Amgen's Quarter Is on the Mark

Moving over to Amgen's other big drug franchise, second-quarter sales of Neupogen, used to boost white blood cell counts and fight infections in cancer patients, fell 7% to $329 million, compared with sales of $353 million in the year-ago quarter.

Neupogen sales are falling as doctors move patients over to the company's longer-acting version of the drug, Neulasta, which was launched in April. Neulasta sales totaled $212 million in the fourth quarter, a 49% sequential growth rate, and above Wall Street estimates of about $200 million. Again, Amgen said some inventory stocking contributed to the combined Neupogen and Neulasta sales growth.

Fourth-quarter sales of the rheumatoid arthritis drug Enbrel were $204 million, up 29% sequentially and but down 5% year over year.

"My view is that this was a very solid quarter, Amgen met consensus earnings expectations despite higher-than-expected spending," says Banc of America Securities biotech analyst Mike King, doing his part to refute some of the critical chatter about Amgen's fourth-quarter performance. King rates Amgen a buy and his firm doesn't do banking for the company.

One fund manager, long Amgen, believes the Amgen sell-off in after-hours trading stems from some investors' unrealistic expectations.

"Even with the help of inventory stocking, Amgen still beat top-line revenue estimates by a comfortable margin. And some of the higher spending and lower gross margins should not have come as any surprise to people," he says.

Amgen offered bullish 2003 sales and earnings guidance in December, including an earnings forecast in the range of $1.70 to $1.80 per share. Analysts are looking for 2003 earnings of $1.74 per share.

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