Amgen Profit Beats Estimates as Drugmaker Raises Forecast

Amgen Inc., the maker of cancer treatments and blood boosters to combat anemia, reported first-quarter profit that topped analysts’ estimates and raised its forecast for the year on stronger-than-expected drug sales. The shares rose in late trading.

Earnings excluding one-time items rose to $2.48 a share from $1.87 a year earlier. Analysts had forecast $2.10 on average, according to estimates compiled by Bloomberg. Revenue increased 11 percent to $5.03 billion, the Thousand Oaks, California-based company said Tuesday in a statement. Analysts had predicted $4.89 billion.

The results were driven primarily by increased sales of drugs including Enbrel for arthritis, Prolia for osteoporosis and Epogen for anemia. Lower operating costs, including a 13 percent reduction in research and development expenses, also contributed to earnings, Amgen said.

The drugmaker began a major restructuring last year, cutting back on staff and facilities to achieve as much as $1.5 billion in annual savings and a 15 percentage point increase in adjusted operating margin by 2018. First-quarter profit margin rose to 50 percent from 43 percent a year earlier.

The Thousand Oaks, California-based drugmaker also raised its forecasts for 2015. Adjusted earnings per share will be $9.35 to $9.65 this year, and sales will increase to $20.9 billion to $21.3 billion. In January, the drugmaker had forecast EPS of $9.05 to $9.40 and revenue of $20.8 billion to $21.3 billion. Analysts had predicted earnings of $9.31 and sales of $21 billion.

The shares rose 2.4 percent to $172.50 in late trading at 4:56 p.m. New York time after gaining 1.5 percent at the close. They have surged 44 percent in the past year, compared with 61 percent for the Nasdaq Biotechnology Index.

Product Pipeline

Amgen is entering the cardiovascular arena with a heart-failure drug, Corlanor, and a new type of cholesterol drug that’s likely to be approved in August. The potential patient population for the cholesterol drug, Repatha, is more than 25 million, Chief Executive Office Robert Bradway said at a JPMorgan Chase & Co. health-care conference in January.

Amgen terminated a midstage study of brodalumab, an experimental drug for asthma, according to the statement. The trial was stopped for lack of efficacy, not for safety reasons, spokeswoman Kristen Davis said in an e-mail. Brodalumab is also being tested for moderate to severe plaque psoriasis.

The drugmaker also has invested in developing biosimilars, drugs that mimic other biologic medicines, creating one of the most ambitious pipelines in the industry. It plans to have as many as five biosimilars on the market by 2019. At the same time, Amgen itself is under threat from other copycat makers. Novartis AG’s version of Neupogen was approved in the U.S. in March, becoming the first biosimilar to clear that hurdle.

First-quarter net income rose 51 percent to $1.62 billion, topping the average estimate of $1.27 billion. Higher drug sales outweighed the effect of a stronger dollar, which reduced total revenue by 2 percentage points, Amgen said.

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