Amgen (AMGN), a biotechnology company, Monday reported a slight increase in fourth quarter profit helped by higher product sales especially in the international segment driven by anemia drug Epogen and cancer drugs Neulasta and Neupogen. As a result, Amgen now expects full year 2010 profit and revenue to come in line with estimates.
On a reported basis, net income of Oaks, California-based Amgen increased to $931 million or $0.92 per share from $0.87 per share or $925 million in the same quarter a year ago.
Amgen's net income for the quarter dropped by $0.04 per share and by $0.87 per share in the prior year quarter related to the adoption of new accounting standards. As such, the company recorded additional non-cash interest expense of $64 million and $61 in the fourth quarter of 2009 and 2008, respectively.
Adjusted net income, which excludes stock option expense, expenses related to acquisitions and certain other items, decreased to $1.07 billion or $1.05 per share from $1.12 billion or $1.06 per share in the year-ago quarter.
On average, 19 analysts polled by Thomson Reuters expected earnings of $1.13 per share for the quarter. Analysts' estimate typically excludes one-time items.
Amgen's total revenue increased 2% to $3.81 billion from $3.75 billion in the year-ago quarter, but still below Street estimates of $3.85 billion.
Positively impacted by foreign exchange, total product sales during the quarter rose 2% to $3.74 billion with sales in US totaling $2.88 billion, a decrease of 1%, while International sales increased 11% to $861 million.
Declining demand and unfavorable changes in wholesaler inventories caused worldwide sales of Aranesp, as well as over concerns of safety, dropped 8% to $648 million with US sales declining 20% to $288 million. International sales, however, increased 4% to $360 million helped by change in foreign exchange. The drug in a study was found to produce adversities in patients taking part and was then stopped causing Amgen's shares to decline.
Meanwhile, demand for Epogen increased 9% in sales to $703 million. Combined worldwide sales of Neulasta and Neupogen increased 2% to $1.20 billion driven primarily by increased demand for Neulasta. Combined sales of Neulasta and Neupogen in the U.S. were $880 million. while International sales were $322 million.
Sales of Enbrel were relatively unchanged at $912 million, compared to $913 million in the same quarter a year ago.
Sequentially, in the third quarter, profit of Amgen rose 24% to $1.39 billion or $1.36 per share helped by tight cost control and lower taxes offset a small revenue drop. Total revenue fell 2% to $3.81 billion.
Novartis AG (NVS), a Swiss drug-maker, in its third quarter, reported a marginal increase in profit to US$2.1 billion from US$2.09 billion, as local currency sales growth at Pharmaceuticals, Consumer Health and Sandoz divisions offset sharply lower sales from Vaccines and Diagnostic segment. Net sales grew 3% to US$11.09 billion.
For the quarter under review, Amgen's cost of sales decreased 3% to $535 million from $549 million, driven primarily by lower excess capacity charges and lower excess inventory write-offs, partially offset by less favorable product mix and higher sales volume.
Higher licensing fees associated with the Array BioPharma agreement and other items caused research & development expenses to rise 12% to $864 million from the prior year quarter.
Selling, General & Administrative expenses increased 9% to $1.16 billion mainly due to increased spending for activities in anticipation of the approval and launch of Prolia, partially offset by expense recoveries associated with the GlaxoSmithKline collaboration agreement for Prolia in postmenopausal osteoporosis in Europe, Australia, New Zealand, and Mexico.
Total operating expenses increased to $2.56 billion from $2.38 billion in the year-earlier quarter. Operating income was $1.25 billion, compared to $2.38 billion in the prior-year quarter.
During the fourth quarter of 2009, Amgen repurchased approximately 22 million shares of common stock at a total cost of $1.2 billion.
For full year 2009, Amgen's net income increased to $4.61 billion or $4.51 per share from $4.05 billion or $3.77 per share in the prior year. Adjusted earnings increased to $5.01 billion or $4.91 per share from $4.89 billion or $4.55 per share a year ago. Total revenue dropped 2% to $14.64 billion from $15.00 billion in the prior year.
Looking ahead to full year 2010, Amgen expects adjusted earnings in the range of $5.05 to $5.25 per share, while the Street expects earnings of $5.12 per share. Adjusted forecast excludes stock option expense, certain expenses related to prior acquisitions and non-cash interest expense resulting from a change in accounting for convertible debt.
Total revenue for 2010 is expected to be in a range of $15.1 billion to $15.5 billion, in line with Street estimates of $15.31 per share for the year.
Kevin Sharer, Chairman and CEO said, "We are ready and look forward to launching denosumab worldwide this year."
Amgen also expects results from the prostate skeletal related events study in the first quarter of 2010 and is also planning for the worldwide submission of a Biological License Application (BLA) later this year for the treatment of SREs in advanced cancer patients.
Besides, the company also anticipates data from the Phase 3 bone metastasis prevention study in prostate cancer in the second half of 2010.
Based on current event rates, the company also said it anticipates completion of the Phase 3 Evaluation of Cinacalcet Therapy to Lower Cardiovascular Events study in dialysis patients and Motesanib Phase 3 1st-line study in 2011.
The company also said it plans to initiate a Phase 3 program in ovarian cancer .
On October 12, 2009, brokerage, UBS upgraded Amgen's share to 'Buy' from 'Neutral,' with a mean target of $69.24.
AMGN closed Monday's regular trading at $55.71, down $0.89 or 1.57%, on a volume of 6.71 million shares. In after-hours, the stock gained $0.07 or 0.13%, to trade at $56.00. In the last 52-week period, the stock traded in a range of $44.96 to $64.76, with a three-month average volume of 6.54 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.