Although Amgen Inc. reported a 23 percent jump in third quarter1996 earnings, the company also revealed its platelet boosting drug,one of the high profile products in its pipeline, did not perform wellin two early clinical trials.
The Thousand Oaks, Calif., company's net income of $179 million,or 64 cents per share, for the three months ending Sept. 30, 1996, was23 percent greater than the $146 million, or 52 cents per share,earned during the same period in 1995.
Total revenues for the third quarter of 1996 reached $567 million, a15 percent increase over revenues of $493 million a year ago.
For the first nine months this year, Amgen's net income of $502million was 28 percent higher than last year's nine-month profit of$392 million. Earnings per share were up 27 percent to $1.78 from$1.40.
Revenues for the first three quarters of 1996 were $1.65 billioncompared with $1.43 million in 1995.
The company's income jumped with higher sales of its two marketedproducts, Epogen, a red blood cell booster for treatment of anemia inkidney dialysis patients, and Neupogen, a drug used to replenishwhite blood cells destroyed by cancer chemotherapy.
Despite the strong third quarter earnings, which beat Wall Streetanalysts' consensus estimate, Amgen's stock dipped $1.125Wednesday to close at $58.50, following a drop of $3.688 the daybefore. The company released the third quarter fiscal report after themarket closed Tuesday.
Negative reaction from investors, analysts suggested, was spurred, inpart, by the company's release of disappointing results formegakaryocyte growth and development factor (MGDF), a plateletbooster, in two Phase I trials.
One study evaluated the drug's ability to restore platelets in acutemyeloid leukemia (AML) patients undergoing chemotherapy and theother tested MGDF's performance in combination with peripheralblood progenitor cell (PBPC) transplants to counter high-dosechemotherapy's destruction of bone marrow.
Amgen said data from the trials "indicated AML is not a promisingindication" and "the probability of success is not high" in usingMGDF with PBPC transplants.
However, Joyce Lonergan, analyst for Cowen & Co., in Boston, saidthe MGDF setback in those two small cancer indications does notdiminish her estimate of the drug's potential sales in its primarymarket, which is restoring platelets in a broad range of cancerchemotherapy patients. The drug is in Phase II studies in thatindication.
Lonergan estimates MGDF eventually will reach annual revenues of$250 million, however she pushed back by a year the projectedmarket launch to 1999.
In evaluating Amgen's third quarter report, Lonergan said higher thanexpected earnings and a pipeline of 14 product candidates in clinicaltrials offset any fallout from the MGDF leukemia and PBPC studies.
Those data, she added, are "disappointing only in a psychologicalway." MGDF is a high profile drug, she observed, in an area _blood cell growth factors _ where Amgen makes its money.
In addition to targeting the drug for cancer chemotherapy patients,Amgen said it is developing MGDF to boost the effectiveness ofplatelet donations.
David Kaye, spokesman for Amgen, said the company has not yetdesigned a clinical study for platelet donations. The idea is toadminister MGDF to healthy donors to enrich their platelets in aneffort to reduce the number of donations given to cancerchemotherapy patients.
He added the company also is waiting to see results of the Phase IItrials of MGDF before releasing a timetable for a Phase III trial.
In discussing the early studies of MGDF in leukemia and incombination with PBPC, Kaye noted the drug's effectiveness wasaffected by the extent of destruction to the patients' bone marrow.
In the ongoing Phase II trials of MGDF, he said, the bone marrow ofthe cancer patients is not as devastated.
MGDF faces competition from two other platelet boosting drugsunder development by Genetics Institute Inc., of Cambridge, Mass.,and Genentech Inc., of South San Francisco.
In its 1996 third quarter report, Amgen reported combined sales forEpogen and Neupogen of $533 million, a 16 percent increase over$461 million in sales of the two products during the third quarter of1995.
Nine-month sales figures for Epogen and Neupogen topped $1.5billion this year, a 15 percent jump over product revenues of $1.33billion during the same period last year.
Amgen also said it boosted spending for research and development24 percent during the third quarter of 1996 to $130 million from$105 million in 1995.
For the first nine months of this year research and developmentspending jumped to $384.6 million from $327.7 the year before. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.