Amgen 1Q profits rise despite decline in sales

THOUSAND OAKS, Calif. – Amgen Inc. (Nasdaq: AMGN) posted first-quarter adjusted net income of $1.14 billion, a 2.3-percent increase from the year-ago period’s $1.11 billion, on revenue that fell 2.0 percent to $3.61 billion.
Earnings per share rose to $1.04, an 11-percent increase from the year-ago 94 cents.

Stock-option expenses amounted to 2 cents per share in the quarter just ended, down from 3 cents in the 2007 first quarter, Amgen said. Excluding stock-option expenses, and certain restructuring, acquisition and other expenses, adjusted net income fell 2 percent to $1.22 billion.

“Though first-quarter product sales were mixed, based on current trends and expectations, we are confident that revenues for the year will be within our previously announced guidance,” Kevin Sharer, Amgen’s chairman and CEO, said in the after-market report.
Total first-quarter product sales amounted to $3.54 billion, a decrease of 7.9 percent from the year-ago level, the company said. U.S. sales fell 3.3 percent year-over-year to $2.79 billion, while international sales rose 10 percent to $749 million, aided by a $72 million benefit from favorable currency exchange rates. Excluding the impact of exchange rates, total product sales fell 3 percent and international sales fell 1 percent, Amgen said.
The company is in talks with the U.S. Food and Drug Administration over its erythropoiesis stimulating agents (ESAs), Aranesp (darbepoetin alfa) and Epogen (Epoetin alfa), both of which saw year-over-year sales declines: Aranesp sales fell 25 percent compared to $761 million while Epogen sales fell 11 percent to $554 million. Sales also fell for Vectibix (panitumumab), dropping 33 percent to $34 million as demand declined.
But sales of Enbrel (etanercept) rose 30 percent to $951 million, on increasing demand; sales of Sensipar (cinacalcet HCl) rose 27 percent to $133 million; and combined worldwide sales of Neulasta (pegfilgrastim) and Neupogen (Filgrastim) rose 7 percent to $1.09 billion, Amgen said.
For the first quarter, Amgen declared research and development costs of $661 million, an 18-percent decrease from a year ago. The company cited “lower staff-related costs and other expense reductions resulting from the previously announced restructuring plan; cost recoveries derived from licensing transactions with Daiichi Sankyo and Takeda in Japan; and lower clinical-trial costs.”
“We continue to be encouraged by the lasting effects of our cost-management efforts,” Sharer said. “These, combined with our revenue and expense expectations, place us solidly within our adjusted EPS guidance for the year.
“Most importantly, we will sustain a strong R&D investment as we look forward to disclosing important clinical data in the next six to 12 months.”
Amgen Inc. (Nasdaq: AMGN) – based in Thousand Oaks, Calif., with operations in 10 other U.S. locations, including West Greenwich – is a biotechnology company focusing on the development and production of new medicines for human use. Additional information is available at www.amgen.com.

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