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Amgen reports revenue growth in Q3 but lowers full-year guidance

By   /   Tuesday, November 2nd, 2021  /   Comments Off on Amgen reports revenue growth in Q3 but lowers full-year guidance

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Sales increases across Amgen’s drug lineup drove increases in revenue and non-GAAP earnings at the Thousand Oaks biotech company during the third quarter, according to its Nov. 2 earnings release, but pandemic issues persist, and the company lowered its revenue guidance for the year.

Amgen, one of the largest biotech companies in the world, reported a revenue increase of 4% for the quarter ended Sept. 30 compared to a year earlier, generating $6.7 billion in the third quarter of 2021. This figure was partially offset by lower net selling prices.

Non-GAAP earnings increased 8% year-over-year, from approximately $2.5 billion to $2.7 billion. The per-share increase was 11%, to $4.67 a share, as the company had fewer outstanding shares in the most recent quarter. Amgen repurchased 4.6 million shares of stock during the third quarter, totaling about $1.1 billion.

GAAP earnings did take a 7% hit, dropping from just over $2 billion to a little under $1.9 billion. Earnings per share dropped 3%, to $3.31. Amgen attributed the decline to one-time costs associated with a $400 million licensing-related expense from its collaboration with Kyowa Kirin, partially offset by increased revenues.

On June 1, Amgen announced an agreement with Kyowa Kirin, a Japanese pharmaceutical company, to jointly develop and commercialize a human monoclonal antibody in a deal that could be worth as much as $1.25 billion.

Despite revenue and non-GAAP earnings growth for the third quarter, Amgen revised its sales guidance for the full year, lowering it by about $400 million. The company now projects sales of $25.8 billion to $26.2 billion.

Amgen did raise its earnings outlook, however, by about 30 cents, to $16.50 to $17.10 per share.

In its Nov. 2 news release, Amgen stated that while there has been a gradual recovery from the slowdown in prescriptions seen during the COVID-19 pandemic, a downturn in doctor visits will continue to hurt the business through 2021.

“We are not going to give 2022 guidance at this point,” Bob Bradway, Amgen’s CEO, said during the company’s earnings call, when asked about the narrowing of sales guidance and pandemic-related issues. “We continue to manage the business effectively, reflected in the 4% on the top line and 11% on the bottom line. … We expect to be able to deliver growth for our shareholders and we will have more to say about that when we give guidance for the next period.”

Amgen’s stock was up almost 2.5% during the trading day Nov. 2, closing at $214.26. Shares dropped about 1.5% in after-hours trading, after the earnings release, with the stock hovering just above $210.

Lumakras, Amgen’s newest treatment and the first treatment approved for non-small cell lung cancer with a particular genetic mutation called KRAS G12C, has the potential to be a $1 billion drug, the company has said. In its first full quarter of sales in the United States, Lumakras generated $36 million in sales.

“We are very happy with the recent launch of Lumakras in the U.S. and we look forward to additional approvals and launches across the world soon,” Bradway said. “Lumakras joins a portfolio of medicines already generating some $10 billion a year in sales and many of these other medicines delivered double-digit sales growth in the third quarter.”

Other medicines that delivered double-digit growth for Amgen include Prolia, the company’s treatment for osteoporosis, which grew 15% to $530 million in the third quarter.

Otezla, Amgen’s psoriasis treatment, grew 13%, while Repatha, Amgen’s cholesterol treatment, grew 33%, reaching sales of $495 million and $139 million, respectively.

Biosimilars continued to put pressure on Amgen’s drug lineup. Amgen said sales volume for the quarter rose 8%, but net prices fell 7% because of the competition from cheaper generics.

Enbrel, Amgen’s drug to treat rheumatoid arthritis, was the only drug to generate above $1 billion in sales in the third quarter. Enbrel made $1.2 billion in the quarter, down 3% from the same quarter of 2020.

Amgen ended the third quarter with cash and investments totaling about $12.9 billion and outstanding debt of $37.6 billion.

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