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Amgen Profit Down 9%, Revenue Up: Sees Strong FY12

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Amgen Inc. (AMGN) Thursday reported a nine percent decline in fourth-quarter profit as tax benefits last year and higher expenses offset a three percent growth in revenues. Adjusted earnings, which excludes one-time items, for the quarter missed estimates by a penny, while revenues topped expectations mainly on a seven percent growth in its lead infection treatment drugs Neulasta and Neupogen, and Xgeva which is used to prevent skeletal-related events.

The biotechnology giant also provided a strong outlook for the full year 2012, with both adjusted earnings and revenues indicated to come in ahead of Street expectations.

Thousand Oaks, California-based Amgen reported fourth-quarter net earnings of $934 million, a decline from $1.02 billion last year. However, on a per share basis, earnings for the quarter was unchanged at $1.08, reflecting a lower share count.

Results for the prior-year quarter included a huge income tax benefit of $113 million related to resolving certain non-routine transfer pricing issues with tax authorities.

Excluding items, adjusted earnings for the quarter was $1.04 billion or $1.21 per share, compared to $1.1 billion or $1.17 per share last year.

On average, 23 analysts polled by Thomson Reuters expected earnings of $1.22 per share for the quarter. Analysts' estimates typically exclude special items.

Amgen reported fourth-quarter revenues of $3.97 billion, compared to $3.84 billion last year. Twenty-two Wall Street analysts expected revenues of $3.91 billion for the quarter.

Total product sales for the quarter grew 4 percent from last year to $3.9 billion. In US, where most of Amgen's business emanates, sales grew 5 percent to $3 billion, while International sales edged up 1 percent to $900 million, from a year ago.

Total combined sales of its lead drugs Neulasta and Neupogen - used to stimulate the production of neutrophils and fight infections - rose 7 percent to $1.32 billion from last year, mainly on a rise in average net sales price, and partly on favorable changes in wholesaler inventories.

Total sales of rheumatoid arthritis drug Enbrel rose a modest 1 percent to $945 million from last year. Sales of Xgeva, used to prevent skeletal-related events, totaled $134 million in the fourth quarter since its launch, amounting to a 31 percent sequential growth.

Meanwhile, sales of anemia drugs Aranesp fell 15 percent from last year to $538 million as unit sales waned, with US sales down by 22 percent and international sales leaner by 9 percent.

Epogen sales fell 18 percent to $486 million from last year, impacted by poorer dose utilization due to changes in reimbursement and product labeling. Sales of Sensipar/Mimpara increased 15 percent to $216 million from last year.

Amgen said its total operating expenses for the quarter increased to $2.8 billion from $2.77 billion last year, and includes a 2 percent rise in research and development costs.

During the fourth quarter 2011, Amgen repurchased about 86 million shares of common stock at a total cost of $5.2 billion.

For 2012, Amgen expects net earnings of $5.43 to $5.70 per share, and adjusted earnings of $5.90 to $6.15 per share. Revenues are forecast in the range of $16.1 billion to $16.5 billion.

Street analysts on consensus, currently expect Amgen to report earnings of $5.94 per share with revenues of $16.05 billion for 2012.

Earlier today, Amgen said it will acquire Micromet Inc. (MITI) for about $1.16 billion. The deal, unanimously approved by both the companies boards, is expected to close in the first quarter.

Amgen said the deal will enable it to access Micromet's experimental leukemia drug blinatumomab, which is in mid-stage clinical trials for treating acute lymphoblastic leukemia and for non-Hodgkin's lymphoma.

The proposed deal is reportedly the largest acquisition by Amgen since it acquired Abgenix Inc. for $2.2 billion in an all-cash deal in 2006.

AMGN closed Thursday on the Nasdaq at $68.08, down $1.13 or 1.63%, on a volume of about 6.8 million shares. However, in the after hours, the stock gained $0.52 or 0.76%.

by RTT Staff Writer

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