Washington Editor

A "hurricane" of events that struck Amgen Inc. this past year resulted in a profit decrease of 82 percent from a year ago.

The Thousand Oaks, Calif.-based firm reported net income of $201 million, or 18 cents per share, for the third quarter, down from $1.1 billion, or 94 cents per share, from last year.

Total revenue remained unchanged during the third quarter at $3.6 billion vs. a year ago.

"We were caught in an unexpected hurricane," CEO Kevin Sharer said during a conference call.

Sales of Amgen's erythropoiesis-stimulating agents (ESAs) Aranesp (darbepoetin alfa) and Epogen (epoetin alfa) were adversely affected this year after the FDA called for a black-box warning on the products in response to concerns raised about an increased risk of adverse cardiovascular events and death.

The Centers for Medicare & Medicaid Services also imposed restrictions on payments for ESAs used in cancer patients.

Worldwide sales of Aranesp decreased 23 percent to $818 million.

"This was principally driven by a decline in U.S. demand" for the product caused by the reaction to recent regulatory and reimbursement actions, Amgen said, noting that U.S. Aranesp sales decreased 36 percent to $460 million.

International Aranesp sales, however, increased 3 percent to $358 million compared with $347 million a year ago.

Sales of Epogen decreased 5 percent to $602 million from $633 million from a year earlier. The company attributed that decrease to a decline in dose utilization.

In a research report, analyst Christopher Raymond of Chicago-based Baird & Co. Inc. noted that recent survey data showed that an accelerating number of nephrologists indicated a tendency to reduce the amount of Epogen used in the dialysis setting, citing safety concerns as the primary reason.

Of those surveyed in the third quarter, 22 percent of nephrologists responded that they were decreasing Epogen use compared with 10 percent of those who responded in the first quarter, Raymond said, citing data from BioTrends Research Group.

"We are worried that early signs of deteriorating Epogen use may be just the beginning of a broader trend among nephrologists," Raymond said. Amgen said it anticipates incurring $775 million to $850 million in restructuring charges, an increase from the $600 million to $700 million it estimated earlier this year.

The firm on Aug. 15 announced plans to restructure worldwide operations, including job cuts of up to 2,600 employees and plant closings to improve its cost structure in response to the negative financial impact on the company it attributed to regulatory and reimbursement changes related to ESAs.

Amgen said it already has taken a hit of $582 million in restructuring charges.

One good piece of news Amgen received this week was a jury verdict in favor of the firm in its two-year patent infringement dispute against F. Hoffmann-La Roche Ltd. over the Swiss firm's ESA Mircera. (See BioWorld Today, Oct. 25, 2007.)

Mircera is expected to receive FDA approval next month, but Amgen said it would seek an injunction to stop the product from entering the U.S. market. An injunction hearing is scheduled for Nov. 15.

Sales of Amgen's cancer drug Vectibix also decreased in the third quarter to $41 million compared with second quarter sales of $45 million, the firm reported. The decrease, Amgen said, primarily was driven by reaction to results of a study that showed an increased risk of adverse events in patients taking Vectibix combined with Avastin.

Decreased sales of ESAs and Vectibix partially were offset in the third quarter by sales of Amgen's Neulasta (pegfilgrastim), Neupogen (filgrastim), Enbrel (etanercept) and Sensipar (cinacalcet HCl).

Combined worldwide sales of Neulasta and Neupogen increased 10 percent to $1.1 billion in the third quarter, and combined U.S. sales of the drugs were up 8 percent to $830 million.

Sales of Amgen's arthritis and psoriasis drug Enbrel increased 16 percent to $821 million "driven by an increase in demand due to increases in both patients and net sales price," the company stated.

The firm noted that it has submitted a supplement to its approval application for Enbrel for use in pediatric patients with chronic moderate-to-severe plaque psoriasis who have tried another therapy. If approved, Enbrel would be the first biologic and systemic medication indicated to treat the disease in that population.

While Enbrel has been a solid performer this year, Raymond said, that may change in early 2008 when Abbott is expected to receive U.S. approval for its arthritis drug Humira to treat psoriasis.

Amgen also reported that worldwide sales of Sensipar increased 47 percent to $122 million.

Shares of Amgen (NASDAQ:AMGN) dropped 82 cents Thursday to close at $57.31

In other earnings news:

• Celgene Corp., of Summit, N.J., reported product sales of $331 million in the third quarter, an increase of 48 percent. Total revenue for the firm increased 43 percent to $350 million. Net sales of Celgene's multiple myeloma drug Revlimid (lenalidomide) jumped 97 percent to $199 million, but missed analysts' expectations of $218 million. Sales of Thalomid (thalidomide), which is approved to treat multiple myeloma and leprosy, increased to $111 million and slightly beat analysts expectations of $106 million. The company's adjusted operating income increased 84 percent to $146 million and its adjusted net income increased 109 percent to $124 million. Celgene reported more than $2.5 billion in cash and marketable securities. Shares of Celgene (NASDAQ:CELG) fell $5.96 Thursday to close at $64.22.

• ImClone Systems Inc., of New York, reported total revenues for the third quarter of $147.5 million, down from $150.7 million a year earlier. Total operating expenses rose to $160.7 million compared with $93.2 million from last year. Those expenses included $50 million to settle a patent dispute with the Massachusetts Institute of Technology and Waltham-Mass.-based Repligen Corp. Sales of Erbitux rose 23 percent to $351.4 million, ImClone said. The company reported $1.1 billion in cash, cash equivalents and marketable securities. Shares of ImClone (NASDAQ:IMCL) rose 33 cents Thursday to close at $44.04.