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Amgen Beats on Q4 Earnings & Revenues, Maintains Outlook - Analyst Blog

Arpita Dutt

Amgen (AMGN) reported fourth quarter 2014 earnings of $2.16 per share, well above the Zacks Consensus Estimate of $2.05 and the year-ago earnings of $1.81. Earnings were driven by higher revenues.

Amgen Inc. - Earnings Surprise | FindTheBest


Total revenues increased 6.4% to $5,331 million in the fourth quarter of 2014, beating the Zacks Consensus Estimate of $5,192 million.

Including one-time items, fourth quarter earnings grew 26% to $1.68 per share.

Full year earnings grew 14.8% to $8.68 per share. Revenues increased 7.4% to $20.1 billion.

The Quarter in Detail

Fourth quarter total product revenues increased 8% from the year-ago quarter to $5,174 million (U.S.: $4,003 million, ex-U.S.: $1,171 million) with products like Enbrel, Vectibix, Neulasta, Prolia and Xgeva driving growth. Unit demand was mainly responsible for growth with price also contributing to the same.

Revenues of Amgen’s erythropoiesis-stimulating agent (ESA) Aranesp grew 2% from the year-ago quarter to $479 million (U.S.: $206 million; ex-U.S.: $273 million) reflecting unit demand.

Revenues of Amgen’s other ESA, Epogen, grew 3% to $539 million. Amgen reported that Epogen benefited from price and favorable changes in inventory levels which were partially offset by lower unit demand.

Worldwide revenues of Neulasta and Neupogen grew 3% to $1,454 million in the fourth quarter. While Neulasta revenues grew 7% from the year-ago period, Neupogen recorded an 11% decline in revenues reflecting competition in the U.S., unfavorable changes in inventory levels and unfavorable currency movement. We note that Sandoz, Novartis’ (NVS) generic arm, has made significant progress with its biosimilar version of Neupogen. Earlier this year, the FDA’s advisory panel voted in favor of approving Sandoz’s product.

Enbrel delivered revenues of $1,337 million, up 11% from the year-ago quarter, benefiting from inventory build.

Fourth quarter 2014 Prolia revenues came in at $315 million, up 33% from the year-ago quarter due to higher demand from share growth. The response to a new DTC campaign, launched last year, remains strong and has resulted in an increase in patient awareness.

Meanwhile, Xgeva delivered fourth quarter 2014 revenues of $325 million, up 14% from the year-ago quarter due to higher demand. Xgeva continues to gain share in the market.

Sensipar/Mimpara revenues increased 3% from the year-ago quarter to $317 million due to higher demand and price growth. Vectibix revenues came in at $132 million during the quarter, up 29% from the year-ago quarter reflecting higher unit demand. Vectibix sales benefited from a stronger label (first-line treatment in combination with Folfox in patients with wild-type KRAS metastatic colorectal cancer).

Kyprolis posted sales of $91 million, down 3.2% sequentially due to an inventory drawdown. Amgen is currently looking to expand Kyprolis’ label in the U.S. and EU into relapsed multiple myeloma.

Both R&D & SG&A expenses in the fourth quarter of 2014 remained unchanged from the year-ago period.

Amgen continues to progress with its pipeline. The company is currently seeking marketing approval for Repatha (evolocumab - dyslipidemia), Corlanor (ivabradine - chronic heart failure) and T-Vec (metastatic melanoma).

Reaffirms 2015 Guidance

Amgen maintained its previously issued guidance for 2015. The company expects to earn $9.05 - $9.40 per share on total revenues of $20.8 billion - $21.3 billion. The Zacks Consensus Estimate for earnings and revenues are $9.35 per share and $20.9 billion, respectively.

Amgen has $3.8 billion remaining under its share buyback program.

Our Take

Amgen’s fourth quarter results were once again strong with the company beating on all fronts. We are positive on the company’s restructuring plan which should make it leaner and more cost-efficient. This will be an important year on the pipeline and regulatory front as well. However, the company does have some competitive challenges in store for 2015. 

Amgen is a Zacks Rank #2 (Buy) stock. Alexion Pharmaceuticals, Inc. (ALXN) and Celgene Corp. (CELG) are better-ranked stocks in the biotech sector with both carrying a Zacks Rank #1 (Strong Buy).

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