By Caroline Chen
By Caroline Chen
NEW YORK - Amgen Inc., the world’s largest biotechnology company by revenue, disappointed analysts with lower-than-expected sales of its top drug as executives assured investors the drop was seasonal and they were on target to meet their 2014 projections.
Quarterly revenue increased 6.6 percent to $4.52 billion compared with a year earlier, missing the $4.75 billion average of 19 analysts’ estimates compiled by Bloomberg. Sales of Enbrel, the company’s best-selling arthritis medicine, declined 5 percent to $988 million because of lower unit demands, Amgen said yesterday in a statement. Analysts projected $1.11 billion.
Amgen is seeking to expand its portfolio of products from Enbrel and its anemia medicines led by Neulasta. The Thousand Oaks, Calif.-based company acquired Kyprolis for blood cancer in its purchase last year of Onyx Pharmaceuticals Inc. and an experimental cholesterol drug produced successful results in a late-stage trial reported last month.
The drugmaker repeated its 2014 forecast of $19.2 billion to $19.6 billion in revenue, and earnings per share excluding one-time items in the range of $7.90 to $8.20.
“We’re confident we’re on track to deliver on our targets this year,” CEO Robert Bradway said in a conference call with analysts.
First-quarter Enbrel sales are typically lower because Amgen raises prices in January, leading retailers to stock up in the fourth quarter, said Eric Schmidt, a New York-based analyst at Cowen & Co.
The therapy has “a bit of competition” from Johnson & Johnson’s psoriasis drug, Stelara, Schmidt said in a telephone interview. The drop in sales, however, is primarily “more of a seasonal head wind.”
“Demand remains strong, growing at double digit rates,” Anthony Hooper, an Amgen executive vice president, said of Enbrel during the call. Hooper said underlying demand in the rheumatology segment was growing at 14 percent while the increase was 11 percent for dermatology products.
Amgen’s shares fell 3 percent to $115.75 in extended trading in New York after the earnings were announced. The company gained 5.2 percent in the past 12 months to close Tuesday at $119.30.
Kyprolis also disappointed analysts with the company reporting $68 million in first-quarter sales compared with the average estimate of $82.2 million. Analysts are closely watching two studies of the drug that are important for the therapy’s introduction in Europe. Amgen said the results would be announced in the second or third quarter this year. Previously, Amgen said data would come in the first half.
“It’s always tempting to read into that, but that’s not a wise thing to do,” Sean Harper, an executive vice president, said about the delay. “I think you just have to wait to get the data.”
Net income fell to $1.07 billion, or $1.40 a share, from $1.43 billion, or $1.88, a year earlier, the company said in its statement. Adjusted for one-time items, profit was $1.87 a share, missing the $1.94 average of 22 analysts’ estimates compiled by Bloomberg.
Amgen attributed the decline to tax breaks the company received in the first quarter of 2013, which were not repeated this year. The drugmaker also had additional expenses related to integrating the Onyx acquisition.