Biotechnology company Amgen Inc. (AMGN) said Monday that its board of directors has authorized the buyback of up to an additional $5 billion of its common stock, citing confidence in the company's long-term prospects. Amgen currently has about $1.2 billion remaining under its previous stock repurchase plan.
The company's board had previously authorized stock repurchase programs of $5 billion each in July 2007 and December 2006, respectively.
In mid-October, Amgen reported a 24% increase in profit for the third quarter, as tight cost control and lower taxes offset a small decline in revenue.
The company's GAAP net income for the third quarter rose to $1.39 billion or $1.36 per share from $1.12 billion or $1.05 per share in the year-ago quarter. Excluding items, adjusted net income for the quarter increased to $1.52 billion or $1.49 per share from $1.31 billion or $1.23 per share in the prior-year quarter. Total revenue for the quarter declined 2% to $3.81 billion from $3.88 billion in the same quarter last year.
In the recent past, sales of the company's anemia drugs Aranesp and Epogen have been falling, due to safety concerns and warnings. Now, the company is pinning its hope on its experimental osteoporosis drug denosumab, which is expected to be its next major blockbuster drug.
While reporting its financial results, Amgen had also said that its adjusted outstanding debt was $12.2 billion at the end of the third quarter. The company's outstanding debt presented in accordance with GAAP was $11.5 billion at the end of the quarter, while cash and marketable securities were $14.0 billion.
Among other companies in the drug industry, Merck & Co. Inc. (MRK) said in mid-November that its board has approved purchases of up to $3 billion of common stock for its treasury.
In Monday's regular trading session, AMGN is trading at $56.70, down $0.15 or 0.26% on a volume of 1.07 million shares. In the past 52 weeks, the stock has been trading in a range of $44.96-$64.76.
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