Exceeding consensus estimates, Amgen Inc.'s first-quarter results showed strong sales that analysts said leave the company poised for near-term growth.

Adjusted earnings per share for the quarter were 57 cents - a 36 percent increase from the first quarter of 2003 and a penny above consensus.

Total product sales grew 35 percent from last year, reaching $2.2 billion worldwide, or $1.8 billion in the U.S.

The big winners for the company were Aranesp and Enbrel. Aranesp sales increased more than 100 percent in both U.S. and international markets, while Enbrel sales increased 45 percent from last year.

"The first quarter exhibited strong top-line product growth both domestically and internationally," said Kevin Sharer, the company's chairman and CEO, in a conference call.

Total revenue for the quarter increased 33 percent to $2.3 billion from what it was in the same period in 2003.

Using U.S. generally accepted accounting principals (GAAP), Amgen, of Thousand Oaks, Calif., had earnings per share of 52 cents in the first quarter vs. 37 cents for last year. GAAP net income was $690 million vs. $493 million in 2003's first quarter.

"I'm very pleased with this quarter," Sharer said, "and I think it shows real progress by the company and exceptional financial performance."

Wall Street also liked the results. Amgen's shares (NASDAQ:AMGN) rose slightly Friday, up $1.17, to close at $58.31.

Analysts generally echoed that enthusiasm, but they did show some concerns for the Neupogen/Neulasta sales for the quarter - which fell short of expectations.

"If there is a pocket of disappointment for us with the results, it lies with sales of Neupogen/Neulasta," stated a research note by William Tanner, with New York-based Leerink Swann & Co. Combined revenues of Neupogen and Neulasta were $664 million, down from Leerink Swann's estimate of $697 million and SG Cowen Securities Corp.'s estimate of $690 million. However, the sales increased 22 percent from the first quarter of 2003.

Neulasta (pegfilgrastim), a longer-acting version of Neupogen, is Amgen's once-per-cycle product for decreasing the risk of chemotherapy-related infections due to neutropenia. Neupogen (filgrastim), a white-blood-cell stimulator, is used to decrease the incidence of cancer-related chemotherapy infections.

While a decrease in Neupogen sales was expected due to the conversion to Neulasta, Tanner said Leerink Swann harbors "some disappointment that the overall [granulocyte-colony stimulating factor] market is growing slowly."

Richard Nanula, Amgen's executive vice president and chief financial officer, said in the conference call that the Neupogen/Neulasta business remains solid, and the company just needs to better educate physicians and patients on the benefits of proactive protection against neutropenia.

SG Cowen's analyst Eric Schmidt said in a research note that strong sales of Aranesp might serve to quiet the critics. Aranesp sales in the first quarter were $543 million, up from Cowen's estimate of $535 million and double what it was last year due to expansion into worldwide markets. The company's other erythropoietin (EPO) product, Epogen, had sales of $590 million, down from Cowen's estimate of $610 million, but an 8 percent increase over last year due to changes in wholesaler inventory.

Epogen (epoetin alfa) is Amgen's anemia therapy for patients on dialysis, while Aranesp (darbepoetin alfa) is approved to treat anemia associated with chronic renal failure and anemia due to chemotherapy.

Both analysts seemed enthused by prospects for the EPO products. Also, Schmidt said Aranesp will likely continue to take share from the competition, and Tanner said Enbrel could realize its breakout potential with an expanded manufacturing capacity now available.

But the enthusiasm is for near-term potential, Schmidt said.

"Amgen has excellent visibility for near-term earnings growth, the potential to exceed consensus estimates and a reasonable valuation," he wrote. "However, uncertainties relating to heightened erythropoietin competition and reimbursement changes may prevent stock from posting substantial outperformance."

Cowen previously has warned that at least seven firms in Europe are developing generic versions of EPO and plan product launches as early as 2006 at discounts of 10 percent to 50 percent. There is fear that that might cause Amgen's sales in its EPO franchise to drop.

Aside from the EPO products, Enbrel (etanercept), to treat inflammation, also did quite well, with first-quarter sales of $397 million - a 45 percent increase over last year. Amgen said the increase was driven by a greater demand in rheumatology and wider use as a psoriatic arthritis therapeutic. The drug was re-launched in the first quarter once the FDA approved Amgen's Rhode Island manufacturing facility.

Two major events occurred for Amgen in the first quarter. The FDA approved the small-molecule therapeutic Sensipar for secondary hyperparathyroidism in dialysis patients. The company has launched the product, which is now available to more than 300,000 U.S. dialysis patients. (See BioWorld Today, March 10, 2004.)

Also in the first quarter, Amgen announced its planned expansion into the San Francisco area through the acquisition of Tularik Inc. (See BioWorld Today, March 30, 2004.)

"Tularik is a science driven company that is truly a pioneer in drug discovery relating to cell signaling and the control of gene expression," Sharer said. "We believe that this acquisition is a great strategic fit and a win for both companies."

Looking ahead, Amgen expects to receive approval for a weekly injection of Enbrel sometime this quarter, as well as an expansion of the label into the psoriasis indication. Data are expected this year from the Phase I trial of AMG 706, a mixed kinase inhibitor that has shown some responses in multiple tumor types, and from a Phase II trial of GDNF in Parkinson's disease. Amgen also plans to complete Phase II trials and begin Phase III trials this year of the osteoporosis candidate AMG 162, a monoclonal antibody that targets the receptor activator of nuclear factor kappa B ligand.

The company closed the quarter with $4.5 billion in cash and marketable securities. It reported about 1.3 billion shares outstanding as of March 31.