By LINDA A. JOHNSON, Associated Press
TRENTON, N.J. (AP) — Biotech giant Amgen Inc. said Tuesday that its first-quarter profit rose 5 percent on higher sales of its top two drugs and two new ones, and it easily beat Wall Street forecasts.
The maker of biologic drugs such as Enbrel for rheumatoid arthritis said net income was $1.18 billion, or $1.48 per share, up from $1.13 billion, or $1.20 per share, a year ago.
Excluding one-time items, the Thousand Oaks, Calif., company said it would have earned $1.29 billion, or $1.61 per share.
Revenue totaled $4.05 billion, up 9 percent, despite sharply lower sales for two drugs with recent safety warnings.
Analysts were expecting earnings per share of $1.46, excluding one-time items, and sales of $3.93 billion, according to FactSet.
"It's not really the great quarter that it looks like at first blush," said Edward Jones analyst Judson Clark, noting that adjusted income was up only 2 percent. "This certainly isn't the fast-growing biotech company it was a few years ago."
UBS analyst Matthew Roden noted the company surpassed analyst expectations even without the boost it got from two one-time payments from research partners, totaling $72 million.
"It does leave one questioning if this kind of performance is sustainable," Roden said, but called it "a good quarter."
Amgen shares were flat at $68.63 in after-hours trading, after rising 34 cents during regular trading hours.
Outgoing CEO Kevin Sharer, who is being replaced by Chief Operating Officer Bob Bradway on May 23, told analysts the company's sales, profit, drug pipeline and business development were all strong in the quarter.
Sharer also praised Amgen founder George Rathmann, who died Sunday.
"His science base, his desire to make big bets on projects that can move the needle ... his energy, will always be part of us," Sharer said of Rathmann.
Amgen, the world's biggest biotechnology company, spent $723 million in the quarter on research and development on an adjusted basis, up 3 percent, as a few of its experimental drugs are now in expensive late-stage patient testing.
Sales and administrative expenses rose 5 percent on an adjusted basis to $1.06 billion, mainly because the company has started ads targeting consumers for the first time and increased its marketing overseas for two of its products: Enbrel and one of the company's newest products, injected osteoporosis drug Prolia.
"I think what we're seeing is them getting ahead of biosimilars," said Clark.
The first biosimilar versions of complex biologic drugs are expected to be approved for U.S. sales in the next few years, erasing their monopoly and cutting their sales just as generic pills reduce sales of brand-name ones.
Clark said he thinks Amgen is trying to build name recognition ahead of that for the two products, which are more likely than Amgen's other products to be requested by patients.
The Enbrel TV commercials feature golfer Phil Mickelson, while the Prolia commercials, which started recently, feature actress Blythe Danner worrying about "breaking a leg" as she goes on stage for a performance.
Sales rose 9 percent in the quarter to $1.34 billion for Neulasta and Neupogen, for treating a decline of infection-fighting white blood cells caused by cancer and other disorders. Enbrel sales jumped 7 percent to $938 million, and sales of three smaller drugs climbed by double-digit percentages.
Prolia and a similar drug, Xgeva for preventing fractures in cancerous bones, both saw sales more than triple from a small base to a combined $241 million.
But the sharp sales decline continued for blockbuster anemia drugs Aranesp and Epogen, which have had limits put on dosing and reimbursement due to safety concerns. Epogen was down 17 percent to $446 million and Aranesp fell 11 percent to $518 million.
Amgen reiterated its 2012 adjusted profit forecast of $5.90 to $6.15 per share. Analysts predict $6.08 per share, on average.
Linda A. Johnson can be followed at http://twitter.com/LindaJ_onPharma
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