) reported second quarter 2014 earnings of $2.37 per share, well
above the Zacks Consensus Estimate of $1.99 and the year-ago
earnings of $1.88.
Total revenues increased 11% to $5,180 million in the second
quarter of 2014, beating the Zacks Consensus Estimate of $4,875
Including one-time items, second quarter earnings increased 22%
to $2.01 per share.
Amgen Inc - Earnings Surprise | FindTheBest
The Quarter in Detail
Second quarter total product revenues increased 8% from the
year-ago quarter to $4,949 million (U.S.: $3,758 million, ex-U.S.:
$1,191 million) with products like Enbrel, Kyprolis, Prolia and
Xgeva driving growth.
Revenues of Amgen's erythropoiesis-stimulating agent (ESA)
Aranesp declined 1% from the year-ago quarter to $517 million
(U.S.: $223 million; ex-U.S.: $294 million) reflecting lower
demand. Revenues will continue to be impacted by practice patterns
in both oncology and nephrology in the U.S. and price competition
Revenues of Amgen's other ESA, Epogen, grew 2% to $512
Worldwide revenues of Neulasta and Neupogen decreased 1% to
$1,429 million in the second quarter. Amgen said that underlying
demand was slightly impacted by short- and long-acting competition
in the U.S. and Europe, respectively.
Enbrel delivered revenues of $1,243 million, up 7% from the
year-ago quarter. Revenues benefited from an inventory build of
about $60 million, price and strong underlying demand and segment
growth. The company has been taking steps to improve Enbrel's
performance which includes optimization of the sales force, higher
direct-to-consumer (DTC) advertising and increased focus on
Second quarter 2014 Prolia revenues came in at $264 million, up
40% from the year-ago quarter due to higher demand. The response to
a new DTC campaign, launched in January, has been strong and has
resulted in an increase in patient awareness.
Meanwhile, Xgeva delivered second quarter 2014 revenues of $299
million, up 20% from the year-ago quarter due to higher demand.
Sensipar/Mimpara revenues increased 15% from the year-ago
quarter to $298 million due to higher demand and price increases in
the U.S. Vectibix revenues came in at $132 million during the
quarter, up 42% from the year-ago quarter.
Kyprolis, an Onyx product, posted sales of $78 million, up 14.7%
While second quarter 2014 R&D expenses increased 4% from the
year-ago period, SG&A expenses declined 12%. Investment in
late-stage clinical programs for Kyprolis and other candidates led
to the increase in R&D spend. Meanwhile, the end of the Enbrel
profit share arrangement with Pfizer (
) led to lower SG&A spend.
Amgen continues to progress with its pipeline. The company
remains on track to file for approval of evolocumab (cholesterol
management) in the third quarter. Amgen has already filed for
regulatory approval of ivabradine (chronic heart failure).
Meanwhile, the interim analysis of the ASPIRE study on Kyprolis in
relapsed multiple myeloma patients, and the final analysis of the
FOCUS study in relapsed refractory multiple myeloma patients should
occur in the third quarter.
Announces Job Cuts
In addition to presenting second quarter results, Amgen
announced a restructuring plan which will see the company cutting
2,400-2,900 positions (12% - 15% of the total work force) starting
later this year and continuing through 2015. The job cuts will
mostly be in the U.S. While Amgen will close its facilities in the
states of Washington and Colorado, it will expand its presence in
the biotech hubs of South San Francisco, CA and Cambridge, MA.
Amgen expects to cut expenses by about $700 million in 2016
compared to 2013. However, most of the savings will be reinvested
in the company's efforts to launch new products.
Amgen is exploring other efficiency initiatives as well. We
expect further updates once a business review meeting is conducted
in the fourth quarter.
Ups 2014 Guidance
During 2014, Amgen expects to earn $8.20 - $8.40 per share on
total revenues of $19.5 billion - $19.7 billion. Earlier this year,
the company had guided towards earnings of $7.90 - $8.20 per share
on total revenues of $19.2 billion - $19.6 billion. The Zacks
Consensus Estimate for earnings and revenues are below the guidance
range at $8.10 per share and $19.3 billion, respectively.
Amgen's second quarter results were impressive with the company
beating on all fronts. The company's new guidance is also above the
Zacks Consensus Estimate. We are positive on the company's
restructuring plan which should make it leaner and more
Amgen has quite a few catalysts coming up, the most important
being the FOCUS data on Kyprolis that should be out this quarter.
The inclusion of positive data in the label would boost sales.
Amgen currently carries a Zacks Rank # 3 (Hold). Better-ranked
stocks in the biotech sector include Actelion (
) and Celgene (
) - both carry a Zacks Rank #1 (Strong Buy).
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