Amgen Profit Tops Street, Lifts Outlook; To Cut Up To 2,900 Jobs

(RTTNews) - Amgen Inc (AMGN) Tuesday reported a 23 percent jump in second-quarter profit, mainly from sales of rheumatoid arthritis drug Enbrel, Prolia for treatment of postmenopausal osteoporosis, and myeloma drug Kyprolis. Both earnings and revenue for the quarter topped Wall Street estimates with ease.

Looking ahead, Amgen raised its guidance for 2014 and said it would cut up to 2,900 jobs to optimize resource allocation as the biotechnology giant prepares to unleash its product pipeline.

Amgen shares gained about 3.5 percent in after-hours trade on the Nasdaq, following the announcement.

"Robust growth through the first half of 2014 affirms the underlying strength of our business," said Robert Bradway, Amgen chief executive officer. "We are making excellent progress in advancing our pipeline as we prepare to launch a number of promising new innovative medicines."

Throwing light on its restructuring efforts, Amgen said it would cut 2,400 to 2,900 employees, or 12 to 15 percent of workforce, mostly this year and next. The drug maker will also close facilities in Washington and Colorado, while expanding presence in South San Francisco, California, and Cambridge, Massachusetts.

Amgen expect charges of $775 million to $950 million, mostly in 2014 and 2015, with modest savings anticipated in 2015 and cost reductions of about $700 million in 2016, compared with 2013.

Amgen, based in Thousand Oaks, California, reported a second-quarter profit of $1.55 billion or $2.01 per share, compared with $1.26 billion or $1.65 per share last year.

Excluding items, adjusted earnings for the quarter were $2.37 per share, compared with $1.89 per share a year ago. On average, 19 analysts polled by Thomson Reuters estimated earnings of $2.07 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the second quarter climbed 11 percent to $5.2 billion from $4.68 billion in the prior year. Seventeen analysts had a consensus revenue estimate of $4.90 billion.

Enbrel sales rose 7 percent year-over-year to $1.2 billion, and Prolia sales jumped 40 percent to $264 million. Sales of Xgeva, for the prevention of skeletal related events, rose 20 percent to $299 million.

Kyprolis recorded sales of $78 million for the quarter. Amgen acquired cancer drug maker Onyx Pharmaceuticals (ONXX) in October for about $10.4 billion, gaining Kyprolis.

Sales of colon cancer drug Vectibix climbed 42 percent to $132 million.

Amgen's combined sales of white blood cell boosters Neulasta and Neupogen edged down 1 percent from last year to $1.43 billion.

For 2014, Amgen now expect adjusted earnings of $8.20 to $8.40 per share and revenues of $19.5 billion to $19.7 billion. The company had earlier projected adjusted earnings of $7.90 to $8.20 per share with revenues of $19.2 billion to $19.6 billion.

Analysts currently expect earnings of $8.09 per share on revenues of $19.41 billion for the year.

Amgen has an investigational cholesterol drug in pipeline which it plans to submit this year for regulatory approval in the U.S. and European Union.

Amgen is also exploring treatments for kidney disease, and reported this month that its experimental drug AMG 416 reduced parathyroid hormone levels in patients with chronic disease.

Amgen stock closed Tuesday at $123.36, up $0.71 or 0.58%, on a volume of 3.2 million shares. In after hours, the stock gained $4.14 or 3.36% at $27.50.