By Matthew Willett

The earnings report delivered late Wednesday could represent more for Amgen Inc. than the consistent performance the as-anticipated numbers indicated on the surface.

The announcement of a fast-moving oncology indication program for Aranesp, the company's extended-release formulation of the blockbuster Epogen alfa, and the movement in the discovery pipeline evidenced by two new research collaborations with Pharmacopeia Inc. might mark a move to a new Amgen, a better Amgen, analysts said, especially in light of the company's recent victory on the EPO franchise front and more promising milestones on the horizon.

Taken at face value, Thousand Oaks, Calif.-based Amgen's 2000 earnings - $1.05 per share for 2000 - just confirmed what Wall Street expected.

Earnings per share came in at 24 cents, a penny under analysts' consensus predictions. Amgen posted a net income of $211 million for the fourth quarter and $1.14 billion for the year, compared to $281.6 million and $1.1 billion, respectively, for the corresponding periods in 1999.

More notable, analysts said, were slowing Neupogen sales, which dropped to $311 million in the fourth quarter, a 12 percent dive compared to the $353 million Amgen logged in the same period in 1999. Annual sales for Neupogen were $1.22 billion, down 3 percent from 1999 sales of $1.26 billion.

Even more notable than that, analysts said, were positive results of clinical trials of Aranesp in oncology patients with anemia. If approved in that indication, Amgen could tap into an oncology market company officials know is "high growth."

Bank of America Securities Analyst Eric Ende said the earnings taken in a larger context represent an evolution for Amgen.

"You've got to look at this company in two ways: from the perspective of their core business, and then from their pipeline that will provide the future growth. People are paying not for the core business - on the Neupogen side that appears to be degenerating - but for the pipeline, where it's accelerating."

David Kaye, Amgen's associate director of corporate communications, said the perception of an evolving Amgen isn't off track.

"The bottom line on the quarter is that we met the financial guidance we gave The Street for the quarter and for the year," Kaye told BioWorld Today. "More importantly, things look very, very bright for the future. We're awaiting approval on Aranesp in nephrology in the U.S. and in Europe, and we've received very positive data for Aranesp in the oncology setting. We'll rapidly this year develop and file a regulatory package for Aranesp in the oncology setting way ahead of our internal timelines."

Amgen included a progress report on Aranesp in an oncology indication in Wednesday evening's earnings report. A pivotal trial of the compound in oncology patients with anemia was deemed successful by the company. Data from the trial are not being disclosed now, but Amgen said it will submit those data for presentation at an upcoming scientific meeting.

Kaye agreed that the oncology indication for Aranesp will open markets for the EPO franchise currently off-limits to Amgen because of the Johnson & Johnson marketing agreement for Epogen that gives J&J non-anemia commercialization rights in the U.S. and marketing rights outside the U.S.

"The approval of Aranesp and the fact that we own all the rights to all the indications worldwide lets us participate in those markets we're barred from," Kaye said.

The Amgen pipeline seems ever-expanding. Concurrent to the earnings release came the announcement of a research and discovery collaboration with Pharmacopeia. The double agreement includes an Amgen license for a series of Pharmacopeia lead compounds and Pharmacopeia screening of its internal sample collection against an Amgen target.

"That's a pretty early stage research collaboration that allows us to benefit from their research platform," Kaye said. "There's a lot of activity in the late-stage clinical programs, in every stage, really, including in-licensing of research platforms."

Amgen has several candidates in late-stage testing, and expects regulatory filing this year for programs including IL-1ra, Amgen's interleukin-1 pathway inhibitor for rheumatoid arthritis, and SD/01, the next generation of Neupogen, a longer-acting version the company anticipates filing for regulatory approval for before summer.

In addition, Amgen partner Praecis Pharmaceuticals Inc. Thursday said it received notification from the FDA that its new drug application for abarelix depot for the hormonal treatment of prostate cancer was granted priority review. Praecis expects regulatory review will be complete by June.

"There are a lot of catalysts occurring," Ende said. "Aranesp's approval and launch and the oncology indication moving much farther along. There's a drug for prostate cancer moving quickly. The pipeline is moving well."

Amgen's pipeline is strong, but it's the perception investors carry of the biotech giant that moves The Street. To that end, analysts said, the recent decision for Amgen over patent opponent Transkaryotic Therapies Inc. will make a difference, at least in the short term, on the company's share price.

"It has a psychological impact," Ende said. "A lot of people were waiting on the sidelines wanting Amgen but not wanting to buy it without [the TKT dispute] out of the way. Now people can step in and buy the stock, and I expect it to trade really well over the near term."

Kaye said the decision gives the company room to breathe. "Obviously, it's a positive development," he said. "It basically allows us to not be distracted from focusing a great deal of senior management attention on commercializing the pipeline. It avoids a major distraction."

Epogen sales in the fourth quarter increased 9 percent over fourth-quarter 1999 sales, coming in at $533 million. Annual sales of Epogen for 2000 were $1.96 billion, a 12 percent jump from 1999 sales of $1.76 billion.

With the addition of Aranesp to the EPO franchise, Amgen expects to see better growth in sales in 2001. In its earnings report it offered guidance to the effect that it expects combined sales of Epogen and Aranesp to grow at a high-teens to low-20s rate over Epogen alone in 2000.

Total product sales are estimated by the company to grow by a rate in the mid- to high-teens, and Amgen continues to expect its earnings per share to grow at a mid-teens rate in the coming year.

Amgen's shares (NASDAQ:AMGN) dropped slightly in after-market trading Wednesday after the earnings report release, but rebounded Thursday, rising 4.25 percent, or $2.937, to close at $72. The shares closed Jan. 19 at $60 before the positive ruling that night on the TKT suit.