Beleaguered biotech giant Amgen Inc. on Thursday reported a surprisingly steep drop in sales of its main anemia product line, raising doubts about the company's growth prospects.
But the Thousand Oaks-based firm's profit remained substantial on stronger-than-expected sales of other products.
Revenue increased 3% during the second quarter to $3.7 billion, versus $3.6 billion last year. Profit rose 2% to $1.3 billion, compared with $1.2 billion in the second quarter of 2006.
Domestic sales of Amgen's top-line product, Aranesp, which boosts levels of oxygen-carrying red blood cells, were $578 million, in contrast to $713 million in the second quarter last year, an almost 20% decrease.
Christopher Raymond, biotech analyst at Robert Baird & Co., said the news highlighted the serious problems facing the company. The earnings "were not great," he said. "There remains significant pressure and they may not have yet hit bottom."
Several recent studies have raised questions about the safety of Aranesp and its shorter-acting predecessor Epogen in some patients and dosages.
This spring a Food and Drug Administration advisory panel recommended that the agency change the drugs' labels and lower recommended dosages for some patients.
In response, the federal Medicare agency has proposed limiting reimbursement rates for the drugs, the agency's largest medication expense.
Aranesp and Epogen were Amgen's top-selling biotech drugs in 2006, with sales of roughly $7.2 billion, according to IMS Health. Amgen shares have fallen 18% this year.
On the plus side, sales of Amgen's Enbrel, a treatment for rheumatoid arthritis, increased 14% over the same period last year.
In addition, this week Blue Shield of California reversed a recent policy change that limited when the insurer would pay for the anemia drugs.
Before its earnings were announced at the close of the day, Amgen's stock fell $1, or 1.7%, to $56.16. The stock rose to $57 in after-hours trading.