By Charles Craig
Amgen Inc. reported earnings increases for the second quarter and first six months of 1997 based on continued growth in sales of its two marketed drugs, Epogen and Neupogen, which are proteins that boost red and white blood cells, respectively.
Second quarter net income was $200 million, or 72 cents per share, compared with $179 million, or 64 cents per share, for the same period in 1996. Income was up 12 percent and earnings per share 13 percent.
Total revenues for the second quarter of 1997 reached $620 million, compared with $571 million a year ago, a 9 percent increase.
For the first six months of this year, net income was $381 million, or $1.37 per share, compared with $322 million, or $1.14 per share, during the first half of 1996. Income was up 18 percent and earnings per share 20 percent.
Total revenues for the first six months jumped to $1.2 billion from $1.1 billion a year ago, an 11 percent increase.
Amgen's two drugs, Epogen and Neupogen, generated sales of $567 million for the quarter. The two products accounted for 91 percent of the company's total revenues. The sales figures represents a 9 percent increase over the same quarter last year, when the drugs produced $519 million in sales.
For the first six months Epogen and Neupogen sales totaled $1.1 billion, which also was 91 percent of the total revenues for the period. Combined sales of the two drugs increased 9 percent over the first half of 1996, when they generated $996 million.
Amgen sells Epogen, a red blood cell booster, to treat anemia in dialysis patients. Sales of the drug for the second quarter were $295 million and for the first six months $587 million. The revenues represent a 12 percent increase over the second quarter of 1996 ($264 million) and 15 percent jump over the total for the first six months of last year ($508 million).
Neupogen, a white blood cell booster, is sold to replenish white blood cells of cancer patients undergoing chemotherapy. Sales of the drug for the second quarter were $272 million and for the first six months $516 million. The figures represent a 7 percent increase over the second quarter of 1996 ($255 million) and a 6 percent boost over the first six months of last year ($488 million).
Amgen, of Thousand Oaks, Calif., released its fiscal report after the market closed Tuesday. It's stock (NASDAQ:AMGN) jumped $2.75 Wednesday to close at $60. Shares ended the day Thursday up $0.688 to $60.688.
Amgen's stock increase was attributed to quarterly earnings that beat most analysts' estimates by one cent.
Another plus for Amgen, said Barbara Hoffman, analyst with Vector Securities International Inc., of Deerfield, Ill., was a federal court decision not to grant dismissal of Amgen's Epogen patent infringement lawsuit against Transkaryotic Therapies Inc., of Cambridge, Mass., and its partner, Hoechst AG, of Frankfurt. The ruling means the patent fight eventually can proceed to trial.
Other positives for Amgen, she noted, are the anticipated release of clinical trial data in the fourth quarter of this year for cancer-related protein drugs: megakaryocyte growth and development factor for boosting platelets and keratinocyte growth factor for mucositis.
"Amgen trades off earnings expectations and outlook for its product pipeline," Hoffman said. The fourth quarter clinical trial results are "important for increasing investor confidence in the company," she said.
Amgen officials also noted their pipeline includes leptin, a protein drug for obesity and Type II diabetes that is progressing to Phase II trials, and glial-derived neurotrophic factor, which is in Phase I studies for Parkinson's disease.
For 1998, Hoffman said, "There is uncertainty regarding Amgen's earnings," spurred by potentially slower growth for existing products and greater demands on research and development spending.
Contributing to the slower product growth, she observed, may be increased competition for Neupogen from Seattle-based Immunex Corp.'s Leukine, also a white blood cell booster, whose overall market share has jumped from "7.5 percent to between 9 percent and 10 percent." *