Amgen Profits Slump 82% After Sales Drop for Aranesp
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Amgen Inc., the world’s largest biotechnology company, said third-quarter profit dropped 82% on accounting charges and as sales fell for its top-selling anemia drug Aranesp.
Net income fell to $201 million, or 18 cents a share, from $1.1 billion, or 94 cents, a year earlier, the company said yesterday in a statement. Profit excluding certain items was $1.08 a share, beating the $1.03 average estimate of 16 analysts surveyed by Bloomberg.
Amgen has lost about $17 billion in market value this year, after studies showed the company’s anemia drugs, Epogen and Aranesp, raised the risk of heart attack and death at high doses. The medicines account for about 40% of Amgen’s revenue. Worldwide sales of Aranesp fell 23% to $818 million in the quarter.
“We worry that Amgen’s anemia drug franchise may continue to face pressure,” an analyst with Robert W. Baird in Chicago, Christopher Raymond, said in a note to clients on October 23.
Sales of Enbrel, now the company’s biggest product after the decline in Aranesp, rose 16% to $821 million.
Amgen shares rose 43 cents to $58.13 in Nasdaq Stock Market trading. The stock has declined 15% this year. The company is based in Thousand Oaks, Calif.
Total revenue was unchanged from a year earlier at $3.6 billion. Amgen announced plans in August to cut 2,200 to 2,600 jobs, close plants, and cut capital spending by $1 billion next year. It made the decisions after Medicare announced it would pay for the anemia drugs in cancer patients at low doses.
The company took a $582 million accounting charge stemming from the job cuts and plant closings. It also had a $590 million charge for the acquisitions of two private companies and $293 million for asset impairment, depreciation and severance costs.
“We were caught in an unexpected hurricane, and we are coming out of it,” Amgen’s chief executive officer, Kevin Sharer, said on a conference call with analysts after the earnings release. American sales of Aranesp fell 36% to $460 million in the third quarter. Epogen, sold in America for kidney dialysis patients with anemia, dropped 5% to $602 million.
Vectibix, for colorectal cancer, dropped 9% from the previous quarter to $41 million. In March, a study showed the drug raised the risk of death when combined with Genentech Inc.’s Avastin for newly diagnosed patients.
