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Amgen's Net Income Tops Expectations

The biotech company lifts its full-year earnings outlook on strong sales of its anemia and arthritis drugs.

July 21, 2006|From Reuters

Amgen Inc. posted better-than-expected quarterly earnings Thursday and lifted its full-year earnings forecast on strong sales of its anemia and arthritis drugs.

Shares of Thousand Oaks-based Amgen rose more than 4% in after-hours trading.

Excluding a $1.1-billion charge related to the acquisition of Abgenix Inc., stock option expenses and other items, Amgen earned $1.05 a share, topping analysts' expectations by 11 cents a share, according to Reuters Estimates.

The world's largest biotechnology company expects 2006 earnings of $3.75 to $3.85 a share -- 15 cents a share higher than its previous forecast -- and revenue of $14 billion to $14.3 billion.

Profit for the second quarter was $14 million, or 1 cent a share, reflecting the huge one-time Abgenix charge. That compared with a profit of $1 billion, or 82 cents, a year earlier.

The Abgenix deal gave Amgen full control of the promising cancer drug panitumumab, considered the most important late-stage experimental medicine in the company's pipeline.

U.S. regulators in June said the colon cancer drug would get a priority review, meaning an approval decision could come within six months. The company said it expected to launch the drug later this year.

The company also said late-stage trials of AMG 706 in breast and lung cancer that were set to begin in the fourth quarter of this year had been delayed.

Chief Executive Kevin Sharer said the delay was caused by the discovery of a gall bladder condition in 2% to 3% of patients given the drug.

Amgen's current drug portfolio helped push second-quarter revenue up 14% to $3.6 billion.

Worldwide sales of Aranesp for treating anemia in cancer and kidney dialysis patients rose 26% to $1.06 billion for the quarter, exceeding Wall Street estimates of $963 million.

Sales of Epogen, an earlier version of Aranesp, fell 5% to $613 million because of wholesaler inventory changes and increased hospital use of Aranesp.

Amgen is trying to block a potential rival to its Aranesp/Epogen franchise by Roche Holding from being sold in the U.S., arguing that the Roche drug, Cera, infringes Amgen patents.

"We'll settle it in court," Sharer said.

North American sales of Enbrel, used to treat arthritis and the skin condition psoriasis, rose 13% to $724 million, topping analysts' consensus expectations of $698 million.

Neulasta and Neupogen, used to boost white blood cells in chemotherapy patients, saw global sales rise 12% to $1 billion.

Amgen shares rose to $66.50 in extended trading after falling 64 cents to $63.92 in regular trading.

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