Amgen, Inc. (AMGN)
Q3 2009 Earnings Call
October 21, 2009 5:00 pm ET
Arvind Sood - Vice President of Investor Relations
Kevin Sharer - Chairman and Chief Executive Officer
Robert A. Bradway - Chief Financial Officer, Executive Vice President
George J. Morrow - Executive Vice President of Global Commercial Operations
Roger M. Perlmutter, MD, PhD - Executive Vice President of Research & Development
Geoffrey Porges – Bernstein
Jim Birchenough – Barclays Capital
Geoff Meacham – J.P. Morgan
Yaron Werber – Citi
Maged Shenouda – UBS
Mark Schoenebaum – Deutsche Bank
May-Kin Ho – Goldman Sachs
Michael Aberman – Credit Suisse
Bret Holley – Oppenheimer & Co.
Michael Yee – RBC Capital Markets
Eric Schmidt – Cowen and Company
Eun Yang – Jefferies
Steve Harr – Morgan Stanley
Joel Sendek – Lazard Capital Markets
Rachel McMinn – Bank of America
Chris Raymond – Robert Baird
Joshua Schimmer – Leerink Swann
Shiv Kapoor – Morgan Joseph
Previous Statements by AMGN
» Amgen, Inc. Q2 2009 Earnings Call Transcript
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I would like to welcome you to our third quarter results conference call. As we have a lot of ground to cover today, I’ll keep my comments very brief so we have adequate time for your questions at the end of our prepared remarks.
Joining me today are Kevin Sharer, our Chairman and CEO, who will provide a strategic review of our business, followed by our CFO Bob Bradway who will discuss our quarterly results, underscore the significant strides we have made, and how we manage our capital and offer insights on our revised growth outlook for the year. George Morrow, our head of global commercial operations, will then discuss our product performance trends in the US and international markets as well as how we have held up against biosimilars outside the US, and then Roger Perlmutter who is our head of R&D will provide a regulatory and pipeline update.
We will use slides for our presentation today. The slides have been posted on our website, and a link was sent to you separately by email. I would like to remind you that our comments today will be governed by our Safe Harbor statement. In other words, through the course of our presentation today, we will make certain forward-looking statements, and actual results can vary materially.
With that, I would like to turn the call over to Kevin.
Good afternoon everyone, and welcome to our third quarter 2009 conference call. I’m very pleased with our third quarter operating results on both the top and bottomline. While acknowledging the benefit from tax this quarter, our results on the bottomline continue to exceed my expectations, and we’ve once again raised earnings guidance. There are many moving parts in the product sales line, and George will update you. Net, the base business is solid, excluding Aranesp in the US, and grew 5% as we anticipate several future growth drivers. We also completed and announced the results of an unprecedented for Amgen 5 major phase III trial results in oncology and nephrology. We also advanced our midstage pipeline. Roger has more detail. One of the studies treating anemia has important information that we’re working with the FDA to communicate soon to physicians. Roger will share the detail and our plans later in the call.
As you know, we received a complete response letter from the FDA regarding Prolia in osteoporosis. Among other things, the letter was in effect a status report and roadmap for next steps. We continue to work closely and collaboratively with the FDA, and I remain optimistic about Prolia’s prospects to help patients with osteoporosis soon.
Healthcare reform continues to evolve, and we’re paying close attention. While it is too soon to know the final outcome, we will have a view regarding the likely affect on Amgen by the time we discuss 2010 guidance in January. I’d especially thank my colleagues at Amgen for their hard work and excellent results this quarter.
Bob, over to you.
Robert A. Bradway
On page five I will walk you through the adjusted income statement for the third quarter. As you can see, we reported very strong earnings per share growth of 21% for this quarter, and I’d like to walk you through the components of that growth.
Let me start with revenues. As you can see, year over year revenue were down about 2% in the third quarter to $3.8 billion. When looking at these results, however, recall that the Aranesp label changed last year in the third quarter, and that is reflected in this year’s third quarter results. Revenue excluding Aranesp increased 4% on a year over year basis, and in addition our results were negatively affected by a stronger dollar in this quarter. George will give you more product detail shortly. I would note that looking at our results sequentially, it’s also worth noting that revenues were up about 3%.
Wholesaler inventory levels which were low at the beginning of the year have normalized now for the most part, and in terms of specific products, we ended the third quarter with wholesale inventories below the low end of normal ranges for both Epogen and Vectibix and above the high end of normal ranges for Aranesp. Wholesaler inventories for our other products were within the normal ranges.
Shifting to a review of the business by geography, our US sales for the quarter were relatively unchanged at $2.9 billion, and internationally we posted third quarter sales of about $818 million which represents a decrease of 4% versus the prior year reflecting the fact that the dollar was stronger this quarter. Excluding the impact of foreign exchange which was about $76 million in the quarter, total product sales increased 1% and international product sales increased 5%.