New Drugs Help Drive Amgen's Operating Income Up 18% in Q1

It was steady as she goes for one of the most decorated biopharmaceuticals in the U.S., Amgen (NASDAQ: AMGN  ) , which reported solid top- and bottom-line growth in the first quarter following its acquisition of Onyx Pharmaceuticals, which closed in October.

For the quarter, revenue rose 5% over the year-ago period, to $4.52 billion, although revenue declined 9% from the sequential fourth quarter primarily due to inventory drawdowns. The biggest boost on a percentage basis came from osteoporosis therapies Xgeva and Prolia, which delivered combined growth of 30%, to $475 million. Sales of its white blood cell stimulator used in patients undergoing cancer treatment, Neulasta/Neupogen, recorded a 3% sales increase, to $1.38 billion, primarily on the heels of price increases. It still represents its largest drug by revenue. Kyrpolis, the relapsed and refractory multiple myeloma treatment acquired when Amgen purchased Onyx, also saw sales increase to $68 million.

Offsetting these stronger sales was a 5% drop in Enbrel revenue, to $988 million, as well as a 2% dip in Aranesp sales, to $460 million.

In spite of the stronger revenue, Amgen's adjusted profit declined 5%, to $1.87, which it attributed to favorable tax benefits experienced in the year-ago quarter. Operating income, however, expanded 18%, to $1.86 billion, as cash flow improved 9%, to $1 billion. Amgen cited benefits from the end of its Enbrel profit share, as well as improved sales of newer therapies as the reason its operating income improved year over year.

Looking ahead, Amgen reaffirmed its previous guidance, which calls for $19.2 billion to $19.6 billion in revenue, and $7.90-$8.20 in EPS, with an adjusted tax rate in the 15% to 16% range.


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