Amgen to report 4th-quarter results, full-year profit likely near low end of company guidance

Earnings Preview: Amgen to report 4Q results

NEW YORK — Biotechnology company Amgen Inc. is scheduled to report its fourth-quarter and full-year results Monday. The following is a summary of key developments and analyst commentary for the period.

OVERVIEW: The potential for a continued decline in anemia drug sales lingered throughout the quarter, as new study data heightened safety concerns. Sales of Aranesp and Epogen have been declining for nearly two years, following warnings and stricter Food and Drug Administration labeling because of potential risks to cancer patients.

In October, a study showed that Aranesp nearly doubled the risk of stroke in people with diabetes and chronic kidney problems. FDA officials now plan to form a panel of outside experts to re-examine safety issues for chronic kidney disease patients taking Aranesp, Epogen, and other similar drugs on the market.

Meanwhile, the potential future blockbuster osteoporosis drug Prolia met with some resistance by the FDA in October, with the agency requesting more information, specifically, a risk-mitigation plan.

Costs during the quarter could include ongoing legal fees, as the Thousand Oaks, Calif., company faces lawsuits from about 15 states alleging Amgen paid medical providers to bill third parties, including Medicaid, for Aranesp that was available at no cost. The lawsuits also allege the company conspired to offer kickbacks to boost prescriptions of Aranesp.

BY THE NUMBERS: Analysts polled by Thomson Reuters expect fourth-quarter profit of $1.16 per share on revenue of $3.85 billion.

Meanwhile, Amgen has already said its full-year profit would be near the low end of its earlier guidance, partly because of a development deal with Array BioPharma for a potential treatment for type 2 diabetes. Amgen paid $60 million upfront during the quarter.

For the full year, Amgen expects profit between $4.90 and $5.05 per share, with revenue between $14.4 billion and $14.8 billion. Analysts expects $4.99 in profit on $14.68 billion in revenue.

ANALYST TAKE: BMO Capital Markets analyst Jason Zhang, in a Jan. 13 note, said he expects sales of the company’s anemia drug franchise to continue slipping while some costs might be higher than expected as the company hires a sales force for Prolia.

Meanwhile, Robert W. Baird analyst Christopher J. Raymond, in a Jan. 13 note, expressed “disappointment” in Amgen’s updated view that full-year profit would likely be toward the low end of guidance. Still, he maintained a positive view on the stock, saying “the stage is set” for Prolia to revive sales growth at the company when it reaches the market.

WHAT’S AHEAD: Analysts are still looking to future sales of Prolia to revive the company’s revenue growth. Zhang said it could take the FDA between two and six months to finish reviewing Prolia, depending on how the agency classifies Amgen’s response.

STOCK PERFORMANCE: The stock fell 6.7 percent to end the quarter at $56.57. Shares shed 2 percent overall in 2009.