Amgen Earnings: This May Hurt

Amgen's(AMGN Quote) first-quarter earnings report, due Thursday, probably won't look very pretty.

At best, the company will post a modest increase in profits and revenue that matches Wall Street's expectations. However, an earnings miss, spurred by disappointing sales of two or three of its key drugs -- Aranesp, Epogen and Enbrel -- seems to be the consensus view of analysts and investors heading into Thursday's report.

The expectations for weak first-quarter earnings have weighed on Amgen's stock price, down 22% for the year. Amgen was falling 0.8% to $45.70 in recent trading.

Amgen is expected to grow first-quarter earnings by 3% to $1.15 a share on total revenue of $3.64 billion growing 1% year over year, according to Thomson Reuters.

Worldwide sales of the company's anemia drug Aranesp are expected to fall about 5% sequentially to $669 million, while sales of Enbrel, which is mainly used to treat rheumatoid arthritis and psoriasis, are expected to drop 1% to $908 million, according to analysts' consensus estimates.

Prescription tracking data for the first two months of the year suggest sales of Aranesp, Enbrel, or both, could sink even further below already-lowered Wall Street expectations. Amgen has previously warned of a reduction in worldwide Aranesp sales due to new safety-related label restrictions mandated by regulators in the U.S. and Europe. Less expensive copycat versions of Aranesp -- so-called biosimilars -- are also being marketed by competitors in Europe.

The headwinds hitting Enbrel include strong competition from other rheumatoid arthritis drugs, including Abbott Labs'(ABT Quote) Humira, as well as the recession, which is forcing some patients to delay or forgo expensive treatments for non-life threatening diseases like rheumatoid arthritis.