Amgen's 2012 Guidance On Tap

THOUSAND OAKS, Calif. (TheStreet) -- Amgen(AMGN) is looking ahead to a year in which growth will come not from its core drug franchises but from its newest products, cost cutting and continued share buybacks.

The biotech giant -- which many investors now consider a small pharmaceutical company -- will provide initial 2012 financial guidance on Thursday, Jan. 26 along with its fourth-quarter earnings report.

Amgen is expected to grow 2012 revenue by just 3% to $16.04 billion, according to the consensus analyst estimate compiled by Thomson Reuters. Amgen's most important growth driver is the relatively new denosumab franchise -- Prolia for osteoporosis and Xgeva for bone-related cancer complications -- which should more than double sales this year and surpass the $1 billion "blockbuster" mark for the first time.

By comparison, Amgen's legacy drug franchises are no longer growing, hurt by regulatory crackdowns, reduced physician usage and competition from biosimilars in Europe. Sales of the company's mainstay anemia drugs, Epogen and Aranesp, are expected to fall about 7% in 2012, although the revenue decline is less than what it's been in recent years. Neupogen and Neulasta, which Amgen sells to prevent cancer-related infections, and the rheumatoid arthritis drug Enbel, are expected to post flat sales this year.

Consensus estimate calls for Amgen to earn $5.88 per share (adjusted) in 2012, or 10% year-over-year growth. Absent adequate top-line growth, Amgen reaches the Street's earnings target by reducing operating expenses and continuing an aggressive share buyback plan.

Numbers aside, investors will be watching Amgen in 2012 for some significant developments with its drug pipeline and changes in the executive suite. In February, Amgen's long-time research chief Roger Perlmutter steps down, replaced by current chief medical officer Sean Harper. In May, CEO Kevin Sharer leaves, replaced by current president and chief operating officer Bob Bradway.

The FDA is convening an advisory panel on Feb. 8 to review Amgen's request to expand Xgeva's label to include treatment for the prevention of prostate cancer spreading to bone. Amgen is also expected to announce top-line results this year from a phase III study of its melanoma therapy OncoVex.

Amgen shares are down 2% to $68.14 Monday as J.P. Morgan downgraded the stock to neutral from overweight on valuation concerns.

--Written by Adam Feuerstein in Boston.

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