The New York Times-20080125-Amgen Posts Weak Results- But Hails Osteoporosis Drug
Return to: The_New_York_Times-20080125
Amgen Posts Weak Results, But Hails Osteoporosis Drug
Amgen, the biotechnology company, said Thursday that its experimental osteoporosis drug, the brightest hope in its product pipeline, proved superior to Fosamax from Merck in a clinical trial.
The announcement provided a positive note as Amgen announced results for 2007, perhaps the toughest year in its history. Sales of its anemia drug Aranesp plunged 25 percent in the fourth quarter and 12 percent for the year because of safety concerns. The company projected that both its revenue and earnings would decline in 2008.
Amgen desperately needs the osteoporosis drug, called denosumab, to become a big seller. And with Fosamax scheduled to face cheaper generic competition in two weeks, it was important for denosumab to prove superior.
Amgen said its drug, which is injected twice a year, proved about 40 percent superior to weekly Fosamax pills in improving bone mineral density at the hip and was also better at some other locations. It said side effects of the two drugs appear to be similar.
Simply put, we could not have hoped in this study for better results, Amgen's chief executive, Kevin W. Sharer, told analysts on a conference call. The company said full data would be presented at a medical meeting.
Still, the important measure for an osteoporosis drug is whether it prevents fractures. This trial, involving 1,189 women followed for a year, was too small and short to determine that. Results comparing denosumab with a placebo in fracture prevention are expected later this year.
In its financial results, Amgen said fourth-quarter revenue decreased 2 percent from the period a year earlier, to $3.7 billion, because of the decline in Aranesp sales. For the year, revenue was $14.8 billion, up 4 percent.
Earnings, after adjustments, were $1 a share for the quarter, up 11 percent, and $4.29 for the year, up 10 percent. Earnings were helped by layoffs and other cost cutbacks, with the $739 million in restructuring charges not included in the adjusted earnings. Adjusted net income increased 3 percent, to $1.09 billion in the quarter from $1.06 billion in the period a year earlier.
Aranesp sales have been severely hurt by concerns that the drug, often used to treat the anemia caused by cancer chemotherapy, could make cancer worse or shorten lives. Warnings were added to the drug's label and Medicare sharply restricted reimbursement.
Sales of Aranesp fell 25 percent in the fourth quarter, to $827 million, with a 39 percent decrease in the United States alone. For the year, Aranesp sales fell 12 percent, to $3.61 billion. But Amgen executives said sales seemed to have stabilized.
The Food and Drug Administration has scheduled another advisory committee meeting for March that could lead to further restrictions on Aranesp's use.
Sales of Epogen, Amgen's older anemia drug, which is used only to treat kidney dialysis patients, held up better. Fourth quarter sales fell 3 percent, to $638 million. For the year, sales dipped 1 percent, to $2.49 billion.
For 2008, Amgen said it expected revenue to drop slightly to $14.2 billion to $14.6 billion. It projected adjusted earnings at $4 to $4.30 a share, flat to down compared with the $4.29 in 2007.
Shares of Amgen rose $1.37, to $46.12 Thursday, with its announcements coming after the close of regular trading. After hours the stock was up about 4 percent, to $47.90.
