By Mary Welch

Amgen ended 1999 with net income of $1 billion for the first time, an earnings-per-share increase of 24 percent over 1998, and late in the year filed for regulatory approval of two products, NESP and Kineret.

"We were positively impressed and it looks like full steam ahead on their pipeline," said Matthew Geller, senior biotech analyst with CIBS World Markets Corp., of New York. "They have four products ready for launch. That's impressive. Not many pharmaceutical companies can say that."

Joel Sendek, an analyst with Gerald Klauer Mattison & Co. Inc., of New York, called the financial report a "strong quarter. There were no surprises. The products are selling well and their numbers are right in line with what we were expecting, both in top-line and expenses. For a company with relatively mature products, the growth they're having is really commendable."

Amgen's novel erythropoiesis stimulating protein (NESP) showed it can manage hemoglobin levels in people with chronic renal failure at the same level as when patients take Epoetin alfa (EPO), the standard treatment, but with less frequent dosing. (See BioWorld Today, Nov. 9, 1999, p. 1.)

The FDA and European filing broadly covers renal disease and includes data from patients with chronic renal insufficiency, also known as pre-dialysis, as well as patients with chronic renal failure requiring dialysis. The filing was based on data from the treatment of more than 2,100 patients. If approved, the product should be launched in 2001.

The NESP oncology program currently is in Phase II both in the U.S. and Europe.

Deutsche Banc Alex. Brown, of New York, stated in its research report that NESP is a "potential $1.5 billion product. Regulatory approval of NESP should enable Amgen to compete against Johnson & Johnson and its Procrit/Eprex product in all major indications once data from the cancer trials become available. NESP addresses a nearly $3 billion incremental market for the treatment of anemia associated with cancer and kidney failure."

In addition, the Thousand Oaks, Calif.-based company filed a biologics license application with the FDA for the use of Kineret in treating rheumatoid arthritis. The filing was based on a 419-person study that showed 42 percent of patients receiving a Kineret injection once a day when combined with methotrexate achieved a meaningful clinical response compared to 23 percent of the patients receiving placebo. In addition, Kineret didn't increase the chance of infections like anti-TNF drugs. (See BioWorld Today, Nov. 16, 1999, p. 1.)

Kineret is a recombinant form of the cytokine interleukin-1ra, which selectively blocks the effects of IL-1, a cytokine released as part of the disease process in rheumatoid arthritis. IL-1 is a central mediator of bone and cartilage destruction and inflammation in rheumatoid arthritis.

Analysts believe Kineret potentially is a $300 million drug.

"There's substantial potential there," said Geller. "It's a most interesting product."

In terms of financial news, the company was riding - or leading - the biotechnology success wave as total product sales reached $3 billion and new income hit $1 billion for the first time, going from $863 million for 1998 to $1.1 billion in 1999. Fourth-quarter net income increased 18 percent to $282 million, up from $239 million in the fourth quarter of 1998. Earnings for the quarter were 26 cents, up from 22 cents last year, and $1.02 for the year, up from 82 cents a year earlier.

Total product sales increased 21 percent to $3.04 billion, up from $2.51 billion for 1998. For the fourth quarter, sales were $847 million, up from $695 million, a boost of 22 percent.

The company said that included in the earnings-per-share year-end numbers are a third-quarter benefit of $0.03 per share from reduced uncertainty related to potential spillover liabilities to Johnson & Johnson, of New Brunswick, N.J., and a fourth quarter benefit of $0.02 per share from Y2K-related sales to wholesalers.

Sales of Epogen (Epoetin alfa) increased 27 percent to $1.76 billion for 1999, an increase of 27 percent from 1998 sales, which were $1.38 billion. For the fourth quarter, sales were up 25 percent to $488 million, from $391 million in the fourth quarter 1998.

Year-end sales of Neupogen were $1.26 billion, an increase of 13 percent from 1998 sales of $1.12 billion. Fourth-quarter 1999 sales were $353 million, up 19 percent from 1998's fourth-quarter sales of $298 million.

Sales of Infergen (Interferon alfacon-1) increased to $26 million for 1999, up from 1998's total of $16 million. Fourth-quarter 1999 sales were $7 million, up from $6 million in the 1998 fourth quarter.

"Neupogen's growth was driven solely by an increase in demand in the U.S. oncology market due to highly effective marketing and patient management initiatives by Amgen," Elise Wang, first vice president of PaineWebber, of New York, wrote in a research paper. She expects sales to increase 10 percent to $1.35 billion, in 2000.

The company had cash on hand of $1.3 billion as of Dec. 31, and about 1 billion shares outstanding.

Going forward, the company expects to file a marketing license with the FDA late in the year for Abarelix, for prostate cancer. Results from two Phase III studies will be presented at the American Society of Clinical Oncology in May. An additional Phase III study is under way with 500 patients in order to have a larger data set for the filing. A Phase III study for endometriosis will be started this year. Abarelix is partnered with Praecis Pharmaceuticals Inc., of Cambridge, Mass.

A Phase III study of Neupogen SD/01 for breast cancer was started in the third quarter of last year. Positive Phase II data were presented in December at the American Society of Hematology meeting. The company may file in 2001 for SD-01 as an adjunctive therapy in oncology.

Amgen's stock (NASDAQ:AMGN) closed Wednesday at $64.125, down $5.25.