Amgen fourth quarter profit tops Street; raises 2016 forecast

By Bill Berkrot

(Reuters) - Amgen Inc's fourth-quarter earnings soundly beat estimates on higher sales of its blockbuster rheumatoid arthritis drug Enbrel and lower costs, and the world's largest biotechnology company raised its 2016 profit forecast.

Amgen said on Thursday it now expects 2016 adjusted earnings of $10.60 to $11.00 per share, up from its prior view of $10.35 to $10.7. The change reflects U.S. congressional approval of the research and development tax credit and delays in competition from biosimilar versions of some of its products.

Analysts on average were estimating 2016 earnings of $10.67 a share, according to Thomson Reuters I/B/E/S.

Excluding one-time items, Amgen had adjusted earnings of $2.61 a share, topping analysts' average expectations by 32 cents.

 

"The financial performance was great, and it's nice to see the guidance go up so early in 2016," said Cowen & Co analyst Eric Schmidt.

Amgen now sees 2016 revenue of $22 billion to $22.5 billion versus its earlier view of $21.7 billion to $22.3 billion.

Amgen this year will release data eagerly awaited by investors, including pivotal Phase III results on romosozumab, a monthly injection to build bone density in osteoporosis patients; and a first look at whether its new cholesterol fighter, Repatha, cuts the risk of heart attacks, strokes and death.

Sales and insurer reimbursements are expected to be muted until those so-called outcomes results are unveiled.

Once the heart benefits are known and added to the Repatha's label, "we should see some dramatic uptake," said Tony Hooper, Amgen's head of commercial operations.

Revenue for the quarter rose 4 percent to $5.53 billion, matching Wall Street estimates.

Amgen's ongoing cost cuts helped drive the earnings beat as R&D expenses fell 10 percent in the quarter and costs of sales decreased 7 percent.

Sales of Enbrel rose 8 percent to $1.44 billion, primarily driven by price increases. That topped Wall Street estimates for about $1.32 billion.

The osteoporosis drug Prolia also topped estimates as sales jumped 21 percent to $380 million, compared with analysts' expectations of about $352 million.

Sales of its older white blood cell booster Neupogen fell 4 percent due to competition, including from Novartis' Zarxio, the first approved biosimilar in the United States.

Amgen said net profit rose to $1.8 billion, or $2.37 per share, from $1.29 billion, or $1.68 a share, a year ago.

Amgen shares rose 20 cents in extended trading to $148.55, giving back some earlier gains.

(Reporting by Bill Berkrot; Editing by Richard Chang)