Staff Writer

Amgen Inc.'s future, in particular the prospects for recently approved drugs Prolia and Xgeva, have gotten much of the attention this week as the Thousand Oaks, Calif.-company reported fourth-quarter and full-year 2010 financial results. But CEO Kevin Sharer put things in perspective when he reminded listeners during a conference call that the future is in large measure the past: it took 15 years of work to develop the products and set the stage for Amgen's promising outlook.

"I think it is biotechnology at its best," he said.

Xgeva (denosumab) was approved in November at the 120-mg dosage as a therapy to prevent skeletal-related events (SRE) in patients with bone metastases from solid tumors, a market that analysts have estimated could exceed $2 billion. Then in December, Amgen reported top-line Phase III results showing Xgeva improved median bone metastasis-free survival by 4.2 months in men with castrate-resistant prostate cancer vs. placebo – the first time a bone-targeted drug has delayed the spread of prostate cancer to the bones. (See BioWorld Today, Dec. 15, 2010.)

The FDA approved Prolia (denosumab) in June at the 60-mg dosage under the as a treatment for postmenopausal women with osteoporosis at high risk for fracture. (See BioWorld Today, Oct. 20, 2009, Oct. 23, 2009, June 2, 2010, June 3, 2010, and Nov. 22, 2010.)

Sharer said that Amgen's priorities starting 2011 are advancing Prolia and Xgeva, but added that "predicting the ramp-up rate is challenging."

Overall, Amgen reported fourth quarter 2010 results in line with estimates and expects a strong performance in 2011. The company had product sales of $3.7 billion in the quarter and $14.6 billion for the year, an increase of 2 percent over 2009. Total revenue for the quarter was $3.8 billion and for the year $15 billion, an increase of 3 percent. The company said it expects total revenue for 2011 in the range of $15.1 billion to $15.5 billion with 2011 adjusted EPS in the range of $5 to $5.20.

Amgen reported adjusted earnings per share of $1.17 for the fourth quarter of 2010, an increase of 11 percent compared to $1 .05 for the fourth quarter of 2009. Full year 2010 adjusted EPS was up 6 percent to $5.21 from $4.91 in 2009.

Adjusted net income increased 4 percent to $1.1 billion in the fourth quarter of 2010 compared to $1 billion in the fourth quarter of 2009. Full year 2010 adjusted net income increased slightly to $5 billion. The company had a cash balance of $17.4 billion.

Shares (NASDAQ:AMGN) were down 13 cents, to $57.16 at close Tuesday.

Piper Jaffray & Co. analyst Ian Somaiya noted that while some would consider the fourth quarter earnings lackluster, Amgen had the "growth of the denosumab franchise" to look forward to. He said he expected Prolia adoption to accelerate following Medicare Part D coverage in the second quarter, as well as willingness by more payers to universally cover Xgeva.

"This combined with a rapidly advancing pipeline could help expand AMGN's multiple in the near term and drive upside to revenue and earnings longer term," he wrote, adding that, "a notable change for management was guidance for an increase in R&D after three years of cost cutting. Reading between the lines, this implies more products are going to move forward into Phase III trials, which is a positive given numerous Phase II catalysts in 2Q/3Q 2011."

Oppenheimer & Co. analyst Bret Holley wrote that although Prolia sales were a "modest" $20 million in 2010, "we expect establishment of Medicare Part D reimbursement in 1H11 will drive broader [primary care physician] adoption. Despite only one month of availability, Xgeva sales of $7M were impressive. . . . We believe AMGN's '11 guidance implies robust Prolia/Xgeva sales growth. . . . Although we expect nearly flat '11 core franchise growth, we continue to believe AMGN is undervalued based on our Prolia/Xgeva expectations and the company's cash/cost flexibility."

Worldwide sales of Prolia were $20 million in the fourth quarter and $33 million for the year, which the company said reflected "steady progress with physicians, patients and payers in the U.S. and internationally." Xgeva, which was approved by the FDA on Nov. 18, had U.S. sales of $8 million for the fourth quarter.

Sales of Epogen (Epoetin alfa) were down 16 percent to $591 million in the fourth quarter of 2010 compared to $703 million in the fourth quarter of 2009. The company said the decline was caused primarily by a decline in unit demand and unfavorable changes in wholesaler inventories and accounting estimates. The decrease in unit demand partially reflects a decrease in dose utilization as health care providers began implementing new dose regimens, partially offset by patient population growth, the company said. For the year, Epogen sales decreased 2 percent to $2.5 billion in 2010 vs. $2.5 billion in 2009.

Worldwide sales of Aranesp (darbepoetin alfa) also decreased 2 percent to $633 million in the fourth quarter of 2010 compared to $648 million in the fourth quarter of 2009. For the year, worldwide Aranesp sales decreased 6 percent to $2.5 billion in 2010 compared to $2.6 billion in 2009, due principally to a decline in U.S. unit demand.

Combined worldwide sales of Neulasta (pegfilgrastim) and Neupogen (Filgrastim) increased 3 percent to $1 .2 billion in the fourth quarter of 2010 compared to $1.2 billion in the fourth quarter of 2009. For the year, combined worldwide Neulasta and Neupogen sales increased 4 percent to $4.8 billion in 2010 compared to $4.6 billion in 2009, mainly because of an increase in the U.S. average net sales price.

Enbrel (etanercept) sales increased 3 percent to $939 million in the fourth quarter of 2010 compared to $912 million in the fourth quarter 2009. For the year, Enbrel sales increased 1 percent to $3.5 billion in 2010 compared to $3.4 billion in 2009. Worldwide sales of Sensipar/Mimpara (cinacalcet) increased 10 percent to $188 million in the fourth quarter of 2010 compared to $171 million in the fourth quarter of 2009. For the year, Sensipar/Mimpara sales increased 10 percent to $714 million compared to $651 million in 2009.