Amgen beats Q2 estimates, announces Glaxo partnership for denosumab (AMGN, NVS, GSK)

July 27, 2009 · Filed Under General 

Amgen Inc. (Nasdaq: AMGN) shares are up about 3 percent to $62.66 after hours, on better-than-expected top and bottom-line result that helped to overshadow disappointing sales of its blockbuster Neulasta.

Next up for the company is an August FDA panel meeting to discuss its osteoporosis drug candidate denosumab.  The candidate did so well in a head-to-head Phase III trial vs. the current standard drug, Novartis Inc.’s (NYSE:  NVS) Zometa earlier this month that the Amgen’s drug may become the new standard for osteo patients with breast cancer.

“We are optimistic about our financial performance in 2009 and are focused on making denosumab a success,” said Kevin Sharer, chairman and chief executive officer.

Separately, Amgen announced it will collaborate with GlaxoSmithKline (NYSE: GSK) to commercialize denosumab in Europe, Australia, New Zealand and Mexico for postmenopausal osteoporosis.

Financial terms of the partnership include an initial payment and near-term commercial milestones to Amgen totaling $120 million, as well as ongoing royalties.

In Europe, Amgen and GlaxoSmithKline will share profits after accounting for expenses associated with the partnership.

In emerging markets, GlaxoSmithKline will be responsible for all commercialization expenses and purchase denosumab from Amgen to meet demand.

The strong trial results earlier this month appear to be raising hopes that Denosumab also will perform well in two upcoming Phase III trials. One is for solid tumor/multiple myeloma in which results could be available later this year. The other is a trial of prostate cancer patients in which the disease has spread to the bone.

Amgen posted earnings of $1.29 a share, or 13 cents better than analyst expectations. Revenue fell 1.4 percent vs. year-ago results to $3.71 billion, aove the $3.58 billion analyst consensus.

The company guided higher for fiscal 2009, and now sees per-share earnings in a range of $4.80 to $4.95 a share, above the $4.57 analyst consensus. It also sees revenue for the fiscal period trending toward the upper end of its previously provided guidance range of $14.4 billion to $14.8 billion, which is above consensus of $14.33 billion.

One of the only disappointments was with sales of Neulasta, which often is prescribed for chemotherapy patients to boost their white cell counts. Quarterly sales were $831 million, vs. $875 million analyst expectations.

Most of its other best-selling drugs, including Enbrel for rheumatoid artritis, came in with results above or near analyst estimates. — Mike Tarsala

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