Amgen 4Q profit drops 16 pct. on higher spending
Drugmaker Amgen Inc. on Wednesday posted a 16 percent drop in fourth-quarter profit, as higher costs for production, marketing, research and other items offset higher sales for many of its biologic medicines. The results fell a bit short of Wall Street expectations.
The world's biggest biotech company, based in Thousand Oaks, Calif., said net income was $788 million, or $1.01 per share, for the three months ended Dec. 31. That was down from $934 million, or $1.08 per share, a year earlier.
Excluding one-time items, net income would have been $1.40 per share. That's 4 cents less than analysts expected, on average, according to research provider FactSet.
In after-hours trading, Amgen shares fell 24 cents to $82.83. They had fallen 22 cents in the regular session before the results were released.
The maker of anemia treatments Aranesp and Epogen said revenue rose 11 percent to $4.42 billion. Analysts predicted sales of $4.37 billion.
"Overall, I would say it was a fine quarter," Edward Jones analyst Judson Clark said. "It was not remarkable."
Clark said the higher expenses generally seemed "legitimate," such as a 9 percent jump in spending on research and development as a half-dozen experimental drugs are in, or about to start, expensive late-stage patient testing.
Company executives told analysts on a conference call that they have increased ads targeting consumers for some existing medicines, or plan to do so.
Amgen also has increased the sales force for immune disorder treatment Enbrel, one of its top money makers. A partnership, under which Amgen sells the drug in the U.S. and Pfizer Inc. sells it in other countries, is going to wind down, with Amgen likely handling all the marketing eventually. Clark said Pfizer is switching its focus to its own, competing drug, Xeljanz, which was approved for treating rheumatoid arthritis in November.
In addition, Amgen last month agreed to pay $762 million to resolve federal criminal and civil liability over its marketing of some drugs for unapproved uses.
"We ended 2012 with momentum, really across our products and geographies," Amgen CEO Robert A. Bradway told the analysts. "Our European business continued to grow despite tough economic conditions."
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