Old drugs lose market share, but good biotechs offset the losses with new ones. Amgen Inc. (NASDAQ:AMGN) didn't report eye-popping revenue gains in the second quarter, but surprise performances from three younger products allowed the top line to advance slightly and led management to raise expectations significantly.

Amgen Inc. results: The raw numbers

Metric Q2 2018 Q2 2017 Year-Over-Year Change
Revenue $6.06 billion $5.81 billion 4%
Income from operations $2.83 billion $2.70 billion 5%
Earnings per share $3.48 $3.27 17%

Data source: Amgen Inc.

What happened with Amgen this quarter?

Sales of the company's aging anti-inflammatory injection Enbrel fell 11%, but that didn't stop total product sales from rising 2% compared to the same period last year. Here's what offset the losses:

  • Sales of Repatha bounded 78% higher, to $148 million in the second quarter, which makes it look like the company finally found a price for the cholesterol therapy that insurers can live with. Earlier this year, Express Scripts, a major pharmacy benefits manager, announced it would remove Repatha from its preferred formulary in favor of a competing drug.
  • Sales of Kyprolis continue to pick up in response to recent label expansions. The multiple myeloma therapy generated $263 million for Amgen during the second quarter, which was a 25% gain over the previous year.
  • The company's bispecific antibody Blincyto earned an important label expansion at the end of March that helped push sales of the leukemia therapy 40% higher. At just $60 million, Blincyto isn't a major contributor at the moment, but you'll want to keep an eye on this space in the quarters ahead. 
  • The company's bone density drug denosumab continues to fire on all cylinders. Second-quarter sales of Prolia rose 21%, and Xgeva sales marched 14% higher on the year. Sales of both brands hit a combined $1.06 billion during the three-month period.
  • Neulasta still is the company's No. 2 drug, but not for long. Sales of the white blood cell booster rose just 1%, to $1.10 billion, during the three months ended June.
Prescription pills stacked in the shape of an upward sloping chart.

Image source: Getty Images.

While it's encouraging to see steady top-line growth, Amgen investors love the profits this company's drugs throw off and what management tends to do with them. The company spent $3.2 billion on share repurchases in the second quarter, which has helped lower its outstanding share count a whopping 10.6% over the past year.

What management had to say

Robert A. Bradway, Chairman and CEO, was justifiably upbeat about his rookie lineup, which gained a recent addition in the second quarter:

Amgen's strong performance in the second quarter was driven by double-digit, volume-driven growth from our new and recently launched products. Our two most recently launched products, Aimovig and Parsbiv, are off to a strong start.

Aimovig, the company's recently launched migraine drug, is currently the first new treatment option for millions of people who suffer from the vicious headaches and is expected to generate blockbuster sales in the years ahead. 

Looking forward

Better-than-expected uptake of recent drug launches convinced the company to boost its revenue projections $600 million higher, to a range between $22.5 billion and $23.2 billion for 2018. Blincyto recently earned approval to treat certain leukemia patients who are nearly in remission, in order to keep the disease from coming back. The expansion might not seem like a big deal on the surface, but it could allow for long treatment durations known to drive up sales of cancer therapies over the long run.

Blincyto's surge was especially encouraging because Amgen expects data from two similar drugs that aim at different blood cancer targets before the end of the year. These bispecific antibodies bind to known targets found on cancer cells, while their other side engages the immune system. If AMG 420 or AMG 330 produce impressive responses, Amgen could finally quell complaints that its late-stage pipeline lacks anything for investors to get excited about.