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Amgen Posts 45% Increase in Profit

April 23, 2003|Denise Gellene | Times Staff Writer

Biotech giant Amgen Inc. said Tuesday that first-quarter profit soared 45% on stronger-than-expected sales of drugs for anemia and cancer.

The company's stock, which hit a 52-week high before the results were announced, continued to rise in after-hours trading.

Amgen reported net income of $493 million, or 37 cents a share, compared with $341 million, or 32 cents, a year earlier. Driving the result was a fivefold jump in quarterly sales of the anemia drug Aranesp and surging sales of Neulasta, a medication for chemotherapy-related infections that was launched less than a year ago.

On a pro forma basis, excluding expenses related to Amgen's acquisition of rival Immunex Inc. last year, Amgen's first-quarter earnings were $558 million, or 42 cents a share, beating Wall Street analysts' expectations by 3 cents a share, according to Thompson First Call.

Amgen, based in Thousand Oaks, expects the pace of its two key drug franchises to continue and added $400 million to its 2003 product revenue forecast. In addition, the company raised its full-year earnings guidance by 10 cents a share.

"It was a terrific quarter," Chairman and Chief Executive Kevin W. Sharer said, "at the upper end of my expectations."

Amgen's first-quarter revenue rose 75% to $1.76 billion from $1.01 billion. The year-earlier figure does not include sales of the anti-inflammatory drug Enbrel that Amgen acquired in last summer's Immunex purchase.

Sales of Aranesp, a longer-acting version of Amgen's mainstay drug Epogen, jumped to $255 million from $39 million in the quarter last year. Aranesp posted international sales of $97 million, aided by a weaker dollar and quality problems with a rival drug sold by Johnson & Johnson. In the U.S., Aranesp sales totaled $158 million. Sharer said a cut in Medicare reimbursements for hospital outpatients during the first quarter did not affect Aranesp sales.

For the year, Amgen said sales of Aranesp and Epogen, sold exclusively to kidney dialysis patients, should be $3.4 billion to $3.6 billion, up from an earlier estimate of $3.2 billion to $3.4 billion.

Combined sales of Neupogen and its longer-acting version, Neulasta, rose 53% in the quarter to $545 million from $355 million for Neupogen alone in the first quarter of last year.

Amgen said combined revenue of the drugs should total $2.3 billion to $2.5 billion for the year, up from an earlier forecast of $2.1 billion to $2.3 billion.

In the quarter, Enbrel's sales rose 26% to $274 million from $216 million reported a year ago by Immunex.

Amgen said much of the revenue growth was driven by its ability to fill prescriptions for thousands of patients on a waiting list. The company said the pace of growth should slow in subsequent quarters.

Amgen shares closed at a 52-week high of $60.94, up 86 cents, before the earnings were reported. In after-hours trading the stock climbed to $62.

Paul Abel, portfolio manager at Kinetics Asset Management, which owns Amgen shares, said he planned to lighten his holdings. "It is a great company; the results are fantastic. But as an investor, the shares are getting a little pricey," he said.

The stock trades for about 33 times this year's expected earnings per share of about $1.90.

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