By Tess Stynes
Amgen Inc. raised its 2015 guidance after reporting that its
second-quarter earnings rose 6.9% on better-than-expected sales
growth and lower operating expenses.
For the year, the biotechnology company now expects per-share
earnings of $9.55 to $9.80 and revenue of $21.1 billion to $21.4
billion, compared with its previously boosted estimate for
per-share profit of $9.35 to $9.65 a share on revenue of $20.9
billion to $21.3 billion. Amgen reduced its capital spending
outlook to about $700 million, from its previous estimate of about
$800 million.
Amgen, based in Thousand Oaks, Calif., has continued to showcase
its drug pipeline, which includes the potential for a number of
product launches this year. Like other big drug makers, Amgen needs
to bring new treatments to market, as older ones face the threat of
low-price competition.
The U.S. Food and Drug Administration recently granted approval
for Amgen's Kyprolis combination therapy as a second-line treatment
for patients with multiple myeloma, which will allow access to the
drug to a broader population of patients. Kyprolis, which Amgen
gained with its $10.4 billion acquisition of Onyx Pharmaceuticals
Inc. in 2013, initially received FDA approval in 2012 as a
third-line treatment.
In the latest quarter, sales of Kyprolis surged 53% to $119
million on higher volume.
Sales of Amgen's osteoporosis drugs increased, also on stronger
volume. Prolia revenue climbed 29% to $340 million, while XGeva
sales improved by 11% to $331 million.
Sales of arthritis drug Enbrel rose 8% to $1.35 billion as a
boost from higher prices was partly offset by impacts from
increased competition.
In the latest quarter, Amgen's operating expenses declined about
1%, including a benefit of three percentage points from
foreign-exchange rates. Research-and-development costs fell 6%,
driven by the company's efforts to reduce expenses.
During October, the company laid out streamlining plans aimed at
generating as much as $1.5 billion in annual cost savings by
2018.
Overall, Amgen reported a profit of $1.65 billion, or $2.15 a
share, up from $1.55 billion, or $2.01 a share, a year earlier.
Excluding certain costs from acquisitions and restructuring as well
as other items, per-share earnings rose to $2.57 from $2.37.
Revenue increased 3.7% to $5.37 billion. Currency fluctuations
had a negative impact of about 2.5 percentage points on the
growth.
Analysts polled by Thomson Reuters expected per-share profit of
$2.43 and revenue of $5.319 billion.
Combined sales of Neulasta and Neupogen, both of which are used
to prevent infections in patients receiving chemotherapy, decreased
1% to $1.41 billion. Neulasta sales rose 2% to $1.15 billion,
driven by price. Neupogen sales dropped 14% to $256 million mostly
because of competition in the U.S.
Write to Tess Stynes at tess.stynes@wsj.com
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