Active Biotech Stock: Amgen Posts Q2 Earnings, Dominates News

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Amgen (AMGN) reported second quarter 2014 earnings of $2.37 per share, well above the Consensus Estimate of $1.99 and the year-ago earnings of $1.88. Total revenues increased 11% to $5,180 million in the second quarter of 2014, beating the Consensus Estimate of $4,875 million. Including one-time items, second quarter earnings increased 22% to $2.01 per share.

Second quarter total product revenues increased 8% from the year-ago quarter to $4,949 million (U.S.: $3,758 million, ex-U.S.: $1,191 million) with products like Enbrel, Kyprolis, Prolia and Xgeva driving growth.

Revenues of Amgen’s erythropoiesis-stimulating agent (ESA) Aranesp declined 1% from the year-ago quarter to $517 million (U.S.: $223 million; ex-U.S.: $294 million) reflecting lower demand. Revenues will continue to be impacted by practice patterns in both oncology and nephrology in the U.S. and price competition in Europe.

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Worldwide revenues of Neulasta and Neupogen decreased 1% to $1,429 million in the second quarter. Amgen said that underlying demand was slightly impacted by short- and long-acting competition in the U.S. and Europe, respectively. Second quarter 2014 Prolia revenues came in at $264 million, up 40% from the year-ago quarter due to higher demand. The response to a new DTC campaign, launched in January, has been strong and has resulted in an increase in patient awareness.

Enbrel delivered revenues of $1,243 million, up 7% from the year-ago quarter. Revenues benefited from an inventory build of about $60 million, price and strong underlying demand and segment growth. The company has been taking steps to improve Enbrel’s performance which includes optimization of the sales force, higher direct-to-consumer (DTC) advertising and increased focus on appropriate access.

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Amgen’s second quarter results were impressive with the company beating on all fronts. The company is also having a restructuring plan which should make it leaner and more cost-efficient. Amgen expects to cut expenses by about $700 million in 2016 compared to 2013. However, most of the savings will be reinvested in the company’s efforts to launch new products. Amgen has quite a few catalysts coming up, the most important being the FOCUS data on Kyprolis that should be out this quarter. The inclusion of positive data in the label would boost sales.

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