, reversed itself this year in response to complaints from doctor and patient groups. The new rules essentially leave it up to physicians to determine what level of red blood cells a patient requires and how long to keep the patient on the drug to achieve that.
The latest change allowed Epogen to "resume its more normal growth," Chairman and CEO Gordon Binder said. While federal officials are now refining the reimbursement rules, the company believes the changes will not have a significant impact.
The number of dialysis patients is also growing by 7% to 8% a year. Binder said the company is expecting Epogen sales to increase "in the low double digits." Sales of the drug accounted for $337 million for the quarter, up from $295 million a year ago.
Sales for Amgen's other billion-dollar-a-year drug, Neupogen, have been flat, but that was partly the result of new AIDS treatments, which leave patients healthier and reduce their need for Neupogen, which boosts white blood cell counts in patients undergoing chemotherapy. A strong U.S. dollar hurt foreign product sales, Binder said.
The Thousand Oaks-based company reported net income for the quarter of $216 million, up 8% from $201 million a year ago.
Overall revenue for the quarter was $657 million--an increase of $36 million from last year.