Amgen boosts sales forecast as Q2 profits jump
- Amgen raised its sales guidance for 2016 for the second time this year, announcing a 13% jump in profits last quarter, compared to a year prior. The better-than-expected performance was driven by higher sales of Amgen's top-selling Enbrel, as well as strong growth from new drugs Prolia and Kyprolis.
- But biosimilar competition continued to eat away at the market share of Neupogen and threatens both Enbrel and Neulasta, raising the stakes for Amgen to hit on recently launched products.
- One of those drugs, the cholesterol drug Repatha, has been slow to pick up sales as payers in the U.S. have limited coverage. Revenues in the second quarter hit $27 million, up from $16 million in the first three months of the year.
Enbrel, a biologic treatment for rheumatoid arthritis and psoriasis, pulled in just under $1.5 billion in sales in the second quarter, up 10% from a year earlier. Higher sales were driven primarily from price increases in the U.S.
Amgen is vigorously trying to defend Enbrel's market exclusivity as companies like Novartis take aim at Enbrel's revenue. An advisory panel to the Food and Drug Administration recently backed Novartis biosimilar copy of Enbrel, unanimously recommending the drug for approval. While patent litigation could delay entry, the biosimilar threat will likely only grow for Amgen.
Other companies such as Samsung Bioepis, which recently won approval for a biosimilar of Enbrel in Europe, plan to bring their own copies to the U.S. as well. (Enbrel is marketed by Pfizer outside of the U.S.)
Novartis has been developing a biosimilar of Amgen's other big-earner Neulasta but recently got hit with a complete response letter from the FDA, setting back any potential approval decision. Sales of Neulasta slipped by 1% last quarter to $1.2 billion.
Elsewhere, higher new patient starts drove a 30% jump in sales of Prolia, a drug for osteoporosis. And revenues of the newly launched multiple myeloma med Kyprolis rose by 45% on the back of increased market share and longer duration of therapy.
Amgen noted higher net selling prices for Xgeva, Enbrel, Sensipar and Neulasta helped drive growth (or in the case of Neulasta partially offset declines).
While many in the industry have focused on what Gilead might buy with its $24 billion in cash, Amgen has an even more impressive cash hoard with just over $35 billion in cash and cash equivalents as of June 30.
Amgen has reportedly been considering a bid for Medivation, which has sparked takeover interest due to the success of its prostate cancer drug Xtandi. So far only Sanofi has gone public with a bid, offering around $10 billion for the San Francisco-based company.
Answering a question on an investor call following the results, chief financial officer David Meline hinted at Amgen's M&A efforts: "We continue to be active and we've got a number of pretty interesting prospects that we think could come to closure, including still this year."
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