Amgen

(AMGN) - Get Report

turned in another solid financial performance in the third quarter, posting higher profits bolstered by mostly strong drug sales.

The No. 1 biotech firm, which closed its acquisition of

Immunex

in July, also reaffirmed and increased bullish sales forecasts for two of its core drug franchises, while issuing cautious guidance for a third.

As calculated by generally accepted accounting principles, Amgen posted a third-quarter net loss of $2.6 billion, or $2.10 per share, due principally to a $3 billion, one-time write-off of in-process research and development costs related to the Immunex merger.

Pro forma net profits rose 13% to $437 million, or 34 cents per share. Amgen earned $330 million, or 30 cents per share, in the year-ago quarter. These results exclude certain expenses related to the Immunex acquisition, but they beat Wall Street's consensus estimate by 2 cents per share, as compiled by Thomson Financial/First Call.

Total product sales rose 53% to $1.3 billion in the quarter, compared with product sales of $880 million in the third quarter last year. Total revenue was $1.5 billion, ahead of Wall Street estimates of $1.4 billion.

Before its earnings release, Amgen shares closed Wednesday up 20 cents to $50.

Looking closer at Amgen's results, third-quarter sales of Aranesp, the company's longer-acting anemia drug, totaled $114 million in the quarter, above the range of most Wall Street analysts and up 103% from second-quarter sales of $56 million. Aranesp is approved for use in patients with chronic kidney disease and cancer patients undergoing chemotherapy. The latter use is the key growth driver because this is where Aranesp will compete fiercely against Procrit, the rival anemia drug marketed by

Johnson & Johnson

(JNJ) - Get Report

.

Epogen, Amgen's older anemia drug, racked up $558 million in third-quarter sales, an 8% increase from the year-ago quarter. Amgen reiterated previous guidance for the Epogen-Aranesp franchise of sales growth in the low-20% range this year, compared with 2001.

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 $332 million, compared with sales of $360 million in the year-ago quarter.

In previous quarters, Neupogen sales growth had fallen into the single-digit percentage range, but that was expected because doctors are moving patients over to the company's longer-acting version of the drug, Neulasta, which was launched in April. Neulasta sales continue to rip, totaling $142 million in the third quarter, a 29% sequential quarterly growth rate, and well above Wall Street estimates. (Although to be fair, the whisper number among analysts for the estimates were higher.)

Wednesday, the company raised sales-growth estimates for the Neupogen/Neulasta franchise into the mid-30% range, above the previous forecast of mid-20% sales growth.

With the Immunex merger complete, Amgen now gains control of the rheumatoid arthritis drug Enbrel, which has been plagued by well-publicized supply constraints. Wednesday, Amgen warned that these supply issues would force Enbrel sales to the low end, or slightly below, the previous 2002 sales forecast of $800 million to $850 million.

Amgen said it recorded third-quarter Enbrel sales of $158 million, which does not include full sales for the quarter because the Immunex merger closed two weeks into the third quarter.

The inability to get Enbrel into the hands of rheumatoid arthritis patients has boosted sales and market share for Remicade, a competing drug marketed by Johnson & Johnson. Another competitor,

Abbott Labs'

(ABT) - Get Report

D2E7, is expected to hit the market next year. Wednesday, Amgen said plans are on schedule to boost Enbrel supply by opening a new manufacturing plant in Rhode Island by early next year.

In July, Amgen forecast 2003 Enbrel sales in the range of $1.2 billion to $1.4 billion, but didn't reiterate that guidance Wednesday.

All three of these rheumatoid arthritis drugs will be the focus of multiple scientific presentations at the annual meeting of the American College of Rheumatology, which begins Saturday in New Orleans.

Getting back to Amgen's overall future outlook, the company said it expects 2002 earnings will grow by a percentage rate in the midteens, excluding the impact of the Immunex acquisition. Analysts are expecting Amgen to earn $1.33 per share in 2002, compared with $1.18 per share in 2001.

Amgen said it would give 2003 guidance at a Nov. 21 meeting with analysts.