Cost-cutting helps Amgen lift 3rd quarter 2009 EPS 21%

Leading US biotechnology firm reported adjusted earnings per share of $1.49 for the third quarter of 2009, an increase of 21% on the like quarter of 2008. Consensus analysts' estimates were for EPS of $1.27. Adjusted net income increased 16 % to $1,518 million. However, total revenue decreased 2% to $3,812 million. largely attributed to a 19% drop in sales of anemia drug Aransep (darbepoetin alfa).

The company lifted its full-year profit outlook, but its shares dropped 3.6% to $57.25 in after-hours trading on Wednesday on news that additional study results would be needed to gain approval of the experimental drug  Prolia (denosumab) in the treatment and prevention of postmenopausal osteoporosis (The Pharma Letter October 20). The company also needs additional studies to gain approval as a preventive treatment.

Product sales performance

During the quarter, total product sales fell 1%to $3,736 million. Turnover in the USA totaled $2,918 million, relatively unchanged versus $2,929 million in the third quarter of 2008. International sales decreased 4 %to $818 million. The decline in third quarter 2009 international sales reflects the unfavorable impact of changes in foreign exchange, which were in aggregate approximately $76 million. Excluding the impact this, total product sales increased 1% and were up 5% internationally.

Worldwide sales of Aranesp decreased 19% to $685 million, falling 27% in the USA to $333 million. The decrease was driven by a decline in demand reflecting the negative impact, primarily in the supportive cancer care setting, of additional product label changes which occurred in August 2008, and a decrease in average net sales price. In addition, the decrease in sales also reflects, to a lesser degree, a slight loss of segment share. International Aranesp sales fell 9% to $352 million due to the unfavorable foreign exchange, which was in aggregate approximately $29 million and, to a lesser extent, segment decline, the firm noted.

Elsewhere, turnover of Epogen (epoetin alfa) increased 5% to $663 million, as a result of an increase in demand, principally due to patient population growth and, to a lesser extent, increases in average net sales price and dose/utilization, said Amgen.

Combined worldwide sales of Neulasta (pegfilgrastim) and Neupogen (filgrastim) were up 2% to $1,210 million, with US turnover rising 5% to $897 million,  due primarily to an increase in demand, which was driven by an increase in units sold and an increase in average net sales price. Combined international sales fell 7% 7 to $313 million in the third quarter of 2009 versus $336 million for the third quarter of 2008.

Sales of Enbrel (etanercept) increased 3% to $924 million, driven primarily by an increase in demand, partially offset by a favorable change in the accounting estimate recorded in the third quarter 2008 related to accruals for sale incentives. The increase in demand was principally due to a high single digit increase in the average net sales price partially offset by a decrease in units sold due to share declines as a result of increased competitive activity in dermatology. Enbrel continues to maintain a leading position in both the rheumatology and dermatology segments, Amgen pointed out.