Amgen Is a Total Battleground

Back in September, I was optimistic that Amgen (AMGN) had many ways to win. I was looking towards the drug pipeline and not the slowdown in existing therapies. But now Amgen has become a total battleground.

After Amgen reported third-quarter results, the stock dived as sales of Enbrel came in below consensus estimates. Enbrel reported sales of $1.452 billion, flat with last year. Epogen continued to lose market share to Aranesp, as sales fell 31% to $355 million.

Neupogen sales declined 36% to $183 million. Neupogen is facing serious competition from a biosimilar treatment called Zarxio from Sandoz.

Neulasta faces serious competitive threats too. Its sales fell 5% to $1.2 billion.

Total third-quarter revenue was $5.8 billion, up 2%, while total product sales were flat with last year.

Third-quarter earnings of $3.02 per share were 23 cents better than expected. Revenue rose 1.5% to $5.81 billion, vs. the $5.71 billion consensus. And Amgen's expense control is impressive. Non-GAAP operating margins jumped 4.2 points to 52.9%.

Management increased guidance for fiscal 2016. The company sees earnings between $11.10 and $11.40 vs. the previous estimate of $11.35. Revenue is expected to be between $22.6 million and $22.8 billion.

Even though the company raised guidance, revenue is still slowing. In 2014, sales grew 7.4%, but sales are expected to slow to just 3.5% in 2017 and come in virtually flat by 2018.

Legacy products -- Epogen, Aranesp, Neupogen, Neulasta and Sansipar -- could experience a 4% annualized drop in revenue through 2020. Analysts think the company's new products will not generate enough revenue to offset the losses on Amgen's legacy products.

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