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Amgen profit up, 2008 outlook steady
2008-01-24
Biotech giant Amgen Inc. reported Thursday that its fourth-quarter profits rose, topping analysts' estimates, despite government warnings about the safety of its popular anemia drugs. The company's forecast for 2008, however, calls for revenue to dip compared to 2007 -- in line with Wall Street's expectations -- and for earnings to slip into a lower range and fall short of Wall Street's prediction. Amgen reported a profit of $835 million for the fourth quarter, or 76 cents per share, compared with $833 million, or 71 cents per share, during the same period a year earlier. Revenue fell 2 percent to $3.75 billion from $3.84 billion in the quarter a year earlier. Excluding a mix of one-time buyout and restructuring charges, the company said it earned $1 per share, compared with 90 cents per share a year earlier. Analysts polled by Thomson Financial expected an adjusted profit of 97 cents per share on revenue of $3.54 billion. The pharmaceutical maker, based in Thousand Oaks, earned an adjusted total of $4.30 per share for the year, excluding stock options expenses, on revenue of $14.78 billion. It forecast earnings per share in 2008 of $4 to $4.30 per share on revenue of $14.2 billion to $14.6 billion, while Wall Street analysts forecast earnings per share of $4.37 on revenue of $14.49 billion. Not everyone was concerned with Amgen's projections falling short of expectations. Eric Schmidt, a biotech equities analyst with Cowen and Company, LLC, said the company was playing it safe and could easily exceed its own estimates. "It's pretty hard to see Amgen falling short," said Schmidt, who said predicted of the company's anemia drugs had leveled out and wouldn't fall farther. Amgen's stock price fell nearly 35 percent in 2007 amid U.S. Food and Drug Administration concerns about a class of drugs that includes the company's Aranesp and Epogen products, which treat anemia caused by kidney failure or chemotherapy. The FDA issued a "black box" warning, its most serious, on erythropoiesis-stimulating agents, include Aranesp and Epogen, after research suggested high doses increased patients' risk of tumors and death. Aranesp sales slumped 25 percent to $827 million in the fourth quarter and 12 percent for the year to $3.61 billion, driven mainly by a 39 percent drop in U.S. fourth-quarter demand, the company reported. Fourth-quarter Epogen sales fell 3 percent to $638 million, and annual sales dropped 1 percent to $2.49 billion. Amgen is also facing scrutiny from New Jersey's Attorney General, who subpoenaed company records after two former sales representatives accused Amgen of pushing its sales force to market its top-selling psoriasis drug Enbrel for unapproved uses. Company officials have said Amgen would cooperate with the investigation but have declined to comment on it. Separately, Amgen said a trial showed its post-menopausal osteoporosis drug denosumab was 40 percent more effective on some measures than Merck's Fosamax. In after-hours trading, Amgen shares were up 5 percent to $48.45, after closing regular trading at $46.12 before the results were released. ___ AP Business Writer Damian J. Troise in New York contributed to this report.
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