Amgen Inc. had strong sales of Epogen to help offsetsomewhat disappointing Neupogen sales as the companymet analysts' expectations for third-quarter earnings of 52cents per share.
Net income for the Thousand Oaks, Calif.-company wasup 28 percent, to $146 million, on revenues of $493million, which was 16 percent more than $426 million thecompany reported in last year's third quarter. Net incomein the third quarter last year was $114 million, or 41 centsper share.
Sales of Epogen, a recombinant human erythropoietinused to boost red blood cell production, were up 23percent, to $230 million. Sales of Neupogen, orrecombinant granulocyte colony stimulating factor, whichhelps restore white blood cells, increased 7 percent, andalso totaled $230 million.
With the third-quarter numbers, released after themarket's close on Thursday, Amgen disclosed someclinical trial data. It said a Phase III trial for Neupogen incommunity acquired pneumonia (CAP) failed to meet itsprimary endpoint of time to morbidity, but did showbenefit in other areas, such as reducing the incidences ofend organ failures and of adult respiratory distresssyndrome. The company plans Phase III trials this winterto confirm mortality benefit in those with severepneumonia, and to attempt to confirm other positiveaspects of the trial.
More than 16.5 million shares of Amgen(NASDAQ:AMGN) were traded on Friday, when thestock lost $4.25 per share, or 8 percent, to close at$46.13.
Ed Hurwitz, an analyst with Roberston Stephens & Co.,of San Francisco, said Amgen demonstrated flexibility incontrolling the bottom line as evidenced by lower cost-of-goods numbers and a lower tax rate than expected. Someanalysts cut their ratings on Amgen because of the failureon the primary endpoint in the CAP study. Others,however, maintained their ratings and called the news amixed bag, with long-term possibilities.
"They made the numbers," Hurwitz said. "The weaknessin the Neupogen numbers were consistent with what mysources said was going to happen. However, the Epogennumbers continue to be stronger than anyone thought."
Hurwitz said the Neupogen trial data in CAP wasencouraging, even though, as he suspected, the primaryendpoint was not reached.
"While near-term weakness in Neupogen sales is likely tobe the trend, the long-term prospects for the drug to havea renewed life are much better today than they wereyesterday."
Matthew Geller, an analyst at Oppenheimer & Co., ofNew York, said the slowdown of Neupogen sales had tohappen sooner or later. "The company has been guidingpeople in that direction," he said.
"But the Epogen sales were a real positive, higher thananyone had predicted," Geller said. As to the CAP trial,Geller said, "Most people did not expect it to work, butsome people had hoped for a home run."
Along with its third-quarter earnings news, Amgen said itwill meet with the FDA's Biological Response ModifiersAdvisory Committee on Nov. 13, 1995, to review itsrequest to expand the Neupogen label to mobilization ofperipheral blood progenitor cells, which may providefaster neutrophil and platelet recovery followingmyeloablative or myelosuppressive chemotherapy.
Amgen also said it filed for regulatory approval in Europeto include the use of Neupogen in treating neutropeniadue to myelosuppressive medications in HIV patients.Hurwitz said that's an aspect of Amgen news he believesmany have missed.
The company said it was starting Phase III trials of brain-derived neurotrophic factor for amyotrophic lateralsclerosis, and Phase III of stem cell factor in combinationwith Neupogen for mobilizing progenitor cells in thetreatment of cancer.
Finally, Amgen said it will file a product licenseapplication for Infergen (a consensus alpha interferon) totreat chronic hepatitis C.
Amgen reported cash and marketable securities of $992million, nearly $300 million more than it had at the endof 1994. n
-- Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.