National Editor

With strong sales and what one analyst called a still sanguine outlook for its anemia product Aranesp (darbepoetin alpha), Amgen Inc. came out ahead of Wall Street estimates for the sixth earnings quarter in a row.

Specifically, adjusted earnings per share for the third quarter was 53 cents - two cents above consensus - vs. 34 cents for the third quarter of 2002, an increase of 56 percent.

"It really does appear to be a company, at least operationally, that's firing on all cylinders," said Cory Kasimov, analyst with Ryan Beck & Co. in New York.

Amgen's stock (NASDAQ:AMGN) fell $3.35 Wednesday to close at $60.30.

Adjusted net income was $714 million in the third quarter, compared to $437 million in the third quarter of 2002, up 63 percent.

The team of leaders, once again, was made up of Aranesp, the second generation of Amgen's red-blood-cell booster Epogen (epoetin alfa), first approved for chronic renal failure; Enbrel (etanercept), first approved for rheumatoid arthritis; and Neulasta (pegfilgrastim), used to decrease infection during chemotherapy.

"Aranesp is off to a strong start and we think growth there will continue," Kasimov said. The drug was approved for anemia in oncology indications in July 2002. (See BioWorld Today, July 23, 2002.)

On a reported basis, calculated according to generally accepted accounting principles (GAAP), Amgen reported earnings per share of 46 cents in the third quarter and a loss of $2.10 per share in the third quarter of last year.

GAAP net income for the third quarter of this year was $612 million vs. a loss of $2.6 billion last year, related to the acquisition of Seattle-based Immunex Corp. (See BioWorld Today, July 17, 2002.)

Product sales totaled $2.1 billion, 54 percent above the same period last year, with $1.8 billion of that in the U.S., which amounts to 47 percent more than the third quarter of 2002.

Combined Epogen and Aranesp sales increased by 58 percent from the third quarter of 2002, jumping from $672 million to $1.1 billion, thanks mainly to Aranesp, which was approved in the U.S. in mid-2002 for chemotherapy-induced anemia. Epogen sales contributed $626 million, up 12 percent over last year's third quarter.

Enbrel tallied third-quarter sales of $342 million, a 116 percent increase over sales of $158 million last year, when a supply shortage affected sales (as well as two weeks of missed sales, since the buyout of Immunex took place July 15).

"Enbrel's relaunch is still in its infancy," Kasimov said, with a new Rhode Island manufacturing facility that was approved in late 2002. Sales of Enbrel for the quarter fell short of Kasimov's $362 million estimate.

Growth of that drug also will continue, "but it doesn't take long for investors to start asking what's next," he added. Amgen officials have declared their first-ever "research and development day" for investors, to be hosted early next year, Kasimov noted.

"I think they may want to start directing attention there to show what they've got," he said. Kasimov does not own any Amgen shares, and his firm does not have a banking relationship with the company.

Meanwhile, Neulasta, which is a longer-acting version of the white-blood-cell stimulator Neupogen (filgrastim), chalked up $327 million in sales, $23 million of which were international sales. Together, Neupogen and Neulasta brought in $657 million in total sales, up 39 percent from $474 million during the same quarter of last year.

Neupogen's worldwide sales of $330 million dipped slightly from the third quarter of 2002, as patients converted to Neulasta - a circumstance that was offset, the company noted, by international growth. The conversion is slowing in the U.S., Amgen said.

The company now expects total product sales will range between $7.6 billion and $7.9 billion in 2003 (a previous estimate had put the range between $7.5 billion and $8 billion), with total revenue ending up between $8.1 billion and $8.4 billion, as compared to the previous guess of between $8 billion and $8.5 billion.

Does the powerhouse have a weak point? The company's stock has been down in recent weeks, maybe because of rumblings about the continuous erythropoiesis receptor agonist (CERA) - another longer-acting form of EPO - being developed by F. Hoffmann-La Roche Ltd., of Basel, Switzerland.

Roche already has NeoRecormon (epoetin beta), another form of EPO, competing in Europe with Eprex (epoetin alfa), from Amgen licensee Johnson & Johnson, which sells the product as Procrit in the U.S.

Eric Schmidt, analyst with SG Cowen in New York, in a research note called "reports of Aranesp's demise grossly exaggerated."

The pegylated CERA is preparing to enter Phase III trials and might gain European marketing approval around 2006, Schmidt said - after biogeneric EPO hits the market.

"While CERA's longer half-life may eventually even the playing field with Aranesp in Europe, we do not believe the drug will reach the U.S. market until at least 2013," he predicted, adding that CERA probably infringes on "Amgen's thoroughly tested intellectual property."

Kasimov agreed, pointing out that Amgen has said the same of CERA and is still at war with Transkaryotic Therapies Inc., of Cambridge, Mass., over yet another EPO version: Dynepo (epoetin delta).

"This is a huge market," Kasimov told BioWorld Today, and predicted "one potential competitive threat after another."