Cost cutting, new drugs boost Amgen shares
Cost cutting moves and new drugs are starting to pay off for Amgen Inc., as the biotech giant raised earnings guidance after a stronger-than-expected third quarter.
The company said Oct. 27 that strong demand for its white blood cell booster, Neulasta, and increased sales of newer drugs helped boost sales. Although profits fell for the quarter due to a restructuring charge, the world’s biggest biotech company said it now expects adjusted earnings of $8.45 to $8.55 per share, up from the earlier $8.20 to $8.40 per share range.
Revenue will come in at $19.8 billion to $20 billion versus previously forecast $19.5 to $19.7 billion. Amgen posted a net profit of $1.24 billion or $1.61 per share down from $1.37 billion a or $1.79 per share a year ago.
Amgen has announced several rounds of layoffs including some at its headquarters operation in Thousand Oaks; the most recent round, announced earlier in the month mainly affected its Seattle operations.
Amgen has been under pressure from activist investor Dan Loeb to split the company into a growth company for new drugs and a legacy company for its core red and white blood cell and arthritis drugs.
Amgen has resisted efforts to split up and has poured money into rolling out its own brand of biosimilars, the rough equivalent of generic drugs, when its core biologic drugs come off patent in a few years.
Amgen shares were trading close to $150 per share up about $1.80 or 1.2 percent in after hours trading.