Despite topping revenue estimates for the fourth quarter, Amgen's Inc.'s stock slipped more than $3 on news of unsettling Phase III Aranesp data.

The Thousand Oaks, Calif.-based company reported $38 billion in revenue for the three months ending Dec. 31, driven by growth in the company's top-selling drugs, including Aranesp, Neulasta, Neupogen and Enbrel. Full-year revenues reached $14.3 billion.

Adjusted net income totaled nearly $1.1 billion for the quarter, marking a 14 percent increase over the previous year. Though Amgen's earnings-per share of 90 cents fell short of the 95-cent consensus estimates, the company attributed that in part to a collaboration signed in late December with South San Francisco-based Cytokinetics Inc., to develop small molecules for heart failure. That deal, which could be worth up to $725 million to Cytokinetics, resulted in a cost of 3 cents per share in the fourth quarter, Amgen's Chairman and CEO Kevin Sharer said during a conference call. (See BioWorld Today, Jan. 4, 2007.)

Those figures, however, were overshadowed by results from a Phase III expanded-label study of Aranesp (darbepoetin alfa) to treat anemia in cancer patients who are not receiving chemotherapy or radiotherapy. Data revealed that the drug failed to show a statistically significant reduction in transfusion at week 16, but it was reports of a higher rate of death in the Aranesp-treated group that raised the most concern among investors, dropping Amgen's stock (NASDAQ:AMGN) $3.35, 4.5 percent, Friday to close at $71.50.

"It looks like a typical knee-jerk reaction from investors," said analyst Eric Schmidt, of New York-based Cowen and Co., who maintained an "outperform" rating on Amgen. He added that it's too soon to know "whether the worst-case scenario will transpire," that being the loss of revenues from Aranesp sales off-label to cancer-induced anemia patients. Amgen estimates that 10 percent to 12 percent of revenues come from that patient population, which would account for less than five percent of the company's revenue, Schmidt said.

Overall, Schmidt told BioWorld Today, the erythropoietin market "remains an extraordinarily strong $4 billion franchise for Amgen." Fourth-quarter worldwide sales of Aranesp, which is approved for chemotherapy-induced anemia and anemia associated with chronic kidney failure, totaled about $1.1 billion, a 27 percent increase over last year. "It's going to take a lot to derail that kind of growth," Schmidt said.

For the full year, the product recorded sales of $4.1 billion, a 26 percent increase over 2005.

Amgen's total product sales were $3.7 billion and $13.9 billion for the fourth quarter and full year, respectively. Sales of Epogen (epoetin alfa), which is approved for anemia associated with chronic renal failure in dialysis patients, totaled $661 million, marking an increase of 6 percent, which partly was offset by the growing use of Aranesp in the hospital setting.

North American sales of Enbrel (etanercept) increased 18 percent over last year to $792 million. And combined worldwide sales of Amgen's neutropenia drugs, Neulasta (pegfilgrastim) and Neupogen (filgrastim) increased 10 percent to $1 billion for the last three months of 2006.

Vectibix (panitumumab), Amgen's colorectal cancer drug targeting the epidermal growth factor receptor, got off to a good start, reporting U.S. sales of $39 million for the quarter. The drug was launched shortly after gaining FDA approval in late September, and Sharer said the company was pleased with the "market share and volume and overall receptivity" of the drug.

But not all Vectibix news was promising. The company said that interim 12-week data from an ongoing study of the drug in combination with chemotherapy and Avastin (bevacizumab, Genentech Inc.) in first-line metastatic colorectal cancer showed an increased incidence of adverse events, such as diarrhea, dehydration and infection, over Avastin and chemotherapy without Vectibix. While the company said those results were not unexpected, they do raise questions regarding the risk/benefit ratio of Vectibix in first-line therapy.

On another sour note, the company is not filing for an expanded indication of Sensipar (cinacalcet HCl) in secondary hyperparathyroidism in patients with chronic renal insufficiency after recent Phase III results indicated an increased incidence of asymptomatic hypocalcemia. Sensipar, which is approved for secondary hyperparathyroidism in patients with chronic kidney disease on dialysis and hypercalcemia in patients with parathyroid carcinoma, pulled in worldwide sales of $98 million in the fourth quarter.

Despite those setbacks, Amgen is moving ahead with its other pipeline products, including denosumab, which completed enrollment in a Phase III study against alendronate in postmenopausal women with low bone mineral density. That's the program "everyone is most optimistic about this year," Schmidt said.

Amgen has completed both Phase III studies of AMG 531 in immune thrombocytopenic purpura and, pending positive results, expect to file for approval this year in both the U.S. and Europe.

During 2006, the company increased its research and development spending to $3.2 billion, 39 percent over 2005, and, while it has nearly 50 compounds in development, Amgen "is not a pipeline story," Schmidt said. "The story is about its [marketed] products," which boasted an overall 18 percent sales growth in the fourth quarter. Yet, he added, "the stock is trading at just 15 times. I call that a bargain."

The company provided conservative guidance for 2007, expecting total revenue to fall in the range of $15.4 billion to $16 billion.