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Amgen Profit Jumps on Drug Sales

April 23, 2004|Denise Gellene | Times Staff Writer

Amgen Inc.'s first-quarter profit rose 40% on higher sales of drugs for anemia, rheumatoid arthritis and chemotherapy-related infections.

The Thousand Oaks biotechnology company said net income grew to $690.2 million, or 52 cents a share, from $493.3 million, or 37 cents, in the same quarter last year. Revenue climbed 33% to $2.34 billion from $1.76 billion a year earlier.

Excluding charges related to its 2002 purchase of Immunex Corp., Amgen had adjusted earnings of $752.3 million, or 57 cents. Wall Street had expected 56 cents, according to a survey of analysts by Thomson First Call.

Despite continuing to post strong earnings quarter after quarter, the biotech bellwether's stock has languished near its 52-week low of $56.80 on concerns Amgen can't sustain the growth of the last three years.

Shares rose 13 cents to $57.14 on Nasdaq. They gained an additional $1.18 in extended trading, after the earnings announcement.

Analysts said Amgen's strong showing Thursday should allay some concerns.

"They just showed investors they can grow the bottom line," said Deutsche Bank analyst Dennis Harp. "There is nothing like actual performance to convince people their impressions may have been wrong."

Sales of Epogen, an anemia drug for kidney dialysis patients, and its follow-on drug Aranesp rose 41% to $1.13 billion. Aranesp sales more than doubled in the quarter to $542.6 million from $254.8 million last year.

Wall Street had been awaiting the Aranesp sales number. Last week, Amgen's rival in the anemia business, Johnson & Johnson, reported a first-quarter drop in anemia drug sales that it blamed on price competition. J&J said that Amgen was discounting Aranesp by 40% in the United States and had also cut its price in Europe.

On Thursday, Amgen said it was J&J that had ignited a round of discounting. Chief Financial Officer Richard Nanula said that Amgen lowered its price in response to J&J's action, but not by 40%.

"We've got a healthy competitive situation going on here," Chief Executive Kevin Sharer said. "It is not an indication of a price war."

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Associated Press was used in compiling this report.

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