Scarce Arthritis Drug Leads Immunex to Meet Its Numbers

Updated from 5:13 PM

Biopharmaceutical firm Immunex(IMNX Quote) matched Wall Street estimates for the second quarter, posting profits of 7 cents per share on rebounding sales of its rheumatoid arthritis drug Enbrel.

The company actually reported earnings of 9 cents per share, but that included a one-time gain of $13 million, or 2 cents per share, related to the sale of certain products, the company said. Without the sale, Immunex matched analyst estimates of 7 cents per share, according to Thompson Financial/First Call.

Second quarter sales of Enbrel, the company's chief profit maker, rose 18% to $182.6 million, compared to the year-ago quarter. That's in line with most Wall Street estimates and a nice improvement over first quarter's sluggish sales of $165 million.

Immunex has struggled this year to overcome a supply crunch for Enbrel. In January, the company was forced to limit access to the drug, guaranteeing access to existing patients but only adding new patients as Enbrel supplies allowed. The company is building a new manufacturing plant to boost supplies of the drug, but the facility is not expected to be ready until the middle of next year.

On its conference call Wednesday night, Immunex executives said new patients obtaining Enbrel bolstered sales during the quarter, but the company would not disclose how many new patients were added. The company did say that about 1,000 patients per week are signing up for the Enbrel "waiting list."

Immunex is under pressure to meet an ambitious goal of $750 million in Enbrel sales for 2001. The company said Wednesday night it will meet that goal and that third quarter sales should reach between $190 million and $200 million. If the company hits the high end of the range, it will still need to record fourth quarter sales of about $202 million to make its numbers.

Immunex executives did not offer much of an update on the status of its Rhode Island manufacturing facility, stating only that progress is being made. The company will rely heavily on this facility to boost supplies of Enbrel not only for rheumatoid arthritis patients, but for expanded uses of the drug. Earlier this week, the company filed an application with the U.S. Food and Drug Administration to approve Enbrel for treatment of patients suffering from psoriatic arthritis.

Approved just two years ago, Enbrel is one of the fastest-growing biotech drugs ever launched. As its uses expand, sales could exceed $1 billion by 2003.

The big catch: Making enough of the drug to meet demand. Doubts about the company's ability to do that has put a drag on the company's growth rates. Immunex is expected to earn 27 cents per share this year, and just 29 cents per share next year, according to Thompson Financial/First Call.

Overall, Immunex posted second quarter net income of $48.8 million, or 9 cents per share, including the one-time sales gain of $13 million. Revenue for the quarter totaled $283.3 million.

Shares of Immunex lost 76 cents, or 5%, to $14.28 Wednesday.