West Coast Editor

As some investors fidget over the outcome of an erythropoietin lawsuit against F. Hoffmann-La Roche Ltd., Amgen Inc. posted estimate-beating third-quarter numbers, with earnings of $1.1 billion, or 94 cents per share, compared to $967 million, or 77 cents per share, during the same period last year.

Take away special charges, including stock option expenses, and the firm would have earned $1.22 billion, or $1.04 a share, beating by 6 cents per share the forecasts by Thomson Financial analysts.

Amgen's flagship anemia therapy, Aranesp (darbepoetin alfa), for chemotherapy patients reaped $1.07 billion for the period, a 27 percent increase that helped revenues rise 15 percent to $3.61 billion from $3.15 billion in the third quarter of last year.

Aranesp is the second generation of Epogen (epoetin alfa), both involved in Amgen's lawsuit against Basel, Switzerland-based Roche, which wants to introduce in the U.S. its competing therapy, called Ro50-3821, or CERA (continuous erythropoiesis receptor activator). Roche's European EPO product, NeoRecormon (epoetin beta), cannot be marketed here because of Amgen's six patents. (See BioWorld Today, Nov. 10, 2005.)

This week, a motion by Roche to dismiss the lawsuit was denied, and analyst Christopher Raymond, with Robert Baird & Co. in Chicago, was not concerned at the "hand wringing" over the lawsuit.

CERA's clinical dataset turns out to be "decidedly less compelling" than many had believed, Raymond wrote in a research report, and Amgen officials during the earnings conference call noted that Roche has designed its Phase III trials to test only the more healthy patients, which could limit CERA's use.

What's more, trials conducted by Roche with CERA for chronic kidney disease might be even less robust than Amgen's data with Aranesp for the supplemental biologics license application for Aranesp against CKD, which gained an approvable letter in October from the FDA. The agency gave its nod to Aranesp dosed once every two weeks, as well as once-monthly dosing regimens for CKD patients with anemia not on dialysis, but asked for more data for the once-monthly dosing regimen, including another study. (See BioWorld Today, Oct. 17, 2006.)

The U.S. District Court where Amgen is fighting Roche is the same arena where Amgen beat Cambridge, Mass.-based Transkaryotic Therapies Inc. and Hoechst Marion Roussel Inc. (now Aventis Pharma AG, of Frankfurt, Germany) in a battle over Dynepo (epoetin delta), a gene-activated EPO that TKT was developing for the U.S. market. (See BioWorld Today, Oct. 19, 2004.)

And the judge is the same, too - William Young, described by Joel Sendek, analyst with Lazard Capital Markets in New York, as "Amgen-friendly." Sendek, in a research report, agreed with Raymond about CERA's trial results. "Latest CERA data appear equivalent to EPO and Aranesp at best," he wrote.

Aranesp's third-quarter sales beat the consensus estimate by $28 million, and Epogen surpassed expectations by $17 million. Enbrel (etanercept), the rheumatoid arthritis drug that sold $2.5 billion last year, proved the only dark spot on earnings this time around, totaling $705 million, or $34 million below consensus, compared to $668 million during last year's period.

Amgen boosted research spending in the third quarter by about half again as much over the period last year, from $559 million to $835 million, as the company faces not only legal fights but patent expirations, while financing late-stage pipeline programs.

The firm's recently approved Vectibix (panitumumab) for colorectal cancer "may sneak up on investors," Raymond predicted. "We understand from industry sources that the launch is going even better than Amgen expected, and uptake in these first few weeks has been outstanding," he wrote. Raymond modeled fourth-quarter revenue from Vectibix of $30 million, and fiscal-year 2007 revenue at $300 million. (See BioWorld Today, Sept. 29, 2006.)

Amgen's shares (NASDAQ:AMGN) closed Tuesday at $74.94, up $1.57.