Earnings Primer: What's on Deck for Amgen Inc. and Biogen Idec Inc.

Biotech stocks have taken a punishing nose-dive over the past month as investors step aside following significant gains. However, the current share slide is likely more a result of emotion than any long-term changes at drug developer heavyweights Amgen (NASDAQ: AMGN  )  and Biogen (NASDAQ: BIIB  ) .

Both have blockbuster therapies that are likely to drive sales higher, rather than lower, this year. Since both are set to report earnings later this month, let's look at what investors may see and should focus on.

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Ongoing growth for two drugs and insight into the pipeline
Amgen is always at the top of growth investor checklists. The company has had a string of blockbusters over the years, including Neulasta and Enbrel. Both of those drugs should continue to post multibillion dollar run rates this year.

But investor attention will likely fall more on growth rates for Xgeva and Prolia. Those compounds, which are different doses of the drug denosumab, have been among Amgen's fastest growers. The two combined for total sales of nearly $1.8 billion last year, up 45% from 2012.

Investors will also be looking to see how momentum is developing for Kyprolis, the cancer drug that was a key reason behind Amgen's $10 billion acquisition of Onyx Pharmaceuticals last summer. Sales of Kyprolis totaled over $70 million in the fourth quarter and should (hopefully) show improvement in the first quarter.

Amgen may also provide additional insight into its timeline for its promising PCSK9 drug, evolocumab. That drug has posted impressive results at lowering bad cholesterol in late-stage trials, and Amgen has previously guided that it will file for FDA approval this year.

Overall, analysts estimate that Amgen's earnings per share will come in at $1.94 for the first quarter when it reports on April 22. If Amgen can outpace those estimates (it has beaten in each of the past four quarters), analysts may end up lifting their full-year earnings projection, which currently stands at $8.15 per share.

Measuring market share growth and a launch overseas
Biogen's investors will be eagerly anticipating results for the company's oral multiple sclerosis drug, Tecfidera. Tecfidera launched to great fanfare last spring and reached a $1 billion blockbuster annualized run rate of $398 million in the fourth quarter, making it the most prescribed oral MS medication. 

Tecfidera's success has investors cheering given Biogen's multibillion dollar MS drug Avonex has been struggling to maintain market share following the roll-out of oral MS therapies from Novartis (NYSE: NVS  ) and Sanofi (NYSE: SNY  ) .

Novartis' Gilenya racked up sales of $1.9 billion in 2013, up 62% from 2012. And while Sanofi's Aubagio hasn't grabbed as much of the market, its sales jumped to $70 million in the fourth quarter, up from $20 million in the first quarter of 2013.

With Biogen planning to rollout Tecfidera in the EU this year, Novartis and Sanofi's growth rate may slow. The EU approved Tecfidera in February, and while negotiations on pricing may mean a slower sales ramp overseas than the drug enjoyed in the U.S., investors should still get some insight into that market's potential during the first-quarter earnings conference call.

Currently, analysts expect that Tecfidera will help Biogen's earnings reach $2.57 per share in the first quarter, up from the $1.97 it earned in the first quarter of last year. Given Biogen has beat analysts estimates in each of the past four quarters, it's possible Biogen could surprise again when it reports on the 23rd. If so, analysts may have to reconsider their recent cuts to their full-year forecast. Over the past 90 days, EPS estimates for this year have dropped from $11.60 to $11.31.

Fool-worthy final thoughts
Amgen and Biogen are always top-of-mind when it comes to biotech investors. Both companies have big money products with substantial market share.

Since share prices in both have retreated this past month, the stakes are high for investors. If Amgen can over deliver on Xgeva and Prolia and can provide a sooner-rather-than-later timeline for evolocumab, shares could move higher. Similarly, shares in Biogen may benefit if Tecfidera's European sales suggest its launch is happening quicker than anticipated.

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