Amgen fourth quarter profit tops Street view, cholesterol news lifts shares

Thu Feb 2, 2017 6:15pm EST
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By Bill Berkrot

(Reuters) - Amgen Inc (AMGN.O: Quote) on Thursday posted a higher-than-expected fourth-quarter profit, helped by a jump in sales of its Enbrel rheumatoid arthritis drug, but it issued a 2017 sales and earnings forecast range below current Wall Street estimates.

The company also announced that its Repatha cholesterol drug reduced the risk of heart attacks, strokes and cardiac death in a huge, long-awaited study of patients with heart disease, sending its shares up nearly 3 percent to $164 in late trade.

"It's obviously a positive, but there's a lot more we want to know about the details," Cowen and Co analyst Eric Schmidt said.

The positive heart data is seen as necessary to unlocking the blockbuster sales potential of the expensive medicine, as health insurers and pharmacy benefit managers (PBMs) have been rejecting 75 percent of prescriptions written while awaiting concrete proof of the drug's health benefits.

Repatha, which dramatically lowers "bad" LDL cholesterol, had sales of just $58 million in the fourth quarter.

For 2017, Amgen forecast adjusted earnings of $11.80 to $12.60 per share, with a midpoint below Wall Street estimates of $12.46, according to Thomson Reuters I/B/E/S. The company sees full-year sales of $22.3 billion to $23.1 billion, while analysts on average are looking for $23.3 billion.

Amgen Chief Financial Officer David Meline said the wide forecast range in part reflects uncertainly over how quickly Repatha gains more reimbursements as a result of the new data.

The company also expects unfavorable foreign exchange rates to lower full-year earnings by about 20 cents per share, and said it will not fully benefit from Enbrel price increases due to discounts negotiated with insurers and PBMs.   Continued...

An Amgen sign is seen at the company's office in South San Francisco, California in this October 21, 2013 file photo.  REUTERS/Robert Galbraith/Files