Investors appear underwhelmed by Amgen's
Sure, red-blood-cell boosters Aranesp and Epogen are hurting -- down 4% and 27% respectively -- but they're no longer the driving force for the biotech. Despite the declines in the anemia drugs, overall sales came in 2% higher excluding favorable currency exchange rates.
Neulasta and its older brother Nupogen, which combined occupy Amgen's top-selling spot, rose 6%. In second place, Enbrel, which Amgen sells with Pfizer
Amgen's future lies with its newest drugs Prolia and Xgeva. While sales remain small compared to the top sellers, they seem to be ramping up nicely. Sales of Xgeva in the third quarter were nearly equal to the first and second quarters combined. Prolia sales are still fairly small -- $51 million in the quarter, half of where Xgeva is despite being launched first -- but that's to be expected. Osteoporosis, which Prolia treats, is a much more crowded market than bone sparring treatments for cancer patients, where Xgeva's only real competition is Novartis'
Most importantly, Amgen remains a cash-generating machine. The biotech instituted a dividend this year and still has money left over. It repurchased $2.4 billion worth of stock last quarter and yesterday announced that the board had upped its repurchase program to a total of $10 billion.
Amgen is in a rebuilding period -- don't expect double-digit revenue gains in the near future -- but there are plenty of reasons to be positive about the long-term future for the company.
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Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Abbott Laboratories and Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Pfizer, Johnson & Johnson, Abbott Laboratories, and Novartis, as well as creating a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.