) reported third quarter 2013 earnings of $1.93 per share, 21
cents above the Zacks Consensus Estimate and 16.3% above the
year-ago earnings. Higher revenues, a lower tax rate and a lower
share count contributed to the year-over-year increase in
earnings despite higher operating expenses.
Total revenue increased 10% to $4,748 million in the third
quarter of 2013, topping the Zacks Consensus Estimate of $4,611
million. A $155 million order from the U.S. government for
Neupogen drove the upside.
Including one-time items, third quarter earnings increased 27%
to $1.79 per share.
The Quarter in Detail
Third quarter total product revenues increased 11% from the
year-ago quarter to $4,647 million (U.S.: $3,625 million,
ex-U.S.: $1,022 million) with products like Neupogen, Neulasta,
Enbrel, Prolia and Xgeva driving growth.
Revenues of Amgen's erythropoiesis-stimulating agent (ESA)
Aranesp declined 10% from the year-ago quarter to $449 million
(U.S.: $171 million; ex-U.S.: $278 million). Lower demand in the
U.S. due to dose reductions and in Europe due to competition and
price cuts will continue impacting sales in these regions.
Revenues of Amgen's other ESA, Epogen, remained flat at $491
million. However, revenues slipped 2.2% sequentially reflecting a
favorable Medicaid rebate adjustment in the second quarter of
Worldwide revenues of Neulasta and Neupogen increased 18% to
$1,601 million in the third quarter. Neupogen sales were boosted
by a U.S. government order worth $155 million.
Enbrel delivered revenues of $1,155 million, up 7% from the
year-ago quarter. Revenues were driven by price increases. The
company has been taking steps to improve Enbrel's performance
which includes optimization of the sales force, higher
direct-to-consumer advertising and increased focus on appropriate
Third quarter 2013 Prolia revenues came in at $178 million, up
62% from the year-ago quarter. Revenues, however, declined 5% on
a sequential basis due to seasonality.
Meanwhile, Xgeva delivered third quarter 2013 revenues of $261
million, up 30% from the year-ago quarter. Sales were up 5% on a
sequential basis on increased segment share. Xgeva's unit share
in the U.S. was 42% despite the presence of generic versions of
Sensipar/Mimpara revenues increased 7% from the year-ago
quarter to $259 million due to higher unit demand. Vectibix
revenues came in at $107 million during the quarter, up 22% from
the year-ago quarter.
While third quarter 2013 R&D expenses increased 14% from
the year-ago period, SG&A expenses increased 10%. Higher
Enbrel profit share expenses and the U.S. healthcare reform
federal excise fee led to the increase in SG&A spend.
Amgen did not repurchase any shares during the third quarter
with $1.6 billion remaining under its share buyback program.
Amgen expects its share buyback activities to slow down with a
higher focus on increasing dividend meaningfully.
Amgen closed its acquisition of Onyx Pharma on Oct 1, 2013.
The company said that Onyx' oncology product, Kyprolis, posted
sales of $65 million, up 6% sequentially.
Rev Guidance Up
Amgen said that it now expects earnings of $7.35 - $7.45 per
share on revenues of $18.3 billion - $18.5 billion in 2013.
Earlier, the company was guiding towards earnings of $7.30 -
$7.45 per share and revenues towards the upper end of its
guidance range of $17.8 billion to $18.2 billion. The new
guidance includes the impact of the Onyx acquisition. The Zacks
Consensus Estimate for earnings and revenues currently stands at
$7.20 per share and $18.3 billion, respectively.
Amgen's third quarter results look impressive initially with
the company surpassing earnings and revenue estimates by a huge
margin. However, revenues surpassed expectations mainly due to a
$155 million order from the U.S. government for Neupogen which
may or may not recur in upcoming quarters.
Third quarter results looked very similar to the company's
second quarter results when a positive Medicaid adjustment impact
of $185 million had boosted the top- and bottom-line.
Although Amgen raised its revenue guidance, we note that this
includes the impact of the one-time boosts in the second and
third quarters of 2013 and the Onyx acquisition.
Meanwhile, Amgen should be able to deliver on its long-term
strategy based on expansion in key markets, launch of new
manufacturing technologies, and pipeline development. We expect
2014 to be a catalyst-rich year for Amgen with the company
expected to report results on several key pipeline
Important pipeline events include pivotal data on cholesterol
management candidate, evolocumab (first quarter of 2014), overall
survival data on oncology candidate, trebananib (second half of
2014), phase III data on psoriasis candidate, brodalumab, and
data on Kyprolis from the ASPIRE and FOCUS studies.
At present, companies like
) look attractive. While Actelion is a Zacks Rank #1 (Strong Buy)
stock, Alexion carries a Zacks Rank #2 (Buy).
ACTELION LTD (ALIOF): Get Free Report
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