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Amgen (AMGN) Q4 2012 Earnings Preview

 January 22, 2013 04:56 PM

(By Balachander) Biotech company Amgen Inc. (NASDAQ: AMGN) is expected to post earnings growth for the fourth quarter driven by higher revenue.

Wall Street analysts, on average, expect AMGN's earnings to increase 19 percent to $1.44 a share on revenue growth of 9.90 percent to $4.37 billion for the three month period.

Investors may likely focus on sales trends of Amgen's biologic drug Neupogen, whose US patents are due to expire in December 2013.

For the year ended December 2011, global sales of Neulasta/Neupogen were about $5.2 billion.

"After a full review of AMGN's base biz, we think there is upside to AMGN shares in 2013 as the impact from competition becomes clearer during the yr," Deutsche Bank analysts Robyn Karnauskas wrote in a recent note.

[Related -Amgen, Inc. (NASDAQ:AMGN): What Will Drive Amgen This Year?]

If there is less of an impact from generic Zometa on Xgeva, generic Neupogen on Neupogen/Neulasta, or Omontys on Epogen, the Street could revise long-term EPS estimates to the upside during 2013, Karnauskas said.

Clarity on each of these items could come this year as Affymax's Omontys (Epo competition) contract decision with Fresenius is expected in April, generic Zometa launches in 1H13, and generic Neupogen launches later this year, the analyst said.

Last month, the company agreed to pay $762 million to resolve criminal and civil liability arising from its sale and promotion of certain drugs. Amgen pleaded guilty for illegally introducing a misbranded drug, Aranesp, into interstate commerce.

[Related -Amgen, Inc. (AMGN) Q3 Earnings Preview: Pipeline In Focus]

Aranesp is an erythropoiesis-stimulating agent (ESA) that was approved by the FDA at calibrated doses for a particular patient population suffering from anemia.

The company also agreed last month to acquire Iceland-based deCODE Genetics for $415 million in cash.

For three consecutive quarters, Thousand Oaks, California-based Amgen has reported an increase in earnings.

For the full year, the company is projected to earn $6.54 per share on revenue increasing 10.50 percent to $17.21 billion.

During the current month, five analysts have recommended AMGN as "Strong Buy" and nine analysts gave "Buy" rating,  while 13 analysts gave "Hold" rating on the stock. One analyst recommends a "Sell" on the stock.

In the preceding third quarter, the company's GAAP net income more than doubled from the year-ago period to $1.11 billion. Revenue rose 10 percent to $4.32 billion, with 8 percent product sales growth spurred by strong performance across its portfolio.  

AMGN shares have been trading between $65.37 and $90.81 over the past year.



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